NetApp (NTAP) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue reached $1.64B, up 2–2.2% year-over-year, with operating margin of 30% and all-flash array ARR at $3.8B, up 10% YoY.

• Public Cloud segment revenue grew 15% YoY to $174M; cloud storage services revenue rose over 40% YoY.

• Over 100 AI and data lake modernization deals closed, with strong demand for AI, cloud, and Storage-as-a-Service (Keystone) offerings.

• Divestiture of Spot by NetApp to sharpen focus on core cloud strategy; new science-based emissions reduction targets approved.

• Product portfolio refresh completed, including new AFF A-Series and C-Series flash arrays and enhanced StorageGRID.

Financial highlights

• Q3 revenue: $1.64B, up 2–2.2% YoY; billings: $1.71B, up 2% YoY; product revenue: $758M (+1% YoY); support revenue: $621M (-2% YoY); professional services: $88M (+14% YoY).

• Public Cloud revenue: $174M (+15% YoY); cloud revenue excluding Spot grew 21% YoY.

• Gross margin: 69.8–71%; product gross margin: 56.7–57%; public cloud gross margin: 65.6–76% (up YoY).

• EPS: $1.91 (non-GAAP), $1.44 (GAAP); operating cash flow: $385M (down YoY); free cash flow: $338M (20.6% of revenue).

• Returned $306M to shareholders via dividends and buybacks; cash and short-term investments: $2.3B; debt: $2B.

Outlook and guidance

• FY25 revenue guidance: $6.49–$6.64B (~5% YoY growth at midpoint), reflecting FX and Spot divestiture.

• FY25 gross margin: ~71%; operating margin: 28–28.5%; EPS: $7.17–$7.27 (non-GAAP); Q4 revenue: $1.65–$1.80B; Q4 EPS: $1.84–$1.94 (non-GAAP).

• FY25 GAAP EPS: $5.49–$5.59; next dividend: $0.52/share payable April 2025.

• Effective tax rate for FY25 expected at 20–21%.

• Capital expenditures for remainder of FY25 projected at $30M–$60M.