Track market-moving stories before they get noisy

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.

Get Ovintiv alerts:

“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.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Ovintiv wasn't on the list.

While Ovintiv currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Discover the next wave of investment opportunities with our report, 7 Stocks That Will Be Magnificent in 2026. Explore companies poised to replicate the growth, innovation, and value creation of the tech giants dominating today's markets.

Get This Free Report

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%.

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.

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.

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.

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.

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.

NetApp, Inc. (NTAP) Q4 2026 Earnings Call Transcript

NetApp: Excellent Returns, I'm Out (Rating Downgrade)

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

(

0.71

%) $

1.14

Current Price

$

161.61

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.

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.

More News From NetApp

Back to Newsroom

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.

The company's online, no-haggle sales model is quietly extending to new vehicles.

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].

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.

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

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Market News and Data brought to you by Benzinga APIs

© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

To add Benzinga News as your preferred source on Google, click here.

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.

Completing a 5-for-1 stock split last month, Carvana (CVNA - Free Report) ) shares have become more accessible to a broader range of investors and has put the company back in the spotlight as a leading e-commerce platform for buying and selling used cars.

While stock splits do not change a company's underlying fundamentals, they often reflect management's confidence in future growth and can attract additional investor interest.

Carvana's 5-for-1 Stock SplitCarvana's 5-for-1 stock split increased the number of outstanding shares while proportionally reducing the share price. For every share previously owned, investors now hold five shares at one-fifth of the pre-split price.

Importantly, the split does not alter Carvana's market capitalization, valuation, revenue outlook, or earnings potential despite EPS being prorated to reflect the split. That said, lower share prices can improve liquidity and make a stock more attractive to retail investors.

Historically, companies often announce stock splits after substantial price appreciation, reflecting strong business momentum and positive investor sentiment. 

This was the case for Carvana, with CVNA previously trading at around $400 a share after skyrocketing more than 1,500% in the last three years, and now trades at under $70.

Image Source: Zacks Investment Research

Carvana's Turnaround Continues to ImpressAfter facing significant challenges from the automotive slowdown during the COVID-19 pandemic, Carvana has executed one of the most notable turnarounds in the market.

Management has focused on improving operational efficiency by reducing costs and strengthening profitability. These efforts have helped Carvana generate stronger financial results while improving investor confidence in its long-term business model.

The company's vertically integrated online platform continues to differentiate it from traditional auto retailers like Cars.com (CARS - Free Report) ) and CarGurus (CARG - Free Report) ), allowing customers to buy, sell, and finance vehicles through a streamlined digital experience.

Carvana’s Growth Drivers Remain IntactCarvana is benefiting from ongoing consumer adoption of online vehicle purchasing. Additionally, the used-car market remains highly fragmented, providing Carvana with opportunities to gain market share over time.

As economic conditions stabilize and vehicle affordability remains a key consideration for consumers, demand for used vehicles could remain supportive of Carvana's business model.

The company also continues to leverage technology and logistics advantages that have helped establish its position as a leading e-commerce platform for used vehicle sales.

EPS Revisions Support a Bullish OutlookOf course, one of the most important drivers of stock performance is earnings estimate revisions, and analysts have become increasingly optimistic about Carvana's prospects.

Over the last 60 days, Carvana’s FY26 EPS estimates have spiked 23% from $1.28 to $1.58. Plus, FY27 EPS estimates are up 16% in the last two months from $1.82 to $2.12. Most importantly, this has helped to justify Carvana’s premium valuation of 43X forward earnings.  

Image Source: Zacks Investment Research

Bottom LineWhile stock splits alone are not investment catalysts, they often accompany strong business momentum. In Carvana's case, the company's improving fundamentals provide a more compelling reason for investors to remain optimistic.

The recent 5-for-1 split may increase visibility and attract additional investor interest, but the real story remains Carvana's operational turnaround and improving earnings outlook. Thanks to a pleasant trend of positive EPS revisions, Carvana stock currently sports a Zacks Rank #1 (Strong Buy).

ADESA, a leader in wholesale auto auctions and subsidiary of Carvana (NYSE: CVNA), today announced the launch of ADESA Timed, the latest enhancement to ADESA’s growing digital wholesale platform. ADESA Timed builds on the success of ADESA Clear, extending ADESA's timed digital auction offering to wholesale sellers.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260610368071/en/

ADESA Timed enables wholesale sellers to leverage ADESA’s timed digital auction capabilities through a self-service selling experience.

“We believe we've built the most compelling digital wholesale platform in the industry, and ADESA Timed extends that marketplace to a broader group of sellers,” said Nikki Behrens, ADESA’s Vice President, Marketplaces. “ADESA Timed gives our customers a new way to reach ADESA's highly-engaged, digital buyer base while benefiting from the same transparency, efficiency, and technology that define our marketplace.”

ADESA Timed enables wholesale sellers, including financial institutions, fleets, rental companies, and dealer groups, to leverage ADESA's timed digital auction capabilities through a self-service selling experience. Sellers can list inventory directly on ADESA's digital auction using the same technology, tools, and merchandising capabilities that support ADESA Clear.

ADESA's digital auction platform now includes three products:

ADESA Clear — ADESA's fully managed timed auction offering ADESA Timed — ADESA’s self-service timed auction offering ADESA Simulcast — Live digital access to ADESA's in-lane auctions Alongside ADESA’s traditional physical auction, these offerings provide a robust, efficient, robust marketplace for wholesale buyers and sellers nationwide.

For more information or to register for upcoming wholesale auctions, visit ADESA.com.

About ADESA

ADESA is a leader in wholesale auto, providing comprehensive remarketing and logistics solutions that help OEMs, financial institutions, fleets, and dealers source, sell and manage cars efficiently and profitably. ADESA customers across the country enjoy access to its extensive physical auction network, robust digital offerings, and value-added services. ADESA is owned by leading online automotive retailer Carvana (NYSE: CVNA).

Learn more about ADESA here.

About Carvana

Carvana’s mission is to change the way people buy and sell cars. Since launching in 2013, more than 4 million customers have chosen Carvana’s leading automotive e-commerce experience to shop, sell, finance, and trade in vehicles entirely online, with the convenience of delivery or local pickup as soon as the same day. Carvana’s unique offering is powered by its passionate team, differentiated national infrastructure, and purpose-built technology.

For more information, please visit Carvana.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260610368071/en/

In the latest close session, Carvana (CVNA - Free Report) was down 3.39% at $67.25. This move lagged the S&P 500's daily loss of 1.62%. On the other hand, the Dow registered a loss of 1.87%, and the technology-centric Nasdaq decreased by 1.98%.

Coming into today, shares of the company had lost 5.58% in the past month. In that same time, the Retail-Wholesale sector lost 6.71%, while the S&P 500 lost 0.03%.

Investors will be eagerly watching for the performance of Carvana in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.42, indicating a 61.54% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $6.9 billion, indicating a 42.6% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.58 per share and a revenue of $27.58 billion, representing changes of -6.51% and +35.72%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Carvana. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.54% higher. As of now, Carvana holds a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Carvana is holding a Forward P/E ratio of 44.06. This denotes a premium relative to the industry average Forward P/E of 16.72.

We can also see that CVNA currently has a PEG ratio of 11.75. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. CVNA's industry had an average PEG ratio of 0.98 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 150, this industry ranks in the bottom 39% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

Have you evaluated the performance of Tapestry's (TPR - Free Report) international operations for the quarter ending March 2026? Given the extensive global presence of this maker of high-end shoes and handbags, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

While analyzing TPR's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.

The company's total revenue for the quarter stood at $1.92 billion, increasing 21.2% year over year. Now, let's delve into TPR's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

A Look into TPR's International Revenue StreamsOf the total revenue, $146.5 million came from Other International during the last fiscal quarter, accounting for 7.6%. This represented a surprise of -1.84% as analysts had expected the region to contribute $149.25 million to the total revenue. In comparison, the region contributed $189.8 million, or 7.6%, and $121.9 million, or 7.7%, to total revenue in the previous and year-ago quarters, respectively.

During the quarter, Greater China contributed $432.2 million in revenue, making up 22.5% of the total revenue. When compared to the consensus estimate of $353.6 million, this meant a surprise of +22.23%. Looking back, Greater China contributed $343.1 million, or 13.7%, in the previous quarter, and $278.9 million, or 17.6%, in the same quarter of the previous year.

Other Asia generated $240.2 million in revenues for the company in the last quarter, constituting 12.5% of the total. This represented a surprise of +4.35% compared to the $230.19 million projected by Wall Street analysts. Comparatively, in the previous quarter, Other Asia accounted for $254.1 million (10.2%), and in the year-ago quarter, it contributed $232.1 million (14.7%) to the total revenue.

Revenue Projections for Overseas MarketsWall Street analysts expect Tapestry to report a total revenue of $1.87 billion in the current fiscal quarter, which suggests an increase of 8.4% from the prior-year quarter. Revenue shares from Other International, Greater China and Other Asia are predicted to be 8.7%, 17.6%, and 10.5%, corresponding to amounts of $163.08 million, $328.39 million, and $196.37 million, respectively.

For the full year, the company is projected to achieve a total revenue of $7.8 billion, which signifies a rise of 11.2% from the last year. The share of this revenue from various regions is expected to be: Other International at 8.4% ($655.28 million), Greater China at 16.6% ($1.29 billion), and Other Asia at 11.3% ($879.61 million).

The Bottom LineRelying on international markets for revenues, Tapestry faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.

Tapestry currently has a Zacks Rank #1 (Strong Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

A Look at Tapestry's Recent Stock Price PerformanceThe stock has declined by 11.2% over the past month compared to the 9.1% increase of the Zacks S&P 500 composite. Meanwhile, the Zacks Retail-Wholesale sector, which includes Tapestry,has increased 6.5% during this time frame. Over the past three months, the company's shares have experienced a loss of 13.2% relative to the S&P 500's 7.1% increase. Throughout this period, the sector overall has witnessed a 4.3% increase.

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.

In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.

However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.

Tapestry (TPR - Free Report) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.

Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

While there are numerous reasons why the stock of this maker of high-end shoes and handbags is a great growth pick right now, we have highlighted three of the most important factors below:

Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.

While the historical EPS growth rate for Tapestry is 15.8%, investors should actually focus on the projected growth. The company's EPS is expected to grow 36.2% this year, crushing the industry average, which calls for EPS growth of 17.3%.

Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.

Right now, year-over-year cash flow growth for Tapestry is 10.6%, which is higher than many of its peers. In fact, the rate compares to the industry average of -4.9%.

While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 21.2% over the past 3-5 years versus the industry average of 15%.

Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The current-year earnings estimates for Tapestry have been revising upward. The Zacks Consensus Estimate for the current year has surged 7.5% over the past month.

Bottom LineTapestry has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

This combination indicates that Tapestry is a potential outperformer and a solid choice for growth investors.

Tapestry's (TPR) geographic revenue breakdown and capital allocation strategy are key strengths supporting its investment case. Recent P&L performance and management's outlook highlight operational momentum for Tapestry. Valuation concerns persist, as well as macroeconomic headwinds, tempering the otherwise positive thesis.