DALLAS--(BUSINESS WIRE)--Texas Pacific Land Corporation (NYSE: TPL) (the “Company,” “TPL,” “we,” “our,” or “us”), one of the largest landowners in the State of Texas with surface and royalty ownership that provides revenue opportunities through the support of energy production, today announced its financial and operating results for the first quarter of 2026.
First Quarter 2026 Highlights
Entered into an arrangement with a developer of a power generation plant to support data center operations. In conjunction with this arrangement, we sold land for aggregate consideration of $42.5 million pursuant to a financing arrangement with the developer, resulting in immediate recognition of $20.9 million in land sale revenue and the recording of a financing receivable. Additionally, we entered into a separate agreement to supply water to the project. On May 5, 2026, TPL’s board of directors (the “Board”) appointed Peter Doyle to the Board. Mr. Doyle is a co-founder and the Co-Chief Executive Officer of Horizon Kinetics, which, through various owned subsidiaries, is TPL’s largest shareholder. Oil and gas royalty production of 37.1 thousand barrels of oil equivalent (“Boe”) per day As of March 31, 2026, TPL’s royalty acreage had an estimated 5.8 net well permits, 9.6 net drilled but uncompleted wells (“DUCs”), and 5.2 net completed but not producing wells (“CUPs”), totaling 20.7 net wells.(1) TPL had 124.4 net producing wells as of March 31, 2026, and net producing wells added during the quarter had an average lateral length of approximately 10,650 feet. Land and Resource Management segment revenues of $153.6 million Water Services and Operations segment revenues of $83.3 million Consolidated net income of $142.9 million, or $2.07 per share (diluted) Adjusted EBITDA(2) of $181.4 million Free cash flow(2) of $136.4 million Quarterly cash dividend of $0.60 per share was paid on March 16, 2026 “For the first quarter of 2026, TPL’s core business performance remained strong, and we are closing in on significant milestones in our emerging opportunities in produced water desalination and land opportunities involving data centers and power generation,” said Tyler Glover, Chief Executive Officer of the Company. “TPL generated record quarterly revenue and net income this quarter, supported by robust volumes across oil and gas royalties, water sales, and produced water royalties. With our unhedged commodity position, we will fully capture the upside from elevated commodity prices. During the quarter, we completed a land sale related to a large-scale data center and power generation project. As part of that transaction, TPL secured a water supply agreement for the gas-powered generation and an option to provide additional water to the data center facility. The urgency amongst hyperscalers, AI labs, and developers to advance projects in West Texas has noticeably increased compared to a year ago, and our ongoing commercial conversations in this area are progressing well. In addition, our 10,000 barrel per day produced water desalination R&D test facility in Orla, Texas is nearing completion and is on track to receive its first inlet barrels in the coming weeks.”
Financial Results for the First Quarter of 2026 - Sequential
The Company reported net income of $142.9 million for the first quarter of 2026 compared to net income of $123.3 million for the fourth quarter of 2025.
Total revenues for the first quarter of 2026 were $236.8 million compared to $211.6 million for the fourth quarter of 2025. The increase in total revenues was primarily due to a $21.4 million increase in oil and gas royalty revenue and a $20.9 million increase in land sale revenue, partially offset by a $13.9 million decrease in water sales compared to the fourth quarter of 2025. The Company’s average realized price was $37.06 per Boe in the first quarter of 2026 compared to $29.33 per Boe in the fourth quarter of 2025, and the Company’s share of production was 37.1 thousand Boe per day for the first quarter of 2026 compared to 37.5 thousand Boe per day for the fourth quarter of 2025. Water sales decreased due to a decrease in both water sales volumes and pricing. TPL’s revenue streams are directly impacted by commodity prices and development and operating decisions made by its customers.
Total operating expenses were $54.5 million for the first quarter of 2026 compared to $62.3 million for the fourth quarter of 2025. The decrease in operating expenses was principally related to a $7.9 million decrease in depreciation, depletion and amortization expense and a $3.2 million decrease in water service-related expenses, partially offset by a $2.2 million increase in general and administrative expenses during the first quarter of 2026 compared to the fourth quarter of 2025.
Financial Results for the First Quarter of 2026 - Year Over Year
The Company reported net income of $142.9 million for the first quarter of 2026 compared to net income of $120.7 million for the first quarter of 2025.
Total revenues for the first quarter of 2026 were $236.8 million compared to $196.0 million for the first quarter of 2025. The increase in total revenues was primarily due to a $20.9 million increase in land sales, an $8.1 million increase in water sales, a $6.9 million increase in oil and gas royalty revenue, and a $5.8 million increase in produced water royalties during the first quarter of 2026 compared to the same period of 2025. The Company’s share of production was 37.1 thousand Boe per day for the first quarter of 2026 compared to 31.1 thousand Boe per day for the same period of 2025, and the Company’s average realized price was $37.06 per Boe for the first quarter of 2026 compared to $41.58 per Boe for the same period of 2025. Produced water royalties increased due to increased produced water volumes, and water sales increased due to both increased volumes and pricing. TPL’s revenue streams are directly impacted by commodity prices and development and operating decisions made by its customers.
Total operating expenses were $54.5 million for the first quarter of 2026 compared to $45.9 million for the same period of 2025. The increase in operating expenses was principally related to an increase of $3.2 million in water service-related expenses, an increase of $2.6 million in general and administrative expenses, and a $2.1 million increase in depreciation, depletion and amortization.
Quarterly Dividend Declared
On May 5, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.60 per share, payable on June 15, 2026 to stockholders of record at the close of business on June 1, 2026.
Appointment of Director
On May 5, 2026, TPL’s Board appointed Peter Doyle to the Board. Mr. Doyle will stand for re-election at the 2026 Annual Meeting. Mr. Doyle was also appointed to serve on the strategic acquisitions committee of the Board. Mr. Doyle is a co-founder and the Co-Chief Executive Officer of Horizon Kinetics (OTCQX: HKHC).
2026 and 2027 Annual Meetings of Stockholders
The Company intends to hold its 2026 Annual Meeting of Stockholders on November 5, 2026 in Dallas, Texas. The Company also intends to hold its 2027 Annual Meeting of Stockholders on May 6, 2027. Additional details, including the deadlines for stockholder proposals, will be provided in the applicable proxy statements to be filed by the Company with the Securities and Exchange Commission (“SEC”) and in other filings the Company makes with the SEC.
Conference Call and Webcast Information
The Company will hold a conference call on Thursday, May 7, 2026 at 9:30 a.m. Central Time to discuss first quarter results. A live webcast of the conference call will be available on the Investors section of the Company’s website at www.TexasPacific.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register and install any necessary audio software.
The conference call can also be accessed by dialing 1-877-407-4018 or 1-201-689-8471. The telephone replay can be accessed by dialing 1-844-512-2921 or 1-412-317-6671 and providing the conference ID# 13759098. The telephone replay will be available starting shortly after the call through May 21, 2026.
About Texas Pacific Land Corporation
Texas Pacific Land Corporation is one of the largest landowners in the State of Texas with approximately 881,000 acres of land, with the majority of its ownership concentrated in the Permian Basin. The Company is not an oil and gas producer, but its surface and royalty ownership provides revenue opportunities throughout the life cycle of a well. These revenue opportunities include fixed fee payments for use of the Company’s land, revenue for sales of materials (caliche) used in the construction of infrastructure, providing sourced water and/or treated produced water, revenue from the Company’s oil and gas royalty interests, and revenue related to saltwater disposal on the Company’s land. The Company also generates revenue from pipeline, power line and utility easements, commercial leases and temporary permits principally related to a variety of land uses including, but not limited to, midstream infrastructure projects and hydrocarbon processing facilities.
Certain statements in this news release are, and certain statements made on the related conference call may be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on TPL’s beliefs, as well as assumptions made by, and information currently available to, TPL, and therefore involve risks and uncertainties that are difficult to predict. Generally, future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and the words “believe,” “anticipate,” “continue,” “intend,” “expect,” and similar expressions or the negative of such terms identify forward-looking statements. Forward-looking statements include, but are not limited to, references to strategies, plans, objectives, expectations, intentions, assumptions, future operations, and prospects; statements regarding anticipated benefits of recent acquisitions or the Permian Basin’s future drilling inventory and energy resources; and other statements that are not historical facts. You should not place undue reliance on forward-looking statements. Although TPL believes that plans, intentions and expectations reflected in or suggested by any forward-looking statements made herein are reasonable, TPL may be unable to achieve such plans, intentions or expectations and actual results, and performance or achievements may differ materially from those set forth in the forward-looking statements due to a number of factors, including, but not limited to: the initiation or outcome of potential litigation; any changes in general economic and/or industry specific conditions; and the other risks discussed in TPL’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. You can access TPL’s filings with the SEC through the SEC’s website at www.sec.gov and TPL strongly encourages you to do so. These forward-looking statements are based only on information available to TPL and speak only as of the date hereof. Except as required by applicable law, TPL undertakes no obligation to update any forward-looking statements or other statements herein for revisions or changes after this communication is made.
Oil and Gas Activity
The table below provides financial and operational data by royalty stream:
Three Months Ended
March 31,
2026
December 31,
2025
March 31,
2025
Company’s share of production volumes (1):
Oil (MBbls)
1,345
1,320
1,123
Natural gas (MMcf)
5,794
6,328
5,230
NGL (MBbls)
1,028
1,078
807
Equivalents (MBoe)
3,339
3,453
2,801
Equivalents per day (MBoe/d)
37.1
37.5
31.1
Oil and gas royalty revenue (in thousands):
Oil royalties
$
90,627
$
74,998
$
76,179
Natural gas royalties
9,803
3,856
17,561
NGL royalties
17,737
17,867
17,505
Total oil and gas royalties
$
118,167
$
96,721
$
111,245
Realized prices (1):
Oil ($/Bbl)
$
70.57
$
59.48
$
71.05
Natural gas ($/Mcf)
$
1.83
$
0.66
$
3.63
NGL ($/Bbl)
$
18.65
$
17.92
$
23.46
Equivalents ($/Boe)
$
37.06
$
29.33
$
41.58
___________________________ (1) Term
Definition
Bbl
One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGL.
Boe
One barrel of oil equivalent.
MBbls
One thousand barrels of crude oil, condensate or NGL.
MBoe
One thousand Boe.
MBoe/d
One thousand Boe per day.
Mcf
One thousand cubic feet of natural gas.
MMcf
One million cubic feet of natural gas.
NGL
Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline.
Water Services and Operations Activity
The table below provides financial and operational data for water sales and produced water royalties:
Three Months Ended
March 31,
2026
December 31,
2025
March 31,
2025
Water volumes (in MBbls) (1):
Water sales
73,747
92,072
71,264
Produced water royalties
414,450
443,578
335,656
Water volumes in barrels per day (in MBbls/d) (2):
Water sales
819
1,001
792
Produced water royalties
4,605
4,822
3,730
Water revenue (in thousands):
Water sales
$
46,863
$
60,733
$
38,813
Produced water royalties
$
33,529
$
33,513
$
27,700
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts) (unaudited)
Three Months Ended
March 31,
2026
December 31,
2025
March 31,
2025
Revenues:
Oil and gas royalties
$
118,167
$
96,721
$
111,245
Water sales
46,863
60,733
38,813
Produced water royalties
33,529
33,513
27,700
Easements and other surface-related income
17,315
20,612
18,225
Land sales
20,944
—
—
Total revenues
236,818
211,579
195,983
Expenses:
Salaries and related employee expenses
14,987
14,894
14,572
Water service-related expenses
14,287
17,523
11,126
General and administrative expenses
8,631
6,424
6,072
Depreciation, depletion and amortization
14,043
21,930
11,941
Ad valorem and other taxes
2,542
1,562
2,199
Total operating expenses
54,490
62,333
45,910
Operating income
182,328
149,246
150,073
Interest expense
(992
)
(690
)
—
Other income, net
2,228
3,209
4,321
Income before income taxes
183,564
151,765
154,394
Income tax expense
40,662
28,419
33,742
Net income
$
142,902
$
123,346
$
120,652
Net income per share of common stock
Basic
$
2.07
$
1.79
$
1.75
Diluted
$
2.07
$
1.79
$
1.75
Weighted average number of shares of common stock outstanding
Basic
68,959,013
68,938,230
68,942,085
Diluted
69,009,942
69,020,805
69,017,541
SEGMENT OPERATING RESULTS
(dollars in thousands) (unaudited)
Three Months Ended
March 31,
2026
December 31,
2025
Land and
Resource
Management
Water
Services and
Operations
Consolidated
Land and
Resource
Management
Water
Services and
Operations
Consolidated
Revenues:
Oil and gas royalties
$
118,167
$
—
$
118,167
$
96,721
$
—
$
96,721
Water sales
—
46,863
46,863
—
60,733
60,733
Produced water royalties
—
33,529
33,529
—
33,513
33,513
Easements and other surface-related income
14,449
2,866
17,315
16,662
3,950
20,612
Land sales
20,944
—
20,944
—
—
—
Total revenues
153,560
83,258
236,818
113,383
98,196
211,579
Expenses:
Salaries and related employee expenses
7,558
7,429
14,987
7,457
7,437
14,894
Water service-related expenses
—
14,287
14,287
—
17,523
17,523
General and administrative expenses
5,495
3,136
8,631
3,966
2,458
6,424
Depreciation, depletion and amortization
9,194
4,849
14,043
17,276
4,654
21,930
Ad valorem and other taxes
2,530
12
2,542
1,551
11
1,562
Total operating expenses
24,777
29,713
54,490
30,250
32,083
62,333
Operating income
128,783
53,545
182,328
83,133
66,113
149,246
Interest expense
(793
)
(199
)
(992
)
(552
)
(138
)
(690
)
Other income, net
1,581
647
2,228
2,527
682
3,209
Income before income taxes
129,571
53,993
183,564
85,108
66,657
151,765
Income tax expense
28,648
12,014
40,662
15,566
12,853
28,419
Net income
$
100,923
$
41,979
$
142,902
$
69,542
$
53,804
$
123,346
SEGMENT OPERATING RESULTS (Continued)
(dollars in thousands) (unaudited)
Three Months Ended
March 31,
2026
March 31,
2025
Land and
Resource
Management
Water
Services and
Operations
Consolidated
Land and
Resource
Management
Water
Services and
Operations
Consolidated
Revenues:
Oil and gas royalties
$
118,167
$
—
$
118,167
$
111,245
$
—
$
111,245
Water sales
—
46,863
46,863
—
38,813
38,813
Produced water royalties
—
33,529
33,529
—
27,700
27,700
Easements and other surface-related income
14,449
2,866
17,315
15,336
2,889
18,225
Land sales
20,944
—
20,944
—
—
—
Total revenues
153,560
83,258
236,818
126,581
69,402
195,983
Expenses:
Salaries and related employee expenses
7,558
7,429
14,987
7,404
7,168
14,572
Water service-related expenses
—
14,287
14,287
—
11,126
11,126
General and administrative expenses
5,495
3,136
8,631
3,313
2,759
6,072
Depreciation, depletion and amortization
9,194
4,849
14,043
7,689
4,252
11,941
Ad valorem and other taxes
2,530
12
2,542
2,189
10
2,199
Total operating expenses
24,777
29,713
54,490
20,595
25,315
45,910
Operating income
128,783
53,545
182,328
105,986
44,087
150,073
Interest expense
(793
)
(199
)
(992
)
—
—
—
Other income, net
1,581
647
2,228
3,416
905
4,321
Income before income taxes
129,571
53,993
183,564
109,402
44,992
154,394
Income tax expense
28,648
12,014
40,662
23,858
9,884
33,742
Net income
$
100,923
$
41,979
$
142,902
$
85,544
$
35,108
$
120,652
NON-GAAP PERFORMANCE MEASURES AND DEFINITIONS
In addition to amounts presented in accordance with GAAP, we also present certain supplemental non-GAAP performance measurements. These measurements are not to be considered more relevant or accurate than the measurements presented in accordance with GAAP. In compliance with the requirements of the SEC, our non-GAAP measurements are reconciled to net income, the most directly comparable GAAP performance measure. For all non-GAAP measurements, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP measurements.
EBITDA, Adjusted EBITDA, and Free Cash Flow
EBITDA is a non-GAAP financial measurement of earnings before interest expense, taxes, depreciation, depletion and amortization. The purpose of presenting EBITDA is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis.
The purpose of presenting Adjusted EBITDA is to highlight earnings without non-cash activity such as share-based compensation and other non-recurring or unusual items, if applicable. Additionally, Adjusted EBITDA is a metric used by the compensation committee of our Board to evaluate the Company’s performance in determining the short-term and long-term incentive compensation of our executive officers on an annual basis. We calculate Adjusted EBITDA as EBITDA plus employee share-based compensation, less land sale with financing arrangement and pension curtailment and settlement gain, as applicable to the periods presented.
The purpose of presenting free cash flow is to provide investors a metric to measure the funds available for investing in future acquisitions and returning capital to our stockholders through dividends and share repurchases after current income tax expense and purchases of fixed assets. Additionally, free cash flow is a metric used by the compensation committee of our Board to evaluate the Company’s performance in determining the short-term and long-term incentive compensation of our executive officers. To calculate free cash flow, net income is adjusted by adding back income tax expense, depreciation, depletion and amortization and employee share-based compensation, less the cash outflows of current income tax expenses, land sale with financing arrangement, purchases of fixed assets and pension curtailment and settlement gain, as applicable to the periods presented.
We have presented EBITDA, Adjusted EBITDA, and free cash flow because we believe that these metrics are useful supplements to net income in analyzing the Company’s operating performance, ability to fund future acquisitions, ability to return capital to our stockholders and explaining how our executive officers are compensated. Our definitions of EBITDA, Adjusted EBITDA, and free cash flow may differ from computations of similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2026, December 31, 2025, and March 31, 2025 (in thousands):
Three Months Ended
March 31,
2026
December 31,
2025
March 31,
2025
Net income
$
142,902
$
123,346
$
120,652
Add:
Interest expense
992
690
—
Income tax expense
40,662
28,419
33,742
Depreciation, depletion and amortization
14,043
21,930
11,941
EBITDA
198,599
174,385
166,335
Add (deduct):
Employee share-based compensation
3,742
3,756
3,083
Land sale with financing arrangement
(20,944
)
—
—
Adjusted EBITDA
$
181,397
$
178,141
$
169,418
The following table presents a reconciliation of net income to free cash flow for the three months ended March 31, 2026, December 31, 2025, and March 31, 2025 (in thousands):
Three Months Ended
March 31,
2026
December 31,
2025
March 31,
2025
Net income
$
142,902
$
123,346
$
120,652
Add (deduct):
Income tax expense
40,662
28,419
33,742
Depreciation, depletion and amortization
14,043
21,930
11,941
Employee share-based compensation
3,742
3,756
3,083
Current income tax expense
(37,078
)
(26,968
)
(32,954
)
Land sale with financing arrangement
(20,944
)
—
—
Purchases of fixed assets
(7,348
)
(28,653
)
(8,966
)
Decrease (increase) in accounts payable related to purchases of fixed assets
Texas Pacific (TPL - Free Report) came out with quarterly earnings of $2.07 per share, beating the Zacks Consensus Estimate of $2.03 per share. This compares to earnings of $1.75 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +1.97%. A quarter ago, it was expected that this landowner would post earnings of $1.73 per share when it actually produced earnings of $1.79, delivering a surprise of +3.47%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Texas Pacific, which belongs to the Zacks Alternative Energy - Other industry, posted revenues of $236.82 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 2.14%. This compares to year-ago revenues of $195.98 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Texas Pacific shares have added about 49.9% since the beginning of the year versus the S&P 500's gain of 6%.
What's Next for Texas Pacific?While Texas Pacific has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Texas Pacific was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.39 on $274 million in revenues for the coming quarter and $9.27 on $1.07 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Alternative Energy - Other is currently in the top 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Clearway Energy (CWEN - Free Report) , another stock in the same industry, has yet to report results for the quarter ended March 2026. The results are expected to be released on May 7.
This company created by NRG Energy to acquire and operate natural gas, solar and wind plants is expected to post quarterly loss of $0.45 per share in its upcoming report, which represents a year-over-year change of -1600%. The consensus EPS estimate for the quarter has been revised 0.4% lower over the last 30 days to the current level.
Clearway Energy's revenues are expected to be $331.48 million, up 11.2% from the year-ago quarter.
Texas Pacific Land Corporation remains a high-conviction long-term Buy, despite volatility and a premium 53x blended P/E valuation. TPL's unique landowner model generates ~60% net income margins, minimal CapEx, and robust free cash flow, driven by oil/gas royalties and booming water businesses. Produced water and data center initiatives in the Permian Basin position TPL for multi-decade secular growth, with early-stage commercialization and partnerships underway.
Texas Pacific Land Corporation (TPL) remains a Strong Buy despite a 23% price drop since my last rating, driven by its evolving business model. TPL's water handling and real estate empire, especially its monopoly position in water sales to data centers, underpins high-margin, recurring revenue streams. The near-complete 10,000-barrel-per-day desalination facility offers proof of concept for scaling toxic-to-clean water conversion, with significant earnings potential.
Texas Pacific Land Corporation delivers record Q1 2026 revenue of $236.8M and net income of $142.9M, up 21% and 18.4% YoY, respectively. TPL's diversified revenue streams—oil and gas royalties, water sales, easements, and produced water royalties—underscore its capital-efficient, debt-free business model. The Bolt partnership positions TPL to capitalize on the AI-driven data center boom in the Permian, leveraging vast land, water, and power resources.
, /PRNewswire/ - Ovintiv Inc. (NYSE: OVV) (TSX: OVV) (the "Company") today announced that the following matters, as further described in the Company's Proxy Statement filed on March 25, 2026 (the "Proxy Statement"), were voted upon at its 2026 Annual Meeting of Shareholders held on May 6, 2026.
Election of Directors
Ovintiv Announces Results of Annual Meeting (CNW Group/Ovintiv Inc.) Each director listed in the Proxy Statement was elected as a director of the Company. The results of the vote by ballot were as follows:
Shares For
Percent
Shares Against
Percent
Abstain
Broker Non-vote
Sippy Chhina
219,141,816
99.47 %
1,147,078
0.52 %
302,766
14,710,703
Meg A. Gentle
217,733,017
98.83 %
2,555,580
1.16 %
303,063
14,710,703
Gregory P. Hill
219,958,195
99.85 %
318,726
0.14 %
314,739
14,710,703
Ralph Izzo
217,084,203
98.54 %
3,201,032
1.45 %
306,425
14,710,703
Terri G. King
219,869,206
99.80 %
421,482
0.19 %
300,972
14,710,703
Howard J. Mayson
218,559,824
99.21 %
1,727,532
0.78 %
304,304
14,710,703
Brendan M. McCracken
219,990,062
99.86 %
301,536
0.13 %
300,062
14,710,703
Steven W. Nance
216,320,763
98.19 %
3,965,224
1.80 %
305,673
14,710,703
George L. Pita
219,920,329
99.83 %
366,574
0.16 %
304,757
14,710,703
Thomas G. Ricks
211,920,523
96.20 %
8,363,019
3.79 %
308,118
14,710,703
Brian G. Shaw
217,438,225
98.70 %
2,849,399
1.29 %
304,036
14,710,703
Advisory Vote to Approve Compensation of Named Executive Officers
The results of the non-binding advisory vote for the compensation of the Company's named executive officers were as follows:
Shares For
Percent
Shares Against
Percent
Abstain
Broker Non-vote
212,529,856
96.66 %
7,328,913
3.33 %
732,891
14,710,703
Ratification of PricewaterhouseCoopers LLP as Independent Auditors
The results for the ratification of PricewaterhouseCoopers LLP, Chartered Accountants, as the Company's independent auditors were as follows:
Shares For
Percent
Shares Against
Percent
Abstain
Broker Non-vote
229,536,390
97.66 %
5,488,534
2.33 %
277,439
0
Further information on Ovintiv Inc. is available on the Company's website, www.ovintiv.com, or by contacting:
Efficiency, Best-in-Class Inventory, and Clean Balance Sheet Delivering Superior Returns
Highlights:
Generated first quarter cash from operating activities of $1.1 billion, Non-GAAP Cash Flow of $1.2 billion and Non-GAAP Free Cash Flow of $634 million after capital expenditures of $605 million Produced average first quarter volumes of 679 thousand barrels of oil equivalent per day ("MBOE/d"), at the high end of company guidance across all products including 225 thousand barrels per day ("Mbbls/d") of oil and condensate, 100 Mbbls/d of other NGLs (C2 to C4) and 2,124 million cubic feet per day ("MMcf/d") of natural gas Closed the acquisition of NuVista Energy Ltd., adding approximately 100 MBOE/d of production, 930 net 10,000-foot equivalent well locations, and approximately 140,000 net acres of land for approximately $2.8 billion Closed the sale of the Company's Anadarko assets in April for total cash proceeds of approximately $2.85 billion after preliminary closing adjustments Redeemed the Company's $700 million, 5.65% senior notes due May 15, 2028, on April 20, 2026, using proceeds from the Anadarko divestiture; annualized interest savings to total approximately $40 million Net Debt of less than $3.3 billion as of April 30, 2026; approximately 40% lower than one year prior Resumed share buybacks in March with the repurchase of approximately 1.5 million shares for total consideration of approximately $84 million; year-to-date share buybacks as of April 30, 2026, totaled 3.2 million shares for total consideration of $180 million Released the 2025 Sustainability Report on the Company's website , /PRNewswire/ - Ovintiv Inc. (NYSE: OVV) (TSX: OVV) ("Ovintiv" or the "Company") today announced its first quarter 2026 financial and operating results. The Company plans to hold a conference call and webcast at 8:00 a.m. MT (10:00 a.m. ET) on May 12, 2026. Please see dial-in details within this release, as well as additional details on the Company's website at www.ovintiv.com under Presentations and Events – Ovintiv.
Ovintiv Reports First Quarter 2026 Financial and Operating Results (CNW Group/Ovintiv Inc.) "We've built a track record of leading execution efficiency and disciplined capital allocation and now we've combined those strengths with best-in-class inventory depth in the two best E&P assets, and a clean balance sheet," said Ovintiv President and CEO, Brendan McCracken. "With the enhanced stability of our business today, we are intensely focused on efficient execution and profitability. Our strong first quarter continues to demonstrate differentiated results that reflect the moat we have created through disciplined portfolio management and stacked innovation."
First Quarter 2026 Financial and Operating Results
Reported first quarter net loss of $630 million, or $2.35 per share diluted, including non-cash ceiling test impairments of $1.2 billion, after tax, or $4.30 per share diluted; impairment primarily driven by a weaker SEC 12-month trailing oil price relative to the previous quarter Recognized a net loss on risk management in revenues of $63 million, before tax Generated cash from operating activities of $1.1 billion and Non-GAAP Cash Flow of $1.2 billion First quarter average total production volumes were approximately 679 MBOE/d, including 225 Mbbls/d of oil and condensate, 100 Mbbls/d of other NGLs (C2 to C4) and 2,124 MMcf/d of natural gas; all products were at the high end of guidance First quarter capital investment of $605 million was at the low end of the guidance range of $600 million to $650 million First quarter upstream operating expense of $3.71 per BOE, upstream transportation and processing costs of $7.53 per BOE, production, mineral and other taxes of $1.30 per BOE, or 3.6% of upstream product revenue; costs were at the low end of guidance on a combined basis. Including the impact of hedges, first quarter average realized price for oil and condensate was $70.14 per barrel (98% of WTI), $18.12 per barrel for other NGLs, and $3.24 per Mcf (64% of NYMEX) for natural gas, resulting in a total average realized price of $36.08 per BOE 2026 Guidance
The Company issued its second quarter 2026 guidance and reiterated its full year guidance. Full year production volumes are expected to average 620 to 645 MBOE/d, with full year expected capital investment of $2.25 billion to $2.35 billion.
2026 Guidance
2Q 2026
Full Year 2026
Total Production (MBOE/d)
610 – 635
620 – 645
Oil & Condensate (Mbbls/d)
200 – 205
205 – 212
NGLs (C2 to C4) (Mbbls/d)
75 – 80
80 – 85
Natural Gas (MMcf/d)
2,000 – 2,100
2,000 – 2,100
Capital Investment ($ Millions)
$550 – $600
$2,250 – $2,350
Shareholder Returns
First quarter shareholder returns totaled approximately $169 million, consisting of share buybacks of approximately $84 million, or approximately 1.5 million shares of common stock, and base dividend payments of approximately $85 million. As of April 30, 2026, year to date share buybacks totaled $180 million, or approximately 3.2 million shares of common stock.
Continued Balance Sheet Focus
Ovintiv had approximately $2.8 billion in total liquidity as of March 31, 2026, which included available credit facilities of $3.4 billion, available uncommitted demand lines of $162 million, and cash and cash equivalents of $26 million, net of outstanding commercial paper of $824 million. The Company's Net Debt was approximately $6.4 billion of March 31, 2026.
Following the receipt of proceeds from the Anadarko disposition on April 9, 2026, Ovintiv repaid the balance under its Term Credit Agreement and the facility was terminated. The Company also redeemed its $700 million, 5.65% senior notes due May 15, 2028 on April 20, 2026. Annualized interest savings from the note redemption are expected to total approximately $40 million.
As of April 30, 2026, Ovintiv's Net Debt was less than $3.3 billion and Net Debt to Adjusted EBITDA was less than 0.8 times using twelve-month trailing EBITDA as of March 31, 2026.
The Company remains committed to maintaining a strong balance sheet and is currently rated investment grade by four credit rating agencies.
Dividend Declared
On May 11, 2026, Ovintiv's Board declared a quarterly dividend of $0.30 per share of common stock payable on June 30, 2026, to shareholders of record as of June 15, 2026.
Asset Highlights
Permian
Permian production averaged 221 MBOE/d (79% liquids) in the first quarter with 34 net wells turned in line ("TIL"). In 2026, Ovintiv plans to invest approximately $1.325 billion to $1.375 billion in the play to run approximately 5 rigs and bring on an expected 125 to 135 net wells. 2026 oil and condensate production is expected to average 117 to 123 Mbbls/d and natural gas production is expected to average 270 to 295 MMcf/d.
Montney
Montney production averaged 365 MBOE/d (27% liquids) in the first quarter with 26 net wells TIL. In 2026, Ovintiv plans to invest approximately $875 million to $925 million in the play to run approximately 6 rigs and bring on an expected 130 to 140 net wells. 2026 oil and condensate production is expected to average 80 to 84 Mbbls/d and natural gas production is expected to average 1.7 to 1.8 Bcf/d.
2025 Sustainability Report Released
Today, the Company released its 21st annual Sustainability Report, highlighting its progress and performance on several key sustainability initiatives.
"We take our role as a responsible producer seriously," said McCracken. "We are proud of our track record of integrating tangible actions into our business that allow us to deliver superior returns to our shareholders while continuing to make progress on sustainability outcomes."
Key Sustainability Highlights
Achieved greater than 85% of the Company's goal to reduce Scope 1 & 2 greenhouse gas (GHG) emissions intensity by 50% by 2030, relative to 2019 levels Continued advancing Ovintiv's safety culture through collective dedication to serious injury prevention with the expansion of the Leading with Safety program and the introduction of Safe Decision-Making training Announced investment in the Ovintiv Tool Hub at Northwestern Polytechnic, supporting skilled-trades training and equipping students with practical experience for the workforce Announced the retirement of current Board Chair and the unanimous election of a new Chair, Steven Nance Welcomed a new independent director, Gregory Hill, in January 2026, adding a wealth of energy industry and leadership experience to the Board, maintaining an ongoing Board refreshment process Ovintiv's sustainability report can be found on the Company's website at Download Sustainability Report – Ovintiv.
For additional information, please refer to the First Quarter 2026 Results Presentation available on Ovintiv's website, www.ovintiv.com under Presentations and Events – Ovintiv. Supplemental Information, and Non-GAAP Definitions and Reconciliations, are available on Ovintiv's website under Financial Document Library – Ovintiv.
Conference Call Information
A conference call and webcast to discuss the Company's first quarter 2026 results will be held at 8:00 a.m. MT (10:00 a.m. ET) on May 12, 2026.
To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/4aQ9VDs to receive an instant automated call back. You can also dial direct to be entered to the call by an Operator. Please dial 888-510-2154 (toll-free in North America) or 437-900-0527 (international) approximately 15 minutes prior to the call.
The live audio webcast of the conference call, including slides and financial statements, will be available on Ovintiv's website, www.ovintiv.com under Investors/Presentations and Events. The webcast will be archived for approximately 90 days.
Refer to Note 1 Non-GAAP measures and the tables in this release for reconciliation to comparable GAAP financial measures.
Capital Investment and Production
(for the period ended March 31)
1Q 2026
1Q 2025
Capital Expenditures (1) ($ millions)
605
617
Oil (Mbbls/d)
141.8
150.5
NGLs – Plant Condensate (Mbbls/d)
83.5
55.2
Oil & Plant Condensate (Mbbls/d)
225.3
205.7
NGLs – Other (Mbbls/d)
99.6
88.7
Total Liquids (Mbbls/d)
324.9
294.4
Natural gas (MMcf/d)
2,124
1,764
Total production (MBOE/d)
678.9
588.3
1) Including capitalized directly attributable internal costs.
First Quarter Financial Summary
(for the period ended March 31)
($ millions)
1Q 2026
1Q 2025
Cash From (Used In) Operating Activities
Deduct (Add Back):
Net change in other assets and liabilities
Net change in non-cash working capital
1,056
(14)
(169)
873
(11)
(120)
Non-GAAP Cash Flow (1)
1,239
1,004
Non-GAAP Cash Flow (1)
1,239
1,004
Less: Capital Expenditures (2)
605
617
Non-GAAP Free Cash Flow (1)
634
387
Net Earnings (Loss) Before Income Tax
Before-tax (Addition) Deduction:
Unrealized gain (loss) on risk management
Impairments
Non-operating foreign exchange gain (loss)
(827)
(53)
(1,485)
2
(193)
(46)
(730)
87
Adjusted Earnings (Loss) Before Income Tax
Income tax expense (recovery)
709
172
496
126
Non-GAAP Adjusted Earnings (1)
537
370
1) Non-GAAP Cash Flow, Non-GAAP Free Cash Flow and Non-GAAP Adjusted Earnings are non-GAAP measures as defined in Note 1.
2) Including capitalized directly attributable internal costs.
Realized Pricing Summary (Including the impact of realized gains (losses) on risk management)
(for the period ended March 31)
1Q 2026
1Q 2025
Liquids ($/bbl)
WTI
71.93
71.42
Realized Liquids Prices
Oil
70.78
71.79
NGLs – Plant Condensate
69.06
66.22
Oil & Plant Condensate
70.14
70.30
NGLs – Other
18.12
23.21
Total NGLs
41.35
39.71
Natural Gas
NYMEX ($/MMBtu)
5.04
3.65
Realized Natural Gas Price ($/Mcf)
3.24
3.16
Cost Summary
(for the period ended March 31)
($/BOE)
1Q 2026
1Q 2025
Production, mineral and other taxes
1.30
1.64
Upstream transportation and processing
7.53
7.36
Upstream operating
3.71
3.89
Administrative, excluding long-term incentive,
restructuring, transaction and legal costs
1.31
1.36
Debt to EBITDA (1)
($ millions, except as indicated)
March 31, 2026
December 31, 2025
Long-Term Debt, including Current Portion
6,398
5,202
Net Earnings (Loss)
771
1,242
Add back (Deduct):
Depreciation, depletion and amortization
2,195
2,179
Interest
383
376
Income tax expense (recovery)
(635)
(472)
EBITDA
2,714
3,325
Debt to EBITDA (times)
2.4
1.6
1) Debt to EBITDA is a non-GAAP measure as defined in Note 1.
Debt to Adjusted EBITDA (1)
($ millions, except as indicated)
March 31, 2026
December 31, 2025
Long-Term Debt, including Current Portion
6,398
5,202
Net Earnings (Loss)
771
1,242
Add back (Deduct):
Depreciation, depletion and amortization
Impairments
2,195
1,675
2,179
920
Accretion of asset retirement obligation
29
28
Interest
383
376
Unrealized (gains) losses on risk management
1
(6)
Foreign exchange (gain) loss, net
19
31
Other (gains) losses, net
(72)
(46)
Income tax expense (recovery)
(635)
(472)
Adjusted EBITDA
4,366
4,252
Debt to Adjusted EBITDA (times)
1.5
1.2
1) Debt to Adjusted EBITDA is a non-GAAP measure as defined in Note 1.
Hedge Details(1) as of March 31, 2026
Oil and
Condensate
Hedges ($/bbl)
2Q 2026
3Q 2026
4Q 2026
1Q 2027
2Q 2027
3Q 2027
4Q 2027
WTI Fixed Price
Swaps
4 Mbbls/d
$62.86
4 Mbbls/d
$63.29
4 Mbbls/d
$63.59
0
-
0
-
0
-
0
-
WTI 3-Way Options
Call Strike
Put Strike
Sold Put Strike
51 Mbbls/d
$70.65
$61.25
$51.08
51 Mbbls/d
$70.89
$59.28
$50.10
41 Mbbls/d
$70.23
$57.25
$50.13
30 Mbbls/d
$75.50
$59.11
$50.00
0
-
-
-
0
-
-
-
0
-
-
-
WTI Collars
Call Strike
Put Strike
1 Mbbls/d
$69.01
$57.33
1 Mbbls/d
$69.01
$57.33
1 Mbbls/d
$69.01
$57.33
0
-
-
0
-
-
0
-
-
0
-
-
Natural Gas
Hedges ($/Mcf)
2Q 2026
3Q 2026
4Q 2026
1Q 2027
2Q 2027
3Q 2027
4Q 2027
NYMEX Fixed Price
Swaps
20 MMcf/d
$4.07
20 MMcf/d
$4.07
20 MMcf/d
$4.07
0
-
0
-
0
-
0
-
NYMEX 3-Way
Options
Call Strike
Put Strike
Sold Put Strike
450 MMcf/d
$5.92
$3.33
$2.58
450 MMcf/d
$5.92
$3.33
$2.58
450 MMcf/d
$5.92
$3.33
$2.58
300 MMcf/d
$5.04
$3.50
$2.50
200 MMcf/d
$4.49
$3.50
$2.50
200 MMcf/d
$4.49
$3.50
$2.50
200 MMcf/d
$4.49
$3.50
$2.50
NYMEX Collars
Call Strike
Put Strike
95 MMcf/d
$5.27
$3.75
95 MMcf/d
$5.27
$3.75
95 MMcf/d
$5.27
$3.75
15 MMcf/d
$4.72
$3.50
15 MMcf/d
$4.72
$3.50
15 MMcf/d
$4.72
$3.50
15 MMcf/d
$4.72
$3.50
AECO Nominal
Basis Swaps
338 MMcf/d
($1.25)
338 MMcf/d
($1.25)
338 MMcf/d
($1.25)
260 MMcf/d
($1.17)
260 MMcf/d
($1.17)
260 MMcf/d
($1.17)
260 MMcf/d
($1.17)
AECO Fixed Price
Swaps
133 MMcf/d
$2.31
152 MMcf/d
$2.28
118 MMcf/d
$2.31
100 MMcf/d
$2.00
119 MMcf/d
$2.00
119 MMcf/d
$2.00
106 MMcf/d
$2.00
AECO Collars
Call Strike
Put Strike
10 MMcf/d
$2.19
$1.72
10 MMcf/d
$2.19
$1.72
3 MMcf/d
$2.19
$1.72
0
-
-
0
-
-
13 MMcf/d
$2.40
$1.79
20 MMcf/d
$2.40
$1.79
NuVista Cash Flow
Deduction ($MM)(2)
$30
$34
$24
$16
$8
$12
$10
1) Ovintiv also manages other key market basis differential risks for gas, oil and condensate.
2) NuVista's financial hedge position at close of the acquisition was valued at ~$199 MM. Those gains are booked as assets and realized into cash over time as they are settled but are not included in Non-GAAP Cash Flow.
Important information
Ovintiv reports in U.S. dollars unless otherwise noted. Production, sales and reserves estimates are reported on an after-royalties basis, unless otherwise noted. Unless otherwise specified or the context otherwise requires, references to "Ovintiv," "we," "its," "our" or to "the Company" includes reference to subsidiaries of and partnership interests held by Ovintiv Inc. and its subsidiaries.
Please visit Ovintiv's website and Investor Relations page at www.ovintiv.com and investor.ovintiv.com, where Ovintiv often discloses important information about the Company, its business, and its results of operations.
NI 51-101 Exemption
The Canadian securities regulatory authorities have issued a decision document (the "Decision") granting Ovintiv exemptive relief from the requirements contained in Canada's National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). As a result of the Decision, and provided that certain conditions set out in the Decision are met on an on-going basis, Ovintiv will not be required to comply with the Canadian requirements of NI 51-101 and the Canadian Oil and Gas Evaluation Handbook. The Decision permits Ovintiv to provide disclosure in respect of its oil and gas activities in the form permitted by, and in accordance with, the legal requirements imposed by the U.S. Securities and Exchange Commission ("SEC"), the Securities Act of 1933, the Securities and Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and the rules of the NYSE. The Decision also provides that Ovintiv is required to file all such oil and gas disclosures with the Canadian securities regulatory authorities on www.sedarplus.ca as soon as practicable after such disclosure is filed with the SEC.
NOTE 1: Non-GAAP Measures
Certain measures in this news release do not have any standardized meaning as prescribed by U.S. GAAP and, therefore, are considered non-GAAP measures. These measures may not be comparable to similar measures presented by other companies and should not be viewed as a substitute for measures reported under U.S. GAAP. These measures are commonly used in the oil and gas industry and/or by Ovintiv to provide shareholders and potential investors with additional information regarding the Company's liquidity and its ability to generate funds to finance its operations. For additional information regarding non-GAAP measures, see the Company's website. This news release contains references to non-GAAP measures as follows:
Non-GAAP Cash Flow is a non-GAAP measure defined as cash from (used in) operating activities excluding net change in other assets and liabilities, and net change in non-cash working capital. Non-GAAP Free Cash Flow is a non-GAAP measure defined as Non-GAAP Cash Flow in excess of capital expenditures, excluding net acquisitions and divestitures. Non-GAAP Adjusted Earnings is a non-GAAP measure defined as net earnings (loss) excluding non-cash items that the Company's management believes reduces the comparability of the Company's financial performance between periods. These items may include, but are not limited to, unrealized gains/losses on risk management, impairments, non-operating foreign exchange gains/losses, and gains/losses on divestitures. Income taxes includes adjustments to normalize the effect of income taxes calculated using the estimated annual effective income tax rate. In addition, valuation allowances and the effect of non-recurring discrete transactions are excluded in the calculation of income taxes. Net Debt is defined as long-term debt, including the current portion, less cash and cash equivalents. Adjusted EBITDA, Debt to EBITDA, Debt to Adjusted EBITDA (Leverage Target/Ratio) and Net Debt to Adjusted EBITDA are non-GAAP measures. EBITDA is defined as trailing 12-month net earnings (loss) before income taxes, depreciation, depletion and amortization, and interest. Adjusted EBITDA is EBITDA adjusted for impairments, accretion of asset retirement obligation, unrealized gains/losses on risk management, foreign exchange gains/losses, gains/losses on divestitures and other gains/losses. Debt to EBITDA is calculated as long-term debt, including the current portion, divided by EBITDA. Debt to Adjusted EBITDA is calculated as long-term debt, including the current portion, divided by Adjusted EBITDA. Net Debt to Adjusted EBITDA is calculated as Net Debt, divided by Adjusted EBITDA. The forecasted April 30, 2026, Net Debt to Adjusted EBITDA is calculated using Net Debt as at April 30, 2026, divided by the 12-month trailing EBITDA as at March 31, 2026. Adjusted EBITDA, Debt to EBITDA, Debt to Adjusted EBITDA and Net Debt to Adjusted EBITDA are non-GAAP measures monitored by management as indicators of the Company's overall financial strength. ADVISORY REGARDING OIL AND GAS INFORMATION – The conversion of natural gas volumes to barrels of oil equivalent (BOE) is on the basis of six thousand cubic feet to one barrel. BOE is based on a generic energy equivalency conversion method primarily applicable at the burner tip and does not represent economic value equivalency at the wellhead. Readers are cautioned that BOE may be misleading, particularly if used in isolation.
ADVISORY REGARDING FORWARD-LOOKING STATEMENTS – This news release contains forward-looking statements or information (collectively, "forward-looking statements") within the meaning of applicable securities legislation, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, except for statements of historical fact, that relate to the anticipated future activities, plans, strategies, objectives or expectations of the Company, including the first quarter and fiscal year 2026 guidance and expected free cash flow, the presence of recoverability of estimated reserves, the expectation of delivering sustainable durable returns to shareholders in future years, plans regarding share buybacks and debt reduction, and timing and expectations regarding capital efficiencies and well completion and performance, are forward-looking statements. When used in this news release, the use of words and phrases including "anticipates," "believes," "continue," "could," "estimates," "expects," "focused on," "forecast," "guidance," "intends," "maintain," "may," "opportunities," "outlook," "plans," "potential," "strategy," "targets," "will," "would" and other similar terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words or phrases. Readers are cautioned against unduly relying on forward-looking statements which, are based on current expectations and by their nature, involve numerous assumptions that are subject to both known and unknown risks and uncertainties (many of which are beyond our control) that may cause such statements not to occur, or actual results to differ materially and/or adversely from those expressed or implied. These assumptions include, without limitation: future commodity prices and basis differentials; the ability of the Company to access credit facilities and capital markets; the availability of attractive commodity or financial hedges and the enforceability of risk management programs; the Company's ability to capture and maintain gains in productivity and efficiency; the ability for the Company to generate cash returns and execute on its share buyback plan; expectations of plans, strategies and objectives of the Company, including anticipated production volumes and capital investment; the Company's ability to manage cost inflation and expected cost structures, including expected operating, transportation, processing and labor expenses; the outlook of the oil and natural gas industry generally, including impacts from war and changes to the geopolitical environment, including tariffs between the United States and Canada; and projections made in light of, and generally consistent with, the Company's historical experience and its perception of historical industry trends; and the other assumptions contained herein.
Although the Company believes the expectations represented by its forward-looking statements are reasonable based on the information available to it as of the date such statements are made, forward-looking statements are only predictions and statements of our current beliefs and there can be no assurance that such expectations will prove to be correct. All forward-looking statements contained in this news release are made as of the date of this news release and, except as required by law, the Company undertakes no obligation to update publicly, revise or keep current any forward-looking statements. The forward-looking statements contained or incorporated by reference in this news release, and all subsequent forward-looking statements attributable to the Company, whether written or oral, are expressly qualified by these cautionary statements.
The reader should carefully read the risk factors described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and in other filings with the SEC or Canadian securities regulators, for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.
Further information on Ovintiv Inc. is available on the Company's website, www.ovintiv.com, or by contacting:
Ovintiv (OVV - Free Report) reported $2.53 billion in revenue for the quarter ended March 2026, representing a year-over-year increase of 6.5%. EPS of $2.00 for the same period compares to $1.42 a year ago.
The reported revenue represents a surprise of +9.8% over the Zacks Consensus Estimate of $2.31 billion. With the consensus EPS estimate being $1.85, the EPS surprise was +8.25%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Ovintiv performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Production Volumes - Total - Total: 678.9 millions of barrels of oil equivalent versus the six-analyst average estimate of 674.86 millions of barrels of oil equivalent.Production Volumes - Natural Gas - Total: 2124 millions of cubic feet versus the six-analyst average estimate of 2114.62 millions of cubic feet.Production Volumes - Oil & Plant Condensate - Total: 225.3 millions of barrels of oil compared to the 222.75 millions of barrels of oil average estimate based on five analysts.Production Volumes - NGLs-Other - Total: 99.6 millions of barrels of oil versus 99.85 millions of barrels of oil estimated by five analysts on average.Per-Unit Prices, Excluding the Impact of Realized Gains (Losses) on Risk Management - Oil Price - Total Operations: $72.62 compared to the $69.53 average estimate based on four analysts.Per-Unit Prices, Excluding the Impact of Realized Gains (Losses) on Risk Management - Natural Gas Price - Total Operations: $3.14 versus the four-analyst average estimate of $3.51.Per-Unit Prices, Excluding the Impact of Realized Gains (Losses) on Risk Management - NGLs-Other Price - Total Operations: $18.12 compared to the $17.77 average estimate based on four analysts.Production Volumes - Total - USA Operations: 314 millions of barrels of oil equivalent versus 322.88 millions of barrels of oil equivalent estimated by three analysts on average.Production Volumes - Oil & NGLs - Canadian Operations: 97.6 millions of barrels of oil versus the three-analyst average estimate of 92.21 millions of barrels of oil.Revenues- USA Operations: $1.47 billion versus $1.34 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -12.3% change.Revenues- Corporate & other: $-35 million versus the three-analyst average estimate of $19.57 million. The reported number represents a year-over-year change of +25%.Revenues- Canadian Operations: $1.09 billion compared to the $940.86 million average estimate based on three analysts. The reported number represents a change of +50.9% year over year.View all Key Company Metrics for Ovintiv here>>>
Shares of Ovintiv have returned +3.1% over the past month versus the Zacks S&P 500 composite's +9.1% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.
Ovintiv (OVV - Free Report) came out with quarterly earnings of $2 per share, beating the Zacks Consensus Estimate of $1.85 per share. This compares to earnings of $1.42 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +8.25%. A quarter ago, it was expected that this energy company would post earnings of $0.98 per share when it actually produced earnings of $1.39, delivering a surprise of +41.84%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Ovintiv, which belongs to the Zacks Oil and Gas - Exploration and Production - Canadian industry, posted revenues of $2.53 billion for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 9.80%. This compares to year-ago revenues of $2.38 billion. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Ovintiv shares have added about 47.6% since the beginning of the year versus the S&P 500's gain of 8.1%.
What's Next for Ovintiv?While Ovintiv has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Ovintiv was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.36 on $2.31 billion in revenues for the coming quarter and $7.59 on $9.22 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - Canadian is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the broader Zacks Oils-Energy sector, Prairie Operating Co. (PROP - Free Report) , is yet to report results for the quarter ended March 2026. The results are expected to be released on May 14.
This company is expected to post quarterly earnings of $0.15 per share in its upcoming report, which represents a year-over-year change of +104.3%. The consensus EPS estimate for the quarter has been revised 21.3% lower over the last 30 days to the current level.
Prairie Operating Co.'s revenues are expected to be $87.18 million, up 541.5% from the year-ago quarter.
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The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
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Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Ovintiv (OVV - Free Report) Ovintiv Inc. is an independent energy producer, which explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Previously known as Encana, the company rebranded and shifted its corporate domicile from Calgary, Canada to Denver, U.S.
OVV is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Oils-Energy stock. OVV has a Momentum Style Score of A, and shares are up 4.9% over the past four weeks.
Five analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $3.24 to $7.59 per share. OVV also boasts an average earnings surprise of +13.6%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, OVV should be on investors' short list.
Ovintiv Inc (NYSE:OVV) on Monday posted upbeat first-quarter earnings.
Ovintiv reported quarterly earnings of $2.00 per share which beat the analyst consensus estimate of $1.83 per share. The company reported quarterly sales of $2.532 billion which beat the analyst consensus estimate of $2.430 billion.
Ovintiv shares fell 0.9% to trade at $58.59 on Tuesday.
These analysts made changes to their price targets on Ovintiv following earnings announcement.
Barclays analyst Betty Jiang maintained Ovintiv with an Overweight rating and raised the price target from $62 to $68. Scotiabank analyst Kevin Fisk maintained the stock with a Sector Outperform and raised the price target from $65 to $67. Considering buying OVV stock? Here’s what analysts think:
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2 Canadian Mid-Cap Dividend Payers Energized For GrowthOvintiv NYSE: OVV said its first-quarter 2026 results reflected stronger operational execution, a recently reshaped portfolio and a significantly lower debt balance following asset transactions completed early in the year.
President and CEO Brendan McCracken told investors that the company has moved into what he described as a more stable phase after expanding its drilling inventory, integrating recently acquired NuVista assets and selling its Anadarko assets. He said Ovintiv has increased its Permian and Montney drilling inventory by more than 3,200 locations since 2023 without diluting shareholders, while also improving returns on invested capital and reducing debt.
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“We have fundamentally de-risked our business and positioned ourselves to deliver durable returns for many years to come,” McCracken said.
Debt Reduction and Cash Flow Highlight Quarter Chief Financial Officer Corey Code said Ovintiv’s balance sheet is “now stronger than it has been in a decade.” As of April 30, the company’s net debt was less than $3.3 billion, or below 0.8 times leverage. Code said the company has no remaining long-term debt maturities before 2030 and expects more than $80 million in annualized interest savings from debt repaid since the start of the year.
Ovintiv reported first-quarter cash flow per share of $4.62, which Code said beat consensus estimates by about 6%. Free cash flow totaled $634 million. Capital investment was $605 million, at the low end of the company’s guidance range, and total per-unit costs also came in at the low end of guidance.
The company delivered production at the high end of its guidance ranges across each product category, including oil and condensate production of about 225,000 barrels per day.
Ovintiv recorded a $1.2 billion after-tax non-cash ceiling test impairment, which resulted in a loss for the quarter. Code said the impairment was driven by weaker oil prices in the first quarter lowering the SEC 12-month trailing price. At current strip pricing, he said the company does not expect further impairments.
Shareholder Returns Framework Adjusted for Higher Oil Prices McCracken said Ovintiv has returned $3.7 billion to shareholders since introducing its shareholder return framework in 2021, including $2.4 billion through share buybacks and $1.3 billion through base dividends.
In March, the company committed to returning 50% to 100% of free cash flow through dividends and buybacks. McCracken said Ovintiv entered 2026 expecting to allocate at least 75% of free cash flow to shareholder returns. However, with oil prices higher than expected, the company now expects to be in the 50% to 75% range if prices remain elevated, while using the environment to further accelerate net debt reduction.
He said Ovintiv still expects shareholder returns this year to exceed its original plan on an absolute dollar basis. If oil prices retreat, McCracken said the company would have capacity to be more opportunistic with buybacks and could return to the 75% or higher range.
In response to an analyst question, McCracken said the company continues to evaluate its intrinsic value using a long-held mid-cycle assumption of $55 WTI, which he said implies about $4 billion of cash flow for the business.
Montney Integration and Royalty Impacts Chief Operating Officer Greg Givens said the company’s Montney well productivity in the first quarter was tracking above 2026 type curves. Ovintiv reached its target of 85,000 barrels per day in the first month after closing the NuVista acquisition, and Givens said the acquired assets are now fully integrated into the company’s Montney operations.
Givens said higher commodity prices are raising royalty rates in Canada because of the sliding-scale royalty structure. He said that while gross volumes are unchanged, higher royalties reduce reported net volumes. However, higher prices also lift revenue.
As an example, Givens said that if condensate prices averaged $90 per barrel for the year, Ovintiv would see a 5,000-barrel-per-day reduction in reported net volumes but a 40% increase in revenues. He called the trade-off “a good problem to have.”
Montney production in the second quarter is expected to be at the low end of full-year guidance due to royalty effects and planned plant turnarounds. Still, Givens said well performance from both legacy and acquired NuVista assets remains strong.
The company also highlighted natural gas price diversification in Canada. Givens said Ovintiv’s first-quarter Montney gas price realization was 175% of AECO, and the company is exposed to AECO pricing on less than 20% of its 2026 Canadian gas volumes. A JKM-linked contract for 100 million cubic feet per day began during the quarter, and Givens said it would be worth about $60 million for the rest of the year at current strip pricing.
Permian Performance and Technology Focus Givens said Ovintiv’s Permian operations continued to outperform in the first quarter, with average oil and condensate production of 126,000 barrels per day. He said recent wells are exceeding the company’s 2026 type curve.
Management emphasized what it called “stacked innovation” as a driver of capital efficiency. Givens said Ovintiv has pumped surfactants in more than 300 Permian wells since 2019 and observed a 9% improvement in oil productivity versus comparable untreated wells. He said the company believes surfactants account for roughly half of the type curve improvement seen in its Permian assets since 2022, at a cost of about $100,000 per well.
Givens said other contributors include cube development, reoccupation approaches, stage architecture and the use of artificial intelligence trained on Ovintiv’s proprietary data. He said the company has improved Permian oil productivity per foot by more than 10% since 2023 while the broader basin has faced a 2% annual decline.
Asked whether the productivity gains represent accelerated production or higher recovery, Givens said Ovintiv believes they point to higher recovery. He cited the persistence of the uplift over several years and geochemistry work showing different oil composition from surfactant-treated wells.
Full-Year Outlook Held Steady Ovintiv is maintaining its full-year production guidance, including 205,000 to 212,000 barrels per day of oil and condensate. Code said strong performance in the Permian and Montney is expected to offset volumes lost to higher Canadian royalties.
For the second quarter, Ovintiv expects production of about 623,000 barrels of oil equivalent per day, including approximately 203,000 barrels per day of oil and condensate. Capital spending is expected to be about $575 million.
Code said the company is not seeing significant inflationary pressure on its 2026 capital program outside of higher diesel costs, and expects operational efficiencies to largely offset any additional cost inflation. Ovintiv’s capital guidance remains unchanged.
McCracken said the company has the ability to grow production in both the Permian and Montney but is currently maintaining a stay-flat program while watching commodity market signals. “We’re saying today we’re going to be patient and watch the macro unfold a little bit longer here,” he said.
About Ovintiv NYSE: OVVOvintiv Inc is a North American energy company focused on the exploration, development and production of oil, natural gas and natural gas liquids. Formerly known as Encana Corporation, the company rebranded as Ovintiv in January 2020 and established its headquarters in Denver, Colorado. Ovintiv's upstream portfolio spans multiple unconventional resource plays, reflecting a strategy centered on high-return projects and disciplined capital allocation.
The company's core business activities include the acquisition and development of acreage in major shale basins across the United States and Canada.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
Should You Invest $1,000 in Ovintiv Right Now?Before you consider Ovintiv, you'll want to hear this.
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Ovintiv (OVV - Free Report) . OVV is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.84, which compares to its industry's average of 11.71. Over the past year, OVV's Forward P/E has been as high as 9.97 and as low as 5.23, with a median of 7.66.
Another valuation metric that we should highlight is OVV's P/B ratio of 1.02. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.69. Over the past 12 months, OVV's P/B has been as high as 1.16 and as low as 0.80, with a median of 1.01.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. OVV has a P/S ratio of 1.79. This compares to its industry's average P/S of 2.31.
Finally, investors should note that OVV has a P/CF ratio of 3.78. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.88. Over the past 52 weeks, OVV's P/CF has been as high as 3.97 and as low as 2.29, with a median of 3.24.
Value investors will likely look at more than just these metrics, but the above data helps show that Ovintiv is likely undervalued currently. And when considering the strength of its earnings outlook, OVV sticks out as one of the market's strongest value stocks.
Key Takeaways OVV beat Q1 earnings and revenue estimates as production and natural gas prices increased.Ovintiv completed the $2.7B NuVista acquisition, adding 100 MBOE/d and new drilling inventory.OVV reaffirmed 2026 production and capital spending guidance after strong Q1 execution. Ovintiv Inc. (OVV - Free Report) reported first-quarter 2026 adjusted earnings per share of $2, which beat the Zacks Consensus Estimate of $1.85. The bottom line also increased from the year-ago level of $1.42. The outperformance was driven by higher plant condensate, natural gas liquids and natural gas production volumes and higher average realized natural gas prices.
The Denver, CO-based oil and gas exploration and production company’s total revenues of $2.5 billion increased 6.5% from the year-ago quarter’s figures. The top line also beat the Zacks Consensus Estimate by 9.8%. The outperformance was driven by higher product and service revenues.
On May 11, 2026, Ovintiv's board of directors declared a quarterly dividend of 30 cents per share, which will be paid on June 30, to its shareholders of record as of June 15.
First-quarter shareholder returns totaled $169 million, consisting of share buybacks of $84 million and base dividend payments of $85 million.
During the quarter, the company completed the $2.7 billion acquisition of NuVista Energy Ltd., adding roughly 100 MBOE/d of production, about 930 net equivalent well locations and nearly 140,000 net acres of land.
OVV’s Q1 Production & PricesTotal first-quarter production was 678,900 barrels of oil equivalent per day (BOE/d) compared with 588,300 BOE/d in the prior-year period. The figure beat our prediction of 675,000 BOE/d.
Natural gas production increased to 2,124 million cubic feet per day (MMcf/d) in the first quarter of 2026 from 1,764 MMcf/d in the prior-year quarter. Additionally, the figure beat our estimate of 2,115 MMcf/d.
Total liquids production increased to 324.9 thousand barrels per day (Mbbls/d) in the first quarter of 2026 from 294.4 Mbbls/d in the prior-year quarter. Furthermore, the figure beat our prediction of 323 Mbbls/d.
In the first quarter of 2026, natural gas contributed approximately 52.1%, and liquids accounted for about 47.9% of the total production.
Ovintiv's realized natural gas price was $3.24 per thousand cubic feet compared with the year-ago level of $3.16. The realized oil price decreased to $70.78 per barrel from $71.79 in the prior-year quarter.
OVV’s Costs, Capex & Balance SheetTotal expenses of $3.3 billion increased 33.2% from the year-ago quarter’s figure of $2.5 billion. Moreover, the figure was higher than our projection of $1.7 billion.
Ovintiv’s cash from operating activities in the quarter under review was $1.1 billion, compared to the year-ago figure of $873 million.
OVV's capital investments were $605 million compared with $617 million in the year-ago period. The company generated a non-GAAP free cash flow of $634 million in the reported quarter.
As of March 31, the company had cash and cash equivalents worth $26 million and long-term debt of $5.5 billion. Its debt-to-capitalization was 32.3%.
OVV’s Asset PerformanceIn the first quarter of 2026, average production from the Permian Basin reached approximately 221 MBOE/d, with liquids making up 79% of the total. A total of 34 net wells were brought online during the period. For the full year 2026, capital spending in this region is projected to be between $1.325 billion and $1.375 billion, supporting the development of around five rigs and 125-135 net wells.
From the Montney play, first-quarter output averaged 365 MBOE/d, with liquids contributing about 27% of the volume. The company turned in 26 net wells during the quarter. Full-year 2026 capital expenditures for Montney are expected to be between $875 million and $925 million, supporting the development of six rigs and 130-140 net well additions.
OVV’s Q2 & 2026 GuidanceOvintiv reiterated its full-year 2026 guidance while issuing second-quarter projections. The company expects full-year production volumes to average between 620 and 645 MBOE/d, including oil and condensate production of 205 to 212 Mbbls/d, NGL production of 80 to 85 Mbbls/d, and natural gas production of 2 to 2.1 Bcf/d. Ovintiv forecasts a total 2026 capital investment in the range of $2.25 billion to $2.35 billion, reflecting its continued focus on disciplined capital allocation and operational efficiency.
For the second quarter of 2026, this Zacks Rank #2 (Buy) company expects production between 610 and 635 MBOE/d with capital spending of $550 million to $600 million. Management highlighted that strong first-quarter execution, enhanced inventory depth following the NuVista acquisition and a significantly improved balance sheet position support its confidence in maintaining the full-year outlook.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Important Earnings at a GlanceWhile we have discussed OVV’s first-quarter results in detail, let us take a look at three other key reports in this space.
Northern Oil and Gas, Inc. (NOG - Free Report) reported first-quarter 2026 adjusted earnings per share of 74 cents, which beat the Zacks Consensus Estimate of 71 cents. The outperformance reflects strong production. However, the bottom line declined from the year-ago adjusted profit of $1.33 due to weaker natural gas prices and a 77% increase in operating expenses.
The Minnetonka, MN-based oil and gas exploration and production company reported oil and gas sales of $539.9 million, beating the Zacks Consensus Estimate of $511 million, supported by higher crude oil realizations. However, the top line decreased from the year-ago figure of $576.9 million. The year-over-year decline was mainly due to lower oil and gas sales during this quarter.
As of March 31, 2026, Northern Oil had $37 million in cash and cash equivalents. The company had a long-term debt of $2.6 billion, with a debt-to-capitalization of 58.8%.
Canadian Natural Resources Limited (CNQ - Free Report) reported first-quarter 2026 adjusted earnings per share of 85 cents, which beat the Zacks Consensus Estimate of 74 cents and increased from 81 cents in the year-ago quarter. The outperformance can be attributed to strong operational performance and higher realized natural gas prices.
Total revenues of $7.9 billion increased from $7.6 billion in the prior-year period, fueled by increased production volumes. Additionally, the figure beat the Zacks Consensus Estimate of $7.5 billion.
As of March 31, 2026, CNQ had cash and cash equivalents worth C$808 million and long-term debt of approximately C$16.5 billion, with a debt to capitalization of about 27%.
The Williams Companies, Inc. (WMB - Free Report) reported first-quarter 2026 adjusted earnings per share of 73 cents, which beat the Zacks Consensus Estimate of 65 cents. The bottom line increased from the year-ago period’s level of 60 cents, driven mainly by a 12.5% decrease in costs and expenses. Moreover, better-than-expected performance of its Transmission, Power & Gulf, Northeast G&P, West and Gas & NGL Marketing Services segments also contributed, with increases of 17.2%, 1.9%, 15.8% and 46.5%, respectively, from the year-ago quarter’s level.
The company’s revenues of $3 billion missed the Zacks Consensus Estimate of $3.3 billion. The figure decreased marginally by 0.6% from the year-ago quarter’s reported revenues. This can be attributed to lower service revenues tied to commodity contracts and an increased loss from commodity derivative instruments.
As of March 31, 2026, WMB had cash and cash equivalents of $950 million and a long-term debt of $30 billion, with a debt-to-capitalization of 66.5%.
Ovintiv has transformed into a focused Midland and Montney operator, de-risking its story with asset sales and the NuVista acquisition. OVV now offers a compelling 75% free cash flow return policy, combining a 3% dividend yield with significant buybacks, outpacing most peers. Trading at 5.0x EV/EBITDA and a 13% FCF yield, OVV presents over 30% upside to a price target of $80, assuming peer multiples.
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Ovintiv (OVV - Free Report) , a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Ovintiv currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market? In order to see if OVV is a promising momentum pick, let's examine some Momentum Style elements to see if this energy company holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For OVV, shares are up 3.75% over the past week while the Zacks Oil and Gas - Exploration and Production - Canadian industry is up 3.2% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 12.31% compares favorably with the industry's 13.05% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Ovintiv have increased 18.1% over the past quarter, and have gained 61.94% in the last year. On the other hand, the S&P 500 has only moved 7.88% and 25.61%, respectively.
Investors should also pay attention to OVV's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. OVV is currently averaging 4,165,046 shares for the last 20 days.
Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with OVV.
Over the past two months, 4 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost OVV's consensus estimate, increasing from $4.74 to $8.27 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom LineGiven these factors, it shouldn't be surprising that OVV is a #1 (Strong Buy) stock and boasts a Momentum Score of A. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Ovintiv on your short list.
On June 01, 2026, Ovintiv Inc OVV shares rose 3.8% today, currently trading at $58.14. The stock has experienced a 52-week range of $35.47 to $63.46, reflecting both volatility and potential for growth. Over the past year, shares have increased by 66.8%, outperforming the market significantly.
GF Value™ verdict: Current price is $58.14 vs GF Value™ of $39.38, indicating the stock is 47.6% overvalued.GF Score™ of 64/100 suggests above-average performance relative to peers.Notable signal: Insiders sold $0.9M in the last 3 months, with no buying activity reported. Is OVV Overvalued or Undervalued? According to the GF Value™, Ovintiv Inc is significantly overvalued, with a current price of $58.14 compared to an estimated fair value of $39.38. This indicates a substantial margin of safety for potential investors, as the stock is trading 47.6% above its intrinsic value. The GF Valuation label confirms this overvaluation, suggesting that the current price does not reflect the underlying value based on historical trading multiples, past business growth, and future performance estimates.
Investors should be cautious with Ovintiv's current pricing, as being overvalued presents risks, particularly in a fluctuating market. If the company fails to deliver on growth expectations or the oil and gas sector experiences downturns, the stock could be subject to significant corrections. It is essential to analyze the potential for future performance against the current valuation to assess the risk-reward balance.
How Does OVV's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 19.1x 6.4x Forward P/E 7.2x N/A Ovintiv's current P/E ratio of 19.1x is significantly higher than its 5-year median P/E of 6.4x, indicating that the stock is trading well above its historical valuation levels. This analysis aligns with the GF Value™ verdict of overvaluation, suggesting that investors may be paying a premium for the stock relative to its historical earnings performance.
What Does OVV's GF Score™ Tell Us? Metric Rating GF Score™ 64 Financial Strength 5/10 Profitability 8/10 Growth 1/10 Valuation 5/10 Momentum 3/10 The GF Score™ of 64/100 indicates that Ovintiv Inc is performing above average compared to its peers based on various factors. The strongest aspect is its profitability rank of 8/10, which suggests effective management in generating profits. However, the growth rank of 1/10 highlights a significant weakness, indicating limited growth prospects. The financial strength rating of 5/10 reflects a moderate stability, while the momentum rank of 3/10 indicates a lack of sustained price momentum in the stock.
What Are Insiders Doing with OVV Stock? In terms of insider activity, Ovintiv has seen insiders sell $0.9 million worth of shares in the last three months, with no reported purchases. This pattern of selling may suggest that insiders do not expect significant near-term price appreciation or may be taking profits after the stock's considerable rise over the past year. Such activity can often be interpreted as a lack of confidence in the stock's current valuation, especially given the overvalued status indicated by the GF Value™.
What This Means for Investors Based on the GF Value™ assessment, Ovintiv Inc is currently overvalued. With its stock price significantly above the estimated intrinsic value, potential investors may want to proceed with caution and closely monitor market conditions and company performance before making any decisions.
For the complete analysis, visit the Ovintiv Inc OVV stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is OVV's GF Score™?
OVV's GF Score™ is 64/100, indicating above-average performance compared to its peers based on key metrics.
Is OVV overvalued or undervalued?
OVV is currently overvalued, as indicated by its GF Value™ of $39.38 compared to its current price of $58.14.
What is OVV's P/E ratio?
OVV's P/E ratio is 19.1x, which is significantly above its 5-year median P/E of 6.4x, suggesting it is trading at a premium compared to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways OVV says recent Permian wells are outperforming its expected 2026 production targets.OVV has used surfactants in completions on 300 Permian wells since 2019, lifting oil output ~9%.OVV drills multiple wells per area, revisits sites, optimizes completions and uses AI to cut costs. Ovintiv Inc.’s (OVV - Free Report) Permian performance is increasingly being driven by how efficiently it develops its wells rather than simply the quality of its acreage. Many U.S. shale producers are seeing well productivity come under pressure as fields mature, but Ovintiv is reporting a different trend. The company said its recent Permian wells continue to outperform its expected 2026 production targets, suggesting that strong execution and operational improvements are helping boost results. The key question for investors is whether Ovintiv can continue delivering these stronger well outcomes consistently over time.
A major part of that effort is Ovintiv’s use of surfactants in completions. These chemical additives are designed to improve oil recovery from the rock, and Ovintiv has now applied them across more than 300 Permian wells since 2019. The company’s data shows roughly a 9% oil-productivity uplift versus comparable wells, at an added cost of about $100,000 per well. Investors should know that even a modest percentage gain can improve well economics when spread across a large drilling program, provided the uplift is durable.
The bigger takeaway is that surfactants are just one of the several tools Ovintiv is using to improve well performance in the Permian. The company is also applying techniques such as developing multiple wells from the same area, returning to existing locations for additional drilling, optimizing completion designs and using AI-powered analysis based on its operational data. Together, these approaches are aimed at producing more oil from each well while keeping drilling and completion costs under control. For investors, the key question is whether this combination of technologies and operating practices can continue delivering stronger well results in a basin where boosting productivity is becoming increasingly difficult.
Ovintiv is not the only upstream company trying to improve Permian well performance through better execution and technology. Other major Permian-focused producers are also using scale, improved completion designs and operational efficiencies to get more from each dollar spent in the basin.
Permian Operators Lean on Efficiency to Boost Returns
Diamondback Energy’s (FANG - Free Report) Permian strategy is focused on improving how efficiently it drills and completes wells across its large Midland Basin position. Diamondback Energy continues to use scale, better completion designs and operational discipline to lower costs and improve well results. Diamondback Energy’s use of technologies such as electric simul-frac also supports faster, more efficient completions. If Diamondback Energy continues to lower costs and improve well performance, it could strengthen cash flow generation and support shareholder returns even in a slower commodity-price environment.
Devon Energy’s (DVN - Free Report) Permian initiatives are centered on improving capital efficiency and well performance in the Delaware Basin, one of its most important growth areas. Devon Energy has been working to get more production from each dollar spent by refining drilling plans, completion designs and development timing. Devon Energy’s recent Delaware Basin improvements suggest that better execution is helping support stronger returns. The success of Devon Energy’s strategy will largely depend on its ability to translate operational improvements into higher returns and consistent production growth over the long term.
The Zacks Rundown on Ovintiv
Shares of Ovintiv have gained more than 38% over the past six months, breezing past the industry’s growth.
Image Source: Zacks Investment Research
OVV currently has an average brokerage recommendation of 1.44 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 25 brokerage firms.
Image Source: Zacks Investment Research
The chart below shows Ovintiv’s earnings over the past four quarters.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
APA's Permian cost cuts, debt reduction efforts and the GranMorgu project in Suriname (first oil expected in mid-2028) give it an edge over fellow oil and gas explorer Ovintiv.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Ovintiv (OVV - Free Report) Ovintiv Inc. is an independent energy producer, which explores and churns out oil and natural gas from diverse assets located in the United States and Canada. Previously known as Encana, the company rebranded and shifted its corporate domicile from Calgary, Canada to Denver, U.S.
OVV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Oils-Energy stock. OVV has a Momentum Style Score of B, and shares are up 1.7% over the past four weeks.
Five analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $1.48 to $8.15 per share. OVV also boasts an average earnings surprise of +13.6%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, OVV should be on investors' short list.
It has been about a month since the last earnings report for Ovintiv (OVV - Free Report) . Shares have lost about 2.6% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Ovintiv due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Ovintiv Inc. before we dive into how investors and analysts have reacted as of late.
Ovintiv Q1 Earnings Beat Estimates on Strong ProductionOvintiv Inc. reported first-quarter 2026 adjusted earnings per share of $2, which beat the Zacks Consensus Estimate of $1.85. The bottom line also increased from the year-ago level of $1.42. The outperformance was driven by higher plant condensate, natural gas liquids and natural gas production volumes and higher average realized natural gas prices.
The Denver, CO-based oil and gas exploration and production company’s total revenues of $2.5 billion increased 6.5% from the year-ago quarter’s figures. The top line also beat the Zacks Consensus Estimate by 9.8%. The outperformance was driven by higher product and service revenues.
On May 11, 2026, Ovintiv's board of directors declared a quarterly dividend of 30 cents per share, which will be paid on June 30, to its shareholders of record as of June 15.
First-quarter shareholder returns totaled $169 million, consisting of share buybacks of $84 million and base dividend payments of $85 million.
During the quarter, the company completed the $2.7 billion acquisition of NuVista Energy Ltd., adding roughly 100 MBOE/d of production, about 930 net equivalent well locations and nearly 140,000 net acres of land.
Q1 Production & PricesTotal first-quarter production was 678,900 barrels of oil equivalent per day (BOE/d) compared with 588,300 BOE/d in the prior-year period. The figure beat our prediction of 675,000 BOE/d.
Natural gas production increased to 2,124 million cubic feet per day (MMcf/d) in the first quarter of 2026 from 1,764 MMcf/d in the prior-year quarter. Additionally, the figure beat our estimate of 2,115 MMcf/d.
Total liquids production increased to 324.9 thousand barrels per day (Mbbls/d) in the first quarter of 2026 from 294.4 Mbbls/d in the prior-year quarter. Furthermore, the figure beat our prediction of 323 Mbbls/d.
In the first quarter of 2026, natural gas contributed approximately 52.1%, and liquids accounted for about 47.9% of the total production.
Ovintiv's realized natural gas price was $3.24 per thousand cubic feet compared with the year-ago level of $3.16. The realized oil price decreased to $70.78 per barrel from $71.79 in the prior-year quarter.
Costs, Capex & Balance SheetTotal expenses of $3.3 billion increased 33.2% from the year-ago quarter’s figure of $2.5 billion. Moreover, the figure was higher than our projection of $1.7 billion.
Ovintiv’s cash from operating activities in the quarter under review was $1.1 billion, compared to the year-ago figure of $873 million.
OVV's capital investments were $605 million compared with $617 million in the year-ago period. The company generated a non-GAAP free cash flow of $634 million in the reported quarter.
As of March 31, the company had cash and cash equivalents worth $26 million and long-term debt of $5.5 billion. Its debt-to-capitalization was 32.3%.
Asset PerformanceIn the first quarter of 2026, average production from the Permian Basin reached approximately 221 MBOE/d, with liquids making up 79% of the total. A total of 34 net wells were brought online during the period. For the full year 2026, capital spending in this region is projected to be between $1.325 billion and $1.375 billion, supporting the development of around five rigs and 125-135 net wells.
From the Montney play, first-quarter output averaged 365 MBOE/d, with liquids contributing about 27% of the volume. The company turned in 26 net wells during the quarter. Full-year 2026 capital expenditures for Montney are expected to be between $875 million and $925 million, supporting the development of six rigs and 130-140 net well additions.
Q2 & 2026 GuidanceOvintiv reiterated its full-year 2026 guidance while issuing second-quarter projections. The company expects full-year production volumes to average between 620 and 645 MBOE/d, including oil and condensate production of 205 to 212 Mbbls/d, NGL production of 80 to 85 Mbbls/d, and natural gas production of 2 to 2.1 Bcf/d. Ovintiv forecasts a total 2026 capital investment in the range of $2.25 billion to $2.35 billion, reflecting its continued focus on disciplined capital allocation and operational efficiency.
For the second quarter of 2026, the company expects production between 610 and 635 MBOE/d with capital spending of $550 million to $600 million. Management highlighted that strong first-quarter execution, enhanced inventory depth following the NuVista acquisition and a significantly improved balance sheet position support its confidence in maintaining the full-year outlook.
How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 34.67% due to these changes.
VGM ScoresAt this time, Ovintiv has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Ovintiv has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
SAN JOSE, Calif.--(BUSINESS WIRE)--NetApp (NASDAQ: NTAP), the Intelligent Data Infrastructure company, today reported financial results for the fourth quarter and fiscal year 2026, which ended on April 24, 2026.
“Fiscal year 2026 was a landmark year for NetApp with record results across revenue, gross profit, operating income, cash flow from operations, and free cash flow. Our industry-leading hybrid cloud, intelligent data infrastructure platform, trusted by the world’s leading organizations, is powering customers’ AI driven transformations, delivering secure, high-performance access to data wherever it resides,” said George Kurian, Chief Executive Officer. “We achieved our target operating margin while launching next-generation AI solutions and expanding strategic partnerships. As enterprises scale their AI ambitions, NetApp’s unified data platform and flexible offerings position us for sustained growth. I am proud of our team’s execution and excited for the opportunities ahead in fiscal year 2027 and beyond.”
Fourth Quarter and Fiscal Year 2026 Financial Results
($ in millions, except earnings per share)
GAAP Results
Q4 FY26
Q4 FY25
% Change
FY2026
FY2025
% Change
Net revenues
$
1,948
$
1,732
12
%
$
6,925
$
6,572
5
%
Hybrid Cloud segment revenues
$
1,766
$
1,568
13
%
$
6,237
$
5,907
6
%
Public Cloud segment revenues
$
182
$
164
11
%
$
688
$
665
3
%
Gross profit
$
1,365
$
1,193
14
%
$
4,899
$
4,613
6
%
Net income
$
404
$
340
19
%
$
1,276
$
1,186
8
%
Earnings per share
$
2.03
$
1.65
23
%
$
6.35
$
5.67
12
%
Net cash provided by operating activities
$
950
$
675
41
%
$
2,067
$
1,506
37
%
Non-GAAP Results
Q4 FY26
Q4 FY25
% Change
FY2026
FY2025
% Change
Billings
$
2,163
$
2,032
6
%
$
7,206
$
6,780
6
%
Net revenues
$
1,948
$
1,732
12
%
$
6,925
$
6,572
5
%
Hybrid Cloud segment revenues
$
1,766
$
1,568
13
%
$
6,237
$
5,907
6
%
Public Cloud segment revenues
$
182
$
164
11
%
$
688
$
665
3
%
Gross profit
$
1,374
$
1,203
14
%
$
4,938
$
4,671
6
%
Net income
$
483
$
397
22
%
$
1,635
$
1,516
8
%
Earnings per share
$
2.43
$
1.93
26
%
$
8.13
$
7.25
12
%
Free cash flow
$
900
$
640
41
%
$
1,869
$
1,338
40
%
Constant Currency — Q4 Fiscal Year 2026 versus Q4 Fiscal Year 2025
In constant currency, year-over-year, net revenues increased by 10% and billings increased by 4%. The year-over-year fluctuations of GAAP and non-GAAP net income presented in the tables above each include a favorable impact of approximately $24 million from foreign currency exchange rate changes. The year-over-year fluctuations of GAAP and non-GAAP earnings per share presented in the tables above each include a favorable impact of approximately $0.12 from foreign currency exchange rate changes. Constant Currency — Fiscal Year 2026 versus Fiscal Year 2025
In constant currency, year-over-year, net revenues increased by 4% and billings increased by 4%. The year-over-year fluctuations of GAAP and non-GAAP net income presented in the tables above each include a favorable impact of approximately $65 million from foreign currency exchange rate changes. The year-over-year fluctuations of GAAP and non-GAAP earnings per share presented in the tables above each include a favorable impact of approximately $0.32 from foreign currency exchange rate changes. First Quarter of Fiscal Year 2027 Financial Outlook
The Company provided the following financial guidance for the first quarter of fiscal year 2027:
Net revenues are expected to be in the range of:
$1.750 billion - $1.900 billion
GAAP
Non-GAAP
Consolidated gross margins are expected to be in the range of:
68.1% - 69.1%
69.1% - 70.1%
Operating margins are expected to be in the range of:
19.4% - 20.4%
28.4% - 29.4%
Earnings per share is expected to be in the range of:
$1.35 - $1.45
$2.05 - $2.15
Full Fiscal Year 2027 Financial Outlook
The Company provided the following financial guidance for the full fiscal year 2027:
Net revenues are expected to be in the range of:
$7.325 billion - $7.575 billion
GAAP
Non-GAAP
Consolidated gross margins are expected to be in the range of:
67.5% - 68.5%
68.5% - 69.5%
Operating margins are expected to be in the range of:
22.1% - 23.1%
29.1% - 30.1%
Earnings per share is expected to be in the range of:
$6.51 - $6.81
$8.70 - $9.00
Dividend
The next cash dividend of $0.52 per share is to be paid on July 29, 2026, to stockholders of record as of the close of business on July 10, 2026.
Fourth Quarter of Fiscal Year 2026 Business Highlights
Leading Product and Cloud Service Innovation
NetApp announced new next-generation EF50 and EF80 high-performance storage systems designed to deliver faster throughput, improved efficiency, and scalable performance for demanding workloads like AI, HPC, and databases. NetApp launched the AI Data EngineTM, an end-to-end AI data platform co-engineered with NVIDIA that enables enterprises to find, manage, and prepare data for production AI workloads through a global metadata catalog and integrated ecosystem. NetApp announced the general availability of iSCSI block storage and previews of unified file/block and ONTAPTM-mode for Google Cloud NetApp Volumes, enabling enterprises to run mission-critical workloads in the cloud with high performance, resilience, and simplified operations. NetApp announced the general availability of NetApp Data Migrator, a simple, multicloud data migration service that moves data across environments without specialized expertise. NetApp launched NetApp ConsoleTM Disaster Recovery for Google Cloud NetApp Volumes, providing a simple, low-cost way to protect VMware workloads across on‑premises and cloud environments to reduce the complexity and cost of traditional disaster recovery solutions. NetApp announced the public preview of Azure NetApp Files Elastic zone-redundant storage service level to help customers modernize mission-critical workloads with enterprise resilience, meet availability commitments, and reduce operational overhead. NetApp introduced a public preview integration between Cloud Volumes ONTAPTM and Microsoft OneLake enabling enterprises to run AI and analytics on existing NAS data in place without migration, reducing cost and accelerating time to value. NetApp announced TridentTM 26.02, a new software release that improves Kubernetes scalability and performance through parallelism while adding automation, cloud integrations, and cost-optimizing features like AutoGrow and auto-tiering. Customer and Partner Momentum
NetApp announced an expanded, multi-year collaboration with Google Cloud to deliver secure by design data infrastructure for Google Distributed Cloud environments, enabling AI-driven workloads in highly regulated, air-gapped sovereign and private cloud environments. NetApp announced a partnership with Nutanix to integrate ONTAP-based data infrastructure with the Nutanix Cloud Platform, enabling simplified virtualization modernization, faster migration, and enhanced hybrid multicloud operations. NetApp announced a strategic alliance with Commvault to deliver a closed-loop recovery architecture that combines early ransomware detection signals with an automated, validated recovery workflow at scale. NetApp partnered with Elastio to enhance ransomware resilience by integrating continuous backup inspection and recovery validation into its NetApp Ransomware ResilienceTM Solution for end-to-end, defense-in-depth data protection. NetApp announced that Red Hat OpenShift Virtualization supports Google Cloud NetApp Volumes and NetApp Trident as a generally available option for a unified platform to run and manage virtual machines (VMs) and containers side-by-side. NetApp achieved AWS High Performance Computing Competency for ONTAP, validating its ability to deliver scalable, high-performance storage solutions for HPC workloads on AWS. NetApp collaborated with Enkrypt AI to integrate AI risk insights with data-layer security, enabling real-time, context-aware enforcement of data access decisions to reduce exposure and strengthen AI governance. NetApp expanded its collaboration with Cyera to integrate enterprise data risk intelligence with storage-layer enforcement, enabling real-time, policy-driven access control and automated remediation of sensitive data exposure. Awards and Recognition
For the seventh time, NetApp won the 2026 Google Cloud Infrastructure Modernization Partner of the Year for Storage Award for helping customers modernize infrastructure and run enterprise workloads using Google Cloud NetApp Volumes. NetApp was named a Leader and Fast Mover in GigaOm’s Radar for Globally Distributed File Systems, showcasing FlexCache and ONTAP capabilities for delivering consistent, secure, and high-performance global file access. NetApp AFF A-Series won the Primary Storage category of the Storage Newsletter Awards, which recognized top products in data management, protection, and storage. Webcast and Conference Call Information
NetApp will host a conference call to discuss these results today at 2:30 p.m. Pacific Time. To access the live webcast of this event, go to the NetApp Investor Relations website at investors.netapp.com. In addition, this press release and other information related to the call will be posted on the Investor Relations website. An audio replay will be available on the website after 4:30 p.m. Pacific Time today. NetApp uses its website as a tool to disclose important information about NetApp and comply with its disclosure obligations under Regulation Fair Disclosure.
“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, all of the statements made in the First Quarter of Fiscal Year 2027 Financial Outlook section and the Full Fiscal Year 2027 Financial Outlook section, and statements about our business, economic and market outlook, financial guidance, our overall future prospects, demand for our AI solutions and other offerings, our ability to provide our customers secure, high-performance access to their data, our ability to maintain our operating margins, our ability to sustain growth, our platform and offerings, and our ability to capitalize on opportunities and deliver increasing results and value for our stakeholders. Actual results may differ materially from these statements for a variety of reasons, including, without limitation, our ability to keep pace with the rapid industry, technological and market trends and changes in the markets in which we operate; our ability to execute our evolved cloud strategy and introduce and gain market acceptance for our products and services; our ability to maintain our customer, partner, supplier and contract manufacturer relationships on favorable terms and conditions; global political, macroeconomic and market conditions, including inflation, fluctuating interest rates, tariffs, changes in trade policy, regulations, monetary policy shifts, recession risks, and foreign exchange volatility and the resulting impact on demand for our products; the impact of new or ongoing geopolitical conflicts and sanctions; adoption or changes to laws, regulations, standards, or policies affecting our operations, products, services, the storage industry, or AI usage; material cybersecurity and other security breaches; the impact of supply chain disruptions on our business operations, financial performance and results of operations; changes and related uncertainty in U.S. government spending or policy, including due to prolonged federal government shutdowns; changes in overall technology spending by our customers; revenue seasonality; changes in laws or regulations, including those relating to privacy, data protection and information security; the timing of orders and their fulfillment; and our ability to manage our gross profit margins, including managing component costs. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the factors described under the sections titled “Risk Factors” in our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q. All statements made in this release are made only as of the date set forth at the beginning of this release. We disclaim any obligation to update information contained in this press release, whether as a result of new information, future events, or otherwise.
NetApp, the NetApp logo, and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. All other marks are the property of their respective owners.
NetApp Usage of Non-GAAP Financial Information
To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in the United States (GAAP), NetApp provides investors with certain non-GAAP measures, including, but not limited to, historical non-GAAP gross margins, non-GAAP gross profit, non-GAAP operating income, non-GAAP operating margins, non-GAAP net income, non-GAAP effective tax rate, free cash flow, billings, and historical and projected non-GAAP earnings per share.
NetApp believes that the presentation of its non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. Non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in financial and operational decision making.
NetApp believes that the presentation of non-GAAP gross margins, non-GAAP gross profit, non-GAAP operating income, non-GAAP operating margins, non-GAAP effective tax rate, non-GAAP net income, and non-GAAP earnings per share data provides investors with supplemental metrics that assist in understanding current results and future prospects, earnings and profitability that are complementary to GAAP metrics. Each of these non-GAAP metrics is defined as the applicable GAAP metric adjusted to exclude the items defined in A through I below, as applicable, while our non-GAAP effective tax rate and non-GAAP net income also reflect a non-GAAP tax provision, as described in item J below, instead of our GAAP tax provision. GAAP earnings per share and non-GAAP earnings per share are calculated using the net income divided by the diluted number of shares for the applicable period.
NetApp believes that the presentation of free cash flow, which it defines as the net cash provided by operating activities less cash used to acquire property and equipment, to be a liquidity measure that provides useful information to investors and management because it reflects cash that can be used to, among other things, invest in its business, make strategic acquisitions, repurchase common stock, and pay dividends on its common stock. As free cash flow is not a measure of liquidity calculated in accordance with GAAP, free cash flow should be considered in addition to, but not as a substitute for, the analysis provided in the statement of cash flows.
NetApp approximates billings by adding net revenues as reported on our Condensed Consolidated Statements of Operations for the period to the change in total deferred revenue as reported on our Condensed Consolidated Statements of Cash Flows for the same period. Billings is a performance measure that NetApp believes provides useful information to investors and management because it approximates the amounts under purchase orders received by us during a given period that have been billed.
NetApp excludes the following items from its non-GAAP measures when applicable:
A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its business combinations. The amortization of intangible assets varies depending on the level of acquisition activity. Management finds it useful to exclude these charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods and in measuring operational performance.
B. Stock-based compensation expenses. NetApp excludes stock-based compensation expenses from its non-GAAP measures primarily because the amount can fluctuate based on variables unrelated to the performance of the underlying business. While management views stock-based compensation as a key element of our employee retention and long-term incentives, we do not view it as an expense to be used in evaluating operational performance in any given period.
C. Litigation settlements. NetApp may periodically incur charges or benefits related to litigation settlements. NetApp excludes these charges and benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.
D. Acquisition-related expenses. NetApp excludes acquisition-related expenses, including (a) due diligence, legal and other one-time integration charges and (b) write down of assets acquired that NetApp does not intend to use in its ongoing business, from its non-GAAP measures, primarily because they are not related to our ongoing business or cost base and, therefore, are less useful for future planning and forecasting.
E. Restructuring charges. These charges consist of restructuring charges that are incurred based on the particular facts and circumstances of restructuring decisions, including employment and contractual settlement terms, and other related charges, and can vary in size and frequency. We therefore exclude them in our assessment of operational performance.
F. Asset impairments. These are non-cash charges to write down assets when there is an indication that the asset has become impaired. Management finds it useful to exclude these non-cash charges due to the unpredictability of these events in its assessment of operational performance.
G. Gains/losses on the sale or derecognition of assets. These are gains/losses from the sale of our properties and other transactions in which we transfer and/or lose control of assets to a third party. This is inclusive of third-party advisory, legal and other costs that result directly from and are essential to a sale transaction and that would not have been incurred had the decision to sell not been made. Management believes that these transactions do not reflect the results of our underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
H. Gains/losses on the sale of investments in equity securities. These are gains/losses from the sale of our investment in certain equity securities. Typically, such investments are sold as a result of a change in control of the underlying businesses. Management believes that these transactions do not reflect the results of our underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses incurred as a result of the early extinguishment of debt. Management believes such non-recurring costs do not reflect the results of its underlying, ongoing business and, therefore, are less useful for future planning and forecasting.
J. Income tax effects. NetApp’s non-GAAP tax provision is based upon a projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements, statute lapses and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-recurring book and/or tax accounting method changes, (c) tax charges or benefits that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) tax charges or benefits resulting from the integration of intellectual property from acquisitions. Management believes that the use of non-GAAP tax provisions provides a more meaningful measure of the Company’s operational performance.
Non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, non-GAAP measures are not based on any comprehensive set of accounting rules or principles. NetApp believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. NetApp management compensates for these limitations by analyzing current and projected results on a GAAP basis as well as a non-GAAP basis. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. A detailed reconciliation of our non-GAAP to GAAP results can be found herein. In the press release and accompanying financial statements and reconciliations, the terms "operating income" and "income from operations" are used interchangeably. Similarly, "earnings per share" and "net income per share" are also used interchangeably.
Constant Currency
In periods in which the impacts of foreign currency exchange rate changes are significant, NetApp presents certain constant currency growth rates or quantifies the impact of foreign currency exchange rate changes on year-over-year fluctuations, including for net revenues, billings, and earnings. This constant currency information assumes that the same foreign currency exchange rates that were in effect for the comparable prior-year period were used in translation of the current period results.
About NetApp
For more than three decades, NetApp has helped the world’s leading organizations navigate change – from the rise of enterprise storage to the intelligent era defined by data and AI. Today, NetApp is the Intelligent Data Infrastructure company, helping customers turn data into a catalyst for innovation, resilience, and growth.
At the heart of that infrastructure is the NetApp data platform – the unified, enterprise-grade, intelligent foundation that connects, protects, and activates data across every cloud, workload, and environment. Built on the proven power of NetApp ONTAP, our leading data management software and OS, and enhanced by automation through the AI Data Engine and AFX, it delivers observability, resilience, and intelligence at scale.
Disaggregated by design, the NetApp data platform separates storage, services, and control so enterprises can modernize faster, scale efficiently, and innovate without lock-in. As the only enterprise storage platform natively embedded in the world’s largest clouds, it gives organizations the freedom to run any workload anywhere with consistent performance, governance, and protection.
With NetApp, data is always ready – ready to defend against threats, ready to power AI, and ready to drive the next breakthrough. That’s why the world’s most forward-thinking enterprises trust NetApp to turn intelligence into advantage.
Learn more at www.netapp.com or follow us on X, LinkedIn, Facebook, and Instagram.
NETAPP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
(Unaudited)
April 24, 2026
April 25, 2025
ASSETS
Current assets:
Cash, cash equivalents and investments
$
3,584
$
3,846
Accounts receivable
1,286
1,246
Inventories
198
186
Other current assets
708
573
Total current assets
5,776
5,851
Property and equipment, net
592
563
Goodwill and purchased intangible assets, net
2,794
2,766
Other non-current assets
1,582
1,643
Total assets
$
10,744
$
10,823
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
550
$
511
Accrued expenses
1,151
1,122
Current portion of long-term debt
—
750
Short-term deferred revenue
2,320
2,279
Total current liabilities
4,021
4,662
Long-term debt
2,487
2,485
Other long-term liabilities
360
379
Long-term deferred revenue
2,525
2,257
Total liabilities
9,393
9,783
Stockholders' equity
1,351
1,040
Total liabilities and stockholders' equity
$
10,744
$
10,823
NETAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except net income per share amounts)
(Unaudited)
Three Months Ended
Year Ended
April 24, 2026
April 25, 2025
April 24, 2026
April 25, 2025
Revenues:
Product
$
966
$
845
$
3,194
$
3,040
Services
982
887
3,731
3,532
Net revenues
1,948
1,732
6,925
6,572
Cost of revenues:
Cost of product
425
378
1,401
1,284
Cost of services
158
161
625
675
Total cost of revenues
583
539
2,026
1,959
Gross profit
1,365
1,193
4,899
4,613
Operating expenses:
Sales and marketing
488
458
1,869
1,865
Research and development
261
256
991
1,012
General and administrative
85
85
344
311
Restructuring charges
(1
)
45
21
83
Acquisition-related expense
—
1
—
5
Total operating expenses
833
845
3,225
3,276
Income from operations
532
348
1,674
1,337
Other (expense) income, net
(14
)
6
(26
)
46
Income before income taxes
518
354
1,648
1,383
Provision for income taxes
114
14
372
197
Net income
$
404
$
340
$
1,276
$
1,186
Net income per share:
Basic
$
2.05
$
1.67
$
6.41
$
5.81
Diluted
$
2.03
$
1.65
$
6.35
$
5.67
Shares used in net income per share calculations:
Basic
197
203
199
204
Diluted
199
206
201
209
NETAPP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
(Unaudited)
Three Months Ended
Year Ended
April 24, 2026
April 25, 2025
April 24, 2026
April 25, 2025
Cash flows from operating activities:
Net income
$
404
$
340
$
1,276
$
1,186
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
49
53
200
243
Non-cash operating lease cost
10
10
42
41
Stock-based compensation
100
95
382
386
Deferred income taxes
87
10
135
(100
)
Other items, net
(3
)
25
55
—
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable
27
(323
)
(36
)
(219
)
Inventories
(89
)
81
(12
)
(1
)
Accounts payable
129
69
31
(8
)
Accrued expenses
225
156
(23
)
62
Deferred revenue
215
300
281
208
Long-term taxes payable
(10
)
(123
)
(7
)
(207
)
Changes in other operating assets and liabilities, net
(194
)
(18
)
(257
)
(85
)
Net cash provided by operating activities
950
675
2,067
1,506
Cash flows from investing activities:
(Purchases) redemptions of investments, net
(130
)
(345
)
(412
)
245
Purchases of property and equipment
(50
)
(35
)
(198
)
(168
)
Other investing activities, net
—
67
15
70
Net cash (used in) provided by investing activities
(180
)
(313
)
(595
)
147
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock award plans
—
—
103
108
Payments for taxes related to net share settlement of stock awards
(25
)
(31
)
(137
)
(199
)
Repurchase of common stock
(200
)
(250
)
(950
)
(1,150
)
Issuances of debt, net of issuance costs
—
1,240
—
1,240
Repayments and extinguishment of debt
—
—
(750
)
(400
)
Dividends paid
(103
)
(105
)
(413
)
(424
)
Other financing activities, net
—
(3
)
—
(3
)
Net cash (used in) provided by financing activities
(328
)
851
(2,147
)
(828
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(2
)
18
1
15
Net change in cash, cash equivalents and restricted cash
440
1,231
(674
)
840
Cash, cash equivalents and restricted cash:
Beginning of period
1,635
1,518
2,749
1,909
End of period
$
2,075
$
2,749
$
2,075
$
2,749
NETAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
INCOME STATEMENT INFORMATION
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
NET INCOME
$
404
$
340
$
1,276
$
1,186
Adjustments:
Amortization of intangible assets
4
6
21
47
Stock-based compensation
100
95
382
386
Restructuring charges
(1
)
45
21
83
Acquisition-related expense
—
1
—
5
Gains/losses on the sale or derecognition of assets
(11
)
1
(10
)
7
Gain on sale of equity investment
—
(10
)
—
(10
)
Income tax effects
(8
)
(42
)
(50
)
(149
)
Resolution of income tax matters
(5
)
(39
)
(5
)
(39
)
NON-GAAP NET INCOME
$
483
$
397
$
1,635
$
1,516
COST OF REVENUES
$
583
$
539
$
2,026
$
1,959
Adjustments:
Amortization of intangible assets
(3
)
(3
)
(11
)
(28
)
Stock-based compensation
(6
)
(7
)
(28
)
(30
)
NON-GAAP COST OF REVENUES
$
574
$
529
$
1,987
$
1,901
COST OF PRODUCT REVENUES
$
425
$
378
$
1,401
$
1,284
Adjustments:
Stock-based compensation
(1
)
(1
)
(6
)
(6
)
NON-GAAP COST OF PRODUCT REVENUES
$
424
$
377
$
1,395
$
1,278
COST OF SERVICES REVENUES
$
158
$
161
$
625
$
675
Adjustments:
Amortization of intangible assets
(3
)
(3
)
(11
)
(28
)
Stock-based compensation
(5
)
(6
)
(22
)
(24
)
NON-GAAP COST OF SERVICES REVENUES
$
150
$
152
$
592
$
623
GROSS PROFIT
$
1,365
$
1,193
$
4,899
$
4,613
Adjustments:
Amortization of intangible assets
3
3
11
28
Stock-based compensation
6
7
28
30
NON-GAAP GROSS PROFIT
$
1,374
$
1,203
$
4,938
$
4,671
NETAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
INCOME STATEMENT INFORMATION
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
SALES AND MARKETING EXPENSES
$
488
$
458
$
1,869
$
1,865
Adjustments:
Amortization of intangible assets
(1
)
(3
)
(10
)
(19
)
Stock-based compensation
(41
)
(40
)
(155
)
(162
)
NON-GAAP SALES AND MARKETING EXPENSES
$
446
$
415
$
1,704
$
1,684
RESEARCH AND DEVELOPMENT EXPENSES
$
261
$
256
$
991
$
1,012
Adjustments:
Stock-based compensation
(34
)
(31
)
(126
)
(135
)
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES
$
227
$
225
$
865
$
877
GENERAL AND ADMINISTRATIVE EXPENSES
$
85
$
85
$
344
$
311
Adjustments:
Stock-based compensation
(19
)
(17
)
(73
)
(59
)
Gains/losses on the sale or derecognition of assets
11
(1
)
10
(4
)
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSES
$
77
$
67
$
281
$
248
RESTRUCTURING CHARGES
$
(1
)
$
45
$
21
$
83
Adjustments:
Restructuring charges
1
(45
)
(21
)
(83
)
NON-GAAP RESTRUCTURING CHARGES
$
—
$
—
$
—
$
—
ACQUISITION-RELATED EXPENSE
$
—
$
1
$
—
$
5
Adjustments:
Acquisition-related expense
—
(1
)
—
(5
)
NON-GAAP ACQUISITION-RELATED EXPENSE
$
—
$
—
$
—
$
—
OPERATING EXPENSES
$
833
$
845
$
3,225
$
3,276
Adjustments:
Amortization of intangible assets
(1
)
(3
)
(10
)
(19
)
Stock-based compensation
(94
)
(88
)
(354
)
(356
)
Restructuring charges
1
(45
)
(21
)
(83
)
Acquisition-related expense
—
(1
)
—
(5
)
Gains/losses on the sale or derecognition of assets
11
(1
)
10
(4
)
NON-GAAP OPERATING EXPENSES
$
750
$
707
$
2,850
$
2,809
NETAPP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
INCOME STATEMENT INFORMATION
($ in millions, except net income per share)
Q4 FY26
Q4 FY25
FY2026
FY2025
INCOME FROM OPERATIONS
$
532
$
348
$
1,674
$
1,337
Adjustments:
Amortization of intangible assets
4
6
21
47
Stock-based compensation
100
95
382
386
Restructuring charges
(1
)
45
21
83
Acquisition-related expense
—
1
—
5
Gains/losses on the sale or derecognition of assets
(11
)
1
(10
)
4
NON-GAAP INCOME FROM OPERATIONS
$
624
$
496
$
2,088
$
1,862
OTHER (EXPENSE) INCOME, NET
$
(14
)
$
6
$
(26
)
$
46
Adjustments:
Gains/losses on the sale or derecognition of assets
—
—
—
3
Gain on sale of equity investment
—
(10
)
—
(10
)
NON-GAAP OTHER (EXPENSE) INCOME, NET
$
(14
)
$
(4
)
$
(26
)
$
39
INCOME BEFORE INCOME TAXES
$
518
$
354
$
1,648
$
1,383
Adjustments:
Amortization of intangible assets
4
6
21
47
Stock-based compensation
100
95
382
386
Restructuring charges
(1
)
45
21
83
Acquisition-related expense
—
1
—
5
Gains/losses on the sale or derecognition of assets
(11
)
1
(10
)
7
Gain on sale of equity investment
—
(10
)
—
(10
)
NON-GAAP INCOME BEFORE INCOME TAXES
$
610
$
492
$
2,062
$
1,901
PROVISION FOR INCOME TAXES
$
114
$
14
$
372
$
197
Adjustments:
Income tax effects
8
42
50
149
Resolution of income tax matters
5
39
5
39
NON-GAAP PROVISION FOR INCOME TAXES
$
127
$
95
$
427
$
385
NET INCOME PER SHARE
$
2.03
$
1.65
$
6.35
$
5.67
Adjustments:
Amortization of intangible assets
0.02
0.03
0.10
0.22
Stock-based compensation
0.50
0.46
1.90
1.85
Restructuring charges
(0.01
)
0.22
0.10
0.40
Acquisition-related expense
—
0.01
—
0.03
Gains/losses on the sale or derecognition of assets
(0.05
)
—
(0.05
)
0.03
Gain on sale of equity investment
—
(0.05
)
—
(0.05
)
Income tax effects
(0.04
)
(0.20
)
(0.25
)
(0.71
)
Resolution of income tax matters
(0.02
)
(0.19
)
(0.02
)
(0.19
)
NON-GAAP NET INCOME PER SHARE
$
2.43
$
1.93
$
8.13
$
7.25
RECONCILIATION OF GAAP TO NON-GAAP
GROSS MARGIN
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
Gross margin
70.1
%
68.9
%
70.7
%
70.2
%
Cost of revenues adjustments
0.4
%
0.6
%
0.6
%
0.9
%
Non-GAAP Gross margin
70.5
%
69.5
%
71.3
%
71.1
%
Cost of revenues
$
583
$
539
$
2,026
$
1,959
Cost of revenues adjustments:
Amortization of intangible assets
(3
)
(3
)
(11
)
(28
)
Stock-based compensation
(6
)
(7
)
(28
)
(30
)
Non-GAAP Cost of revenues
$
574
$
529
$
1,987
$
1,901
Net revenues
$
1,948
$
1,732
$
6,925
$
6,572
RECONCILIATION OF GAAP TO NON-GAAP
PRODUCT GROSS MARGIN
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
Product gross margin
56.0
%
55.3
%
56.1
%
57.8
%
Cost of product revenues adjustments
0.1
%
0.1
%
0.2
%
0.2
%
Non-GAAP Product gross margin
56.1
%
55.4
%
56.3
%
58.0
%
Cost of product revenues
$
425
$
378
$
1,401
$
1,284
Cost of product revenues adjustments:
Stock-based compensation
(1
)
(1
)
(6
)
(6
)
Non-GAAP Cost of product revenues
$
424
$
377
$
1,395
$
1,278
Product revenues
$
966
$
845
$
3,194
$
3,040
RECONCILIATION OF GAAP TO NON-GAAP
SERVICES GROSS MARGIN
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
Services gross margin
83.9
%
81.8
%
83.2
%
80.9
%
Cost of services revenues adjustments
0.8
%
1.1
%
0.9
%
1.5
%
Non-GAAP Services gross margin
84.7
%
82.9
%
84.1
%
82.4
%
Cost of services revenues
$
158
$
161
$
625
$
675
Cost of services revenues adjustments:
Amortization of intangible assets
(3
)
(3
)
(11
)
(28
)
Stock-based compensation
(5
)
(6
)
(22
)
(24
)
Non-GAAP Cost of services revenues
$
150
$
152
$
592
$
623
Services revenues
$
982
$
887
$
3,731
$
3,532
RECONCILIATION OF GAAP TO NON-GAAP
OPERATING MARGIN
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
Operating margin
27.3
%
20.1
%
24.2
%
20.3
%
Adjustments
4.7
%
8.5
%
6.0
%
8.0
%
Non-GAAP Operating margin
32.0
%
28.6
%
30.2
%
28.3
%
Income from operations
$
532
$
348
$
1,674
$
1,337
Income from operations adjustments:
Amortization of intangible assets
4
6
21
47
Stock-based compensation
100
95
382
386
Restructuring charges
(1
)
45
21
83
Acquisition-related expense
—
1
—
5
Gains/losses on the sale or derecognition of assets
(11
)
1
(10
)
4
Non-GAAP Income from operations
$
624
$
496
$
2,088
$
1,862
Net revenues
$
1,948
$
1,732
$
6,925
$
6,572
RECONCILIATION OF GAAP TO NON-GAAP
EFFECTIVE TAX RATE
Q4 FY26
Q4 FY25
FY2026
FY2025
Effective tax rate
22.0
%
4.0
%
22.6
%
14.2
%
Adjustments:
Income tax effects
(2.2
)%
4.3
%
(2.2
)%
3.2
%
Resolution of income tax matters
1.0
%
11.0
%
0.3
%
2.8
%
Non-GAAP Effective tax rate
20.8
%
19.3
%
20.7
%
20.2
%
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
TO FREE CASH FLOW (NON-GAAP)
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
Net cash provided by operating activities
$
950
$
675
$
2,067
$
1,506
Purchases of property and equipment
(50
)
(35
)
(198
)
(168
)
Free cash flow
$
900
$
640
$
1,869
$
1,338
RECONCILIATION OF NET REVENUES
TO BILLINGS (NON-GAAP)
($ in millions)
Q4 FY26
Q4 FY25
FY2026
FY2025
Net revenues
$
1,948
$
1,732
$
6,925
$
6,572
Change in deferred revenue*
215
300
281
208
Billings
$
2,163
$
2,032
$
7,206
$
6,780
* As reported on our Condensed Consolidated Statements of Cash Flows
NETAPP, INC.
SUPPLEMENTAL DATA
($ in millions, except net income per share, DSO, DPO, and Inventory Turns)
(Unaudited)
Revenues by Segment
Q4 FY26
Q4 FY25
FY2026
FY2025
Product
$
966
$
845
$
3,194
$
3,040
Support
688
625
2,636
2,512
Professional and Other Services
112
98
407
355
Hybrid Cloud Segment Net Revenues
1,766
1,568
6,237
5,907
Public Cloud Segment Net Revenues
182
164
688
665
Net Revenues
$
1,948
$
1,732
$
6,925
$
6,572
Hybrid Cloud Segment Net Revenues by Storage Category
Q4 FY26
Q4 FY25
FY2026
FY2025
All-flash revenues
$
1,216
$
1,034
$
4,178
$
3,763
Hybrid-flash and other revenues
550
534
2,059
2,144
Hybrid Cloud Segment Net Revenues
$
1,766
$
1,568
$
6,237
$
5,907
Gross Profit by Segment
Q4 FY26
Q4 FY25
FY2026
FY2025
Product
$
542
$
468
$
1,799
$
1,762
Support
640
577
2,438
2,315
Professional and Other Services
36
28
126
94
Hybrid Cloud Segment Gross Profit
1,218
1,073
4,363
4,171
Public Cloud Segment Gross Profit
156
130
575
500
Total Segments Gross Profit
1,374
1,203
4,938
4,671
Amortization of Intangible Assets
(3
)
(3
)
(11
)
(28
)
Stock-based Compensation
(6
)
(7
)
(28
)
(30
)
Unallocated Cost of Revenues
(9
)
(10
)
(39
)
(58
)
Gross Profit
$
1,365
$
1,193
$
4,899
$
4,613
Gross Margin by Segment
Q4 FY26
Q4 FY25
FY2026
FY2025
Product
56.1
%
55.4
%
56.3
%
58.0
%
Support
93.0
%
92.3
%
92.5
%
92.2
%
Professional and Other Services
32.1
%
28.6
%
31.0
%
26.5
%
Hybrid Cloud Segment Gross Margin
69.0
%
68.4
%
70.0
%
70.6
%
Public Cloud Segment Gross Margin
85.7
%
79.3
%
83.6
%
75.2
%
NETAPP, INC.
SUPPLEMENTAL DATA
($ in millions, except net income per share, DSO, DPO, and Inventory Turns)
(Unaudited)
Geographic Mix
% of Q4 FY26
% of Q4 FY25
% of FY 2026
% of FY 2025
Revenue
Revenue
Revenue
Revenue
Americas
50
%
51
%
51
%
51
%
Americas Commercial
40
%
42
%
41
%
40
%
U.S. Public Sector*
10
%
9
%
10
%
11
%
EMEA
36
%
34
%
34
%
34
%
Asia Pacific
14
%
15
%
15
%
15
%
* U.S. Public Sector includes revenue from both 1) the U.S. federal government (“U.S. Fed”) and 2) U.S. state governments, local municipalities and education institutions (“U.S. SLED”).
Pathways Mix
% of Q4 FY26
% of Q4 FY25
% of FY 2026
% of FY 2025
Revenue
Revenue
Revenue
Revenue
Direct
25
%
22
%
24
%
22
%
Indirect
75
%
78
%
76
%
78
%
Non-GAAP Income from Operations, Income before Income Taxes & Effective Tax Rate
Q4 FY26
Q4 FY25
FY2026
FY2025
Non-GAAP Income from Operations
$
624
$
496
$
2,088
$
1,862
Operating Margin
32.0
%
28.6
%
30.2
%
28.3
%
Non-GAAP Income before Income Taxes
$
610
$
492
$
2,062
$
1,901
Non-GAAP Effective Tax Rate
20.8
%
19.3
%
20.7
%
20.2
%
Non-GAAP Net Income
Q4 FY26
Q4 FY25
FY2026
FY2025
Non-GAAP Net Income
$
483
$
397
$
1,635
$
1,516
Non-GAAP Weighted Average Common Shares Outstanding, Diluted
199
206
201
209
Non-GAAP Net Income per Share, Diluted
$
2.43
$
1.93
$
8.13
$
7.25
Select Balance Sheet Items
Q4 FY26
Q4 FY25
Deferred Revenue
$
4,845
$
4,536
DSO (days)
60
65
DPO (days)
86
86
Inventory Turns
12
12
Days sales outstanding (DSO) is defined as accounts receivable divided by net revenues, multiplied by the number of days in the quarter.
Days payables outstanding (DPO) is defined as accounts payable divided by cost of revenues, multiplied by the number of days in the quarter.
Inventory turns is defined as annualized cost of revenues divided by net inventories.
Select Cash Flow Statement Items
Q4 FY26
Q4 FY25
FY2026
FY2025
Net Cash Provided by Operating Activities
$
950
$
675
$
2,067
$
1,506
Purchases of Property and Equipment
$
50
$
35
$
198
$
168
Free Cash Flow
$
900
$
640
$
1,869
$
1,338
Free Cash Flow Margin
46.2
%
37.0
%
27.0
%
20.4
%
Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities less purchases of property and equipment.
Free cash flow margin is defined as free cash flow as a percentage of net revenues.
Some items may not add or recalculate due to rounding.
NETAPP, INC.
RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP
FIRST QUARTER FISCAL 2027
First Quarter
Fiscal 2027
GAAP Guidance - Gross Margin
68.1% - 69.1%
Adjustments:
Cost of revenues adjustments
1%
Non-GAAP Guidance - Gross Margin
69.1% - 70.1%
First Quarter
Fiscal 2027
GAAP Guidance - Operating Margin
19.4% - 20.4%
Adjustments:
Stock-based compensation expense
6%
Restructuring charges
3%
Non-GAAP Guidance - Operating Margin
28.4% - 29.4%
Some items may not add or recalculate due to rounding.
NETAPP, INC.
RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP
EXPRESSED AS NET INCOME PER SHARE
FIRST QUARTER FISCAL 2027
First Quarter
Fiscal 2027
GAAP Guidance - Net Income Per Share
$1.35 - $1.45
Adjustments of Specific Items to Net Income
Per Share:
Amortization of intangible assets
$0.02
Stock-based compensation expense
$0.52
Restructuring charges
$0.30
Income tax effects
($0.14)
Total Adjustments
$0.70
Non-GAAP Guidance - Net Income Per Share
$2.05 - $2.15
Some items may not add or recalculate due to rounding.
NETAPP, INC.
RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP
FISCAL 2027
Fiscal 2027
GAAP Guidance - Gross Margin
67.5% - 68.5%
Adjustments:
Cost of revenues adjustments
1%
Non-GAAP Guidance - Gross Margin
68.5% - 69.5%
Fiscal 2027
GAAP Guidance - Operating Margin
22.1% - 23.1%
Adjustments:
Stock-based compensation expense
6%
Restructuring charges
1%
Non-GAAP Guidance - Operating Margin
29.1% - 30.1%
Some items may not add or recalculate due to rounding.
NETAPP, INC.
RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP
EXPRESSED AS NET INCOME PER SHARE
FISCAL 2027
Fiscal 2027
GAAP Guidance - Net Income Per Share
$6.51 - $6.81
Adjustments of Specific Items to Net Income
Per Share:
Amortization of intangible assets
$0.11
Stock-based compensation expense
$2.19
Restructuring charges
$0.30
Income tax effects
($0.41)
Total Adjustments
$2.19
Non-GAAP Guidance - Net Income Per Share
$8.70-$9.00
Some items may not add or recalculate due to rounding.
NetApp (NTAP - Free Report) came out with quarterly earnings of $2.43 per share, beating the Zacks Consensus Estimate of $2.27 per share. This compares to earnings of $1.93 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +7.05%. A quarter ago, it was expected that this data storage company would post earnings of $2.07 per share when it actually produced earnings of $2.12, delivering a surprise of +2.42%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
NetApp, which belongs to the Zacks Computer- Storage Devices industry, posted revenues of $1.95 billion for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 4.51%. This compares to year-ago revenues of $1.73 billion. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
NetApp shares have added about 33.3% since the beginning of the year versus the S&P 500's gain of 9.9%.
What's Next for NetApp?While NetApp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for NetApp was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.92 on $1.69 billion in revenues for the coming quarter and $8.64 on $7.24 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer- Storage Devices is currently in the top 9% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the broader Zacks Computer and Technology sector, Guidewire Software (GWRE - Free Report) , is yet to report results for the quarter ended April 2026. The results are expected to be released on June 4.
This provider of software to the insurance industry is expected to post quarterly earnings of $0.79 per share in its upcoming report, which represents a year-over-year change of -10.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Guidewire Software's revenues are expected to be $356.01 million, up 21.3% from the year-ago quarter.
For the quarter ended April 2026, NetApp (NTAP - Free Report) reported revenue of $1.95 billion, up 12.5% over the same period last year. EPS came in at $2.43, compared to $1.93 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $1.86 billion, representing a surprise of +4.51%. The company delivered an EPS surprise of +7.05%, with the consensus EPS estimate being $2.27.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how NetApp performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Gross margin - Product - Non-GAAP: 56.1% versus the seven-analyst average estimate of 55.5%.Total Revenue - % Change: 12% versus the six-analyst average estimate of 7.4%.Gross margin - Services - Non-GAAP: 84.7% compared to the 84% average estimate based on six analysts.Net revenues- Services: $982 million versus $948.67 million estimated by seven analysts on average. Compared to the year-ago quarter, this number represents a +10.7% change.Net revenues- Product: $966 million compared to the $910.27 million average estimate based on seven analysts. The reported number represents a change of +14.3% year over year.Net revenues- Public Cloud: $182 million compared to the $182 million average estimate based on five analysts. The reported number represents a change of +11% year over year.Net revenues- Hybrid Cloud: $1.77 billion compared to the $1.67 billion average estimate based on five analysts. The reported number represents a change of +12.6% year over year.Net revenues- Support: $688 million versus the four-analyst average estimate of $663.96 million. The reported number represents a year-over-year change of +10.1%.Net revenues- Professional and Other Services: $112 million versus $111.21 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +14.3% change.Gross Profit- Products: $542 million compared to the $505.36 million average estimate based on seven analysts.Gross Profit- Public Cloud: $156 million versus $155.08 million estimated by three analysts on average.Gross Profit- Professional and Other Services: $36 million versus the three-analyst average estimate of $34.72 million.View all Key Company Metrics for NetApp here>>>
Shares of NetApp have returned +31.4% over the past month versus the Zacks S&P 500 composite's +5% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.
Is Backblaze the Next Momentum Monster?NetApp NASDAQ: NTAP reported record fourth-quarter and fiscal 2026 results, with executives citing strong demand for artificial intelligence infrastructure, public cloud services, all-flash storage and its Keystone storage-as-a-service offering.
Chief Executive Officer George Kurian called fiscal 2026 “a landmark year” for the company, saying NetApp achieved record results across revenue, gross profit, operating income, cash flow from operations and free cash flow. He said the company’s performance was supported by fourth-quarter customer demand and demonstrated its ability to benefit from “the accelerating adoption of enterprise AI and cloud.”
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Semtech Stock Climbs as AI Boom Drives Turnaround Success“NetApp stands at the forefront of a transformative era driven by rapid AI adoption and explosive cloud growth,” Kurian said, emphasizing the company’s positioning in hybrid cloud and intelligent data infrastructure.
Quarterly Revenue and Earnings Top Guidance Chief Financial Officer Wissam Jabre said NetApp delivered fiscal fourth-quarter revenue of $1.95 billion, up 12% year-over-year and 14% sequentially. Excluding the divested Spot by NetApp business, which generated $9 million in the year-ago quarter, revenue grew 13% year-over-year. Jabre said revenue was up 10% year-over-year excluding foreign exchange effects.
2 AI Stocks That Gap and Crapped for a Dip Buying Opportunity Non-GAAP earnings per share were $2.43, up 26% from the prior year and above the high end of the company’s guidance range. Jabre said the quarter marked NetApp’s 10th consecutive quarter of year-over-year revenue growth.
Hybrid cloud revenue was $1.77 billion, up 13% year-over-year. Product revenue increased 14% to $966 million, which Jabre attributed in part to the execution of a multi-year agreement with Google Cloud to deliver secure, AI-ready data infrastructure to Google Distributed Cloud environments. Support revenue rose 10% to $688 million, partly driven by a one-time item, while professional services revenue grew 14% to $112 million, mainly due to growth in Keystone.
Public cloud revenue was $182 million in the quarter, up 11% year-over-year. Excluding Spot, public cloud revenue increased 18%, driven by demand for first-party and marketplace storage services.
AI and All-Flash Demand Drive Momentum Kurian said AI was a “clear growth engine” for NetApp in fiscal 2026. The company recorded approximately 500 AI and data preparation wins in the fourth quarter, bringing the full-year total to more than 1,100. During the question-and-answer session, Kurian said all 500 fourth-quarter AI wins were on-premises and included a mix of enterprise and neo-cloud customers.
He said roughly half of the AI use cases were tied to data preparation and large-scale analytics, while the remainder was split between training or fine-tuning large language models and inferencing.
NetApp’s all-flash revenue reached $4.2 billion for fiscal 2026, up 11% from the prior year. Fourth-quarter all-flash revenue was $1.2 billion, up 18% year-over-year. Kurian said customers are using NetApp’s flash offerings for high-performance AI environments where storage must support expensive GPU infrastructure, while hybrid flash also grew for less demanding AI workloads.
Kurian highlighted several customer examples, including a global financial company that signed a $20 million deal with NetApp to support AI-driven fraud detection and customer personalization, and a European government agency using NetApp’s disaggregated AFX solution in an NVIDIA SuperPOD environment.
In response to an analyst question, Kurian said AFX had early wins in neo-cloud, financial services, hedge funds and life sciences, while the company’s AI Data Engine was receiving positive feedback from customers seeking to organize large stores of unstructured data for AI projects.
Cloud, Keystone and Google Partnership Expand Opportunity Kurian said public cloud revenue reached $688 million for fiscal 2026, up 18% year-over-year on a basis normalized for the Spot divestiture. First-party and marketplace cloud services grew 30% during the year.
He said customers are increasingly choosing NetApp to simplify and scale hybrid and multi-cloud environments, including AI-related use cases. Kurian cited an insurance company using Azure NetApp Files with Azure Databricks for financial risk modeling and data science, and an Asian engineering company using FSx for NetApp ONTAP to support a generative AI chatbot deployment on AWS.
Revenue from Keystone grew approximately 65% from fiscal 2025. Kurian said the growth reflects a broader shift toward consumption-based IT models and the desire for a cloud-like experience for on-premises data. During the Q&A, he said Keystone’s growth is not merely a response to higher NAND pricing, although some customers may view the offering as a way to balance cost and use during a period of inflationary component costs.
The company also emphasized its expanded partnership with Google Cloud for Google Distributed Cloud. Kurian said the collaboration supports government agencies and regulated enterprises in secure and sovereign environments. In response to an analyst question, he said Google Distributed Cloud brings Google’s technology stack to disconnected or lightly connected data centers, including regulated industries, public sector and national security environments, and that NetApp was selected to provide a large portion of the data infrastructure.
Margins, Cash Flow and Capital Returns Fourth-quarter non-GAAP gross margin was 70.5%, up 100 basis points year-over-year, driven by public cloud gross margin expansion. Operating income was $624 million, up 26% from the prior year, while operating margin reached 32%, up 340 basis points year-over-year. Jabre said both operating income and operating margin were all-time records.
For the full fiscal year, revenue was $6.93 billion, up 5% year-over-year and above the high end of guidance. Excluding Spot, revenue grew 7%. Full-year operating margin was 30.2%, up 190 basis points, while non-GAAP EPS was $8.13, up 12%.
Operating cash flow for the year was $2.07 billion, and free cash flow was $1.87 billion, up close to 40% year-over-year. NetApp ended the year with $3.58 billion in cash and short-term investments and $2.49 billion in gross debt, resulting in a net cash position of $1.1 billion.
The company returned $303 million to shareholders in the fourth quarter through $200 million of share repurchases and $103 million in dividends. For the full year, NetApp returned $1.36 billion through share repurchases and dividends. Jabre said approximately $500 million remained under the current buyback authorization and announced a $1 billion increase to that authorization.
Fiscal 2027 Outlook Reflects AI Demand and Component Cost Pressure For fiscal 2027, NetApp guided for revenue of $7.325 billion to $7.575 billion. At the midpoint of $7.45 billion, that implies 8% year-over-year growth. The company expects gross margin of 68.5% to 69.5%, operating margin of 29.1% to 30.1%, and EPS of $8.70 to $9.00.
For the fiscal first quarter, NetApp expects revenue of $1.75 billion to $1.9 billion, with the midpoint implying 17% year-over-year growth. Jabre noted that the quarter includes an extra week, expected to contribute approximately $65 million of revenue and $21 million of operating expenses. First-quarter EPS is expected to range from $2.05 to $2.15.
Executives addressed investor questions about potential demand pull-forward and pricing changes tied to higher memory and component costs. Kurian said NetApp saw some accelerated decision-making, but added that “on the face of the Q4 P&L, the impact of pull forward or accelerated decision-making was minimal.” He said fourth-quarter results were tied to large deals the company had previously indicated could materialize in the second half of fiscal 2026.
Jabre said product gross margin is expected to trough in the July quarter and gradually improve as price adjustments take effect. Kurian said NetApp believes it can source adequate supply to meet its outlook for the year.
“As we look to FY 2027, we are confident in our strategy and our ability to deliver ongoing growth and leadership in AI and cloud,” Kurian said in closing remarks.
About NetApp NASDAQ: NTAPNetApp, Inc NASDAQ: NTAP is a data management and storage company that delivers hybrid cloud data services for applications and data. Founded in 1992 as Network Appliance and rebranded as NetApp in 2008, the company is headquartered in Sunnyvale, California. NetApp's offering focuses on enabling organizations to store, manage, protect and move data across on-premises environments and major public clouds.
The company's product portfolio centers on the ONTAP data management software and a range of storage systems and services built around it.
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NetApp Inc (NTAP) Q4 2026 Earnings Call Highlights: Record Revenue and Strategic AI Expansion NetApp Inc (NTAP) reports robust growth in revenue and earnings, driven by strong demand in cloud services and AI partnerships. Summary
Q4 Revenue: $1.95 billion, up 12% year over year.FY26 Revenue: $6.93 billion, up 5% year over year.Q4 Non-GAAP EPS: $2.43, up 26% year over year.FY26 Non-GAAP EPS: $8.13, up 12% year over year.Q4 Gross Margin: 70.5%, up 100 basis points year over year.FY26 Gross Margin: 71.3%, up 20 basis points year over year.Q4 Operating Margin: 32%, up 340 basis points year over year.FY26 Operating Margin: 30.2%, up 190 basis points year over year.Q4 Cash Flow from Operations: $950 million, up over 40% year over year.FY26 Free Cash Flow: $1.87 billion, up close to 40% year over year.Public Cloud Revenue FY26: $688 million, up 18% year over year.All-Flash Revenue FY26: $4.2 billion, up 11% year over year.Keystone Revenue Growth: Approximately 65% from FY25.Deferred Revenue: $4.85 billion, up 7% year over year.Remaining Performance Obligations: $5.65 billion, up 14% year over year.Q4 Public Cloud Gross Margin: 85.7%, up over 6 percentage points year over year.FY27 Revenue Guidance: $7.325 billion to $7.575 billion, implying 8% growth at midpoint.FY27 EPS Guidance: $8.70 to $9, implying 9% growth at midpoint.
Release Date: May 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points NetApp Inc NTAP achieved record results in FY26 across revenue, gross profit, operating income, cash flow from operations, and free cash flow, driven by strong customer demand.Public cloud revenue grew to $688 million in FY26, up 18% year over year, with first-party and marketplace cloud services increasing by 30%.The company reported nearly 50 partner AI factories and labs, highlighting the large opportunity as enterprises operationalize AI.NetApp Inc (NTAP) expanded its partnership with Google Cloud, enhancing opportunities in AI and sovereign cloud environments.All-flash revenue reached $4.2 billion in FY26, an increase of 11% from the previous year, with robust Q4 performance. Negative Points Rising memory and component costs are impacting NetApp Inc (NTAP), requiring close management of supply chain partnerships and pricing adjustments.The company faces potential risks from accelerated purchasing and demand pull-forward, which could affect future quarters.There is uncertainty around the impact of component cost pressures on product gross margins, despite efforts to mitigate these through price adjustments.NetApp Inc (NTAP) is navigating a dynamic macroenvironment, which could pose challenges to maintaining its growth momentum.The company has not provided specific breakdowns of revenue or bookings related to AI, making it difficult to assess the full impact of AI-related demand on overall financial performance. Q & A Highlights Q: Can you touch on the demand strength for all-flash in the quarter and its impact on future quarters?
A: George Kurian, CEO, noted that momentum was strong across all segments, driven by enterprises ready for AI. The demand was broad-based, and the Q4 results were tied to big deals expected earlier. The outlook for the coming year is strong, supported by the growing adoption of enterprise AI.
Q: How do you view product gross margin trends given the challenging component backdrop?
A: Wissam Jabre, CFO, indicated that the July quarter is expected to be the trough for product gross margins, with gradual improvements anticipated. Price adjustments have been made to offset component cost increases, and these will start to have more effect as the year progresses.
Q: How should investors think about the attach rate and opportunity between AI compute deployments and high-performance storage?
A: George Kurian explained that AI business performed strongly, with 500 AI wins in Q4. All elements of the flash portfolio performed well, and customers are deploying high-performance compute and storage environments to maximize GPU usage. Both all-flash and hybrid flash grew, particularly in AI use cases.
Q: Can you provide insights into the large deal pipeline and its sustainability?
A: George Kurian stated that the large deal pipeline includes infrastructure modernization and AI wins. The AI-related deals are durable and reflect customers' business priorities. The company is confident in its ability to win in accounts that are not traditionally large NetApp accounts.
Q: How is NetApp's go-to-market strategy evolving to capture AI opportunities?
A: George Kurian mentioned that NetApp has built a specialist team to pursue AI opportunities and expanded account coverage to gain market share. The company is confident in its momentum and has added more accounts to its directly managed coverage resources.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways NTAP beat fiscal Q4 revenue and EPS estimates; shares rose 16.6% in premarket trading.Hybrid Cloud revenues rose to $1.77B; Public Cloud to $182M, with 18% growth ex-Spot business.NTAP guides FY27 revenues to $7.325B-$7.575B and Q1 revenues to $1.75B-$1.90B. NetApp, Inc. (NTAP - Free Report) reported strong fourth-quarter fiscal 2026 results, with both top and bottom lines surpassing the Zacks Consensus Estimate.
The company’s performance highlights its ability to benefit from the accelerating adoption of enterprise AI and cloud technologies. With its differentiated hybrid cloud and intelligent data infrastructure platform, trusted by leading enterprises and cloud providers worldwide, NetApp is becoming increasingly central to customers’ data-driven AI transformation initiatives.
After the announcement, the company’s shares are up 17% in the pre-market trading session today. Shares of NTAP have gained 72.1% in the past six months compared with the Zacks Computer- Storage Devices industry's growth of 262.2%.
NTAP 6-Month Share Price Performance
Image Source: Zacks Investment Research
NTAP’s Net IncomeNet income on a GAAP basis was $404 million or $2.03 per share compared with $340 million or $1.65 per share in the prior-year quarter. Strong revenue growth across Hybrid Cloud, Public Cloud and all-flash offerings boosted the bottom line during the quarter.
Non-GAAP net income in the reported quarter was $483 million or $2.43 per share compared with $397 million or $1.93 per share in the prior-year quarter.
The bottom line surpassed the consensus estimate by 16 cents and exceeded the company’s guided range of $2.21-$2.31.
Q1 RevenuesNet sales during the quarter increased to $1.95 billion from $1.73 billion in the year-ago quarter. The figure exceeded the guidance of $1.795-$1.945 billion.
The top line also beat the consensus estimate of $1.86 billion.
NTAP reports revenues under two segments: Hybrid Cloud and Public Cloud.
The Hybrid Cloud segment includes revenues from the enterprise data center business, including product, support and professional services.
The Public Cloud segment comprises revenues from products delivered as a service and related support. The portfolio contains cloud automation and optimization services, storage and cloud infrastructure monitoring services.
The Hybrid Cloud segment’s revenues increased to $1.77 billion from $1.57 billion in the prior-year quarter. The Public Cloud segment revenues increased to $182 million from $164 million in the prior-year quarter. Excluding the divested Spot business, Public Cloud revenues grew 18% year over year, driven by strong demand for first-party and marketplace storage services.
Product revenues (54.7% of segmental revenues) increased 14% year over year to $966 million, driven by the execution of a multiyear agreement with Google Cloud to deliver secure AI-ready data infrastructure for Google Distributed Cloud environments. Support revenues (39% of segmental revenues) rose 10% year over year to $688 million, partly driven by a one-time item. Professional and Other Services (6.3% of segmental revenues) climbed 14% year over year to $112 million, mainly driven by growth in Keystone, the company’s storage-as-a-service offering.
Region-wise, the Americas, Europe, the Middle East and Africa, and Asia Pacific contributed 50%, 36% and 14% to total revenues, respectively.
Direct and indirect revenues added 25% and 75%, respectively, to total revenues.
Key MetricsIn the fourth quarter, the company’s All-Flash Array revenues increased 18% year over year to $1.2 billion. For fiscal 2026, all-flash revenues reached $4.2 billion, up 11% year over year.
Total billings rose 6.4% year over year to $2.16 billion. Deferred revenues and financed unearned services revenues totaled $4.85 billion, up 6.8%.
Remaining performance obligations were $5.65 billion.
Q1 Operating Details of NTAPNon-GAAP gross margin of 70.5% was up 100 basis points from the prior-year quarter’s levels.
The Hybrid segment’s gross margin was 69% compared with 68.4% in the prior year. The
The Public Cloud segment witnessed a gross margin of 85.7%, up from 79.3%.
Non-GAAP operating expenses were $750 million, up from the year-ago quarter’s $707 million.
Non-GAAP operating income increased 26% year over year to a record $624 million.
Non-GAAP operating margin was 32%, up from 28.6%.
Balance Sheet & Cash FlowAs of April 24, 2026, the company had $3.58 billion in cash, cash equivalents and investments and $2.49 billion in gross debt outstanding, resulting in a net cash position of approximately $1.1 billion.
Net cash from operations was $950 million compared with $675 million in the previous-year quarter.
Free cash flow was $900 million (free cash flow margin of 46.2%) compared with $640 million in the prior-year quarter (37%).
The company returned $303 million to its shareholders during the quarter through $200 million in share repurchases and $103 million in dividends. For fiscal 2026, NetApp returned $1.36 billion to its shareholders through dividends and buybacks.
NTAP also announced a cash dividend of 52 cents per share, payable on July 29, 2026, to its shareholders of record at the close of business on July 10.
Q1 & FY27 Outlook by NTAPFor the first quarter of fiscal 2027, the company expects net revenues to range between $1.750 billion and $1.900 billion. GAAP consolidated gross margins are projected to be between 68.1% and 69.1%, while non-GAAP consolidated gross margins are anticipated in the range of 69.1% to 70.1%. The company forecasts GAAP operating margins of 19.4% to 20.4% and non-GAAP operating margins of 28.4% to 29.4%. Earnings per share are expected to be between $1.35 and $1.45 on a GAAP basis, and between $2.05 and $2.15 on a non-GAAP basis.
For the full fiscal year 2027, NetApp projects net revenues in the range of $7.325 billion to $7.575 billion. GAAP consolidated gross margins are expected to be between 67.5% and 68.5%, while non-GAAP consolidated gross margins are forecast in the range of 68.5% to 69.5%. The company anticipates GAAP operating margins of 22.1% to 23.1% and non-GAAP operating margins of 29.1% to 30.1%. Full-year earnings per share are projected to range from $6.51 to $6.81 on a GAAP basis and from $8.70 to $9.00 on a non-GAAP basis.
NTAP’s Zacks RankNetApp currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Releases in the Broader Tech SpaceFlex Ltd. (FLEX - Free Report) reported fourth-quarter fiscal 2026 adjusted EPS of 93 cents, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line compared favorably with 73 cents posted in the prior-year quarter.
Revenues increased 17% year over year to $7.5 billion. It beat the consensus mark by 8.1%. The growth was primarily driven by strong momentum across all three segments, with Cloud and Power Infrastructure emerging as the standout performer.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year.
Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%. Core revenues jumped 5.3%.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%.
Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.
NetApp (NTAP +0.71%) investors are having a nice Friday. The massive-scale data storage specialist's stock jumped as much as 35.3% around 10:25 a.m. ET. The stock backed down a bit from that extreme gain, but was still up 26% at 12:45 p.m. ET. Yep, that's what a strong earnings report can do, especially when paired with bullish guidance targets.
Today's Change
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Another dot-com peak bites the dust With this surge to more than $170 per share, NetApp's stock finally eclipsed a long-standing record price of $148.63, set in the fall of 2000.
NetApp crushed analyst targets in fiscal Q4 2026. Earnings rose 26% year-over-year to $2.43 per diluted share. Revenue increased 13% to $1.95 billion. The consensus Street view had called for earnings near $2.27 per share on sales in the neighborhood of $1.87 billion.
And that's not even the best part. Management's guidance targets for the next quarter and fiscal year 2027 consistently landed well above current analyst projections.
Image source: Getty Images.
Messy data is NetApp's best friend As expected, NetApp CEO George Kurian celebrated the ongoing AI boom. The company helps enterprise customers manage huge arrays of raw, disorganized data.
Real-world data is often messy, especially if it includes input by real, imperfect, wonderful humans. AI systems prefer working with clean, structured datasets. A quick round of NetApp's data cleanup and organization makes a significant difference to the speed and quality of AI training or inference.
"As enterprise AI adoption scales, the primary challenge is not compute, but activating large volumes of unstructured data," Kurian said in the earnings call. "We are encouraged by the robust demand signals we are seeing and are confident in our ability to maintain this momentum, as reflected in our FY27 outlook."
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NetApp. The Motley Fool has a disclosure policy.
On May 29, 2026, NetApp Inc NTAP shares rose 22.1% today, closing at $173.84. This performance comes within a volatile 52-week range, peaking at $192.83 and hitting a low of $93.69.
GF Value™ verdict: Current price of $173.84 is 51.3% above the GF Value™ of $114.90, indicating the stock is overvalued.GF Score™ of 89/100 suggests a strong overall performance, indicating robust fundamentals.Most notable signal: Insiders sold $0.3 million in shares over the last three months, with no insider buying reported. Is NTAP Overvalued or Undervalued? According to the GF Value™, NetApp Inc NTAP is significantly overvalued at its current price of $173.84 compared to the calculated fair value of $114.90. This represents a 51.3% overvaluation, suggesting that the stock is trading at a premium to what its intrinsic value might suggest. The margin of safety, in this case, is quite negative, posing a risk to potential investors who might consider entering at these levels. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
The high current price relative to the GF Value™ indicates that NetApp’s shares may be susceptible to corrections, particularly if the market sentiment shifts or if the company fails to meet growth expectations. Therefore, while the company shows strong fundamentals as indicated by its GF Score™, the valuation appears stretched, warranting caution for those looking to invest at current levels.
How Does NTAP's Valuation Compare to Its History? MetricCurrentHistorical P/E (TTM)29.1x19.2x Forward P/E20.4x- The current P/E ratio of 29.1x is significantly above its 5-year median of 19.2x, indicating that the stock is trading at a premium compared to its historical valuation. This analysis aligns with the GF Value™ verdict, reinforcing the notion that NTAP is overvalued based on its historical performance metrics.
What Does NTAP's GF Score™ Tell Us? MetricRating GF Score™89/100 Financial Strength6/10 Profitability9/10 Growth8/10 Valuation6/10 Momentum7/10 The GF Score™ of 89/100 reflects a strong performance across various metrics, particularly in Profitability, where it scored 9/10. This suggests that NetApp is effectively generating profits relative to its revenue. However, the Financial Strength score of 6/10 indicates some areas for improvement, signaling a moderate risk in terms of balance sheet robustness. Overall, while the company has a solid growth trajectory, the mixed signals in valuation and financial strength raise some caution regarding its current price levels.
What Are Insiders Doing with NTAP Stock? In the last three months, insiders of NetApp have sold a total of $0.3 million worth of shares, with no reported insider buying during this period. This pattern of selling may suggest a lack of confidence among insiders regarding the current valuation levels or future performance prospects. While insider selling does not inherently indicate a negative outlook, it can be a signal for potential caution as it may reflect the insiders’ sentiments on the stock's future trajectory.
What This Means for Investors Based on the GF Value™ assessment, NetApp Inc NTAP is currently overvalued at a price of $173.84 compared to its GF Value™ of $114.90. This situation indicates a substantial risk of a price correction if market conditions shift or growth expectations are not met.
For the complete analysis, visit the NetApp Inc NTAP stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is NTAP's GF Score™?
NTAP's GF Score™ is 89/100, indicating a strong overall performance and suggesting robust fundamentals that have historically generated higher long-term returns.
Is NTAP overvalued or undervalued?
NTAP is considered overvalued based on the GF Value™ assessment, with a current price that exceeds its calculated fair value by 51.3%.
What is NTAP's P/E ratio?
NTAP's current P/E ratio is 29.1x, which is significantly above its 5-year median P/E of 19.2x, confirming the stock's overvaluation based on historical metrics.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways NTAP reported Q4 EPS of $2.43 on $1.95 billion revenues, exceeding consensus estimates.NTAP logged about 500 AI and data-preparation wins in the quarter, supporting FY2027 confidence.NTAP forecasts FY2027 revenue growth of 8% at midpoint despite higher component costs. NetApp, Inc. (NTAP - Free Report) used its fourth-quarter 2026 earnings call to make a forward-looking case that enterprise AI is shifting from experimentation to real infrastructure spending. Management tied the quarter’s outperformance to large deals, rising all-flash demand and stronger cloud adoption.
The bigger message was about fiscal 2027. Executives said demand remains broad-based, while guidance calls for faster revenue growth even as the company manages higher component costs and watches for pockets of accelerated customer purchasing.
NTAP Ties the Quarter to AI ExecutionChief executive officer George Kurian framed fiscal 2026 as a record year built on hybrid cloud, public cloud and AI-related demand. He said NetApp is benefiting as customers try to activate large pools of unstructured data across on-premises and cloud environments.
That message showed up in the quarter’s numbers. NetApp reported non-GAAP earnings of $2.43 per share, beating the Zacks Consensus Estimate of $2.27. Revenues of $1.95 billion surpassed the Zacks Consensus Estimate of $1.86 billion. The reported surprises were 7.05% for earnings and 4.51% for revenues.
Kurian also emphasized that AI was not a side story. NetApp logged about 500 AI and data-preparation wins in the quarter and more than 1,100 for fiscal 2026, with management presenting that activity as a central reason for its confidence entering the new year.
NetApp Sees Strength Across Cloud and FlashManagement pointed to several businesses hitting new highs. Fiscal 2026 public cloud revenues reached $688 million, while all-flash revenues rose to $4.2 billion. In the fourth quarter alone, all-flash revenues climbed 18% year over year to $1.2 billion, and public cloud revenues rose 11% to $182 million.
Kurian said demand has been strongest where AI workloads require high-performance storage and data mobility. He also highlighted Keystone, revenues for which grew about 65% in fiscal 2026, as customers sought more consumption-based buying models.
The company paired that demand narrative with product and partnership updates, including AI Data Engine, new high-performance storage systems and an expanded Google Cloud collaboration tied to Google Distributed Cloud. Those announcements supported management’s argument that NetApp is widening its reach in sovereign, regulated and AI-intensive deployments.
NTAP Guides for Faster Fiscal 2027 GrowthChief financial officer Wissam Jabre said the company expects fiscal 2027 revenues of $7.33 billion to $7.58 billion and non-GAAP earnings per share of $8.70 to $9.00. At the midpoint, that implies 8% revenue growth and 9% earnings growth, both ahead of the fiscal 2026 pace.
For the first quarter, NetApp expects revenues of $1.75 billion to $1.90 billion and non-GAAP EPS of $2.05 to $2.15. Jabre noted that the quarter includes an extra week, worth about $65 million of revenues, mostly in support and cloud, along with $21 million of added operating expense.
Guidance also reflects a lower non-GAAP gross margin range of 68.5% to 69.5% for fiscal 2027, versus 71.3% in fiscal 2026. Management tied that pressure primarily to memory and component costs, while saying pricing actions are being used to protect profitability.
NetApp Defends Margin and Demand AssumptionsIn Q&A, UBS Investment Bank pressed management on whether all-flash demand was being boosted by customer pull-forwards ahead of price increases. Kurian said accelerated decision-making exists, but he described the effect on fourth-quarter results as minimal and said the upside was mainly tied to large deals already discussed earlier in the year.
On margins, Jabre told analysts that product gross margin should be around a trough in the July quarter, with gradual improvement afterward as pricing changes flow through. He also reiterated that the company’s long-term product gross margin target remains in the mid-50% to high-50% range.
That exchange mattered because it clarified the trade-off embedded in guidance. NetApp is leaning into demand opportunities, but management is also signaling that cost recovery will take time rather than show up immediately.
NTAP Uses Q&A to Sharpen the AI StoryMorgan Stanley asked how much of the fiscal 2027 outlook is tied to AI wins. Kurian did not quantify revenues, but he said the roughly 500 AI wins in the quarter were all on-premises and were split across data preparation, model training and inferencing use cases.
That answer added detail missing from the prepared remarks. It showed NetApp’s AI opportunity is not confined to one narrow workload and that management sees the pipeline as broad across customer types, including enterprise and neo-cloud accounts.
Wells Fargo also asked about newer offerings such as AFX and AI Data Engine. Kurian said AFX has already seen wins in targeted verticals, while AI Data Engine is getting positive feedback from customers trying to organize large data estates for AI projects.
NetApp Leaves the Call in Expansion ModeThe call’s closing tone was confident but measured. Kurian repeatedly returned to the idea that NetApp is positioned at the intersection of AI, cloud and data governance, while Jabre emphasized disciplined execution around pricing, margins and cash flow.
That posture was reinforced by capital allocation. NetApp generated $900 million of fourth-quarter free cash flow, returned $303 million to its shareholders in the quarter and added $1 billion to its share repurchase authorization.
NTAP’s Zacks Signals Remain MixedNTAP currently carries a Zacks Rank #4 (Sell), alongside a Value Score of D, Growth Score of A, Momentum Score of A and VGM Score of B. Under the Zacks framework, a stronger Style Score is most useful when paired with a favorable Zacks Rank, especially a Zacks Rank #1 (Strong Buy) or 2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
That leaves a mixed signal. NetApp’s Growth, Momentum and VGM grades indicate favorable style characteristics, but the Zacks Rank remains the more important screening tool in the system. The rank can also change after earnings as estimate revisions adjust to the latest results and outlook.
New FlexPod solutions deliver proven performance, security, and unified management for AI
SAN JOSE, Calif.--(BUSINESS WIRE)--NetApp® (NASDAQ: NTAP), the Intelligent Data Infrastructure company, and Cisco (NASDAQ: CSCO) today announced that they have collaborated to offer new validated solutions for secure, scalable, and simplified AI. Expanding the proven success of FlexPod, the new solutions provide a simple, reliable path for enterprises to address the specific challenges AI workloads place on compute, network, and storage infrastructure.
“As IT teams are tasked with delivering reliable, consistent performance across environments, AI workloads are placing increasing demands on their data infrastructure,” said Dallas Olson, Chief Commercial Officer at NetApp. “NetApp and Cisco’s longstanding partnership on FlexPod has already proven effective, saving customers up to 20 percent of their time in infrastructure management and maintenance. Now, we are applying our combined expertise to modern challenges to accelerate AI adoption while reducing risk with built-in security.”
NetApp and Cisco are expanding FlexPod to support AI adoption across different organizational sizes and maturity levels, using pre-tested, validated architectures and enterprise-grade data management as a consistent foundation. These solutions support use cases such as:
Enterprise AI Deployments: Enterprises can simply and quickly deploy high-performance infrastructure for AI use cases including retrieval-augmented generation (RAG) and semantic search using this validated architecture. FlexPod reduces integration complexity while allowing AI capabilities to run directly where the data resides, with built-in, end-to-end security. This architecture includes disaggregated storage for independent scaling of performance and capacity with NetApp AFX; future functionality of data discovery, preparation and governance capabilities from NetApp AI Data Engine (AIDE) which integrates the NVIDIA AI Data Platform reference design; and distributed security and Zero Trust-aligned controls across the AI pipeline for AI-specific risks from Cisco Secure AI Factory with NVIDIA. Underpinning the Secure AI Factory, Cisco AI networking infrastructure with Nexus One transforms the network into a deterministic, high-performance fabric to maximize XPU utilization, reduce job completion times, and deliver predictable AI outcomes at scale. Targeting full-stack enterprise AI use cases, NetApp and Cisco have collaborated with NVIDIA to build FlexPod Solutions based on NVIDIA Enterprise Reference Architectures, enabling organizations to design, deploy, and scale high-performance AI factories. AI Inferencing and RAG Workflows: To enable teams and departments to tap into the benefits of AI with their existing data, this simplified, pre-integrated solution is designed to lower the cost, complexity, and specialized skill requirements associated with deploying AI infrastructure. Edge Computing: This solution enables enterprises to support AI inferencing, containerized, and virtualized workloads at the edge while maintaining low latency and operational consistency. By extending proven FlexPod architecture to remote and edge locations, customers benefit from faster time to value and reduced operational complexity compared to bespoke infrastructure or isolated IT stacks at each site. Combining Cisco Unified Edge with flexible NetApp storage options delivers a flexible, validated converged solution. Centralized fleet management, policy-based configuration, and automated orchestration enable repeatable deployments and simplified operations across highly distributed environments. “As organizations move from AI experimentation to real‑world deployment, security can’t be an afterthought. It has to be built in from the start,” said Jeremy Foster, GM and SVP at Cisco. “By collaborating with NetApp to extend Cisco Secure AI Factory with NVIDIA to our validated FlexPod solution, we’re helping customers address AI‑specific risks such as data exposure, governance gaps, and compliance challenges while simplifying how AI infrastructure is deployed and operated.”
"Enterprises are sitting on vast amounts of data, but without the discovery, governance and preparation built into the infrastructure itself, enterprises will struggle to power production AI,” said Jason Hardy, vice president, Storage Technologies at NVIDIA. “NetApp AI Data Engine, co-engineered on the NVIDIA AI Data Platform and validated with the Cisco Secure AI Factory with NVIDIA, gives organizations the secure, AI-ready data foundation to deploy AI factories on FlexPod infrastructure at scale."
"The new AI capabilities in FlexPod expand our ability to help customers navigate the AI era with confidence," said Brian Bartell, Practice Manager, Compute & Storage at WWT. "Through our long-standing partnerships with NetApp and Cisco, the introduction of NetApp's AI Data Engine, and the ability to validate these architectures hands-on in WWT's AI Proving Ground, we can compress the time from concept to execution, giving our customers a pre-tested, industry-leading foundation to move at the speed of the market and unlock the power of their data."
To learn more about NetApp's partnership with Cisco, visit the NetApp booth #7414 at Cisco Live!, May 31-June 4 at Mandalay Bay in Las Vegas.
Additional Resources
FlexPod: A Secure, Smart, Sustainable, Hybrid Platform NetApp AI Data Engine: An End-to-End, Storage-Integrated AI Data Service NetApp AFX: The Best Data Infrastructure for AI NetApp Collaborates with Cisco on Enterprise-Grade Converged Infrastructure with Disaggregated Storage for AI Cisco & NetApp: Powering Enterprise Data Centers with AI Networking and Storage About NetApp
For more than three decades, NetApp has helped the world’s leading organizations navigate change – from the rise of enterprise storage to the intelligent era defined by data and AI. Today, NetApp is the Intelligent Data Infrastructure company, helping customers turn data into a catalyst for innovation, resilience, and growth.
At the heart of that infrastructure is the NetApp data platform – the unified, enterprise-grade, intelligent foundation that connects, protects, and activates data across every cloud, workload, and environment. Built on the proven power of NetApp ONTAP, our leading data management software and OS, and enhanced by automation through the AI Data Engine and AFX, it delivers observability, resilience, and intelligence at scale.
Disaggregated by design, the NetApp data platform separates storage, services, and control so enterprises can modernize faster, scale efficiently, and innovate without lock-in. As the only enterprise storage platform natively embedded in the world’s largest clouds, it gives organizations the freedom to run any workload anywhere with consistent performance, governance, and protection.
With NetApp, data is always ready – ready to defend against threats, ready to power AI, and ready to drive the next breakthrough. That’s why the world’s most forward-thinking enterprises trust NetApp to turn intelligence into advantage.
Learn more at www.netapp.com or follow us on X, LinkedIn, Facebook, and Instagram.
NETAPP, the NETAPP logo, and the marks listed at www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.
About Cisco
Cisco (NASDAQ: CSCO) is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco.
Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco’s trademarks can be found at http://www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word ‘partner’ does not imply a partnership relationship between Cisco and any other company.
New NetApp Splunk SOAR playbook helps contain ransomware attacks and limit data loss
SAN JOSE, Calif.--(BUSINESS WIRE)--NetApp® (NASDAQ: NTAP), the Intelligent Data Infrastructure company, and Cisco (NASDAQ: CSCO), today announced an expansion of their collaboration to help customers strengthen defense-in-depth strategies for customers. Combining Intelligent Data Infrastructure with advanced analytics and observability capabilities, NetApp and Splunk have delivered deep, real-time visibility into storage and infrastructure health. Together, they are helping customers turn operational data into actionable insights that improve reliability, security, and business outcomes. By expanding their collaboration with the new NetApp Splunk Security Orchestration, Automation, and Response (SOAR) playbook, NetApp and Splunk are helping joint customers contain ransomware attacks and limit data loss at the storage layer, enhancing the containment of the blast radius of cyberattacks while increasing the speed and reducing the cost of recovery.
“With AI accelerating both the speed and sophistication of cyberattacks, the window to respond has never been smaller,” said Sandeep Singh, Senior Vice President and General Manager, Platform at NetApp. “To limit the cost and impact of ransomware, organizations must act the moment a threat is detected, which means extending security automation into the storage layer where data lives. As the company delivering the most secure storage on the planet, NetApp is uniquely positioned to make storage an active part of a defense-in-depth strategy. By working with Cisco to enable Splunk SOAR workflows to take direct action on data stored in NetApp ONTAP®, we’re helping make a defense-in-depth security strategy simpler and more effective.”
To give customers the resiliency and flexibility they need to protect their data, Cisco and NetApp are releasing the NetApp Splunk SOAR playbook. Splunk Enterprise Security is already integrated with NetApp Ransomware Resilience to collect analytics from the data layer, enhancing incident triage and prioritization. With the new playbook, Splunk SOAR users can now use those signals as well as signals from other solutions to automatically take incident response actions directly on NetApp ONTAP storage as an integral part of their incident response. These actions include blocking a suspicious user, taking snapshots of the data and taking data volumes offline to protect against further infection. As a result, customers will be better able to contain ransomware attacks and limit data loss at the storage layer. Utilized as part of the organization’s defense in depth security strategy, the NetApp Splunk SOAR playbooks help to strengthen collaboration between security and storage teams.
Automating the response and recovery actions against cyber threats with the NetApp Splunk SOAR playbook improves security team metrics like mean time to contain (MTTC) and reduces the manual effort and skills required to protect data. As a result, NetApp and Cisco are making it faster and more efficient for enterprises to achieve cyber resilience.
“Effective security strategies require visibility and action across the entire technology stack, including the data layer,” said David Dalling, GVP, Splunk Security at Cisco. “With the new NetApp Splunk SOAR playbook, ONTAP storage becomes an active participant in the security ecosystem, enabling organizations to contain threats directly targeting enterprise data. By connecting NetApp storage into Splunk SOAR workflows, we’re helping security and storage teams collaborate more seamlessly and respond to incidents with greater speed and confidence.”
“The partnership between Splunk and NetApp helps customers run their businesses more securely and effectively, connecting operations across storage and security teams,” said Dallas Olson, Chief Commercial Officer at NetApp. “By giving customers real-time visibility into what’s happening across their environments, NetApp and Splunk enable enterprises to reduce disruption and optimize performance so they can use their data to drive measurable business outcomes.”
The NetApp Splunk SOAR playbook is now available to download from SplunkBase.
Additional Resources
Aligning Storage and Security to Strengthen Cyber Resilience Cyber Resilience: The Most Secure Storage on the Planet Ransomware Resilience: Ransomware Protection Using AI-Based Detection About NetApp
For more than three decades, NetApp has helped the world’s leading organizations navigate change – from the rise of enterprise storage to the intelligent era defined by data and AI. Today, NetApp is the Intelligent Data Infrastructure company, helping customers turn data into a catalyst for innovation, resilience, and growth.
At the heart of that infrastructure is the NetApp data platform – the unified, enterprise-grade, intelligent foundation that connects, protects, and activates data across every cloud, workload, and environment. Built on the proven power of NetApp ONTAP, our leading data management software and OS, and enhanced by automation through the AI Data Engine and AFX, it delivers observability, resilience, and intelligence at scale.
Disaggregated by design, the NetApp data platform separates storage, services, and control so enterprises can modernize faster, scale efficiently, and innovate without lock-in. As the only enterprise storage platform natively embedded in the world’s largest clouds, it gives organizations the freedom to run any workload anywhere with consistent performance, governance, and protection.
With NetApp, data is always ready – ready to defend against threats, ready to power AI, and ready to drive the next breakthrough. That’s why the world’s most forward-thinking enterprises trust NetApp to turn intelligence into advantage.
Learn more at www.netapp.com or follow us on X, LinkedIn, Facebook, and Instagram.
NETAPP, the NETAPP logo, and the marks listed at www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.
About Cisco
Cisco (NASDAQ: CSCO) is the worldwide technology leader that is revolutionizing the way organizations connect and protect in the AI era. For more than 40 years, Cisco has securely connected the world. With its industry leading AI-powered solutions and services, Cisco enables its customers, partners and communities to unlock innovation, enhance productivity and strengthen digital resilience. With purpose at its core, Cisco remains committed to creating a more connected and inclusive future for all. Discover more on The Newsroom and follow us on X at @Cisco.
Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco’s trademarks can be found at http://www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word ‘partner’ does not imply a partnership relationship between Cisco and any other company.
NetApp (NTAP - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this data storage company have returned +53.9% over the past month versus the Zacks S&P 500 composite's +5.4% change. The Zacks Computer- Storage Devices industry, to which NetApp belongs, has gained 41.3% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, NetApp is expected to post earnings of $1.94 per share, indicating a change of +25.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days.
The consensus earnings estimate of $8.71 for the current fiscal year indicates a year-over-year change of +7.1%. This estimate has changed +0.7% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $9.46 indicates a change of +8.6% from what NetApp is expected to report a year ago. Over the past month, the estimate has changed -0.7%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, NetApp is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of NetApp, the consensus sales estimate of $1.83 billion for the current quarter points to a year-over-year change of +17.4%. The $7.48 billion and $7.81 billion estimates for the current and next fiscal years indicate changes of +8.1% and +4.4%, respectively.
Last Reported Results and Surprise HistoryNetApp reported revenues of $1.95 billion in the last reported quarter, representing a year-over-year change of +12.5%. EPS of $2.43 for the same period compares with $1.93 a year ago.
Compared to the Zacks Consensus Estimate of $1.86 billion, the reported revenues represent a surprise of +4.51%. The EPS surprise was +7.05%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
NetApp is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about NetApp. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.7% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: NetApp (NTAP - Free Report) NetApp provides enterprise storage as well as data management software and hardware products and services. The San Jose, CA-based company assists enterprises in managing multiple clouds environments, adopting next-generation technologies like artificial intelligence (AI), Kubernetes, and contemporary databases, and navigating the complexity brought about by the quick development of data and cloud usage.
NTAP is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
Momentum investors should take note of this Computer and Technology stock. NTAP has a Momentum Style Score of A, and shares are up 35.5% over the past four weeks.
For fiscal 2027, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.26 to $8.88 per share. NTAP boasts an average earnings surprise of +4.7%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, NTAP should be on investors' short list.
Root (ROOT) posted record profits in the latest quarter as the car insurance company seeks to leverage more AI technology with it services. CEO Alex Timm talks about ways the company aims to use evolving tech, calling Root a "disruptor" in the space.
Used-car giant Carvana is reportedly making a push into the new vehicle market.
As The Wall Street Journal (WSJ) reported Monday (May 18), the company has acquired a network of seven Stellantis dealerships, a move that the report said is disrupting traditional sales models while alarming established franchise owners.
This expansion began with a pilot earlier this year when Carvana purchased a dealership in Casa Grande, Arizona. By last month, that location had become the top-selling Chrysler, Jeep, Ram, and Dodge dealer in the U.S.
Monthly sales surged from roughly 30 to 50 vehicles to 350 under Carvana’s management, according to Stellantis figures shared with dealers and seen by WSJ.
The report said this growth is driven by applying the company’s digital playbook — featuring no-haggle pricing and remote, couch-based transactions — to new-car sales. It’s what attracted customer Joshua Higginbotham of Kansas City.
“I’m sure I could’ve gone into a dealership, got some more gray hairs, and negotiated it down to whatever Carvana had it at or lower, but I’m not going to do that to save $1,000 or even a few thousand dollars,” he told WSJ.
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So far, Stellantis is the only carmaker to have allowed Carvana to become a franchised dealer. This move, the report added, has been tough to swallow for traditional dealers who sell Stellanis brands like Dodge and Chrysler.
“Stellantis dealers are in an uproar over this,” said South Florida Jeep-Ram dealer GianMarco Taverna. He added that he doesn’t mind Carvana’s entry into business, provided Stellantis sticks to policies keeping a single dealer from growing too large.
“It is up to us to compete and figure it out,” Taverna said.
Meanwhile, used cars remain Carvana’s bread and butter, with the company recently reporting new quarterly records after it sold 187,393 retail units and took in revenues of $6.4 billion. Those figures marked respective year-over-year increases of 40% and 52%.
The company’s move into the new car business comes as other digital players are entering the realm of physical auto sales.
For example, Hertz recently announced the launch of a dedicated Hertz showroom on eBay’s platform, bringing more than 8,000 “Hertz Certified” vehicle listings to the eCommerce seller’s automotive marketplace.
And Amazon has reportedly begun expanding its automove program as it focuses on forming more partnerships with vehicle sellers.
On May 22, 2026, Carvana Co CVNA shares rose 6.0% today, bringing the current price to $68.28. The stock has experienced a wide range over the past year, with a 52-week high of $97.38 and a low of $54.46.
GF Value™ verdict: The current price is $68.28, which is 7.3% undervalued compared to the GF Value™ of $73.67.GF Score™: 75/100, indicating an above-average rating based on key performance metrics.Most notable signal: Insider activity shows that insiders have sold $27.2 million in shares over the last three months, with no buying activity. Is CVNA Overvalued or Undervalued? The current valuation of Carvana Co CVNA shows that the stock is trading below its estimated intrinsic value, as indicated by the GF Value™ of $73.67. This suggests a margin of safety of 7.3%, which could present a potential opportunity for investors. However, it is essential to note that the GF Valuation label categorizes the stock as "Fairly Valued," implying that while there is some undervaluation, the stock may not be significantly discounted. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
Despite the current undervaluation, the financial landscape for CVNA has been challenging, with a year-to-date decline of 19.1%. This downward trend raises caution for potential investors, as the risk of further declines exists. Nonetheless, the current price presents an opportunity if the company can rebound and leverage its growth potential effectively.
How Does CVNA's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 41.5x 78.2x Forward P/E 45.4x N/A Currently, CVNA's P/E (TTM) of 41.5x is significantly below its 5-year median P/E of 78.2x, indicating that the stock is trading at a lower valuation compared to its historical averages. This aligns with the GF Value™ verdict of being undervalued, suggesting that the stock may have room for appreciation if it can capitalize on its business strategies moving forward.
What Does CVNA's GF Score™ Tell Us? Metric Rating GF Score™ 75 Financial Strength 7/10 Profitability 3/10 Growth 6/10 Valuation 10/10 Momentum 8/10 The GF Score™ of 75/100 indicates that Carvana Co ranks above average compared to its peers. The strongest area is Valuation, with a perfect score of 10/10, suggesting that the stock is positioned well in terms of its intrinsic value. Conversely, the weakest area is Profitability, where it scored only 3/10, indicating challenges in generating consistent profits. Overall, a balanced view of the scores suggests that while CVNA has some promising growth and valuation metrics, its profitability remains a concern that investors should monitor closely.
What Are Insiders Doing with CVNA Stock? Recent insider activity at Carvana Co has shown a trend of selling, with insiders offloading $27.2 million worth of shares over the last three months without any reported buying activity. This pattern of selling may indicate a lack of confidence from those closest to the company regarding its short-term prospects. While insider selling does not directly reflect the company's long-term potential, it is a signal that investors should consider when evaluating the stock.
What This Means for Investors Based on the GF Value™ assessment, Carvana Co CVNA is currently undervalued with a current price of $68.28 compared to the GF Value™ of $73.67. However, potential investors should exercise caution due to the ongoing selling by insiders and the company's recent performance trends.
For the complete analysis, visit the Carvana Co CVNA stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is CVNA's GF Score™?
CVNA's GF Score™ is 75/100, indicating above-average performance based on key metrics that are associated with long-term returns.
Is CVNA overvalued or undervalued?
CVNA is currently undervalued, with a GF Value™ of $73.67 compared to the current price of $68.28, suggesting a potential upside.
What is CVNA's P/E ratio?
CVNA's P/E (TTM) ratio is 41.5x, which is significantly below its 5-year median P/E of 78.2x, indicating that the stock is trading at a lower valuation relative to its historical performance.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
On May 27, 2026, Carvana Co CVNA shares rose 4.1% today, bringing the current price to $73.00. The stock is currently trading within a 52-week range of $54.46 to $97.38.
GF Value™ verdict: Current price is $73.00, 1.2% undervalued compared to GF Value™ of $73.88.GF Score™: 74/100, indicating an above-average ranking.Most notable signal: Insiders sold $27.2M in the last 3 months, with no buying activity. Is CVNA Overvalued or Undervalued? With a current price of $73.00 and a GF Value™ estimate of $73.88, Carvana Co appears to be 1.2% undervalued. This suggests a narrow margin of safety, indicating that there is a slight opportunity for appreciation based on intrinsic value. The GF Valuation label categorizes it as fairly valued, reflecting that the current market price is close to what the stock is deemed worth. However, as the margin is minimal, it is essential to consider other factors before making any conclusions.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Therefore, while the stock shows slight undervaluation, the relatively small margin implies that risks could outweigh potential rewards if the market conditions change.
How Does CVNA's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 44.4x 76.2x Forward P/E 48.7x N/A The current P/E ratio of 44.4x is significantly below its 5-year median of 76.2x, suggesting that the stock is trading at a lower valuation than it has historically. This P/E analysis aligns with the GF Value™ verdict of being fairly valued, as it suggests a potential opportunity for growth but still requires caution due to market volatility.
What Does CVNA's GF Score™ Tell Us? Metric Rating GF Score™ 74 Financial Strength 7/10 Profitability 3/10 Growth 6/10 Valuation 9/10 Momentum 8/10 The GF Score™ of 74/100 indicates that Carvana Co is positioned above average in terms of overall stock quality. The strongest aspect is its Valuation rank at 9/10, suggesting that it is relatively undervalued based on historical metrics. Conversely, the Profitability rank of 3/10 highlights a weakness in this area, indicating potential challenges in generating profits compared to its peers. These scores collectively provide a well-rounded view of the company's financial health and performance metrics.
What Are Insiders Doing with CVNA Stock? In recent months, insider activity has shown a significant selling trend, with insiders offloading $27.2 million worth of shares and no recorded buying activity. This pattern may suggest a lack of confidence from those closest to the company, which could raise concerns for outside investors. Such selling can sometimes be interpreted as a signal of anticipated challenges ahead or simply a personal financial strategy by insiders.
What This Means for Investors Based on the GF Value™ assessment, Carvana Co CVNA is currently fairly valued, presenting a slight undervaluation opportunity. However, the minimal margin of safety, along with the recent insider selling, suggests that potential risks should be carefully weighed against any anticipated rewards.
For the complete analysis, visit the Carvana Co CVNA stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is CVNA's GF Score™?
CVNA's GF Score™ is 74/100, indicating that it ranks above average in terms of stock quality based on key financial metrics.
Is CVNA overvalued or undervalued?
CVNA is considered 1.2% undervalued based on the GF Value™ of $73.88 compared to the current price of $73.00.
What is CVNA's P/E ratio?
CVNA's P/E ratio is 44.4x, which is significantly below its historical 5-year median of 76.2x, suggesting a lower valuation compared to its past performance.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
A month has gone by since the last earnings report for Carvana (CVNA - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Carvana due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Carvana Co. before we dive into how investors and analysts have reacted as of late.
Carvana Q1 Earnings Beat EstimatesCarvana reported first-quarter 2026 earnings of 34 cents per share, which beat the Zacks Consensus Estimate of 28 cents by 19.01% and increased from 30 cents in the year-ago quarter.
Better-than-expected revenues across all segments drove the strong performance. Revenues of $6.43 billion beat the Zacks Consensus Estimate of $6.16 billion by 4.39% and increased 52% from last year.
CVNA Revenue Mix Skews Toward Retail StrengthRetail vehicle sales rose 62% from last year to $4.83 billion and remained the company’s biggest source of revenues. The growth was driven by selling more vehicles as well as earning more money per vehicle.
Wholesale sales grew 24.9% from last year to $1.08 billion, helped by selling more units. Other sales also increased 35.2% to $526 million, making a solid contribution to the company’s overall revenues.
Carvana Volume Expansion Continues Across ChannelsCarvana’s retail vehicle unit sales increased 40% year over year to a record 187,393, extending the company’s recent trend of strong unit growth. Retail revenue per unit improved 15.8% to $25,764, indicating higher selling prices on a per-unit basis versus the prior-year quarter.
Wholesale vehicle unit sales also increased, rising 31.7% to 83,574. Wholesale revenue per unit increased 4.8% to $10,338, suggesting more modest per-vehicle pricing gains in wholesale compared with retail.
CVNA Gross Profit Rises but Total GPU SlipsTotal gross profit increased 36.8% year over year to $1.27 billion, reflecting higher volumes across the platform. Retail vehicle gross profit rose 38.2% to $593 million, while wholesale gross profit increased 36.9% to $152 million. Other gross profit also went up 35.2% to $526 million, matching the level of other sales and revenues for the quarter.
Even though total profit increased, profit per vehicle declined. Total gross profit per unit fell to $6,783 from $6,938 last year.
Retail vehicle gross profit per unit dropped slightly to $3,165 from $3,204, while wholesale gross profit per unit decreased to $811 from $829. Other gross profit per unit also went down to $2,807 from $2,905, which led to the overall decline in profit per unit.
Carvana SG&A Dollars Increase, Efficiency ImprovesSelling, general and administrative expenses rose to $690 million from $535 million a year ago. Within SG&A, compensation and benefits totaled $245 million, advertising was $118 million, market occupancy costs were $19 million, logistics expense was $48 million and other SG&A costs were $260 million.
The company became more efficient as it sold more vehicles. Its SG&A expense per retail unit fell to $3,682 from $3,996 last year.
By per-unit category, Carvana operations costs were $1,622 per retail unit versus $1,658 a year ago, while overhead declined to $1,073 from $1,299. Advertising expense per retail unit increased to $630 from $538, consistent with higher spending levels as the company continued to drive demand.
CVNA Profitability and Liquidity Position Stay FirmOperating income increased to $581 million from $394 million last year, helped by higher profits and better control over costs per vehicle. Net income came in at $405 million, with a profit margin of 6.3%. Adjusted EBITDA was $672 million, with a margin of 10.4%, showing overall strong profitability.
As of March 31, 2026, Carvana’s cash and cash equivalents totaled $2.41 billion compared with $2.33 billion as of Dec. 31, 2025. The company also reported total liquidity of $6.91 billion, including cash, available credit, additional borrowing capacity and other financial resources. Its long-term debt totaled $4.85 billion compared with $4.83 billion reported a year ago.
Carvana’s OutlookIn the second quarter, if market conditions remain stable, Carvana expects to sell more cars and generate higher adjusted EBITDA than in the previous quarter, potentially reaching record levels on both. The company also expects strong growth in retail units sold and adjusted EBITDA for the full-year 2026.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 7.77% due to these changes.
VGM ScoresAt this time, Carvana has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Carvana has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerCarvana is part of the Zacks Internet - Commerce industry. Over the past month, Booking Holdings (BKNG - Free Report) , a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended March 2026 more than a month ago.
Booking Holdings reported revenues of $5.53 billion in the last reported quarter, representing a year-over-year change of +16.2%. EPS of $1.14 for the same period compares with $0.99 a year ago.
Booking Holdings is expected to post earnings of $2.48 per share for the current quarter, representing a year-over-year change of +11.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Booking Holdings. Also, the stock has a VGM Score of C.
Carvana (NYSE:CVNA | CVNA Price Prediction) is back in the spotlight after a blowout quarter, an S&P 500 induction, and a CEO promising 3 million units at 13.5% adjusted EBITDA margins by the next decade. But the details beneath the headline deserve a closer look.
The Hype Trade Is Already Cracking Carvana is the textbook crowded trade. The stock trades at a trailing P/E of 42 and a forward P/E of 51, with a beta of 3.55 that screams “sell first, ask later” the moment sentiment turns. It already is turning. Shares are down 13.51% year to date and 7.97% over the past month, with the stock now trading below both its 50-day and 200-day moving averages.
Look under the hood and the Q4 fireworks lose their shine. That headline net income was juiced by a $618 million non-cash tax benefit, the balance sheet still carries $4.83 billion in long-term debt plus a $2.23 billion tax receivable agreement liability, and CEO Ernie Garcia keeps trimming his stake through a pre-arranged plan. With sticky inflation squeezing the middle class and credit card delinquencies climbing, a debt-fueled used-car platform with roughly 1.5% market share and zero dividend carries elevated risk for retirement-oriented portfolios.
The Cash Cow Hiding in Plain Sight Contrast that with Altria (NYSE:MO), the tobacco giant quietly compounding while everyone chases the auto e-tailer. At $69.58, Altria is up 22.68% year to date and 25.23% over the past year, trading at a P/E of 15 and a forward P/E of 12 with a beta of 0.519. Three reasons it stands out for income-focused investors right now.
1. Inflation-beating pricing power. Despite a tougher consumer, the smokeable segment delivered net price realization of 6.3% with adjusted OCI margins expanding to 65.1%. Marlboro held 59.5% premium share. That is an inelastic demand curve doing exactly what investors need it to do.
2. A cash-cow shareholder return machine. Altria returned $8 billion to shareholders in 2025, paid roughly $1.8 billion in Q1 dividends, and just raised the payout to $1.06 per quarter, the 60th increase in 56 years. The yield sits at 5.84%, with $720 million still authorized on the buyback through December. Total debt-to-EBITDA stands at a healthy 1.9x.
3. Guided, predictable growth. Management reaffirmed full-year 2026 adjusted diluted EPS guidance of $5.56 to $5.72 after growing Q1 adjusted EPS by 7.3%. The on! pouch portfolio shipped over 46 million cans, up nearly 18%, while the Oral Tobacco segment cleared $400 million in adjusted OCI at 67.4% margins. CEO Billy Gifford summed it up: “Our highly cash-generative businesses supported significant returns to shareholders through dividends and share repurchases.”
The Bottom Line Carvana is a momentum vehicle priced for a decade of flawless execution in a fragmented, tariff-exposed industry. Altria is a fortress balance sheet paying retirement investors a near-6% yield to wait, with pricing power that compounds through every inflation cycle. The cash flow story looks more durable than the hype trade.
Editor’s note: This story has been updated to correct a sector classification and to note that Evercore’s price target adjustment reflects Carvana’s 5-for-1 stock split.
Carvana stock is showing notable weakness. Why is CVNA stock falling? That contrast matters because the broader backdrop was quietly constructive at the time of writing: the Russell 2000 was up 0.77%, the Nasdaq was up 0.12%, and 7 of 11 sectors were advancing, while Carvana faced selling pressure.
Evercore Updates CVNA Price TargetEvercore ISI Group analyst Michael Montani maintained an In-Line rating on Tuesday and adjusted the price target to $86, reflecting the company’s 5-for-1 split that went into effect last month.
Carvana underperformed its Consumer Discretionary peer group on Tuesday, dropping 7.59% versus a 0.60% decline for the sector—about a 7.00 percentage point gap. That relative weakness matters because it signals traders were selling Carvana specifically, not just trimming the group.
Carvana And The Problem With Living Below The Trend StackTechnically, the setup is doing the stock no favors. Carvana is trading 8.9% below its 20-day SMA at $71.55 and 7.9% below its 50-day SMA at $70.78, with price also sitting 11%+ under the 100-day and 200-day SMAs. That "below the trend stack" posture tends to cap rallies because every bounce runs into a wall of overhead supply from traders looking to get back to even.
The $71 area is the line in the sand because it's both a round-number zone and sits close to that 20-day/50-day cluster where rebounds have recently failed. Until price can reclaim that neighborhood and hold it, rallies risk looking more like relief than reversal.
Momentum, meanwhile, is neither screaming bargain nor flashing euphoria. RSI sits at 49.47, consistent with a stock that's chopping rather than trending cleanly despite sharp daily swings. That neutrality is important: without an "oversold" signal, bulls typically need a structural improvement rather than hoping volatility alone will manufacture a bottom. Key levels remain straightforward: resistance at $71 and support at $61.
CVNA Shares Are DroppingCVNA Price Action: Carvana shares closed Tuesday down 7.59% at $65.61, according to Benzinga Pro.
Image: Charles-McClintock Wilson/Shutterstock
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On June 02, 2026, Carvana Co (CVNA) shares fell 7.6% today, closing at $65.60. The stock has had a challenging performance over the past month, declining 14.3%,
Carvana benefits from a wholesale used car market that remains firm, defying bearish expectations of price normalization. The March 2026 Manheim Used Vehicle Value Index rose 6.2% year over year to 215.3, reaching a two-year high. Non-adjusted wholesale prices increased 5.7% year over year and 4.2% month over month, signaling persistent pricing strength.
