NTAP

Technology

NetApp

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Market Data

Financials

XBRL · SEC EDGAR

2009–2025(17yr)

Revenue

Net Income

Free CF

Metric	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$3.4B	$3.9B	$5.1B	$6.2B	$6.3B	$6.3B	$6.1B	$5.5B	$5.5B	$5.9B	$6.1B	$5.4B	$5.7B	$6.3B	$6.4B	$6.3B	$6.6B	+4.9%
Gross Profit	$2.0B	$2.5B	$3.3B	$3.7B	$3.8B	$3.9B	$3.8B	$3.4B	$3.4B	$3.7B	$3.9B	$3.6B	$3.8B	$4.2B	$4.2B	$4.4B	$4.6B	+4.1%
Gross Margin	58.4%	64.1%	65.0%	59.6%	59.4%	62.0%	62.6%	60.8%	61.7%	62.5%	64.2%	66.9%	66.4%	66.8%	66.2%	70.7%	70.2%	-0.5pp
Operating Income	$47.2M	$488.4M	$824.3M	$746.5M	$607.8M	$734.3M	$716.5M	$348.0M	$665.0M	$1.1B	$1.2B	$945.0M	$1.0B	$1.2B	$1.0B	$1.2B	$1.3B	+10.1%
Operating Margin	1.4%	12.4%	16.1%	12.0%	9.6%	11.6%	11.7%	6.3%	12.1%	19.0%	19.9%	17.5%	17.9%	18.3%	16.0%	19.4%	20.3%	+1.0pp
Net Income	$64.6M	$400.4M	$673.1M	$605.4M	$505.3M	$637.5M	$559.9M	$229.0M	$509.0M	$76.0M	$1.2B	$819.0M	$730.0M	$937.0M	$1.3B	$986.0M	$1.2B	+20.3%
Net Margin	1.9%	10.2%	13.1%	9.7%	8.0%	10.1%	9.1%	4.1%	9.3%	1.3%	19.0%	15.1%	12.7%	14.8%	20.0%	15.7%	18.0%	+2.3pp
Free Cash Flow	$599.6M	$839.4M	$1.1B	$1.1B	—	—	—	$814.0M	$811.0M	$1.3B	$1.2B	$936.0M	$1.2B	$985.0M	$868.0M	$1.5B	$1.3B	-12.5%
FCF Margin	17.6%	21.4%	21.9%	16.9%	—	—	—	14.7%	14.8%	22.5%	19.0%	17.3%	20.4%	15.6%	13.6%	24.4%	20.4%	-4.1pp
EPS (Diluted)	$0.19	$1.13	$1.71	$1.58	$1.37	$1.83	$1.75	$0.77	$1.81	$0.28	$4.51	$3.52	$3.23	$4.09	$5.79	$4.63	$5.67	+22.5%

Total Debt$3.2B

Cash & Equiv.$2.7B

Net Debt$493.0M

4 min read

1. THE BIG PICTURE

NetApp is defending its market position against commodity hardware rivals by transforming its ONTAP software into the "data backbone" for hybrid cloud and AI environments. By embedding its services natively within AWS, Azure, and Google Cloud, NetApp has secured a unique competitive moat that allows it to maintain industry-leading 70.7% gross margins while navigating the structural decline of traditional on-premises storage (10-K Item 1, XBRL).

2. WHERE THE RISKS HIT HARDEST

NetApp’s "unified data infrastructure" strength is directly threatened by the transition to consumption-based business models. This shift moves revenue from upfront hardware sales to ratable recognition over time, which can depress short-term results even when customer demand is high (Risks, 10-K Item 1). Furthermore, NetApp’s "architectural excellence" is vulnerable to supply chain concentration; a reliance on a limited number of suppliers for NAND means that superior software cannot protect margins if component costs spike or supply is constrained (Risks, Competitive Position). Finally, the fact that 78% of revenue flows through indirect channels makes NetApp highly sensitive to the strategic alignment of partners who, in the case of public cloud providers, are simultaneously its most critical collaborators and its most formidable competitors (Competitive Position).

3. WHAT THE NUMBERS SAY TOGETHER

While NetApp ranks 5th of 6 peers in revenue growth (+4.9% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter), its 70.7% gross margin is the highest in the group, significantly outperforming hardware-heavy peers like Dell (20.8%) and Super Micro (8.5%) (XBRL). This margin profile reflects a business mix increasingly dominated by high-value software and all-flash arrays, the latter of which reached a record $1.0 billion in revenue in Q3 FY2026 (8-K).

The 4% year-over-year revenue growth in the most recent quarter represents a slight deceleration from the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter average, largely due to the sale of the Spot by NetApp business, which masked a 27% surge in first-party cloud storage services (8-K). Despite this, sentiment remains mixed; short interest stands at 10.7% of the float, suggesting a segment of the market is skeptical of the growth narrative (Yahoo Finance). However, a 14.6% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin and a 4.9% buyback yield—the second-highest among peers—indicate that NetApp is using its high-margin software cash flows to aggressively support share prices while it manages its technological transition (XBRL).

4. IS IT WORTH IT AT THIS PRICE?

At 11.5x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, NetApp is priced exactly in line with the peer median (XBRL). The market is currently pricing in 3.2% long-term growth (CAPM analysis). This appears to be a low bar for a company delivering 11% growth in its core all-flash portfolio and maintaining a 17.7% net margin—the second-highest in its peer group (XBRL).

The valuation is sensitive to growth assumptions: if growth were to slow to a GDP-paced 2.5%, the justified multiple would fall to 10.6x, suggesting roughly 8% downside (CAPM analysis). However, the current 8.1% implied EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth (which includes the lift from share retirements) is well-supported by NetApp's 4.9% buyback yield and disciplined operational execution (8-K, CAPM analysis). The stock is at fair value, with its premium margins balancing its slower top-line growth relative to momentum-driven peers like SMCI.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow gross margins fall below the guided 68.5%–69.5% range, which would signal that NAND supply constraints are beginning to erode the profitability of the flash storage rollout (8-K).
Constructive if Public Cloud revenue begins to grow in absolute terms following the Spot divestiture, proving that the 27% growth in first-party services can offset the loss of legacy cloud business (8-K).
Cautious if short interest continues to climb above 10.7% while days-to-cover exceeds the current 6.9, signaling a deepening market conviction that the transition to consumption-based models will cause a significant revenue miss (Yahoo Finance).

6. BOTTOM LINE

Structural Advantage: NetApp’s proprietary ONTAP software is the only enterprise-grade storage service natively embedded in all three major public clouds, creating high switching costs and a unique "data fabric" that commodity hardware vendors cannot replicate.

Bottom Line: NetApp is a high-margin cash generator whose current valuation fairly reflects its successful, albeit slow, transition into an AI-ready data infrastructure provider.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Macroeconomic and Geopolitical Volatility: Global conditions, including inflation, regional conflicts, and trade barriers, create volatility in the IT industry, making it difficult to predict demand and potentially limiting access to capital for NetApp’s suppliers and customers.
Technological Transitions: The shift toward flash storage, hybrid cloud, and IT-as-a-service models requires NetApp to successfully manage product transitions; failure to keep pace with these changes has historically resulted in year-over-year revenue declines, as seen in fiscal 2017, 2020, and 2024.
Supply Chain Dependency: NetApp relies on a limited number of third-party manufacturers and suppliers for critical components; disruptions or price increases in these inputs—particularly for NAND—directly impact product costs and gross margins.
Revenue Forecasting Complexity: Because NetApp sells through diverse indirect channels and strategic partners, including public cloud providers, NetApp faces significant challenges in predicting revenue within specific fiscal quarters or years.
Consumption Model Transition: Moving toward consumption-based models changes the timing of revenue recognition from upfront delivery to ratable recognition over the term of the arrangement, which can negatively impact short-term revenue and profitability.

2. Company-Specific Risks

Sales Force Productivity: NetApp’s growth strategy requires increasing the productivity of its sales force; however, repeated restructuring plans in fiscal 2023, 2024, and 2025 may hinder NetApp's ability to attract and retain the necessary technical and sales talent.
ERP System Implementation: The ongoing implementation of a new enterprise resource planning (ERP) system in fiscal 2025 creates operational risks, including potential disruptions to invoicing, vendor payments, and the ability to report financial results accurately.
Strategic Partner Conflicts: Many of NetApp’s strategic partners, particularly large cloud providers, are also competitors, which complicates these relationships and creates risks that partners may prioritize their own competing solutions.
Concentration of Customers: A significant portion of net revenues is derived from a limited number of customers and distributors, none of whom are bound by long-term purchase commitments, allowing them to stop purchasing at any time.

3. Regulatory/Legal Risks

Data Privacy and Security: NetApp is subject to comprehensive global regulations, including the GDPR, the California Consumer Privacy Act, and the Digital Operational Resilience Act (DORA), which impose significant compliance costs and potential penalties of up to 20 million Euros or 4% of worldwide annual turnover.
Export Controls and Sanctions: NetApp must comply with U.S. export administration regulations and trade sanctions; violations—even if inadvertent—can lead to significant monetary fines, denial of export privileges, and debarment from government contracts.
Government Contracting: Sales to the U.S. government are subject to strict regulatory requirements, including the False Claims Act; non-compliance can result in investigations, fines, and suspension from future government business.
Global Tax Frameworks: The implementation of the OECD’s Pillar Two global minimum tax and Pillar One "Amount B" (effective for NetApp in fiscal 2026) may increase NetApp's worldwide effective tax rate and global tax burden.

4. Financial Impact Map

Macroeconomic Volatility → Revenue Growth and Cash Flows → Unpredictable demand and supply chain interruptions. Technological Transitions → Net Revenues → Historical year-over-year declines in fiscal 2017, 2020, and 2024. Supply Chain Dependency → Product Gross Margins → Rising component costs and limited supply of critical parts like NAND. Consumption Model Transition → Revenue Recognition → Shift from upfront recognition to ratable recognition over the contract term. ERP System Implementation → Internal Controls and Financial Reporting → Potential disruption to invoicing, payments, and timely reporting of financial results.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-Q	Feb 2026	Jan 2026
14A	Jul 2025	—
10-K	Jun 2025	Apr 2025