NetApp to Report Q2 Earnings: Here's What Investors Should Know

Core Viewpoint - NetApp (NTAP) is expected to report its second-quarter fiscal 2025 earnings on November 21, with anticipated non-GAAP earnings per share between $1.73 and $1.83, reflecting a 13.3% increase year-over-year [1][2]. Financial Expectations - The Zacks Consensus Estimate for NTAP's earnings is $1.79 per share, while net revenues are projected to be between $1.565 billion and $1.715 billion, with a consensus estimate of $1.64 billion, indicating a 5.3% increase from the previous year [2]. - NTAP has outperformed estimates in three of the last four quarters, achieving an average earnings surprise of 8.6% [3]. Market Performance - NTAP's stock has increased by 50.3% over the past year, significantly outperforming the industry growth of 12.1% [3]. Product Demand and Growth Drivers - Continued demand for NTAP's modern all-flash arrays, particularly the C-series and ASA products, is expected to positively impact earnings. The new all-flash A-series is also anticipated to contribute to growth [3][4]. - Keystone's storage-as-a-service offering has seen over 60% year-over-year revenue growth in the last reported quarter [4]. Revenue Projections - The estimated revenue for Hybrid Cloud in the second quarter is $1.4835 billion, representing a 5.4% increase from the previous year [4]. - Public Cloud revenues are projected to be $159 million, up 3.3% from the prior year, although there are concerns regarding a decline in subscription services revenue [6]. Strategic Initiatives - NTAP is benefiting from data-driven digital and cloud transformations, including business analytics, AI, data security, and application modernization, having secured over 50 AI and data lake modernization deals in the first quarter [5]. - Strengthening go-to-market activities and cloud collaborations are seen as positive factors for the company [7]. Margin and Economic Conditions - Margin performance is expected to improve due to a favorable product mix and operational discipline, despite challenges from global macroeconomic conditions and cautious IT spending [8].