NetApp Tops Q1 Estimates, Raises 2027 Guide as Shares Drop
Investors sold stock because operating cash flow fell, inventory nearly doubled, restructuring costs jumped, creating doubt about whether the revenue surge will persist.
Overview
- NetApp reported Q1 fiscal 2027 revenue of $2.03 billion and adjusted EPS of $2.58, both well above analyst forecasts, and raised full-year revenue and EPS guidance.
- Shares fell sharply in after-hours trading despite the beats after investors focused on a 25% drop in operating cash flow and a 35% decline in free cash flow.
- Inventory rose from $198 million to $375 million and restructuring charges climbed to $56 million, factors that amplified concerns about cash conversion and margin quality.
- The company said strong demand for all-flash, hybrid and public cloud products helped performance and closed about 350 AI and data-lake deals, while returning $302 million to shareholders and integrating two recent acquisitions.
- What to watch next: whether cash flow recovers, inventory normalizes and deal timing sustains the raised guidance, and whether Q2 results validate the quarter’s strength.