In This Article:
NetApp, Inc NTAP is slated to release third-quarter fiscal 2025 earnings on Thursday.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The company expects non-GAAP earnings per share to be between $1.85 and $1.95 for the quarter. The Zacks Consensus Estimate is pegged at $1.90 per share, indicating a decline of 2.1% from the year-ago level.
Net revenues are anticipated in the range of $1.61-$1.76 billion. The Zacks Consensus Estimate is pegged at $1.69 billion, implying a 5.2% increase from the prior-year level.
NTAP beat estimates in three of the trailing four quarters, delivering an average earnings surprise of 6.5%. It matched the consensus estimate for the remaining quarter.
Image Source: Zacks Investment Research
The stock has lost 6.1% against the Computer Storage Devices growth of 1.2% in the past six months.
Factors to Note Ahead of NTAP’s Q3 Earnings
Continued demand from customers for NetApp’s portfolio of modern all-flash arrays, especially the C-series capacity flash and ASA block-optimized flash bodes well. Momentum in the new all-flash A-series is likely to have acted as a tailwind. These enterprise storage products will allow users to boost workloads including traditional enterprise applications and Gen AI.
The company expects the new AFF A-series, along with its C-series and ASA products to have captured further share in the all-flash market. Also, Keystone’s storage-as-a-service offering has been gaining significant traction, with revenues increasing more than 55% year over year in the last reported quarter.
Our estimate for Hybrid Cloud’s fiscal third-quarter revenues is pegged at $1.514 billion, indicating a rise of 4.1% from the year-ago level.
NetApp, Inc. Stock Price and EPS Surprise
NetApp, Inc. price-eps-surprise | NetApp, Inc. Quote
The company has been gaining from data-driven digital and cloud transformations involving business analytics, artificial intelligence, data security and application modernization. In the fiscal first quarter, the company won more than 100 AI and data lake modernization deals.
Solid momentum in hyperscaler first-party and marketplace storage services has been driving revenues from the Public Cloud. In the last reported quarter, Public Cloud segment’s revenues improved 9% to $168 million, driven by 43% increases in first-party and marketplace cloud storage services. Driven by strength in the cloud storage business, NetApp now expects cloud revenues to have returned to double-digit growth year over year from the fiscal third quarter. Our estimate for Public Cloud revenues is pegged at $171.3 million, up 13.4% from the prior-year actual.
Strengthening go-to-market activities, adding new capabilities to existing products and various cloud collaborations remain as other major positives.