NetApp reported QQ1 2026 revenue of $1.559 billion, representing a modest year-over-year gain of 1.17% but a clear quarter‑over‑quarter decline of 9.99% from the prior quarter. The gross margin stood at 70.43%, with operating income of $309 million and net income of $233 million, translating to an EPS of $1.15–$1.16 on a diluted basis. The company generated $673 million of operating cash flow and delivered free cash flow of $620 million, supported by disciplined working capital management and a relatively light capital expenditure profile. Net debt remained modest at roughly $0.4 billion, and the balance sheet shows a robust liquidity position with cash and short‑term investments totaling about $3.324 billion.
Strategically, NetApp continues to monetize its software‑defined data management stack and cloud integrations (ONTAP, Astra, Cloud Volumes, Cloud Tiering, etc.) while pursuing a multi‑cloud/partner ecosystem. The quarter reflects a normalization in revenue after a stronger prior year period, with a composition shift toward software and cloud‑led solutions that typically carry higher margin profiles. Investors should monitor the pace of cloud adoption, the mix shift toward higher‑margin software and service revenue, and the sustainability of free cash flow in the face of potential macro headwinds and competitive dynamics.