We started FY25 strong, building on our momentum exiting last fiscal year. In Q1, we delivered 8% year-over-year revenue growth and set records for first quarter operating margin and EPS.
— George Kurian
03Detailed Report
NTAP
Company NTAP
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 21, 2026
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Executive Summary
NetApp delivered a solid QQ1 2025 (Q1 FY25) with 8% year-over-year revenue growth to $1.541 billion and non-GAAP earnings per share of $1.56, supported by a robust gross margin of 72% and operating margin of 26%. The company highlighted strength across its Hybrid Cloud and all-flash portfolio, led by continued demand for high-performance flash, cloud storage, and AI workloads. Management raised the full-year revenue and EPS outlook, signaling confidence in the secular growth drivers around GenAI, data unification, and multicloud strategies. Keystone (storage-as-a-service) momentum and first-party marketplace cloud storage services continue to be meaningful growth levers, while Public Cloud revenue grew 3% YoY to $159 million, with cloud gross margins expanding to 71%.
The quarter featured notable AI-ready product introductions (AFF A-series) and strategic collaborations (GenAI toolkit with Azure NetApp Files, Bedrock reference architecture with AWS), underscoring NetApp’s positioning as a data infrastructure platform for AI across on-premises and cloud environments. NetApp also disclosed a new RPO disclosure of $4.5 billion and maintained disciplined capital allocation, including ~$300 million of free cash flow and continued buybacks, while signaling a balanced path to mid-to-upper single-digit revenue growth with double-digit EPS growth through FY27. While macro uncertainty remains a headwind for broader IT spending, NetApp’s differentiated product portfolio, multi-cloud capabilities, and AI-centric go-to-market strategy should support durable profitability and cash generation in FY25 and beyond.
Key Performance Indicators
Revenue
Increasing
1.54B
QoQ: -7.56% | YoY: 7.61%
Gross Profit
Increasing
1.10B
71.25% margin
QoQ: -6.07% | YoY: 10.24%
Operating Income
Increasing
282.00M
QoQ: -22.95% | YoY: 58.43%
Net Income
Increasing
248.00M
QoQ: -14.78% | YoY: 66.44%
EPS
Increasing
1.20
QoQ: -14.89% | YoY: 71.43%
Revenue Trend
Margin Analysis
Financial Highlights
Financial highlights (non-GAAP unless noted):
- Revenue: $1.541B, up 8% YoY (Q1 FY25 vs Q1 FY24).
- Gross margin: 72% (Q1), up ~160 bps YoY; product gross margin ~60%; recurring support gross margin 92%; Public Cloud gross margin 71% (vs 68% prior year).
- Operating margin: 26%; EPS (non-GAAP): $1.56; EPS (GAAP): not disclosed in call, but reported non-GAAP results were above guidance; interest income contributed to margins.
- Net income: $248M; Net income margin: ~16.1%.
- Cash flow: Operating cash flow $341M; Free cash flow $300M; net cash position ending around $600M; cash and short-term investments total about $3.02B.
- Balance sheet: Total assets $9.31B; cash & equivalents $1.65B; short-term investments $1.37B; total liabilities $8.38B; total stockholders’ equity $0.93B; total debt about $2.65B with net debt around $0.996B.
- Working capital: DSO 40 days; inventory turns 8; deferred revenue $4.2B; RPO (unbilled commitments) $4.5B; deferred revenue non-current $2.036B; total deferred revenue around $6.14B (current plus non-current).
- Guidance (FY25): Revenue $6.48B–$6.68B (midpoint up ~5% YoY);
- Gross margin 71–72%; operating margin 27–28%; tax rate 20–21%; net interest income ~$50M; EPS $7.00–$7.20 (midpoint +10% YoY).
- Guidance (Q2 FY25): Revenue $1.565B–$1.715B; gross margin 71–72%; operating margin ~28%; tax rate 20–21%; net interest income ~$15M; EPS $1.73–$1.83.
- RPO and Keystone: Keystone revenue growth >60% YoY; RPO (unbilled commitments) $4.5B; continued progress toward higher-margin, recurring revenue mix.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.54B
7.61%
-7.56%
Gross Profit
1.10B
10.24%
-6.07%
Operating Income
282.00M
58.43%
-22.95%
Net Income
248.00M
66.44%
-14.78%
EPS
1.20
71.43%
-14.89%
Key Financial Ratios
Gross Profit Margin
Excellent
71.30%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Good
18.30%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
16.10%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
2.66%
Return on assets suggests inefficient capital allocation
Return on Equity
Strong
26.70%
Return on equity demonstrates excellent capital efficiency and value creation
Current Ratio
Concern
0.96
Current ratio below safe levels, potential liquidity risk
Debt to Equity
High Risk
2.85
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Growth
26.20x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
27.97x
Very high premium suggests asset-light business model or lofty expectations
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