Start here if you're new
what it is
NetApp helps companies store, move, and manage their data across their own servers and public clouds.
how it gets paid
Last year Netapp made $6.6B in revenue. product was the main engine at $3.04B, or 46% of sales.
why it's growing
Revenue grew 4.9% last year. Said October-quarter revenue reached $1.705 billion, up 3% vs. prior year and above the midpoint of guidance.
what just happened
NetApp beat with EPS of $2.12 versus a $2.05 estimate, and margins stayed weirdly strong.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
95/100 earnings predictability — you can trust these numbers
14.9x trailing p/e — the market's not buying it — or you found a deal
1.8% dividend yield — cash in your pocket every quarter
43.0% return on capital — every dollar works hard here
xvary composite: 77/100 — average
What they do
NetApp helps companies store, move, and manage their data across their own servers and public clouds.
Once your data lives inside NetApp, ripping it out is like replacing plumbing mid-surgery. Support revenue was 38% of sales in 2024, or about $2.5 billion on $6.6 billion of revenue, which means customers keep paying after the first purchase. Gross margin hit 72.6% in the October quarter, so the sticky software-and-services layer is carrying more weight than the hardware label suggests.
How they make money
$6.6B
annual revenue · their business grew +4.9% last year
product
$3.04B
support
$2.51B
professional & other services
$0.40B
public cloud
$0.66B
The products that matter
enterprise data infrastructure
Software, systems, and services stack
$5.0B revenue · 23.4% net margin
this snapshot only gives you the full-company view, but that still matters: $5.0B in revenue paired with a 23.4% net margin tells you the combined stack has pricing power and operational discipline.
whole-company lens
Key numbers
72.6%
gross margin
Gross margin → money left after direct costs → so what: NetApp keeps almost 73 cents of every sales dollar before overhead, which is elite for this category.
43.0%
return on capital
Return on capital → profit earned on the money tied up in the business → so what: every dollar invested works unusually hard.
45%
customer concentration
Customer concentration → sales tied to a few buyers → so what: two distributors carry nearly half the company's revenue.
14.9x
trailing p/e
P/E → how many dollars you pay for one dollar of profit → so what: the stock is priced like a steady old tech company, not a hype machine.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 60 / 100
- long-term debt $2.5B (10% of capital)
- net profit margin 23.2% — keeps 23 cents of every dollar in revenue
- return on equity 76% — $0.76 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in NTAP 3 years ago → it's now worth $19,690.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
NetApp beat with EPS of $2.12 versus a $2.05 estimate, and margins stayed weirdly strong.
Value Line said October-quarter revenue reached $1.705 billion, up 3% vs. prior year and above the midpoint of guidance. Gross margin expanded 60 basis points to 72.6%, which helped lift quarterly EPS above expectations.
$1.71B
revenue
$2.12
eps
72.6%
gross margin
the number that mattered
72.6% gross margin was the real story, because storage hardware companies are not supposed to print software-like economics this consistently.
-
netapp turned in a solid performance for its october quarter.
-
revenues were up 3% from the prior-year period, to $1.705 billion, above the mid-point of the company’s earlier guidance.the datainfrastructure provider experienced some shutdown-related headwinds among public sector customers, but this was offset by broader demand for artificial intelligence (ai) solutions, cloud-storage services, and all-flash offerings.
-
gross margins, meanwhile, surpassed management’s expectations (70.5%-71.5%), expanding 60 basis points, to 72.6% on an adjusted basis.
-
this improvement helped to lift earnings 10% vs. prior year, to $2.05, nicely above netapp’s forecast of $1.84-$1.94.the company should be able to continue its progress over the rest of fiscal 2025. (year ends april 24, 2026.) top-line growth will likely remain in the low- to mid-single-digit range. rising activity around ai infrastructure and data storage projects augurs well for future growth, with netapp closing 200 such deals in the recent quarter, up from 125 in the july period. meanwhile, the company has hiked its full-year target for share earnings from $7.60-$7.90 to $7.75-$8.05, largely reflecting the better-than-expected margin performance in the october quarter.
-
we look for profits to climb 7%-9% in fiscal 2026, to roughly $8.50 a share.revenues are apt to rise at a mid-single-digit rate, but we are more cautious about the prospect of further expansion in the operating margin. in particular, we will be keeping an eye on memory prices, as this key component of netapp’s cost structure has been on the rise. this shouldn’t impact margins in the current fiscal year, but could become a headwind in subsequent quarters.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
the #1 risk is margin compression from rising memory costs.
med
memory cost inflation
Management explicitly called out memory prices as a rising input cost. That matters because the recent beat was driven by gross margin landing at 72.6%.
If that cost line moves the wrong way, the margin beat that lifted EPS above the $1.84–$1.94 range can fade fast.
med
AI momentum may stay niche
AI-related storage deals rose to 200 from 125 in the prior quarter. Good number. Still, the wider revenue outlook is only low- to mid-single-digit growth.
If AI demand does not scale beyond a helpful offset, you are left owning a steady business rather than a re-rating story.
med
enterprise and public-sector spending pauses
The october quarter already saw shutdown-related pressure among public-sector customers. That tells you demand is not immune to budget timing and procurement delays.
When quarterly revenue is $1.705B and growth is 3% from a year ago, even modest delays can become the whole story.
med
upside expectations are not fully aligned
The stock trades at $117.53, while the listed midpoint target is $107. The same page also shows a 3–5 year low target of $140 and high target of $210.
That is not precision. It is disagreement. When the target set looks messy, execution matters more than anyone's neat price box.
A margin-led quarter can support the story for a while, but if gross margin slips and revenue stays in the low- to mid-single digits, the path to the $7.75–$8.05 earnings range gets narrower.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
adjusted gross margin
72.6% was the quarter's real flex. If that starts drifting back toward the 70.5%–71.5% area management had expected, some of the EPS upside disappears with it.
trend
AI deal count
The jump from 125 to 200 deals is the best evidence that the AI angle is real. You want to see that line keep moving, not flatten after one strong quarter.
risk
memory prices
Management flagged memory as a key cost input. If component inflation keeps rising, margin expansion stops doing the heavy lifting.
calendar
fy2026 earnings power
The working number is roughly $8.50 a share. That is the clean checkpoint for whether this remains a dependable compounding story or just a nice quarter.
Analyst rankings
short-term outlook
top 5%
momentum score 1 — the highest rating. in human-speak, analysts think NTAP has stronger near-term price action than almost everything else they cover.
risk profile
average
stability score 3. Translation: not especially defensive, not especially fragile.
chart momentum
top 20%
technical score 2 — the chart has been better than most, which helps as long as the earnings story keeps cooperating.
earnings predictability
95 / 100
Management's guidance tends to travel well. You usually do not wake up to chaos here.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 414 buyers vs. 369 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$67
$147
$118
current price
$107
target midpoint · 9% from current · 3-5yr high: $210 (+80% · 17% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive