How much of the all-flash array growth is driven by ASP versus unit growth, and what is the outlook for AFA growth in FY27? Also, how should investors think about the attach rate between AI compute deployments and high-performance storage?

The AI business performed strongly, with 500 AI wins in Q4 and 1,100 for FY26, significantly up from the prior year. All-flash grew, especially in AI use cases, alongside hybrid flash. This AI strength provides confidence for business acceleration in FY27, as high-performance storage is crucial for feeding expensive GPUs. “Our AI business performed really strongly in the quarter. We noted about 500 AI wins in the quarter, 1,100 for the full year, those compared to roughly 400 for the whole of the prior fiscal year. So you are seeing strong uptick in enterprise AI.”

Can you quantify how much of the FY27 revenue guide is driven by secured and anticipated AI wins, and differentiate between public cloud and on-prem AI solutions?

All 500 AI wins in Q4 were on-prem, a mix of enterprise and neo cloud. The use cases are roughly 50% for data preparation, 25% for training/fine-tuning LLMs, and 25% for inferencing. This broad-based strength in AI, combined with NetApp's installed base and hybrid cloud data infrastructure, gives confidence for the accelerated FY27 outlook. “All of the 500 AI wins are on-prem wins and they combine a mix of enterprise as well as neo cloud. I think if you look at the mix of the use cases, they are roughly the same pattern as we saw before. Half of them are really tied to data preparation, large-scale analytic environment that are now being operated under GPU compute.”

How is the large deal pipeline evolving, and will the strength sustain? Why did NetApp not see significant pull-forward demand despite industry trends, and what is the cadence for future price increases?

The large deal pipeline includes infrastructure modernization and AI wins, with some AI projects accelerating. The impact of pull-forward demand on Q4 P&L was minimal, as results were tied to previously guided big deals. The company aims to meet demand, balance costs, and maintain lead times, acknowledging potential for some accelerated decision-making but emphasizing broad-based demand. “What I said was that on the face of the Q4 P&L, the impact of pull-forward demand was minimal. Our Q4 results from a revenue standpoint were tied to big deals that we told you about when we guided the fiscal year.”

NTAP

NetApp (NTAP) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Apr 2026 (Q4 FY26)· Information Technology· May 28, 2026

Source: earnings call transcript

Executive summary

NetApp Q4 FY26 — Record Results Driven by AI and Cloud Demand

NetApp delivered record Q4 and FY26 results, driven by strong demand for its hybrid cloud and AI solutions. The company is capitalizing on accelerating enterprise AI adoption and cloud growth, with its differentiated data infrastructure platform resonating with customers. Management is confident in continued momentum, reflected in an accelerated FY27 outlook, while actively managing component cost pressures and investing in strategic growth areas.

Highlights

Record revenue in Q4 and FY26, with FY26 revenue of $6.93 billion, up 5% year-over-year.
Record Q4 non-GAAP EPS of $2.43, up 26% year-over-year, and FY26 EPS of $8.13, up 12% year-over-year.
Record Q4 operating margin of 32%, up 340 basis points year-over-year, and FY26 operating margin of 30.2%.
Record Q4 free cash flow of $900 million, up over 40% year-over-year, and FY26 free cash flow of $1.87 billion, up close to 40% year-over-year.
Public Cloud revenue grew 18% year-over-year (ex-Spot) in FY26 to $688 million, with first-party and marketplace services up 30%.

Concerns

Rising memory and component costs are impacting product gross margin, requiring price adjustments.
Hybrid Cloud gross margin was down 60 basis points sequentially in Q4 due to higher product revenue.
Inventory turns decreased sequentially to 12 in Q4 FY26.

Guidance & targets

Category	Target	Timeline	Confidence
Fiscal Year 2027 Revenue	$7.325 billion to $7.575 billion high materiality	FY27	High
Fiscal Year 2027 Gross Margin	68.5% to 69.5% medium materiality	FY27	High
Fiscal Year 2027 Operating Margin	29.1% to 30.1% high materiality	FY27	High
Fiscal Year 2027 Effective Tax Rate	20% to 21% low materiality	FY27	High
Fiscal Year 2027 EPS	$8.70 to $9.00 high materiality	FY27	High
Fiscal Year 2027 Capital Return	Up to 100% of free cash flow high materiality	FY27	High
Fiscal Year 2027 Share Count Reduction	Low-single-digit percentage points medium materiality	FY27	High
Q1 Fiscal Year 2027 Revenue	$1.75 billion to $1.9 billion high materiality	Q1 · FY27	High
Q1 Fiscal Year 2027 Gross Margin	69.1% to 70.1% medium materiality	Q1 · FY27	High
Q1 Fiscal Year 2027 Operating Margin	28.4% to 29.4% medium materiality	Q1 · FY27	High
Q1 Fiscal Year 2027 EPS	$2.05 and $2.15 high materiality	Q1 · FY27	High
Q1 Fiscal Year 2027 Extra Week Revenue Contribution	Approximately $65 million low materiality	Q1 · FY27	High
Q1 Fiscal Year 2027 Extra Week Operating Expenses	$21 million low materiality	Q1 · FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Hybrid Cloud Revenue growth driven by execution of multiyear agreement with Google Cloud. Gross margin down 60 basis points sequentially due to higher product revenue. Product gross margin benefited from Google Cloud Enterprise agreement offsetting higher component costs. Support revenue partly driven by a onetime item. Professional Services gross margin improved 80 basis points sequentially. Product Revenue: $966 millionProduct Revenue Growth YoY: 14%Product Gross Margin: 56.1%Support Revenue: $688 millionSupport Revenue Growth YoY: 10%Support Gross Margin: 93%Professional Services Revenue: $112 millionProfessional Services Revenue Growth YoY: 14%Professional Services Gross Margin: 32.1%	$1.77 billion	13%	—	69%
Public Cloud Revenue growth driven by strong demand for first-party and marketplace storage services. Gross margin up 60 basis points sequentially and over 6 percentage points year-over-year, operating above the high-end of the long-term target range (80%-85%). Revenue Growth YoY (ex-Spot): 18%	$182 million	11%	—	85.7%

NTAP operating KPIs by quarter

NTAP operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jan 2025 Q3 FY25	Apr 2025 Q4 FY25	Jul 2025 Q1 FY26	Oct 2025 Q2 FY26	Jan 2026 Q3 FY26	This call Apr 2026 Q4 FY26	Jul 2026 Q1 FY27	Change vs prior quarter
Billings	$1.71B Billings of $1.71 billion increased 2% year-over-year. Source: earnings call transcript	$2.03B Q4 billings of $2.03 billion were up 12% year-over-year. Source: earnings call transcript	—	—	—	—	—	+18.7%
Remaining performance obligation (RPO)	$4.5B Remaining performance obligations were $4.5 billion. Source: earnings call transcript	$4.97B Q4 Remaining Performance Obligations were $4.97 billion, up approximately $500 million from Q1. Source: earnings call transcript	$4.94B Q1 remaining performance obligations were $4.94 billion, up 11%. Source: earnings call transcript	$4.9B Remaining performance obligations were $4.9 billion, growing 11% year-over-year. Source: earnings call transcript	$5.11B Remaining Performance Obligations were $5.11 billion, growing 14% year-over-year. Source: earnings call transcript	$5.65B Remaining performance obligations were $5.65 billion, up 14% year-over-year. Source: earnings call transcript	$5.65B Remaining performance obligations were $5.65 billion, up 14% year-over-year. Source: earnings call transcript	0%
Unbilled remaining performance obligation	~$350M Unbilled RPO was approximately $350 million, up 6% quarter-over-quarter. Source: earnings call transcript	~$430M Unbilled Remaining Performance Obligations, which is a key indicator of future Keystone revenue growth was approximately $430 million, up 23% quarter-over-quarter. Source: earnings call transcript	$415M Unbilled RPO, a key indicator of future Keystone revenue was $415 million, up 40% year-over-year. Source: earnings call transcript	$456M Unbilled RPO, a key indicator of future Keystone revenue, was $456 million, up 39% year-over-year. Source: earnings call transcript	$482M Unbilled RPO, a key indicator of future Keystone revenue, was $482 million, up 38% year-over-year. Source: earnings call transcript	$807M Unbilled remaining performance obligations, a key indicator of future Keystone storage-as-a-service revenue growth, were $807 million, up 88% year-over-year. Source: earnings call transcript	—	+67.4%
Installed base penetration All-flash	43% The penetration of our all-flash footprint into our installed base is now 43% -- so it's up, again, modestly every quarter, which is a reflection of both the scale of our installed base and the fact that we are growing new footprints in that installed base. Source: earnings call transcript	44% In the fourth quarter, all-flash made up approximately 2/3 of Hybrid Cloud segment revenue, and 44% of systems in our installed base under active support contracts are all-flash. Source: earnings call transcript	—	~46% Exiting the quarter, approximately 46% of installed base systems under active support contracts are All Flash. Source: earnings call transcript	—	—	—	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Deferred Revenue $4.85 billion End FY26

7% YoY (6% YoY in constant currency)

Remaining Performance Obligations (RPO) $5.65 billion End FY26

14% YoY

Unbilled Remaining Performance Obligations (Unbilled RPO) $807 million End FY26

88% YoY

Key indicator of future Keystone storage-as-a-service revenue growth. Outperformance driven by increase in Support performance obligations associated with Google agreement as well as Keystone unbilled RPO.

Product announcements

Product	Type	Timeline	Details
AFX and AI Data Engine	launch	FY26
All-Flash Arrays and Converged AI Solutions	update	FY26

Deals & partnerships

Google Cloud Expanded Partnership Multiyear agreement

Expanded partnership for Google Distributed Cloud, enabling government agencies and regulated enterprises to leverage advanced AI capabilities with NetApp's secure-by-design data infrastructure platform. NetApp was chosen to be a large chunk of the data infrastructure within the Google Distributed Cloud architecture.

Leading Neo Cloud Provider Customer Contract

A leading neo cloud turned to NetApp for intelligent all-flash storage infrastructure, eliminating complexity and powering orchestration at cloud scale. This win allows NetApp to begin expanding into other workloads.

World Wide Technology Partnership

NetApp AFX all-flash storage is featured at World Wide Technology's live AI Proving Ground, allowing customers to test architectures, validate performance, and quickly move from experimentation to deployment. This collaboration highlights the large opportunity ahead for operationalizing AI.

Risks & headwinds

Rising memory and component costs Ongoing

Impacting product gross margin

Mitigation:Working closely with supply chain partners and adjusting pricing to balance growth and margins. Goal is to protect profitability of the business.

Potential for accelerated purchasing or pull-forward demand Near-term (FY27)

Minimal impact on Q4 FY26 P&L, but acknowledged as a dynamic.

Mitigation:Management believes demand is broad-based and has factored in the risks of pull-ins and dynamics into the fiscal year outlook. Goal is to meet customer demand, balance cost and availability of supply, and maintain lead times.

Q&A highlights

Can you elaborate on the demand strength, particularly for all-flash, its linearity, and the impact of price changes on demand, especially looking into FY27?

Momentum is very strong, driven by IT spending for AI. Q4 results were tied to expected big deals, with minimal pull-forward impact on the P&L. The company sees a strong FY27 outlook, powered by confidence in its position and growing evidence of enterprise AI adoption.

“Our Q4 results were tied to the big deals we told you to expect when we guided the fiscal year. And we see really strong outlook for this coming year powered by our confidence in our position and what we see as growing evidence that enterprise AI is happening in front of our eyes.”

asked by David Vogt (UBS) · answered by George Kurian

2 min read 5 chapters

Detailed narrative

Enterprise AI Adoption and Hybrid Cloud Leadership

NetApp is positioned at the forefront of enterprise AI adoption, leveraging its hybrid cloud data infrastructure platform. The company's ability to activate large volumes of unstructured data across hybrid and multi-cloud environments, enabling zero-copy data activation, is a key competitive advantage.

This approach eliminates costly data migration and transforms fragmented infrastructure into a secure platform for real-time AI and automation, resonating strongly with customers and the industry.

Strategic Partnerships and Ecosystem Expansion

NetApp has fueled nearly 50 partner AI factories and labs, including World Wide Technology's AI Proving Ground, showcasing its AFX all-flash storage. Expanded partnerships, such as with Google Cloud for Google Distributed Cloud, enable government agencies and regulated enterprises to leverage advanced AI capabilities with secure data infrastructure.

This collaboration broadens NetApp's reach into sovereign and secure environments, reinforcing its position as a trusted collaborator in the evolving cloud ecosystem.

Strong Performance Across Key Growth Vectors

Record revenue in Q4 and FY26 was driven by Public Cloud, all-flash, and Keystone offerings. Public Cloud revenue grew 18% year-over-year (ex-Spot) in FY26 to $688 million, with first-party and marketplace services up 30%. All-flash revenue increased 11% year-over-year in FY26 to $4.2 billion, with Q4 up 18%.

Keystone storage-as-a-service revenue grew approximately 65% from FY25, reflecting a broader market shift towards consumption-based IT models and meeting customer demand for cloud-like experiences on-premises.

AI as a Growth Engine and Innovation

AI was a clear growth engine, with 1,100 AI and data preparation wins in FY26, including 500 in Q4 alone, significantly up from 400 in the prior fiscal year. NetApp furthered its AI innovation by launching next-generation solutions like AFX and AI Data Engine, which are seeing strong early momentum and positive customer feedback.

These offerings help organizations simplify AI infrastructure, eliminate silos, and accelerate data pipelines, reinforcing NetApp's role as the data infrastructure platform for AI.

Financial Discipline and Shareholder Returns

The company achieved record operating income and free cash flow in FY26, with operating margin reaching 30.2% and free cash flow generation of $1.87 billion, up close to 40% year-over-year. This strong cash generation enables investment in innovation and significant capital returns, with $1.36 billion returned to shareholders in FY26 through share repurchases and cash dividends.

NetApp plans to return up to 100% of FY27 free cash flow to shareholders, demonstrating disciplined capital allocation.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.