NetApp’s AI‑driven revenue expansion accelerated in fiscal 2027 Q1, delivering record‑breaking $2 billion revenue, up 30 % year‑over‑year and surpassing its $1.9 billion upper guidance.
This quarterly growth outpaced Dell’s latest‑quarter revenue increase, though NetApp’s storage revenue still fell short of Dell’s $4.9 billion figure.
NetApp posted GAAP net income of $375 million (+61 % YoY). All‑flash array revenue hit $1.31 billion, rising 47 % annually, while public‑cloud revenue advanced 28 % to $206 million. The 30 % top‑line growth marked a sharp upturn from 12 % in the prior quarter and 4 % the quarter before that. The company closed 350 AI and data‑lake deals during the period.
CEO George Kurian commented: “We achieved an outstanding start to the fiscal year, beating Q1 guidance across every metric and delivering a record‑setting first quarter. Our disciplined execution translated robust top‑line expansion into solid profitability amid challenging component costs. Gross profit rose 29 % to a record $1.43 billion, operating margin reached 31.9 percent, and EPS climbed 66 % year‑over‑year. Even after adjusting for an extra week in Q1, this ranks among the strongest performances in company history.”
He added: “We are witnessing clear structural improvement in underlying demand.”
Financial summary
‑ Gross margin: 70.6 % versus 70.1 % one year ago
‑ Operating cash flow: $503 million vs $673 million YoY
‑ Free cash flow: $401 million vs $620 million YoY
‑ EPS: $1.88 vs $1.15 YoY
‑ Cash, cash equivalents & restricted cash: $3.6 billion vs $2.1 billion YoY
‑ Gross debt outstanding: $2.5 billion, with $1.1 billion in net cash
Product revenue reached $987 million (+51 % YoY); support revenue stood at $720 million (+11 % YoY).
CFO Wissam Jabre stated: “Q1 represented a great fiscal‑year opening, fueled by strong revenue growth driven by rising demand for AI‑ and cloud‑oriented storage solutions.”
Kurian attributed the record quarter to robust gains across public cloud, all‑flash and Keystone subscription revenues. Public‑cloud business accounts for just 10 % of total revenue yet delivers high margins; part of all‑flash growth stemmed from NAND price hikes.
“AI is no longer a future ambition but a business necessity,” Kurian said. “As enterprises operationalize AI, the challenge extends beyond compute to data readiness. The NetApp Platform enables customers to make existing data AI‑ready in‑place.”
NetApp captured direct AI‑related sales alongside infrastructure refresh projects. “There is broad modernization across adjacent workloads and infrastructures. AI adoption pushes enterprises to upgrade databases and unstructured‑data environments, a trend visible across industries and customer segments,” Kurian noted.
The Q1 revenue surge prompted an upward revision of full‑year projections. “Given our strong start and business‑wide momentum, we are materially raising our annual outlook,” Kurian said. “All product lines, customer segments, commercial models including multi‑year agreements, storage‑as‑a‑service and traditional CapEx deals, plus all go‑to‑market channels have materially exceeded expectations, supporting our confident annual view.”
Next‑quarter guidance is $2.1 billion ± $75 million, representing a 23 % mid‑point YoY increase. Full‑year fiscal 2027 guidance was lifted from $7.45 billion ± $125 million to $8.1 billion ± $125 million, equating to 17 % mid‑point annual growth.
NetApp & VCF
New ONTAP features have completed validation for VMware Cloud Foundation (VCF) 9.1. VCF delivers a unified private‑cloud platform for virtualized legacy and container‑native modern workloads.
NetApp’s VMware vSphere Kubernetes Service (VKS) support is validated for VCF 9.1 deployments. Its native cloud storage services are the sole third‑party enterprise‑storage offering certified for ACF across major hyperscalers AWS, Azure and GCP. Via VCF license portability entitlements, customers can deploy VCF within certified hyperscaler environments and run VMware workloads in the cloud without application refactoring.
Beijing Qianxing Jietong Technology Co., Ltd.
Sandy Yang/Global Strategy Director
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Email: yangyd@qianxingdata.com
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