NetApp shares tumble 11% as Q3 revenue misses estimates, guidance disappoints

Published 27/02/2025, 22:12
NetApp shares tumble 11% as Q3 revenue misses estimates, guidance disappoints

SAN JOSE, Calif. - NetApp Inc. (NASDAQ: NASDAQ:NTAP) shares plunged 11% in after-hours trading on Thursday after the data storage company reported third-quarter revenue that fell short of analyst expectations and provided weaker-than-anticipated guidance.

For the fiscal third quarter ended January 24, NetApp posted adjusted earnings of $1.91 per share, slightly above the $1.90 consensus estimate. However, revenue of $1.64 billion missed analysts’ projections of $1.69 billion.

The company’s outlook also disappointed investors. For the current fourth quarter, NetApp forecast adjusted earnings of $1.84 to $1.94 per share on revenue of $1.65 billion to $1.80 billion. Analysts were expecting EPS of $1.99 on revenue of $1.765 billion.

For the full fiscal year 2025, NetApp now sees adjusted EPS of $7.17 to $7.27 on revenue of $6.49 billion to $6.64 billion, below Wall Street’s estimates of $7.33 EPS and $6.67 billion in revenue.

"The strength of our business model yielded operating margin ahead of and EPS in-line with expectations, despite Q3 top line performance below our standards," said CEO George Kurian. "We are taking action to enhance our execution and improve our momentum."

NetApp’s all-flash array annualized net revenue run rate grew 10% YoY to $3.8 billion. The company’s first-party and marketplace cloud storage services revenue increased over 40% YoY.

During the quarter, NetApp returned $306 million to shareholders through share repurchases and dividends. The company ended the period with $2.26 billion in cash and investments.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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