01—Abstract
Summary
Summary of the 10-Q filed August 27, 2025. Cited figures are marked; the original filing is the authoritative source.
NetApp, Inc. reported net revenues of $1,559 milliona for the first quarter of fiscal 2026 (ended July 25, 2025), up from $1,541 million a year earlier.
Services revenues rose to $905 millionb from $872 million, while product revenues declined to $654 million from $669 million. Net income was $233 million, or $1.15 per diluted share, compared with $248 million, or $1.17 per diluted share, in the prior-year quarter. Income from operations increased to $309 million from $282 million, and restructuring charges fell to $2 million from $17 million.
Cash, cash equivalents and short-term investments totaled $3.3 billionc at July 25, 2025, down from $3.8 billion at April 25, 2025. The decrease reflected the repayment of $750 million of 1.875% Senior Notes at maturity in June 2025, $300 million of share repurchases, $104 million of dividends and $53 million of capital expenditures, partially offset by $673 million of operating cash flow. Total debt principal fell to $2.5 billion, and the company had no commercial paper outstanding and no amounts drawn on its $1.0 billion revolving credit facility.
The Board authorized an additional $1.1 billiond of share repurchases in the quarter, leaving $1.2 billion remaining at quarter end. The company also declared a quarterly dividend of $0.52 per share on August 21, 2025. Remaining performance obligations totaled $4.9 billion, with approximately 49% expected to be recognized within the next 12 months.
02—Key points
Key Highlights
- Net revenues rose to $1,559 million from $1,541 million, driven by services growth, while product revenues fell to $654 million from $669 million.
- Net income was $233 million ($1.15 diluted EPS), versus $248 million ($1.17 diluted EPS) a year earlier.
- Income from operations increased to $309 million from $282 million, with restructuring charges reduced to $2 million from $17 million.
- Operating cash flow was $673 million, up from $341 million in the prior-year quarter.
- Cash, cash equivalents and short-term investments declined to $3.3 billion after repaying $750 million of senior notes at maturity.
- The Board authorized an additional $1.1 billion in share repurchases; $1.2 billion remained available at quarter end, and $300 million was repurchased in the quarter.
- Remaining performance obligations were $4.9 billion, with about 49% expected to be recognized in the next 12 months.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, NetApp kept $0.15.
- Revenue$1.56B100.0%
- Cost of revenue−$461.0M29.6%
- Gross profit$1.10B70.4%
- Operating costs−$789.0M50.6%
- Operating income$309.0M19.8%
- Interest, other & tax−$76.0M4.9%
- Net income$233.0M14.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed August 27, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.56B$1.54B | +1.2% |
| Cost of Revenue | $461.00M$443.00M | +4.1% |
| Gross Profit | $1.10B$1.10B | 0.0% |
| R&D Expenses | $242.00M$252.00M | −4.0% |
| Operating Expenses | $789.00M$816.00M | −3.3% |
| Operating Income | $309.00M$282.00M | +9.6% |
| Net Income | $233.00M$248.00M | −6.0% |
| EPS (Basic) | $1.16$1.20 | −3.3% |
| EPS (Diluted) | $1.15$1.17 | −1.7% |
| Shares Outstanding (Basic) | 201.00M206.00M | −2.4% |
| Shares Outstanding (Diluted) | 203.00M212.00M | −4.2% |
05—Questions
Frequently Asked Questions
How did NetApp's revenue and profitability compare with the prior-year quarter?
Net revenues were $1,559 million versus $1,541 million, with services revenues increasing to $905 million from $872 million and product revenues declining to $654 million from $669 million. Net income was $233 million compared with $248 million, as the provision for income taxes rose to $71 million from $51 million, offsetting higher operating income of $309 million versus $282 million.
Did NetApp's cash position change significantly this quarter?
Yes. Cash, cash equivalents and short-term investments fell to $3,324 million from $3,846 million, mainly because of the $750 million repayment of the 1.875% Senior Notes due June 2025, $300 million of share repurchases and $104 million of dividends. Operating cash flow of $673 million partially offset these outflows.
How much debt does NetApp have after the June 2025 repayment?
Total principal debt was $2,500 million at July 25, 2025, down from $3,250 million at April 25, 2025. The Senior Notes mature in 2027, 2030, 2032 and 2035. The company also has a $1.0 billion revolving credit facility, with no amounts drawn during the periods presented, and no commercial paper outstanding.
What are NetApp's capital return plans?
The Board authorized an additional $1.1 billion for share repurchases in the quarter, leaving $1.2 billion available at July 25, 2025. The company repurchased 3.0 million shares for $300 million at an average price of $99.76. On August 21, 2025, it declared a $0.52 per share cash dividend, payable October 22, 2025.
What does the remaining performance obligation figure indicate?
Remaining performance obligations on customer contracts totaled $4.9 billion as of July 25, 2025. The company expects to recognize approximately 49% of this amount as revenue in the next 12 months. The filing notes that backlog from customer orders may not be a meaningful indicator of future revenue because orders are typically placed as needed and are cancellable before shipment.
06—Continue