NetApp, Inc. reported its financial results for the second quarter of fiscal 2026, revealing a net revenue of $1.705 billion, a 3% increase from $1.658 billion in the same period last year. For the first six months of the fiscal year, the company generated $3.264 billion in revenue, up 2% from $3.199 billion in the prior year. The increase in revenue was attributed to growth in both product and services segments, with product revenues rising to $788 million from $768 million year-over-year, and services revenues increasing to $917 million from $890 million.
The company's gross profit for the second quarter was $1.227 billion, compared to $1.177 billion in the previous year, resulting in a gross margin of 72%. Operating expenses totaled $828 million, down from $832 million a year earlier, leading to an operating income of $399 million, up from $345 million. Net income for the quarter was $305 million, or $1.53 per diluted share, compared to $299 million, or $1.42 per diluted share, in the same quarter last year. The effective tax rate for the quarter was 22.4%, reflecting an increase from 16.9% in the prior year.
In terms of strategic developments, NetApp has been actively managing its capital structure, repurchasing 5.2 million shares of common stock for $550 million during the first half of the fiscal year. The company also declared a cash dividend of $1.04 per share, totaling $207 million. Additionally, NetApp has initiated a restructuring plan aimed at redirecting resources to higher return activities, incurring $25 million in restructuring charges during the first half of the fiscal year.
Operationally, NetApp's customer base remains strong, with significant contributions from its Hybrid Cloud and Public Cloud segments. The Hybrid Cloud segment generated $1.534 billion in revenue for the quarter, while the Public Cloud segment contributed $171 million. The company reported a decrease in accounts receivable by $261 million, indicating a reduction in billings compared to the previous six months. As of October 24, 2025, NetApp's cash, cash equivalents, and short-term investments totaled $3.014 billion, down from $3.846 billion at the end of the previous fiscal year.
Looking ahead, NetApp anticipates continued growth driven by its diversified cloud offerings and the overall expansion of the cloud market. The company expects to recognize approximately 47% of its remaining performance obligations, valued at $4.9 billion, as revenue in the next 12 months. However, management remains cautious about potential fluctuations in cash flows due to various factors, including market conditions and operational performance.
About NetApp, Inc.
NetApp, Inc. provides enterprise data storage, management, and cloud solutions that enable organizations to modernize infrastructure, enhance security, and support AI workloads. Its offerings include unified hardware and software platforms, hybrid and multi-cloud services, and data protection tools. Serving diverse industries worldwide, NetApp's core value lies in simplifying complex data environments, delivering scalable, secure, and high-performance data infrastructure across on-premises and cloud environments.
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