01—Abstract
Summary
Summary of the 10-Q filed February 26, 2026. Cited figures are marked; the original filing is the authoritative source.
NetApp, Inc. reported net revenues of $1,713 milliona for the third quarter of fiscal 2026 (three months ended January 23, 2026), up from $1,641 million a year earlier, and $4,977 million for the first nine months, up from $4,840 million.
Net income was $334 millionb for the quarter versus $299 million a year earlier, and $872 million for the nine months versus $846 million. Diluted earnings per share were $1.67 for the quarter and $4.32 for the nine months. Income from operations was $434 million for the quarter, compared with $362 million a year earlier.
Public Cloud revenues were flat in the quarter at $174 million and rose marginally to $506 millionc for the nine months, while product revenues were $786 million for the quarter. Cash, cash equivalents and short-term investments declined to $3.0 billion from $3.8 billion at April 25, 2025. The decrease reflected the repayment of $750 million of 1.875% Senior Notes due June 2025, $750 million of share repurchases, $310 million of dividends and $148 million of capital expenditures, partly offset by $1.1 billion of operating cash flow.
Total debt principal was $2.5 billiond at quarter end. Total stockholders' equity rose to $1.16 billion, and the remaining stock repurchase authorization was $702 million.
The filing also discloses that NetApp implemented the final phase of a new global enterprise resource planning system in the third quarter, which resulted in changes to internal control over financial reporting, and that the filing itself notes disruptions from this transition may affect order processing, invoicing and vendor payments. Management concluded that disclosure controls were effective as of January 23, 2026.
02—Key points
Key Highlights
- Net revenues rose to $1,713 million in the third quarter from $1,641 million, and to $4,977 million for the nine months from $4,840 million.
- Product revenues were $786 million in the quarter versus $758 million a year earlier; services revenues were $927 million versus $883 million.
- Net income was $334 million ($1.67 diluted EPS) in the quarter versus $299 million ($1.44 diluted EPS) a year earlier.
- Income from operations was $434 million in the quarter versus $362 million a year earlier, with operating expenses of $775 million versus $783 million.
- Cash, cash equivalents and short-term investments fell to $3.0 billion from $3.8 billion, after repaying $750 million of senior notes and repurchasing $750 million of stock in the first nine months.
- Total principal debt was $2.5 billion, and the company repaid the $750 million 1.875% Senior Notes due June 2025 at maturity.
- The company implemented the final phase of a new global ERP system in the third quarter, which changed internal controls over financial reporting, and the filing notes that related transition disruptions may affect operations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, NetApp kept $0.19.
- Revenue$1.71B100.0%
- Cost of revenue−$504.0M29.4%
- Gross profit$1.21B70.6%
- Operating costs−$775.0M45.2%
- Operating income$434.0M25.3%
- Interest, other & tax−$100.0M5.8%
- Net income$334.0M19.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed February 26, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.71B$1.64B | +4.4% |
| Cost of Revenue | $504.00M$496.00M | +1.6% |
| Gross Profit | $1.21B$1.15B | +5.6% |
| R&D Expenses | $237.00M$247.00M | −4.0% |
| Operating Expenses | $775.00M$783.00M | −1.0% |
| Operating Income | $434.00M$362.00M | +19.9% |
| Net Income | $334.00M$299.00M | +11.7% |
| EPS (Basic) | $1.69$1.47 | +15.0% |
| EPS (Diluted) | $1.67$1.44 | +16.0% |
| Shares Outstanding (Basic) | 198.00M204.00M | −2.9% |
| Shares Outstanding (Diluted) | 200.00M208.00M | −3.8% |
05—Questions
Frequently Asked Questions
How did NetApp's revenue and profitability trend in the third quarter of fiscal 2026?
Net revenues increased to $1,713 million from $1,641 million, and net income increased to $334 million from $299 million. Income from operations rose to $434 million from $362 million, and diluted EPS was $1.67 compared with $1.44 a year earlier.
How did Public Cloud and Hybrid Cloud performance compare?
Public Cloud revenues were $174 million in the quarter, flat year over year, and $506 million for the nine months, up marginally from $501 million. Hybrid Cloud net revenues were $1,539 million in the quarter versus $1,467 million a year earlier.
How did NetApp use its cash during the first nine months of fiscal 2026?
Operating activities provided $1,117 million. Cash was used for repaying $750 million of senior notes, repurchasing $750 million of common stock, paying $310 million of dividends and purchasing $148 million of property and equipment. Cash, cash equivalents and short-term investments totaled $3.0 billion at January 23, 2026.
What did the company say about its internal controls and systems?
NetApp implemented the final phase of a new global enterprise resource planning system in the third quarter, which changed certain processes and internal control over financial reporting. The filing states that disruptions during this transition have impacted and may continue to impact order processing, invoicing, vendor payments and financial reporting. Management concluded that disclosure controls and procedures were effective as of January 23, 2026.
What capital return actions and dividends were announced?
On February 19, 2026, NetApp declared a cash dividend of $0.52 per share, payable April 22, 2026. The remaining authorization under the stock repurchase program was $702 million at January 23, 2026, after the Board authorized an additional $1.1 billion in the first quarter of fiscal 2026.
06—Continue