NetApp (NTAP) 28 Aug 242025 Q1 Earnings call transcript

Good day, and welcome to the NetApp First Quarter Fiscal Year 2025 Earnings Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Kris Newton, Vice President, Investor Relations. Please go ahead.

everyone. Hi, us. joining for Thanks me today Mike Kurian; CFO, CEO, are our Berry. George and With is and This for webcast being call live our at replay will website netapp.com. on available be

may projections and future including, we forward-looking will second During for our prospects, to year quarter today's outlook These risks revenue, statements and to and other and which without call, strategies. returns and results profitability fiscal and various growth to financial our with guidance shareholder statements our and future subject differ regarding expectations make are actual the limitation, respect cause uncertainties, initiatives our materially. XXXX,

and please information, XX-Q. obligation any update and more time our We to our documents with to and projections. forward-looking refer For XX-K we on file most from Form to the our website. disclaim SEC the including statements time Form recent

will all George. website. unless to estimates are presented During available of the the over indicated. measures turn GAAP our be call, Reconciliations now call non-GAAP non-GAAP on financial otherwise I'll to

Thank unfavoring delivered a the These the you, last QX, margin first EPS. results We business. continued In operating strong, 'XX customer growth the year. fiscal our to momentum of management intelligent and execution disciplined differentiated FY we our environment, data our on are NetApp a of quarter started our year-over-year strong set confidence building records exiting revenue highly uncertain and and for Kris. testament X% in Welcome, in macroeconomic benefits infrastructure platform everyone.

FY and profit. raising As a revenue result, we 'XX outlook both our for are

the markets our revenue QX, opportunities solutions these in we and In and momentum Customers cloud data all drives continued confidence our we and by resonating. our in on our dedication clouds value the innovation, with Day, success. uniquely hybrid and data share. increase This are for most AI. which choose and we new important growth differentiated deploy areas, integration address biggest said of represent help rapidly simplify both bolstered storage is cloud AI, protection. coupled during them market NetApp tailwinds secular challenges. we As to public my notable their fuel block, evidence that are experienced power Leveraging company-specific focused proposition strengthen to unify to across and recent They applications, address because Investor flash, our focus our data

hybrid data to We and uniquely ability giving our secure remains and in protected. deliver revenue data year-over-year We rate portfolio propelled cloud storage. growth consistently up unify to the anywhere billion, ensuring and of performance the storage driven their comprehensive in delivered power our our application customers management X% annualized segment all-flash by XX%, of revenue strength a our robust across all-flash product data demand year-over-year. $X.X seamlessly for with XX% while array manage Broad-based revenue integrated run storage and again all any all-flash growth to platform, and it and

exhibited the most mission-critical of At high-performance advanced the today's tomorrow's the data delivering AI Gen arrays, of we start cloud QX, environments capable new industry-leading family from and to AFFA the of powering workloads modern applications, Series driving protection workloads, management, ransomware introduced demanding all-flash optimized integration and share and Series TAM expectations. an capacity flash our our expanded saw require. that The array ahead and performed customer positive of AFFA all-flash reception Both families gains. addressing growth new block year-over-year, strong

realize a NetApp a infrastructures the storage vertical a a leveraged new to workloads products competitive legacy applications enabled and set broad customers the footprint evaluate and displacing as customer QX, step purchase remaining services. architecture ASA the relationship the and compelling block the and ASA new intelligence. ] our performance markets as help European-based price modernize C refresh a is savings our deploy plans competitor in additional [ as their ASA, legacy comprehensive of had first they together we the with like us to ASA to modern public the its competitive [ replace customer cloud takeouts software across In to and artificial numerous larger ] at customers of environment. the manufacturer Series SAN capture to capabilities The This systems

in Keystone, reduce our QX environment. ago. agility a growing with a is demands good financial of leader example of A growth, was to Storage-as-a-Service rapid chose XX% is market. this in ability again risk to them operational changing the rapidly AI on space. data and to circumstance. the the changing customer cornerstone quarter gives the leading this by help flexibility platform address storage offering of provider automotive highlight they from many NetApp's ongoing the as based but also Keystone the manage gives my thought supplier and of over reinforcing Keystone Keystone year revenue customers position need conversations, proven this a manage infrastructure automotive that dynamic a created transformation to shrink

selecting unique for preparation, from augmented and data well and responsible as as and AI and wide privacy. address inferencing all-flash training AI capabilities retrieve tuning integration management Customers support our governance of range and data NetApp at or data partner the because needs model storage, a cloud every and versioning including high-performance generation extensive are stage the their of a to cycle of RAG as These life capabilities. data requirements model

their by We for a couple and of XX AI high-performance AI business examples. good you gas we were While with companies modernization we compute seeing we workloads. data lake AI largest and AI give had the wins. and today is ahead over for our us, oil expectations. are In ahead I'll enterprise believe selected well momentum world's the another of just of QX, of performing our still large opportunity

management CPU workloads, simulations Our made AI servicing virtualization which cores all XD flat storage lake detection, for and practical XX,XXX AI and scientists. leading will the we and workloads data single power consolidate including improving their a fraud the GPUs, a financial productivity environment. run of portfolio data for more services scoring institution and petabytes into Additionally, to than and of it analytics data credit customers'

workloads, of data customer deep infrastructure AI their for experience are service together growing understanding examples requirements. preference drive AI intelligent to in Both of and NetApp help platform, infrastructure our our how with instances

We of and the Gen stack Gen position AI continue with partnership full to to our and for solutions development RAG. in designed industry Lenovo, with cloud advance optimized QX, partnership in on-premises announced AI strong In a with OBX support system leaders. we

new to introduced data projects Gen generate for models. their pretrained from AI the Microsoft AI combining high capabilities workloads. by AI ability unique with the NetApp giving results relevant We with cloud Additionally, proprietary customers we NetApp also quality files, toolkit integrated Gen designed foundational Azure and

In of multi-cloud workload, reduce proprietary X% help increasingly the hybrid segment breadth conjunction products architecture services and Public FSX environments. for with stored enabled Amazon managing revenue RAG complexity for a has strategic that ONTAP AWS, AI bring and risk Bedrock we workloads was the NetApp for is to into complex implement NetApp Amazon Gen Gen resources truly across on workflows data the and year-over-year. only AI $XXX in released up cloud pipelines. hybrid to a these reference data customers customers million,

increasing top hyperscaler partners. and hyperscaler of marketplace performing our of and expectations priority. first-party roughly ahead our rapidly, storage differentiated XX% to and grow our highly These focus year-over-year remain at services continue Our services each

from 'XX course are services subscription As [indiscernible] the shine first-party expect on FY our of over allowing of storage the we calls, we headwinds lessen and services to the and marketplace to previous strength through.

In XXXX DAP, Our broadening position. NetApp to AWS, and we QX, Year or performance the migration in files. our and workload Award and recognized which to business the Azure work solidify unique Gemini continues enhanced Cap moving scalability large Azure, our ] retail Partner performance the boosting leadership Microsoft of customer rapid Azure the cloud category points to in capabilities included of or storage value evolving [ NetApp in needs. innovation services address price a with support, bring capabilities, to Asian again we its FSX for

We believe year, for and of AI, shareholders QX potential our our success infrastructure with customer block, growth to solutions. cloud 'XX. strong flash, profitability the FY for intelligent data in continues The positions platform unique age into us needs customers. data and our reflects billings the the promising our from path a Our confident last paving alignment increasing continued robust designed performance in revenue storage of highly and differentiated, capture the growth momentum

priorities ahead, Looking are clear. our

seize growing opportunity. to a market positioned well are We

we As management model. maintain our will disciplined to operational grow, our throughout we drive business leverage

to see infrastructure want I also and age next conference intelligence I to innovation uncertain there. Las showcase delivering where in Vegas remind the the our closing, you to our dedication are to that want will for their customers I In customer team hosting exceptional how announce advances environment. their AI. we hope in of for results to make Insight we data agenda we macro thank help an our you NetApp month,

Before sure I already news over seen of his turn the upcoming retirement. you've I'm Mike, call to the

Mike has value. focus a delivering and in partner been me shareholder on great to growth profitable our

to learned to drive end Over human been 'XX X% the day. fiscal every I and partner through his to Mike. I you, to who I 'XX seamless growth world-class being Mike, much tenure, blessed helped entertained XX%. a and of ensure whose course revenue almost appreciate knowledge FY wise has music. transition. has commitment growth smoothly his have friendship disruption Mike's through of he the with navigate has of whom Over from country EPS FY trusted us a the from us encyclopedic of a helped year stay of have

the comments run Thanks, nice come George. back to I I after greatly appreciate comments. I'll those through numbers. the very

to it phase CFO. will until transition. life, a plans excited and name about here ensuring my business to While on a we as seamless usual what smooth, I want come are is that next everyone assure and focus I My in remain family new our our is delivering of

or We in our ranges. hitting of a exceeding macro environment, executed all an quarter solid guidance uncertain

Day on EPS year QX We are evident our double-digit single-digit as in 'XX. Investor revenue average targets fiscal mid- towards of made through We commitments, our progress on and long-term our upper growth solid results. to delivering

key the I the into quarter. let through walk themes Before you details, get for financial me the

reminder, all unless As numbers are noted. non-GAAP, otherwise a discussed

line and in XX% top exceeded and our Our X% revenue year-over-year, with respectively, XX% growing billings year-over-year. and revenue product expectations, growing QX

both margin consolidated reducing highs. repurchases, and and records. all-time cash EPS approximately of QX diluted margin at operating dividends XXX% count strong margin through $X.XX, XX%, X% was near share to flow gross stockholders expected, QX of returned operating QX and XX% Gross As by discipline cash free We drove year-over-year. of share leverage

year. As this expect and we continued Due the quarter's cash free focus of in discussed year. up our strong flow first expectations to XXX% of and our intend growth to operational we discipline call, management, each year-over-year revenue last quarter to and the in we outperformed during return solid to execution quarter deliver

our EPS raising are we fiscal year result, and a 'XX As revenue expectations.

Now quarter This increased billion to our spending. above quarter. growth, increased the X% environment $X.XX our midpoint pressure an $X.XX XX% of of guidance year-over-year, of marks to the with third billings year-over-year. straight range. the QX continuing macro Revenue million details revenue even IT uncertain year-over-year and billings of of

to well Support revenue and aligned innovations of that offset services. year-over-year. will through $XXX We in storage 'XX. by investments and a of cloud million year customers' subscription of XX% the QX services Public year-over-year. increased grew $XXX driven X% of growth by revenue rest ago, million are declines hyperscaler year X% Product priority $XXX first-party confident revenue drive from fiscal remain our expected million up marketplace was

points XX% at XX%, from and margin QX was with up in consolidated a expectations. basis year line gross XXX was ago. gross in came Product margin

which on higher As from Day, share and discussed to we subsequent margin and increasing expect the during continue Investor derived sources, through the we an call recurring total fiscal of 'XX. year we revenue QX revenue have

purchase for have margins mitigate product in to give future, fiscal 'XX. our SSB us which commitments made the We confidence prices strategic year to and supply lock in in continues rising gross

Our The prior highly quarter. continues to gross business of margins cloud to the fourth recurring gross fiscal with QX from support XX% year improved in XX%. public profitable be margins XX%

offset XX% strength XX%. million target long-term X% we QX gross $XXX of with of continue operational business for slightly by was to make expect XX% billings. lower year of model cloud expectations. 'XX, by to our Operating $X.XX and and on disciplined QX operating from income higher again revenues, decrease up higher year Operating partially public end higher and the expenses fiscal 'XX. of purchases, million We declined margins cash fiscal operating towards in During progress the of margin year-over-year our high a X% highlighted of also ahead execution by to above interest annual QX, from our of guidance, payments a rate. SSD EPS a XX% was $XXX customer compensation and of margins strategic year-over-year, driven incentive higher and driven payouts was tax flow collections

decreased lower year-over-year Free In X. flow. million XX QX, flow $XXX operating were turns to XX% to cash and DSO cash decreased inventory due to

to During dividends, $XXX returned we million $XXX and approximately cash net stockholders the quarter, through repurchases with in million ending cash. quarter share the

on We remaining have approximately our billion authorization. existing $X repurchase

remains approximately was cash balance ended short-term billion, past Our year-over-year, sheet decline $X.X X.X% revenue the and down X We with healthy. deferred $X quarters. QX in billion of less than in each quarter the investments. a smaller than

growth We as continued we growth. fiscal during expect 'XX revenue drive in improvement our year deferred billings

relevance gain is a our in of as includes customer business. We and this in our Keystone, RPO, unbilled was a disclosure $X.X adding RPO to meaningful leading Service Storage continues traction of a to are in business. our more it our becoming commitments, quarter market, as cases billion QX. is the indicator growth as which broadening future a use new offering part

Now starting the full turning year. to with guidance,

While that year believe continue X% raising guidance uncertain, we full $X.XX our the and macro between continued representing in forward. at we to to in billion execution our going end, $X.XX us billion revenue business gives that the are our To confidence are for midpoint. growth year-over-year revenue indicators

XX% 'XX unchanged be fiscal XX% from and margin be to XX%, year expectations. operating expect to consolidated margin We XX% prior to gross to both our

be the to raising XX%. We We expectations year our to million $XX driven for income rate interest higher expect our by interest XX% full income. are tax net now to

As we the growth. the of EPS at $X.XX, be in expect a which midpoint, implies $X range XX% result, to year-over-year to

our second Turning now to quarter guidance.

We billion implies revenue range the between and which X% year-over-year. midpoint expect to QX $X.XX $X.XXX billion, growth at

QX to XX%. We be approximately margin XX% expect gross and to in to be margin consolidated operating

and successfully in and and in to closing, and to expect goals. the want employees, in am to commitment rate income customers NetApp. I EPS be investors to XX%, thank their and range customers -- to digital achieve our tax $XX net investment I our transformation XX% of in our approximately their $X.XX ability million the in cloud interest our for We be confident quarter between $X.XX. help

long-term IT investments and well our sustainable committed priority We are to aligned are to for value deliver stockholders.

our road the will I all at Investor recent identified. execute am growth. of all to continues an organization am continue a has to profitable we a and to some successor Q&A, and CFO I before visionary is to announcement. transition I organization to would a its grow ensuring out will honor and excited so over the an Finally, welcome comments who of being role like to such until on promise NetApp add and lead the be team lead am and last finance able Like to my X.X NetApp NetApp part years. the been evolve, go appropriate to Day. It dynamic smooth a take companies, next personal and I helping play to on proud privilege to the in NetApp on and committed against strategic new we level laid a map deliver

events. you Kris, I at to of forward continued support and usual want to seeing in for you thank all your want our investor forward away said, please many the NetApp business. to reiterate it the I upcoming success for of it look now, I of and that being to is That take business for as Q&A. continued look

Q&A. begin let's the Operator, Mike. Thanks,

[Operator Instructions].

with The first question comes TD from Krish Sankar Cowen.

the to the for and side. sell and thanks congrats side question miss We're And strong first help the my buy for you. Mike, on your towards all Mike. Congrats going is results. on And retirement, the

impacting NAND how margins? for purchases Because do standpoint, follow-up line lower can how then you have purchase its I quarters carry from gross but price that NAND understand through? you think about the And standpoint, cost impact demand think demand you top from higher a a many George. for or made strategic And NAND the you the all-flash? a On that I a on do is pricing,

Krish, thank it. Sure. you comments. and I kind for for appreciate question, the the thanks

let's do one So last the first.

the feel fiscal about, How 'XX. forecasted position go into good of talked in may we large that we're NAND about the much our We'll We really majority do We 'XX-plus. we've we'll It goes. decide on depends of prebuys, as for may it on in keep really year? see rest market So the our next market. to what there. a more eye purchased the happens how

in to as we've too And hey, really Back hasn't understand talked question, changed your at budget this -- about, don't first our customers' I if the much. is, standpoint, point, it correctly from I dollars. always market

it of on seen we'll point, have in much this how goes But no not So that, a rest to 'XX. of changes. for based change see demand. the real fiscal we

like? Got earlier the a great And performing. it. feedback just How product then, customers. best-of-breed into product for question And the this new customer for It's to it kind file a order sales. it. quick object is is ACD. flow while update as pushback products the Got for product solution. block year, that And understand a you George, a the on and you ASA any how pipeline like I us you. looking take versus released switch translate of Can Any be would unified helpful. using

very have product a is which you the been the AFFA rates storage introduction We series, the those with introduced -- line, and the of end strong. of family of unified talked have at set been of models product like about, the the pleased we high adoption

in choose customers C be a certification you would unified right that qualifications all customers deploying happy that through while, Series process. little certifications products. storage in the of to seeing terms that As And new new but wins largest We've go activity and proof-of-concepts, the It a product. had the in we're know, environments complements a they several underway. are takes

general-purpose is high-performance strong transactional databases, in complement latency like the Series a low turn, workloads the of that And consistently where of IO. both AI is A-Series saw also family, ASA C a which we for The workloads only demanding those for block and demand uptick. serves optimized workloads, workloads lot block

our So performed really, quarter, year-on-year pleased. in I'm XX% with business flash growth. saw Overall, very really well you the as

Chatterjee comes JPMorgan. Our question from next Samik with

working relative Mike. start some so I with impacting had know macro guess Because of of sequential can at ask you here, it comments and closely. I in doing the had but you've executing on my that that the more was working uncertain I trends job sort question, I to great well. time, which of again, with look you, a you've best question as for I a demand? much the how Thanks there's I luck a for revenue question Before if with us on seen that's storage to historically. are line pretty progression The when been of plan. great seasonality George,

sort more customers to look, does fashion. a spending It are normal of back in

when even pretty how point. seeing your spend, So the you're to you this concern sequential you record to about customers' would in uncertain what is impacting at because with in are trends of revenue appetite think look on terms seasonality. what macro do really track you line

So is hesitation terms giving that that in like some there just is appetite on And to in what of follow-up. are -- seeing fashion. what your spend a a you Is customers' normal have front? curious I you the anything

we has the entered a still they from interest amount geopolitical there are year progressed rate than we be risks, that quarter. when awaiting the there -- I while to ago, a Overall, changes economy were seem the time nearer good Yes. this are are and think of

in the a the is progressing European amount We especially budget a product to and our regard sector performed because strength what With public enterprise especially our continued in right Asia overall, U.S. quarter, in slowness the we still U.S. So well. saw part it the where teams Pac are well. we saw did markets, like saw in way, continuing of lines uncertainty. feels there broad-based of good the and though the solution. some really challenges geopolitical public the things federal in the of with sector, business

is these all prioritizing across we are strategic projects. What see spend customers that markets on

refreshes, of our What of part continues broader-based large-scale we would solutions do is to well, signal business. which confidence recovery I'm really and that a alignment so seen by business in the the [indiscernible] And to that. our and haven't encouraged economic yet

it. customers be hybrid some about of about talk you sort those your of of think more play be towards Got of covering what of in environment are going And AI year. do public of your when with 'XX you these what are solutions. their it. both How a the to thinking And to you're is Got specific you're about like both hybrid cloud cloud AI the wins sort and and how driving about terms ASA AI these talk remarks, workloads, about prepared deployments as sort truly -- and talked fiscal you that more fiscal sort in hybrid, contribution workloads well. going you that saying expecting context to from of looks AI public in wins or for dedicated of

Yes.

models -- a on lakes, particularly think, broadly public cloud, there: AI innovation with really warehouses, are hit databases, me I software very combine AI rate in Let data One of the together the frameworks data applications in at speaking, progressing is that where high, drive that rapid two is, the broader in had points you rate.

where portfolio, secure the our easy saw center through cloud us. in no seeing reason of which the well to a on unified is a ability that much So to sit and the public manage, with workflow we the in why to public storage that we both strength create come might cloud, able many data together within for them architecture the we foundation data and environment is customers what as want we're or silo our AI applications part use of entire cloud in to their are tools the see data as more for make in much, the

portfolio. subscription strong cloud we've seeing headwind with challenges we have our results quarters the as see of now have been it the through part year, play listen, we of that regard on we and Those for by from seen storage business. lessening we some noted how our With said cloud, that are have out masked to multiple the a

So storage expect really With year. the of portfolio, we're raised the year. through to to the guidance pattern listen, growth had year. return We flash to a regard X really, strong quarter I'm we into a cloud encouraged. full consistent the of rest the quarter We've for

very we'll very, the the of you heading are more out. and year We confident to plays rest year, as the tell

from comes James. Simon question next with Leopold Raymond The

This sequential of some the Chiu Victor of is and in trajectory there? color Kind should cloud the quarter. the was for driver going think this Simon. And around Can improvement provide this what forward? from you about just the public sustainability strike in the improvement behind point we how

it's Sure. do Mike. Happy that. Victor, to

So in remarks, really marketplace our about of George that saw that storage growth talked at terms business. strong We and about talked we growth. as a Investor in lot party Day cloud his in our

XX% grew that So year-over-year.

subscription to rest the through of about portfolio, as take be well, hey, though are a go bit a services at of the year. talked we headwind, moderating expecting we as as look you still the we a If little

are less do all the being year, in all, we bit of of little strength making. party through that some and perspective a go services headwind a get we by the also as subscription accelerate we in the to and led So from cloud we a marketplace -- through expect as business revenue changes those first growth

Okay.

kind line most the you for in largely with were part? expecting So was the what strength of

better, what and we were expecting were and a [indiscernible] little cloud frankly. marketplace, even quite was It bit a

forward, because some So business. that we've strength that those we nice continue we look of as products. of in the seen expect really actually And to accelerate growth again, and

a evolve? follow-up. last quick the should initial customers follow-up of just about should Or AI from mix And it helpful. enterprises? of do demand That's think How type the the seeing towards type is as think question. the coming that AI contributions? from How think cloud-type behind evolves you and operators. over hyperscale kind Are the we where how about of biased Okay. initially workloads demand about How time we on one we the of is

from is enterprises demand the model providers, of across There and of training a is as first mix of well data data some operate demand cases and enterprises. fine-tuning internal for service but our Most of phases is as large from foundation most inferencing large of which lakes as AI the Prag. very use

seen cases. a good all those So of blend of we've use

next comes from Advisors. The question Steven with Fox Fox [Operator Instructions]

your dynamics, Mike, I George, retirement. a seems terms sort broad competitive like in that of be guess you you like about set just positives congrats on could share. of of thinking it winning out gains the ago mentioned, forward called where more versus give on days a gains. versus now sense XX market why? sort share you seeing confident Can us going most you're where and And maybe you're of

year, and that that focus better think second of is in our half then and I to on Listen, execution And continues. momentum we've last what continues seen progress get and better. we the good made

really, more hyperscalers of to gain cloud workloads, into points, portfolio, our regard price feel and traction, right? broader are. We've customers really integration we storage good set portfolio more environment. I So to where With got the about the and broader a more continues

gain share against performance well price the leadership products as are about that really strong the good set With portfolio feature really, in as our price the the to feel flash the across our results regard board. I the portfolio, portfolio, against product storage of and block against really had performance pure demonstrating midrange We there. So we which innovation the of part the competition, competitors. is of competitors high-end leadership

the wins good we're really that across about I seeing feel So the board.

question Daryanani Next from with Amit comes Evercore.

seeing as really growth some array have on well. two folks start all-flash I good I you guess, George, maybe with the side. to are

recovery talk just gains? XX% all Can you quarter. demand? your just is in this it flash. perhaps I share think this it's up base, about is towards more installed cyclical converting Or Or

And crucially, understand to as then of this do is on what's trying what forward? all-flash durability the think XX% the the plus growth Just strength here? driving you side you go

customers a is couple successive about really feel broad you have Roughly and we are flash portfolio. double to had of completely first are with we we that With of to Flash the products new third is just new the of and time. to of never portfolio customers high who of have. NetApp me buying raised, new all-flash growth, the NetApp customers rates hit set set good NetApp -- This XX-XX NetApp seeing mix as the a quarter broad our for digits, points well a of which the broadened let as

a portfolio. So that's good indicator in the continued I momentum feel leading of

the the part or of we as product as With both upgraded, ours of regard base very to competitors our the to getting base migration have installed that a said flash cycle drives of hard XXX well a flash portfolio. refresh large the that QLC is very, installed of

so storage it's of the drives of base flash long you I roughly And installed normal. perspective getting think total accounts accounts, XX% to XX% a new mix a some a from of as XX,XXX somewhere of is installed total just for around market the the volume And the was look base of It time. very period if right, refreshed. it to at as well NetApp new

base And so refresh. installed go a there's to huge

in So a the second of if you ask me, inning we are X bulking.

of the stayed the that says with the X that growth our additions comment, into this so installed even of -- our flash, In overall penetration all base terms our base strength customer of grow our the of -- of quarter-on-quarter. even final installed steady flash

we Could margins through ZIP on any the parameters be on just really your had to rest think you would And helpful. code fiscal product George. margins Mike, product the year? QX? should we how maybe for think as it. helpful, the then on about gross of really in congrats that go how year maybe retirement. about just XX% as from That's you Got the touch well gross Just

Sure. do. of And got comments. for to work everybody, appreciate I We've a thanks it. the lot

little You're I gross we it. a margins, through while, as go bit for do to work as down a see going little as to appreciate expect down last we the said pre-buys. we come the me it do quarter product we quarter,

that this full at basis. were as quarter. XX% we XXs we're here comfortable that for right the with year we today, So sit for the year full Again, still we upper to XX% about said

quarter. what we expect -- different of rest we on talked through it real than of anything change the year So last about trajectory the the no that in we

course I to history the we of as some pricing So industry, saw, of add, storage we quarter, the our the up. did in just competitors want the during of see take

take actions broader indicator inflationary of environment. in commodity industry that's that the so would the an And leading

Next from Mehdi SIG. Hosseini question with comes

overall to laid deacceleration Every want another is, record. I when it's want all-flash upgrade XX%, with this kind by FY followed a would past talked XX to spending accelerate? get especially of a time about more is confidence if prior because given broader plus it 'XX. the cycle George's go out question. George, the I to could back to that I come in environment what record over time And targets follow-up. But we we were growth, understand then strong the what a for kind year-over-year going constrained? 'XX, FY acceleration. the in, XX% kind seen cycle have gives see we X,XXX growth, consistent you And I a your the see concern that of okay, in commentary, and understand have remain to FY years, we every of Could this actually had a but of you you to growth 'XX, materializing array

right? than past. where only the two the market one points would have think lot in or what as storage. would I portfolio out we think that that we in we've the price had block a unified offerings sell our previously products broader as custom And now fact three across the flash storage things, by is point I I all well for is

well is and that so innovation data as like areas about portfolio leadership product market. we a I have having the feel as in of really And pretty security in pace fuller underwritten much good clearly the

The is the pure-play where we integrated today system are vendors. second is in where a players outperforming storage the market are

remains look integrated their to quarters at have is And strategic it whether seen broad for And in so a now of that range struggled vendors, the a they be focus you forward. going storage them for system business. many

our other environment have feel players really choppy the spending our I'm benefit more at we rosy a would position when I not in hopeful should for some environment, we now market, to the done that macroeconomic macro in right? so would relative well current stabilizes, And environment, environment. stabilizes, And if the be especially through, business. good. look the to geopolitical a which a come call multiple I quarters see fairly spending I

the of to insight of additional versus for quick trend QLC about quarters? using follow-up that think for how QLC next Thanks one a the NAND over of and are repeat And should would question. other technology mix couple just the in me. How mix terms I

as QLC right flash of roughly should grow now percentage percentage it's our as business. mix, a total a of the half

percentage business. And so see that as you grow a total the should of flash

Our with Fargo. comes next from question Wells Aaron Rakers

double-click hoping on I'm what and we're pretty little for quarter Jake sounds what's adoption for I on in enterprise just competitive Aaron. on could like the This there? the seeing early for a AI is of still Congrats inning you you're it's products. demand think in landscape like you It print. bit AI wondering days was the

Yes.

from the are in with you happening. data why seeing which the far AI But innings fact of so models. a architecture, proprietary the computing standpoint, think build-out early these are using from storage we storage applications think is the AI specific AI compute I AI landscape I seeing requires people and data you're a perspective, their are that the a

generation the trend storage. data as see we've large-scale is And so you'll innings. the well when really early into as said of inferencing in inflection that we're in It play as consistently, come data that

seeing is are right everybody ready getting AI. their we what now think is I for data

AI what the getting their unify particular have data, their of pipelines all And that application, types cloud so it. for so they out they their data data in figure had They applications cloud. to they're need to working had trying

ready, seeing and data kind some getting of a data for We together we're very the data huge amount brings of data that so of we're the unstructured which that. of or a of their infrastructure all positioned a lot form hold data, And well is in lake often in world. the

we a that case on AI naturally any sits generative us. requires of are And so data use part often

the examples that summarize institution they the to are that trying applications. gave data in earnings services their is on call classic unstructured have One And is we large all the you financial of a two examples. various

application vendors us to work -- feed so their with into LLMs. And they into that a their all in of of set AI

inferencing data be the Xx is data to and market, the expected into AI is are than more and storage We landscape. generate market XX% the about RAG the to about It's expected for AI enterprise fed maybe expecting XX%, that RAG preponderant the majority total is of of the pipeline.

So new lot there's applications become of going happen main wherein a to generation strain. if these

Our comes question next from Loop with Ananda Baruah Capital.

done, with have you, we'll well guess, working one. job I miss obviously. sticking George, just but Mike, congratulations, there. right I

Analyst Day. Speaking right there, piggybacking the off

also then is to opportunity? the of you Like companies data So to capability and that relative XX% and does to amplify comments that from remind that vast just say, XX% feed in -- then have. the can just EDN, like Can you you other and also, way, other can opportunity RAG [indiscernible]? up some XX% opportunity? [indiscernible]? time. inferencing you market a your could ago base guys how in, I have you actually, you moment perspective, include you place that over And is a that Or -- -- the in growth mentioned us on installed you And in there. the But say the just storage thoughts be how out could you about thrown the us you how data access sort guess, of WECA the getting stack there, to a of remind the does got made to stack up interesting

Yes.

let questions me So three there. hit, there's in

effect RAG it you multiplicative And inferencing data the about for store do inferencing, the of part data and actually that grows we growth, you on data, one, the right? comment vectorization create where the actually data quite we structure On of first see is top see of that of amount significantly. so when the it unstructured of large

that is inferencing. hey, into say, we fits that that so XX% And probably opportunity of set it

With set. to we our listen, good set, feel capability really, capability our about really regard

been lot AI. we we of I with is, market We've see that since first customers of of what experience in a have think AI the a NVIDIA, of XXXX hundreds in lot have all, we do us. with --

of The this to to second scale-out is object. file integrated systems, kind large-scale you need and workloads, AI have do

wins across a in have capabilities wins of and integrated board. the the and We've so that training. a system file got fact SX fine-tuning we've got got wins in scale-out much lakes gives with us we right? We've in in entrenching, ONTAP, And NFS pretty So strengthen lot the parallel data market.

by hybrid NetApp in we what that in market unique because cloud would with the also And integration we are one of can is Literally, -- else We there We right? market no I the just do do. to the Insight. else pipelines, the that have. one close come saying no native

that an have XX that today. got the set showcase real of done build solve technology to capabilities we've problems far. work months, And hard so We are awesome AI over awesome will our real set using innovations an of customers next on how we the all

follow-up. Gen AI company amplified you an me, I'm you suggest have George, that position the helpful. to all just this share Does in kicks the that does in? super capabilities believe could do a about, like spoke quick going when That's going just given storage that

With are that to Gen market us hear the installed We X well AI, come feel super you'll good players capabilities more. about the positioned. base inside, have extraordinarily tell and our

Bank from comes question of next Our Wamsi America. Mohan,

think And that do follow-up. George, of most are elaborate the all-flash seeing you between market have new all I the you you who share most you're taking hybrid the and And all-flash you just to and you parts had bit said NetApp just traction Flash. little a from? capacity in you a performance? Can what

because I is market -- you think the the is is the fastest-growing the look it if market, at capacity new. overall flash technology

XXK continues I think see drives, right? the And of performance displacement all year-on-year market tailwinds, the to has it's of we and strongest the be as where are You that's growth. compares seeing market the capacity The a part business. growing flash

that compete against lock have for part We Performance are which We expanding opportunity arrays, for well and market in I of a feel us. the right? prospects there, frame about done TAM good the products, our

our essentially, databases be capability it performance, is could array exceptional the Dell from the that It HPE. a to makes we large have price latency, or which or Hitachi easy And run consistent PowerMax frame environments a want. plug on that landscape these infrastructure and set you and them that great of unify workloads take the to features AI plus you your other workflows data into and allow

base And XXK midrange on the so range, of in a XXXk with about we end, that upgrading good we bases -- our drives in rides. installed QLC feel the of installed seen have high against progress good also other broad upgrading

And our results same strong. compete with, we suspects so are

in good market. about taken we've share the And that feel I fact the so

Okay. level the rate? congrats as well. rate, in at the about not And talk lower despite much And for tax dollars the my income it drivers for for operational higher the if one the interest tax -- show you Can revenue. does look Mike, you and increase slightly operating lower higher higher

And out? that are you first expecting what anything the step that wondering does of change takes you've these quarter. still half versus Or that like made there, now because the have pre-buys little the a gross half? some in you'd there you just if during margins to and So to second puts call down are

So Wamsi. question. for Thanks the thank you,

of I'm gross going said the and we the last walk to takes guidance. trajectory no. margin. change of terms and No I'd give time just answer in of puts then to answer is first, me the through one last So what The to chance the

a a, So second. back for up let's

in So in $XX revenue $X.XX by $XX beat million Because in in business in and our raised of million we it by confidence strength then then million and the it, the we first in $XX quarter EPS. and revenue EPS. the

to think I this Let's go important. is go we're to then down first, right going left and because

QX, visibility the and those into based another raise results the $XX that by about demand So and did see we million. QX on we

the that you We revenue well. as through the second also year. in go raised largely half follows EPS as

in underspend did in OpEx the first we However, quarter.

answers of your say And throughput some about half. then questions. -- the pushed much. let's as other the question you we Therefore, the That spend in that don't see operational second your why

of rate, the On is simply forecast it a GEO. the projection income tax by

it years the all X go up rate tax invest in the on would And to a income, lot can profitability. Xf XX.X%. we has sure cash last be year. of been that last making then with the We has mix team great of And it interest Our our done now the on based work, expect balances. consistent we thought

best didn't number candidly, lower they might. as that thought as well. rates they as up And Hence, we we've bunk

through -- percentage then margin those is that's percentage in movers year And are one year. year, big guidance. and income So gross the quarter the then we'll let as and through in. We But for the We're importantly, next operating the full left good take get the us only feel the quarter, go about we've consistent. really that we a year. look at

hopefully, So that the helps. That's outline guidance year. for for the

Vogt Our UBS. today comes with David final from question

we a do the base or Gen then to just need on Brian AI, flash so? And Or adoption shipments David. come over down cost storage? of drive the wondering TCO and is for installed today? what of next today at Flash further year percentage is on curve are I'm This to

roughly at With regard is, you XX% the of hybrid it, to if revenue. look cloud shipments, flash

it's bit than that little product higher so revenue. And a on

it there. leave just would I So

base, installed been right? total years. the we've The to for base. it's still installed a it's selling flash many The regard of still is part with XX%. small And think I the is drives, hard majority majority about how

growing. overall our installed the So fact size it that shows and the base is

what about in. the operating to -- get your part me you're on AI. Let cycle With life depends it regard of question to

are different be types, language being in used the with If to sort of of want large data you portion that that to to is the be large going building data unifying the a flash. that model, process able repository mode data all where a either we'll reasons, environment, like what large-scale you're far, object regulatory want data The of solutions will on that a for disk-based is is actively disk-based you or they customer business on that typically models data trajectory solutions. that sets so have keep to that are doesn't reasons practical we've for for of keep kind a seen their they gold-plate repositories on lake the archived run

and that move is set LLM. you inferencing fine-tuning configuration inferencing model process, If move training your data with all-flash then have you active when crunched an into business to in right? where model, wherever an you being the an then And active happens happens

it the [indiscernible] could probably also a have you in cloud. data could run environment it manufacturing have center could where where then you Flash you on So you flash. in it could small it And could facility in have your you use

inferencing are instances many our used. We that of cloud-based are being seeing tools

I -- it's that of gave answer. broad there's you gave you So business is sense one the that a hope hope I a at. where good no mix

you, closing George right. back All for to I'm it some Brian. going pass remarks. to Thank

Thank you, Kirs, and thanks, everyone.

with 'XX of strong solutions FY strong execution. of important our got our with alignment have a We to Because start. customers' coupled focused most data the challenges, off

yield fast operational updating delivering well the to capture are are in outcomes. at relentless to opportunities, growth combined to the positioned you. -- a continued with at disciplined AI progress markets pace I on Thank next NetApp of you management flash, key on see our positive to We block, and forward and potential significant you call. storage Insight, continues quarter's focus hope innovation and look cloud these our on

The for Thank has concluded. now today's conference attending presentation. you

may now disconnect. You