Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $1,560 million, up 1% year over year, exceeding the midpoint of guidance [21] - Excluding the divested spot business, total revenue increased by 3% year on year [21] - Q1 hybrid cloud revenue was $1,400 million, also up 1% year over year [21] - Product revenue decreased by 2% year over year to $654 million [21] - Public cloud revenue increased by 1% year over year to $161 million, and excluding spot, it was up 18% year over year [21] - Q1 consolidated gross margin improved by 1.6 percentage points sequentially to 71.1% [23] - Operating profit was $400 million with an operating margin of 25.7% [25] - Diluted EPS was $1.55, aligned with expectations [25] Business Line Data and Key Metrics Changes - All flash array revenue grew 6% year over year to $893 million, with an annualized run rate of $3,600 million [8] - Professional services revenue grew 18% year over year to $97 million, driven by Keystone, which was up approximately 80% compared to the same period last year [21] - Recurring support business maintained a gross margin of 92.3% [23] - Public cloud gross margin was 80.1%, up 80 basis points sequentially and nine percentage points year over year [24] Market Data and Key Metrics Changes - Strong performance in The Americas enterprise offset declines in the U.S. Public sector and EMEA [5] - The company secured approximately 125 AI infrastructure and data lake modernization deals across various geographies and industries in Q1 [15] - The emerging enterprise AI market is driving urgency among customers to modernize data infrastructure [6] Company Strategy and Development Direction - The company is focused on helping customers modernize their data infrastructure and advance cloud transformations [5] - The strategy includes enhancing profitability and free cash flow while delivering value to customers and shareholders [27] - The company aims to capitalize on growing opportunities in the enterprise AI sector [18] Management's Comments on Operating Environment and Future Outlook - Management noted some macro-related spending caution but emphasized strong demand for AI solutions [6] - The company expects revenue for Q2 to be $1,690 million, implying 2% growth year over year at the midpoint [26] - Full year guidance for fiscal year 2026 remains between $6,625 million and $6,875 million, reflecting 3% growth year over year [27] Other Important Information - The company ended Q1 with $4,530 million in deferred revenue, up 9% year over year [22] - Cash flow from operations reached a record $673 million in Q1 [25] - The company redeemed senior notes due in June 2025 for $757 million [25] Q&A Session Summary Question: All flash revenue growth has decelerated from double digits to just 5%. What is driving this? - Management indicated that softness in the U.S. Public sector and EMEA contributed to lower growth, but they anticipate improvement for the rest of the year [34][36] Question: What is the outlook for enterprise AI adoption? - Management reported strong momentum with over 125 AI wins in Q1, indicating a shift from proof of concept to production [40] Question: How does the availability of 128 terabyte QLC based NAND impact search solutions for AI applications? - Management stated that they have a broad range of NAND technologies available and do not feel gated by any specific technology [44] Question: What is the competitive landscape for all flash storage? - Management expressed confidence in their competitive position despite challenges in certain markets, noting that high-performance flash outgrew capacity flash year on year [110] Question: Can you elaborate on the gross margin guidance for public cloud business? - Management explained that improvements in gross margin are driven by depreciation roll-off and increased software content in revenue [57]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2026 was $861 million, representing a 13% year-over-year growth, while operating profit was $130 million with an operating margin of 15.1% [22][28] - Subscription services revenue reached $415 million, up 15% year-over-year, accounting for 48% of total revenue [26] - Total remaining performance obligations (RPO) grew 22% to $2.8 billion, reflecting robust renewals and new commitments [26] - Total gross margin remained strong at 72.1%, with subscription services gross margin at 76.5% [27] Business Line Data and Key Metrics Changes - Strong performance was noted across the entire portfolio, particularly in FlashBlade and core software and services offerings like Evergreen One, Cloud Block Store, and Portworx [22][24] - Total contract value (TCV) sales for Storage as a Service offerings grew 24% year-over-year to $125 million [24] - The FlashBlade E family showed strength, contributing to overall product gross margin improvement [88] Market Data and Key Metrics Changes - U.S. revenue was $577 million, growing 7%, while international revenue was $284 million, growing 26% year-over-year [27] - More than 300 new customers were added, maintaining a 62% penetration rate in the Fortune 500 [27] Company Strategy and Development Direction - The company is focused on the enterprise data cloud architecture, which is transforming how organizations manage data, emphasizing the shift from traditional siloed storage to a software-defined model [9][11] - Continued investment in partnerships with hyperscalers, including Meta, to enhance direct flash technology and expand market presence [25][17] - The introduction of a guidance range for financial metrics aims to align with industry practices and provide flexibility for growth opportunities [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to extend industry leadership despite a variable macro environment, citing strong execution and planning [20] - Positive momentum is expected in the second half of the fiscal year, driven by strong demand signals and an increasing pipeline of large deals [110] - The company anticipates revenue for FY 2026 to be in the range of $3.6 billion to $3.63 billion, representing a 14% year-over-year growth at the midpoint [31] Other Important Information - The company reported a strong free cash flow performance of $150 million, with a free cash flow margin of 17.4% [29] - A new partnership with Nutanix is expected to enhance customer interest and scalability in virtualization environments [58] Q&A Session Summary Question: What is driving the acceleration of growth in the back half of the fiscal year? - Management noted broad-based strength in product lines and improved visibility into the pipeline, contributing to confidence in growth forecasts [36] Question: How has the relationship with Meta evolved? - The relationship is progressing as expected, with deployments on track and revenue recognition beginning [42] Question: What factors contributed to the sequential gross margin improvement? - Management attributed the improvement to revenue mix, product mix, and pricing discipline, with Meta's contribution being less material than anticipated [48] Question: How is the engagement with other hyperscalers progressing? - Early-stage engagements are ongoing, with technology assessments and proofs of concept underway, but still in the initial phases [64] Question: What are the long-term expectations for Meta's contribution? - Management expects to achieve one to two exabytes of deployment this fiscal year, with potential for double-digit contributions in the next fiscal year [70] Question: How should the split between product versus subscriptions be viewed? - Management indicated that both product and subscription revenues are expected to grow, with subscription gross margins being higher than product gross margins [98]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2026 was $861 million, representing a 13% year-over-year growth [20] - Operating profit was $130 million, resulting in an operating margin of 15.1% [20] - Subscription services revenue reached $415 million, up 15% year-over-year, accounting for 48% of total revenue [25] - Total remaining performance obligations (RPO) grew 22% to $2.8 billion [25] - Free cash flow was $150 million, with a free cash flow margin of 17.4% [28] Business Line Data and Key Metrics Changes - Strong performance in FlashBlade and core software and services offerings, including Evergreen One, Cloud Block Store, and Portworx [20][6] - TCV sales for Storage as a Service offerings grew 24% year-over-year to $125 million [23] - Product gross margin rose to 68%, aligning with long-term expectations [26] Market Data and Key Metrics Changes - U.S. revenue was $577 million, growing 7%, while international revenue was $284 million, growing 26% year-over-year [26] - The company added over 300 new customers, maintaining a 62% penetration of the Fortune 500 [26] Company Strategy and Development Direction - The company is focused on the enterprise data cloud architecture, which transforms data management for organizations [9][13] - Continued emphasis on modernizing IT environments, including partnerships with hyperscalers and financial institutions [11][15] - The introduction of a guidance range for financial metrics to align with industry practices and allow flexibility for growth opportunities [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the macroeconomic environment, indicating a positive outlook for the second half of the fiscal year [36][110] - The company anticipates revenue growth of 14% year-over-year for FY 2026, with Q3 revenue expected to be between $950 million and $960 million [29][30] Other Important Information - The company recognized its first revenue from a strategic co-engineering effort with Meta during Q2 [24] - The balance sheet remains strong with $1.5 billion in cash and investments [27] Q&A Session Summary Question: What is driving the acceleration of growth in the back half of the fiscal year? - Management noted broad-based strength in product lines and improved visibility into the pipeline, contributing to confidence in forecasts [35] Question: How has the relationship with Meta evolved? - The relationship is progressing as expected, with revenue recognition beginning and confidence in achieving the forecasted deployment of one to two exabytes [40][42] Question: How much of the gross margin improvement was due to Meta shipments? - Management indicated that while Meta contributed to gross margin improvement, the majority came from product and revenue mix, as well as pricing discipline [48] Question: What are the expectations for the partnership with Nutanix? - The partnership is generating strong customer interest, with plans for general availability by the end of the year [57] Question: How are early engagements with other hyperscalers progressing? - Engagements are progressing well, with technology assessments and proofs of concept underway, but still in early stages [62] Question: What are the demand drivers observed in the quarter? - Demand was steady with above-average linearity, indicating strong macro and competitive environments, along with an increasing willingness from customers to expand their needs [110]

Financial Performance - NetApp achieved Q1 FY26 revenue of $1.56 billion, a 1.2% year-over-year increase[44] - Billings for Q1 FY26 reached $1.51 billion, representing a 4.3% year-over-year growth[44] - The company's Q1 FY26 Non-GAAP gross margin was 71.1%, a decrease of 110 bps year-over-year[44] - Non-GAAP earnings per share for Q1 FY26 were $1.55, a 0.6% decrease year-over-year[44] - NetApp's Q1 FY26 free cash flow was $620 million, resulting in a free cash flow margin of 39.8%[43, 44] Segment Performance - Public Cloud Services gross margin long-term target range raised to 80%-85%[43] - Public Cloud Segment Net Revenues is $161 million[84] - Hybrid Cloud Segment Net Revenues is $1.398 billion[84] Future Outlook - NetApp reaffirmed its FY26 revenue guidance of $6.625 billion to $6.875 billion[82] - The company projects a Non-GAAP gross margin of 71% to 72% and a Non-GAAP operating margin of 28.8% to 29.8% for FY26[82]

Financial Performance - Pure Storage achieved strong numbers across the board, including margins and guidance that topped analyst expectations [1] - Product revenue is up, along with as-a-service offerings, indicating balanced growth across products and software [2] - The company recognized its first revenue from a hyperscale environment last quarter and anticipates continued scaling in the future [6] AI and Technology Trends - AI has shifted enterprises' perspective on their data, highlighting fragmentation and prompting a need for a unified data cloud [4] - Pure Storage plays into the AI environment by selling products into both AI training and inference environments [3] - The company introduced the concept of an enterprise data cloud, enabling data storage to operate like a cloud within the enterprise for security, performance, and AI analytics [4][5] - Performance is critical in AI environments, requiring low latency and rapid delivery of vast amounts of data [9] - FlashBlade Exa, a product introduced earlier this year, has achieved top industry benchmarks [9] Market Dynamics and Strategy - North America is currently the largest market for AI, with significant buying activity also observed in the Middle East and Far East [10][11] - Pure Storage provides only flash storage, offering benefits in hyperscale environments by reducing space, power, and cooling requirements [7][8] - Strong buying signals are observed, reflecting both macro conditions and the company's industry strength [12]

Q2 Fiscal Year 2026 Performance - Total revenue reached $861 million, representing a 13% year-over-year growth[9] - Subscription Annual Recurring Revenue (ARR) hit $1.8 billion, an 18% year-over-year increase[9] - Storage as a Service offerings generated $125 million in revenue, a 24% year-over-year growth[9] - Non-GAAP operating margin was 15.1%[9] - Free cash flow was $150.1 million, resulting in a free cash flow margin of 17.4%[12, 33] Customer Satisfaction and Adoption - The company has over 13,500 global customers[9] - Net Promoter Score (NPS) reached 81, the highest in the industry[9] - 62% of Fortune 500 companies are customers[9, 31] Financial Position - Total cash and marketable securities amounted to $1.54 billion[9] - Remaining Performance Obligations (RPO) reached $2.84 billion, a 22% year-over-year growth[9] Future Outlook (Guidance) - Q3 Fiscal Year 2026 revenue is projected to be between $950 million and $960 million, indicating a year-over-year growth of 14.3% to 15.5%[57] - Q3 Fiscal Year 2026 non-GAAP operating income is expected to range from $185 million to $195 million, a year-over-year growth of 10.6% to 16.6%[57] - Fiscal Year 2026 revenue guidance was raised to $3.60 billion - $3.63 billion, reflecting a 13.5% to 14.5% year-over-year growth[59] - Fiscal Year 2026 non-GAAP operating income guidance was increased to $605 million - $625 million, an 8.2% to 11.7% year-over-year growth[59]

Core Insights - Seagate Technology is experiencing significant demand growth driven by cloud, AI, and edge computing, with nearline hard drives being essential for hyperscale cloud storage [1][2] - The company's build-to-order contracts provide revenue visibility into mid-2026, ensuring predictable supply for cloud service providers [1] - Seagate's mass-capacity revenues increased by 40% year-over-year to $2 billion in Q4, with nearline drives making up 91% of mass-capacity exabytes shipped [2][9] Revenue and Profitability - The adoption of Heat-Assisted Magnetic Recording (HAMR) technology and the Mozaic 3+ platform is expected to enhance storage economics and profitability [3] - Seagate's Q4 non-GAAP gross margin reached 37.9%, a 170 basis point sequential increase and nearly 700 basis points year-over-year, driven by high-capacity nearline drives and pricing discipline [5][9] - Non-GAAP operating income nearly doubled to $640 million, resulting in an operating margin increase to 26.2% [5] Future Outlook - For Q1 of fiscal 2026, Seagate anticipates revenues of approximately $2.5 billion, reflecting a 15% year-over-year growth at the midpoint, with non-GAAP earnings projected at $2.30 per share [6] - Management expects continued gross margin expansion into the mid-to-high 20% range of revenues [6] Competitive Landscape - Seagate faces competition from HDD and SSD manufacturers like Western Digital and Pure Storage, which are also capitalizing on rising cloud demand [7][8] - Western Digital reported a non-GAAP gross margin of 41.3% in Q4, while Pure Storage's non-GAAP gross margin was 70.9% in Q1 of fiscal 2025 [8][10] Market Performance - Seagate's shares have increased by 66.4% over the past year, outperforming the Zacks Computer Integrated Systems industry's growth of 20.2% [11] - The forward price/earnings ratio for Seagate is 17.01X, lower than the industry's 19.97X [12] - The Zacks Consensus Estimate for Seagate's earnings for fiscal 2026 has been revised up by 4.2% to $10.30 [13]

Core Insights - Western Digital Corporation (WDC) has achieved a significant turnaround in profitability, with non-GAAP gross margin increasing from 28.7% in fiscal 2024 to 39.4% in fiscal 2025, and operating income rising 578% to $2,326 million from $343 million [1][7] - The recovery is attributed to cyclical cloud demand, cost control, and strategic decisions such as spinning off the SanDisk flash business, enhancing margins and cash flow [1][7] - The company anticipates continued revenue growth, projecting non-GAAP revenues of $2.7 billion, a 22% increase year over year, and non-GAAP earnings of $1.54 for the next quarter [4][7] Financial Performance - In the fiscal fourth quarter, WDC reported a non-GAAP gross margin of 41.3%, up 610 basis points year over year, exceeding guidance [3] - Non-GAAP operating expenses decreased by 16% year over year to $345 million, while non-GAAP operating income rose 147% year over year to $732 million [3] - The company shipped 190 exabytes in the fourth quarter, a 32% year-over-year increase, driven by demand for nearline drives and high-capacity products [2] Market Position and Technology - WDC maintains a strong position in the global HDD market, with its ePMR and UltraSMR technologies offering reliability and low total cost of ownership [2] - The company is advancing next-generation HAMR drives, expected to qualify in 2027, and anticipates continued demand for high-capacity drives [2] - The competitive landscape includes major players like Seagate, Pure Storage, and others, with pricing pressure being a persistent concern [5] Competitive Analysis - Seagate reported a 32% year-over-year increase in HDD revenues, with a non-GAAP gross margin of 37.9% [6] - Pure Storage, focusing on all-flash storage solutions, expects a revenue increase of 10.6% year over year for the fiscal second quarter [8] Stock Performance and Valuation - WDC shares have gained 26.1% over the past year, outperforming the Zacks Computer-Storage Devices industry, which fell by 7.1% [9] - The forward price/earnings ratio for WDC is 12.89X, lower than the industry average of 17.86X [10] - The Zacks Consensus Estimate for WDC's earnings for fiscal 2026 has been revised up 14% to $6.50 [11]

Core Insights - Qualstar Corporation will present at the 2025 Gateway Conference on September 3-4, 2025, in San Francisco, CA [1][2] - CEO Steven N. Bronson will discuss the company's strong second-quarter results, highlighting 34% gross margins and positive net income [3] - The company aims to leverage its 40 years of expertise to pursue growth opportunities, including complementary software solutions and selective acquisitions [3] Company Overview - Qualstar Corporation, founded in 1984, specializes in manufacturing data storage systems and high-efficiency power solutions [5] - The data storage systems are marketed under the Qualstar™ brand, featuring scalable automated magnetic tape libraries for electronic data management [6] - Power solutions are marketed under the N2Power™ brand, providing OEM designers with enhanced functionality while reducing thermal loads and operating costs [7]

Group 1 - NetApp is expected to announce its fiscal first-quarter 2026 earnings on August 27, 2025, with anticipated earnings of $1.54 per share and revenue of $1.54 billion, reflecting a slight year-over-year decline in earnings and flat sales compared to the previous year [2] - For fiscal 2026, NetApp projects revenue between $6.63 billion and $6.88 billion, indicating a growth of 3% to 4%, with gross margins of 71% to 72% and non-GAAP EPS of $7.60 to $7.90 [3] - The company aims to return up to 100% of free cash flow through dividends and buybacks, highlighting its focus on profitability and shareholder returns [3] Group 2 - Over the past twelve months, NetApp generated $6.6 billion in revenue, with an operating profit of $1.4 billion and a net income of $1.2 billion, showcasing its operational strength despite subdued top-line growth [3] - Historical data indicates that NetApp shares have increased following earnings reports 60% of the time, with a median one-day gain of 4.4% and a maximum observed increase of 18% [2][4] - The correlation between one-day post-earnings returns and subsequent five-day returns can provide insights for traders, with a strategy to position long if the one-day return is positive [5]