Executive Summary
NetApp’s QQ2 2025 results demonstrate solid top-line growth and a durable gross margin, supported by a balanced mix of storage hardware and software-enabled data management solutions. Revenue totaled USD 1.658 billion, up 3.2% year over year and 7.6% quarter over quarter, with a gross profit of USD 1.177 billion and a gross margin of approximately 71.0%. Despite a modest year-over-year dip in operating income, management delivered substantial sequential improvement, with operating income at USD 345 million and an EBIT margin near 20.8%. Net income reached USD 299 million, translating to basic earnings per share of USD 1.47 and diluted USD 1.42. The quarter produced USD 105 million of cash flow from operations and USD 60 million of free cash flow, underscoring ongoing cash generation despite a sizable investment and capital return program.
Key Performance Indicators
Key Insights
Revenue: 1.658B USD; YoY +3.24%, QoQ +7.59%. Gross Profit: 1.177B USD; YoY +2.26%, QoQ +7.19%. Operating Income: 345M USD; YoY -5.74%, QoQ +22.34%. Net Income: 299M USD; YoY -4.47%, QoQ +20.56%. EPS: 1.47 (GAAP) / 1.42 (diluted); YoY -3.29%, QoQ +22.50%. Margin highlights: Gross margin 71.0%, Operating margin 20.8%, Net margin 18.0%. Cash flow: Operating cash flow 105M, Capex 45M, Free cash flow 60M. Balance sheet: Total assets 9.00B, Total liabilities 8.11B, Net debt 0.772B, Cash and equivalent...
Financial Highlights
Revenue: 1.658B USD; YoY +3.24%, QoQ +7.59%. Gross Profit: 1.177B USD; YoY +2.26%, QoQ +7.19%. Operating Income: 345M USD; YoY -5.74%, QoQ +22.34%. Net Income: 299M USD; YoY -4.47%, QoQ +20.56%. EPS: 1.47 (GAAP) / 1.42 (diluted); YoY -3.29%, QoQ +22.50%. Margin highlights: Gross margin 71.0%, Operating margin 20.8%, Net margin 18.0%. Cash flow: Operating cash flow 105M, Capex 45M, Free cash flow 60M. Balance sheet: Total assets 9.00B, Total liabilities 8.11B, Net debt 0.772B, Cash and equivalents 1.478B. Leverage and liquidity: Current ratio 0.912, Quick ratio 0.839, Cash ratio 0.342. Valuation indicators show P/E about 20.37x, Price/Book 27.31x, EV/EBITDA 57.38x, and Price/FCF 406x.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.66B |
3.24% |
7.59% |
| Gross Profit |
1.18B |
2.26% |
7.19% |
| Operating Income |
345.00M |
-5.74% |
22.34% |
| Net Income |
299.00M |
-4.47% |
20.56% |
| EPS |
1.47 |
-3.29% |
22.50% |
Key Financial Ratios
operatingProfitMargin
20.8%
operatingCashFlowPerShare
$0.52
freeCashFlowPerShare
$0.29
dividendPayoutRatio
35.5%
Management Commentary
Transcript data not provided in the input. Consequently, no management quotes or themes can be authoritatively cited from the QQ2 2025 earnings call. When transcript is available, expected themes would typically cover: strategy execution (hybrid cloud data services), product mix shifts toward software and cloud offerings, customer adoption of NetApp Astra and Cloud Volumes, and margin discipline amidst incremental cloud-related investments. Placeholder takeaway: management commentary should illuminate progress on cloud data services monetization and operating efficiency.
Forward Guidance
No explicit forward guidance is present in the supplied data. Given the QQ2 2025 results, investors should monitor: (i) trajectory of cloud data management adoption (Astra, Cloud Volumes, ONTAP enhancements) and ARR growth from software offerings, (ii) ongoing capital allocation cadence (free cash flow generation, balance sheet deleveraging, and capital returns via buybacks/dividends), and (iii) competitive dynamics in hybrid cloud storage alongside macro cloud spend cycles. Management commentary, when available, would be expected to address cadence of product introductions, customer acquisition in enterprise segments, and any scale-up plans for data services in multi-cloud environments. Qualitatively, NetApp’s resilience in gross margins and cash flow supports an earnings trajectory consistent with a software-enabled storage provider, provided cloud demand remains robust and supply/demand dynamics stabilize.