NetApp (NTAP) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue reached $1.64B, up 2–2.2% year-over-year, with all-flash array ARR at $3.8B, up 10% year-over-year, and billings at $1.71B.

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

• Operating margin was 30% (non-GAAP), with GAAP operating margin at 22%; EPS was $1.91 (non-GAAP) and $1.44 (GAAP).

• Announced divestiture of Spot by NetApp to sharpen cloud focus; over 100 AI and data lake modernization deals closed.

• Returned $306M to shareholders in Q3 via dividends and share repurchases.

Financial highlights

• Q3 gross margin was 69.8–71% (GAAP/non-GAAP); product gross margin was 56.7%; public cloud gross margin was 76.4%.

• Q3 net income was $299M (GAAP), $397M (non-GAAP); cash from operations was $385M; free cash flow was $338M.

• Deferred revenue was $4.1–$4.2B; remaining performance obligations were $4.47–$4.5B.

• YTD FY25 revenue was $4.84B, up 5.2% YoY; YTD net income was $846M.

• Ended Q3 with $2.3B in cash and investments against $2B in debt.

Outlook and guidance

• FY25 revenue guidance: $6.49–$6.64B; non-GAAP EPS: $7.17–$7.27; GAAP EPS: $5.49–$5.59.

• FY25 gross margin: ~71% (non-GAAP); operating margin: 28–28.5% (non-GAAP); effective tax rate: 20–21%.

• Q4 revenue guidance: $1.65–$1.8B; non-GAAP EPS: $1.84–$1.94; GAAP EPS: $1.45–$1.55.

• Sale of Spot by NetApp expected to close in Q4 FY25, with $70M in up-front cash proceeds.

• Next dividend of $0.52/share payable April 23, 2025.