NetApp Chief Financial Officer Wissam Jabre and Investor Relations Vice President Kris Newton said at Citi's 2026 Global TMT Conference that fiscal first-quarter 2027 results exceeded guidance across all metrics, prompting the company to raise its full-year fiscal 2027 outlook. Management said demand broadened across enterprise, commercial and government customers globally, driven by AI adoption and infrastructure modernization, and that growth was tied to end-customer demand rather than channel stocking. NetApp shares were trading at $185.59, up 0.11%.
In the quarter, all-flash array revenue rose 47% year over year, while hybrid flash returned to positive year-over-year growth for the second consecutive quarter. Public cloud revenue increased 28% as reported, or 19% excluding an extra week in the quarter. First-party and marketplace revenue within public cloud grew about 31% year over year, a pace management said was similar to the prior year. Public cloud gross margin reached more than 86%, above the company's long-term target range of 80% to 85%; management said the margin would still round to 86% without the extra week.
For fiscal 2027, NetApp raised revenue guidance by about 2x versus the view provided 90 days earlier, more than doubled EPS guidance and lifted operating margin guidance by about 120 basis points at the midpoint. The company expects revenue to be split roughly 50/50 across the fiscal year, with slightly less than half in the first half. Operating expenses are expected to grow at less than half the pace of revenue. Product gross margins are projected to moderate to the low 50s range in the second quarter.
NetApp said it has maintained dividend payments for 14 consecutive years and currently offers a 1.1% yield. Its capital allocation plan targets returning up to 100% of free cash flow to shareholders through dividends and share buybacks. Analyst expectations for fiscal 2027, as cited by InvestingPro, include EPS of $10.08 and revenue growth of 17%, with 15 analysts revising earnings upward for the upcoming period.
The company completed acquisitions of DataPelago and JetStream Software in the first quarter. DataPelago provides a high-performance data processing software engine that operates in CPU and GPU environments at the storage layer, while JetStream Software offers a disaster recovery solution for VMware environments and a retention storage option for public cloud.
NetApp said supply is secured through long-term agreements and multi-supplier relationships for most commodities. Component cost inflation is being passed through to customers via adjusted pricing mechanisms and shorter quote durations.
