NetApp, Inc. NTAP used its fourth-quarter 2026 earnings call to make a forward-looking case that enterprise AI is shifting from experimentation to real infrastructure spending. Management tied the quarter’s outperformance to large deals, rising all-flash demand and stronger cloud adoption.
The bigger message was about fiscal 2027. Executives said demand remains broad-based, while guidance calls for faster revenue growth even as the company manages higher component costs and watches for pockets of accelerated customer purchasing.
NTAP Ties the Quarter to AI Execution
Chief executive officer George Kurian framed fiscal 2026 as a record year built on hybrid cloud, public cloud and AI-related demand. He said NetApp is benefiting as customers try to activate large pools of unstructured data across on-premises and cloud environments.
That message showed up in the quarter’s numbers. NetApp reported non-GAAP earnings of $2.43 per share, beating the Zacks Consensus Estimate of $2.27. Revenues of $1.95 billion surpassed the Zacks Consensus Estimate of $1.86 billion. The reported surprises were 7.05% for earnings and 4.51% for revenues.
NetApp, Inc. Price, Consensus and EPS Surprise
NetApp, Inc. price-consensus-eps-surprise-chart | NetApp, Inc. Quote
Kurian also emphasized that AI was not a side story. NetApp logged about 500 AI and data-preparation wins in the quarter and more than 1,100 for fiscal 2026, with management presenting that activity as a central reason for its confidence entering the new year.
NetApp Sees Strength Across Cloud and Flash
Management pointed to several businesses hitting new highs. Fiscal 2026 public cloud revenues reached $688 million, while all-flash revenues rose to $4.2 billion. In the fourth quarter alone, all-flash revenues climbed 18% year over year to $1.2 billion, and public cloud revenues rose 11% to $182 million.
Kurian said demand has been strongest where AI workloads require high-performance storage and data mobility. He also highlighted Keystone, revenues for which grew about 65% in fiscal 2026, as customers sought more consumption-based buying models.
The company paired that demand narrative with product and partnership updates, including AI Data Engine, new high-performance storage systems and an expanded Google Cloud collaboration tied to Google Distributed Cloud. Those announcements supported management’s argument that NetApp is widening its reach in sovereign, regulated and AI-intensive deployments.
NTAP Guides for Faster Fiscal 2027 Growth
Chief financial officer Wissam Jabre said the company expects fiscal 2027 revenues of $7.33 billion to $7.58 billion and non-GAAP earnings per share of $8.70 to $9.00. At the midpoint, that implies 8% revenue growth and 9% earnings growth, both ahead of the fiscal 2026 pace.
For the first quarter, NetApp expects revenues of $1.75 billion to $1.90 billion and non-GAAP EPS of $2.05 to $2.15. Jabre noted that the quarter includes an extra week, worth about $65 million of revenues, mostly in support and cloud, along with $21 million of added operating expense.
Guidance also reflects a lower non-GAAP gross margin range of 68.5% to 69.5% for fiscal 2027, versus 71.3% in fiscal 2026. Management tied that pressure primarily to memory and component costs, while saying pricing actions are being used to protect profitability.
NetApp Defends Margin and Demand Assumptions
In Q&A, UBS Investment Bank pressed management on whether all-flash demand was being boosted by customer pull-forwards ahead of price increases. Kurian said accelerated decision-making exists, but he described the effect on fourth-quarter results as minimal and said the upside was mainly tied to large deals already discussed earlier in the year.
On margins, Jabre told analysts that product gross margin should be around a trough in the July quarter, with gradual improvement afterward as pricing changes flow through. He also reiterated that the company’s long-term product gross margin target remains in the mid-50% to high-50% range.
That exchange mattered because it clarified the trade-off embedded in guidance. NetApp is leaning into demand opportunities, but management is also signaling that cost recovery will take time rather than show up immediately.
NTAP Uses Q&A to Sharpen the AI Story
Morgan Stanley asked how much of the fiscal 2027 outlook is tied to AI wins. Kurian did not quantify revenues, but he said the roughly 500 AI wins in the quarter were all on-premises and were split across data preparation, model training and inferencing use cases.
That answer added detail missing from the prepared remarks. It showed NetApp’s AI opportunity is not confined to one narrow workload and that management sees the pipeline as broad across customer types, including enterprise and neo-cloud accounts.
Wells Fargo also asked about newer offerings such as AFX and AI Data Engine. Kurian said AFX has already seen wins in targeted verticals, while AI Data Engine is getting positive feedback from customers trying to organize large data estates for AI projects.
NetApp Leaves the Call in Expansion Mode
The call’s closing tone was confident but measured. Kurian repeatedly returned to the idea that NetApp is positioned at the intersection of AI, cloud and data governance, while Jabre emphasized disciplined execution around pricing, margins and cash flow.
That posture was reinforced by capital allocation. NetApp generated $900 million of fourth-quarter free cash flow, returned $303 million to its shareholders in the quarter and added $1 billion to its share repurchase authorization.
NTAP’s Zacks Signals Remain Mixed
NTAP currently carries a Zacks Rank #4 (Sell), alongside a Value Score of D, Growth Score of A, Momentum Score of A and VGM Score of B. Under the Zacks framework, a stronger Style Score is most useful when paired with a favorable Zacks Rank, especially a Zacks Rank #1 (Strong Buy) or 2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
That leaves a mixed signal. NetApp’s Growth, Momentum and VGM grades indicate favorable style characteristics, but the Zacks Rank remains the more important screening tool in the system. The rank can also change after earnings as estimate revisions adjust to the latest results and outlook.
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