NetApp (NTAP) Q3 2026 earnings summary

Executive summary

• Q3 FY26 net revenues reached $1.71 billion, up 4–4.4% year-over-year, with record non-GAAP EPS of $2.12 and GAAP EPS of $1.67; strong momentum in AI, cloud, and all-flash arrays, with about 300 AI-related customer wins.

• Billings grew 10% year-over-year to $1.89 billion, marking the ninth consecutive quarter of growth.

• Returned $303 million to shareholders via share repurchases and dividends in Q3.

• Major Super Bowl deployment and launch of new AI and cloud innovations, including AFX, AI Data Engine, and integrations with AWS and Azure.

• Restructuring plan implemented to redirect resources and reduce costs, resulting in $22 million in charges for the first nine months.

Financial highlights

• Q3 non-GAAP gross margin was 71.2%, up 50 bps year-over-year; GAAP gross margin was 70.6%.

• Non-GAAP operating margin reached a record 31.1%, up 1.1 percentage points year-over-year; GAAP operating margin was 25.3%.

• Free cash flow was $271 million, with a margin of 15.8%; cash provided by operations was $317 million.

• Cash and short-term investments at quarter end were $3.0–$3.01 billion; gross/long-term debt at $2.5–$2.49 billion.

• YTD revenue totaled $4.98 billion, up 2.8% year-over-year; YTD non-GAAP EPS reached $5.70, up 7%.

Outlook and guidance

• Q4 FY26 revenue expected at $1.795–$1.945 billion; non-GAAP EPS: $2.21–$2.31; GAAP EPS: $1.76–$1.86.

• FY26 revenue guidance: $6.772–$6.922 billion; non-GAAP EPS: $7.92–$8.02; GAAP EPS: $6.07–$6.17.

• FY26 gross margin: 70.7%–71.7%; operating margin: 29.3%–30.3%.

• Next dividend of $0.52 per share payable April 22, 2026.

• Capital expenditures for the remainder of FY26 expected between $50 million and $100 million.