AI Adoption and Infrastructure Wins

Previous calls described robust AI momentum with Q4 2025 reporting around 150 AI infrastructure and data lake modernization deals and Q3 2025 noting over 100 wins as enterprises moved from proofs-of‐concept to production deployments. " " " " " "

Q1 2026 focused on continued momentum with 125 AI infrastructure deals, expanding use cases (data lakes, training, RAG) and enhanced ecosystem initiatives such as AI Pod Mini and NVIDIA reference architectures. " " " "

Consistent momentum is maintained with growing enterprise adoption and an expanded AI ecosystem.

Market Leadership in All-Flash Storage

In Q3 2025, all-flash storage grew 10% YOY with strong product portfolio refreshes and installed base penetration, while Q4 2025 highlighted record revenue run rates, significant market share gains, and competitive wins. " " " " "

Q1 2026 reported a deceleration in all-flash revenue growth to 6% YOY, driven by higher flash costs and regional softness, yet reaffirmed the company’s market leadership and strategic positioning. " " "

Leadership remains strong, though growth and margins are under pressure from cost dynamics.

Product Portfolio Innovation and Ecosystem Expansion

Q3 2025 emphasized a refreshed product portfolio—including AFF, ASA, and storage grids—and initial AI integrations, while Q4 2025 expanded on AI-ready infrastructure, new cloud services, and strategic partner certifications for NVIDIA and hyperscalers. " " " " " " "

Q1 2026 continued the innovation theme with enhanced AI-specific solutions (e.g., AI Pod Mini), further cloud storage enhancements, and broader ecosystem expansion through new partnerships and reference architectures. " " " "

Robust and evolving innovation persists with a deepening focus on AI and cloud-enabled solutions.

Storage-as-a-Service (Keystone) Growth

Q3 2025 noted strong momentum with nearly 60% YOY growth and contribution to professional services, and Q4 2025 reported a 54% YOY increase in Keystone TCV with growing customer adoption and use cases favoring OpEx over CapEx. " " " " "

Q1 2026 reported an 80% YOY revenue increase for Keystone, reinforcing its role in bridging on-premises to cloud transitions and boosting professional services with flexible consumption models. " "

The as‐a‐service model is accelerating, with consistently strong growth and deeper customer adoption.

Cost Pressures, Tariff Impacts, and Supply Chain Challenges

In Q3 2025, NetApp managed cost pressures with strategic SSD purchases and minimal tariff exposure, while Q4 2025 detailed a 40–60 basis point tariff impact and disciplined supply chain performance to counter cost and regional challenges. " " " " " "

Q1 2026 highlighted higher flash costs affecting margins but noted that supply chain challenges remain minimal with no significant disruptions and no new tariff actions, suggesting improved resilience. " " "

Persistent cost pressures are being balanced by improved supply chain management, with tariffs remaining controlled.

US Public Sector and Geopolitical Uncertainties

Q3 2025 showed the U.S. public sector contributing 10–13% of revenue, while Q4 2025 discussed caution due to federal budget uncertainties and geopolitical risks in EMEA affecting customer behavior. " " " "

Q1 2026 described the U.S. public sector as very weak due to delayed budget deployment and shifting allocations, with ongoing geopolitical uncertainty continuing to affect market sentiment. " "

The U.S. public sector has weakened further and geopolitical uncertainties persist, posing challenges to near-term revenue.

Sales Execution and Deal Slippage Issues

Q3 2025 saw inconsistent sales execution with delays in closing large deals, while Q4 2025 emphasized that most deal slippages were resolved and sequential growth exceeded trends. " " " " "

No mention in Q1 2026, indicating that the previous deal slippage issues have been effectively resolved and are no longer a detractor [N/A].

Earlier execution issues have been resolved, highlighting improved deal management and execution discipline.

Working Capital and Free Cash Flow Constraints

Q3 2025 noted working capital headwinds from strategic SSD purchases and tax timing that reduced cash flow, while Q4 2025 showed some easing with improved operating cash flow and free cash flow performance despite earlier constraints. " " " "

Q1 2026 posted record cash flow from operations and free cash flow, reflecting significant improvements in working capital management. "

Significant improvements have been achieved, with free cash flow constraints largely resolved.

Near-Term Revenue Guidance and Outlook Concerns

Q3 2025 provided Q4 guidance factoring FX, the divestiture of Spot, and public sector caution, and Q4 2025 detailed near-term concerns over macro uncertainties, tariffs, and regional issues affecting budgets. " " " " " " "

Q1 2026 maintained moderate near-term guidance with revenue expectations for Q2 and full-year forecasts, while caution persists due to continued weakness in the U.S. public sector and broader macroeconomic challenges. " " " " "

A consistently cautious near-term outlook remains due to macroeconomic and geopolitical pressures, despite progress on longer-term growth drivers.