NetApp to Report Q1 Earnings: Here's What Investors Should Know

NetApp, Inc. NTAP is slated to release first-quarter fiscal 2027 earnings on Sept. 2, after the closing bell.

The company expects non-GAAP earnings per share to be between $2.05 and $2.15 for the quarter. The Zacks Consensus Estimate is currently pegged at $2.12 per share, indicating 36.8% growth from the year-ago level.

Net sales are anticipated to be in the range between $1.750 billion and $1.900 billion. The Zacks Consensus Estimate is pegged at $1.84 billion, implying an 18.2% increase from the prior-year reported number.

NTAP’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 4.65%.

Key Factors to Note for NTAP’s Q1 Earnings

NetApp is likely to have benefited from momentum across cloud, flash, AI and Keystone in first-quarter fiscal 2027, supported by a strong enterprise IT spending environment and increasing AI activity. In the last reported quarter, management anticipated IT spending to rise as enterprises prepared for AI, with demand across cloud, flash, AI and Keystone. The company is also likely to have benefited from broad-based demand as customers prioritized data infrastructure for AI. The first quarter included an extra week, which was expected to contribute about $65 million of revenue, mainly from Support and Cloud, while adding $21 million of operating expenses. Management anticipates first-quarter non-GAAP gross margin of 69.1-70.1% and operating margin of 28.4-29.4%.

AI remains a key growth driver for NetApp. The company reported approximately 500 AI wins in the fourth quarter and more than 1,100 for fiscal 2026 compared with roughly 400 for the entire prior fiscal year. These wins included enterprise and neocloud customers and covered data preparation, large-scale analytics, training, fine-tuning and inferencing. All elements of the flash portfolio performed strongly in enterprise AI configurations, while hybrid flash gained traction in less demanding AI environments. On the last earnings call, management highlighted AI strength to remain broad-based across segments, verticals and geographies.

All-flash storage is also benefiting from AI demand, with management noting particularly strong growth in AI use cases. NetApp’s installed-base penetration increased another 1% to 48%. The company raised prices during the fourth quarter, with pricing actions expected to increasingly flow through over the next one to two quarters. Management expects product gross margin to reach a trough in the July quarter and gradually improve as pricing actions offset higher component costs.

NetApp, Inc. Price and Consensus

NetApp, Inc. price-consensus-chart | NetApp, Inc. Quote

Public Cloud and Keystone are additional growth contributors. First-party and marketplace cloud storage services grew 30% year over year in fiscal 2026, while AI use cases are beginning to emerge in the cloud. Keystone continues to benefit from the shift toward consumption-based storage models and is expected to grow faster than the traditional business.

NetApp is also seeing opportunities from AFX, AI Data Engine, neo cloud and sovereign cloud customers. Meanwhile, the company continues to manage higher NAND and component costs through pricing actions, supplier diversification and supply-chain measures. On the last earnings call, management stated that it believed it could source adequate supply to meet its fiscal 2027 outlook, which might have benefited NTAP in the to-be-reported quarter.

However, the company is facing stiff competition, while changes in customer purchase timing could lead to volatility despite the healthy overall demand environment.

Recent Developments

On Aug. 6, 2026, NetApp acquired JetStream Software, which specializes in VMware disaster recovery and migration. The acquisition will aid NetApp in helping enterprises safeguard applications, speed up cloud migration and modernize infrastructure while ensuring cyber resilience.

On July 22, 2026, NetApp acquired DataPelago, a startup specializing in AI data infrastructure.  The deal expands NetApp's intelligent data infrastructure portfolio by bringing GPU-accelerated data processing directly to the storage layer, allowing organizations to process data where it resides instead of copying it to separate AI infrastructure. The acquisition is likely to strengthen NetApp's competitive position in the rapidly growing AI infrastructure market.

On June 23, 2026, NetApp launched StorageGRID 12.1 to improve distributed data management, helping customers scale AI workloads, data lakes and modern object-based applications more efficiently.

On June 3, 2026, NetApp and Cisco expanded their FlexPod platform with new validated AI solutions designed to simplify enterprise AI deployments, inferencing, RAG workflows and edge computing while enhancing security and scalability. The collaboration integrates technologies from NVIDIA to help organizations accelerate AI adoption with pre-tested, enterprise-grade infrastructure.

On the same day, NetApp and Splunk expanded their collaboration with a new SOAR playbook designed to help customers contain ransomware attacks, reduce data loss and strengthen cyber resilience. The solution combines NetApp’s Intelligent Data Infrastructure with Splunk’s analytics and observability capabilities to improve threat response and recovery efficiency.

What Our Model Says About NTAP

Our proven model predicts an earnings beat for NTAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. This is the case here.

NTAP has an Earnings ESP of +3.77% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With Favorable Combination

Here are a few other companies worth considering, as our model indicates that they possess the right combination to exceed earnings expectations in their upcoming releases:

Ciena Corporation CIEN currently has an Earnings ESP of +0.58% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for revenues and earnings is pegged at $1.64 billion and $1.73 per share, respectively. CIEN is slated to report third-quarter 2026 results on Sept. 3.

Dell Technologies Inc. DELL has an Earnings ESP of +6.20% and a Zacks Rank #1 at present.

The Zacks Consensus Estimate for revenues and earnings is pegged at $45.3 billion and $4.95 per share, respectively. DELL is slated to report second-quarter fiscal 2027 results on Sept. 1.

lululemon athletica inc. LULU currently has an Earnings ESP of +0.70% and a Zacks Rank #3.

The Zacks Consensus Estimate for revenues and earnings is pegged at $2.47 billion and $1.79 per share, respectively. LULU is scheduled to report second-quarter fiscal 2026 results on Sept. 3.

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This article originally published on Zacks Investment Research (zacks.com).

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