NetApp's AI Flywheel: Record Q4 and a Guide for Acceleration
All-flash, cloud, and Keystone power a record year as NetApp positions itself at the center of enterprise AI data infrastructure.
NTAP · Earnings Call · 2026-05-28
An Inflection in the Data Infrastructure Story
NetApp's fiscal Q4 was a statement. Revenue rose 12% year-over-year to $1.95 billion, EPS jumped 26% to $2.43, and the company closed its fiscal year with record revenue, operating income, and free cash flow. The data infrastructure platform thesis is no longer a promise—it is showing up in the numbers. George Kurian captured the shift: “A significant share of the world's enterprise unstructured data resides on NetApp Solutions. And our ability to activate it securely and efficiently across hybrid and multi cloud environments gives us a powerful competitive advantage.” (component_hash="6086614008839224691") This is a company whose installed base and software-defined storage are becoming the backbone for enterprise AI, and the market is paying attention: the stock is up over 100% in the last 90 days and sits near its all-time high.AI Wins: From Pilot to Production
The most telling metric is the explosion of AI-related wins. In Q4 alone, NetApp secured roughly 500 AI and data preparation deals—bringing the fiscal year total to over 1,100, versus about 400 in the prior year. CEO George Kurian noted, “Our AI business performed really strongly... we noted about 500 AI wins in the quarter, 1.1 thousand for the full year. Those compared to roughly 400 for the whole of the prior fiscal year.” (component_hash="5372314364639035397") This is the AI use cases wave becoming real, and it is broad-based: from neoclouds to sovereign clouds, from financial services to life sciences. The trajectory is visible in the prior quarters too. In FY25, management talked about early pilots and proof-of-concepts; as George said in the August 2025 call, “The wins are quite wide... we have seen some big model training environments which are very large.” (component_hash="4935630206282892203") What has changed is the conversion of that pipeline into repeatable, scalable deployments.Margins, Memory, and Momentum
Of course, the AI boom doesn't come without friction. The most persistent headwind is rising memory and component costs, particularly NAND flash. CFO Wissam Jabre has been transparent: “For us, July quarter is more or less the trough. And from there on, we are anticipating gradual improvements.” (component_hash="1556747043484443290") The component cost pressure is a near-term drag on product gross margins, but management is leveraging pricing power and a resilient supply chain. This isn't new—executives have been discussing this dynamic for over a year. In the November 2025 call, Wissam explained, “We have good visibility till the end of the fiscal year... But we don't necessarily need a lot of time to pass them through.” (component_hash="160492946462847257") The difference now is that demand is strong enough to support those price increases, evidenced by record all-flash revenue of $4.2 billion for the year, up 11%. At the same time, the mix is improving. Public cloud revenue reached $688 million, up 18% ex-spot, and Keystone storage-as-a-service grew ~65%. These higher-margin businesses, combined with operating discipline, drove operating margin to a record 30.2% for the year. Revenue for Q4 was $1.95B, up 12% yoy and 14% sequentially, while full-year free cash flow hit $1.87B, up nearly 40%.The Google Cloud Deal and the Road Ahead
A cornerstone of the quarter was the expanded partnership with Google Cloud for Google Distributed Cloud. This multiyear agreement contributed directly to product revenue growth of 14% yoy and is a strategic win for sovereign and regulated environments. As George described, “Google Distributed Cloud is where Google brings its advanced technology stack to a disconnected or lightly connected data center... NetApp was chosen by Google to be a large chunk of the data infrastructure within the Google Distributed Cloud architecture.” (component_hash="8538430418299434344") This deal is a concrete example of how Google Cloud and other hyperscaler relationships are expanding NetApp's total addressable market. Looking ahead, management's guidance is confident. For fiscal 2027, they project revenue between $7.325B and $7.575B, implying ~8% growth at the midpoint—an acceleration from the 5% delivered in FY26. EPS is guided to $8.70-$9.00, up 9%. The Q1 guide of $1.75-$1.9B includes an extra week that contributes $65M, and the company expects seasonality to normalize. As Wissam put it,This acceleration is driven by the same forces that produced the record Q4: all-flash adoption, cloud growth, Keystone, and the AI data engine. NetApp has transitioned from a storage vendor to an essential layer in the enterprise AI stack. With the stock at an all-time high and a clear strategy, the question is not whether the company can sustain momentum—but how much of the AI-driven data growth it can capture. The answer, if this quarter is any indication, is a lot.We expect fiscal year 27 revenue to be in the range of $7.325 to $7.575 billion. At the $7.45 billion midpoint, this implies 8% year over year growth. Representing an acceleration from the 5% growth we successfully delivered in fiscal year 26.