NetApp (NTAP) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue grew 6% year-over-year to $1.66 billion, driven by 19% growth in all-flash storage and strong cloud storage services performance, with cloud storage services revenue up 43% year-over-year.

• Record Q2 operating margin (non-GAAP 29%) and EPS ($1.87 non-GAAP, $1.42 GAAP), with robust growth across flash, block, cloud storage, and AI segments.

• Strategic focus on innovation, customer-centric solutions, and expanded partnerships, including Google Cloud, led to market share gains and strong customer confidence.

• Recognized as a leader in Gartner Magic Quadrant for Primary Storage Platforms for the 12th consecutive year.

• Returned $406 million to shareholders in Q2 via share repurchases and dividends.

Financial highlights

• Q2 FY25 revenue: $1.66 billion, up 6% year-over-year; billings: $1.59 billion, up 9% year-over-year.

• Product revenue: $768 million (up 9%), support revenue: $635 million (up 2%), professional services: $87 million (up 10%).

• Public Cloud revenue: $168 million, up 9% year-over-year; all-flash array annualized run rate: $3.8 billion, up 19%.

• Q2 gross margin: 72% (non-GAAP), 71% (GAAP); product gross margin: 60%; public cloud gross margin: 74%.

• Q2 net income: $299 million (GAAP), up 28% year-over-year; non-GAAP net income: $392 million.

• Operating cash flow: $105 million; free cash flow: $60 million, 3.6% of revenue.

Outlook and guidance

• FY25 revenue guidance: $6.54–$6.74 billion (6% growth at midpoint); non-GAAP EPS: $7.20–$7.40; GAAP EPS: $5.48–$5.68.

• FY25 non-GAAP operating margin: 28–28.5%; GAAP operating margin: 21–21.5%.

• Q3 FY25 revenue expected at $1.61–$1.76 billion; non-GAAP EPS: $1.85–$1.95; GAAP EPS: $1.41–$1.51.

• Free cash flow for FY25 expected to be slightly lower year-over-year due to timing of SSD payments.

• Next dividend of $0.52 per share payable January 22, 2025.