NetApp (NTAP) Q2 2026 earnings summary

Executive summary

• Q2 FY26 revenue reached $1.71 billion, up 3% year-over-year, with GAAP EPS at $1.51 and record non-GAAP EPS at $2.05, driven by strong demand in all-flash, cloud, and AI segments.

• All-flash array revenue grew 9% year-over-year to $1 billion, and public cloud revenue rose 2% to $171 million, with first-party and marketplace storage services up 32%.

• Record operating margin and EPS achieved, with innovation in AI workload capabilities, cyber resilience, and new product launches such as AFX and AIDE platforms.

• $353 million was returned to shareholders via share repurchases and dividends in Q2.

• A restructuring plan was implemented to optimize resources and reduce costs, resulting in $23 million in charges for the quarter.

Financial highlights

• Non-GAAP EPS was $2.05, up 10% year-over-year; GAAP net income was $305 million, up 2% year-over-year.

• Gross margin set a Q2 record at 72.6% (non-GAAP) and 72.0% (GAAP); operating margin reached 31.1% (non-GAAP) and 23.4% (GAAP).

• Free cash flow was $78 million, representing 4.6% of net revenues.

• Deferred revenue was $4.45 billion, up 8% year-over-year; remaining performance obligations reached $4.9 billion, up 11%.

• Cash, cash equivalents, and short-term investments totaled $3.0 billion at quarter end.

Outlook and guidance

• Q3 FY26 revenue expected between $1.615 billion and $1.765 billion; non-GAAP EPS guidance is $2.01–$2.11.

• FY26 revenue guidance maintained at $6.625–$6.875 billion; non-GAAP EPS $7.75–$8.05; gross margin 71.7%–72.7%; operating margin 29.5%–30.5%.

• GAAP EPS for FY26 expected at $5.82–$6.12; GAAP gross margin 70.7%–71.7%.

• Tax rate for the year expected at 20.2%–21.2%.

• Management anticipates capital expenditures for the remainder of FY26 to be between $90 million and $140 million.