NetApp, Inc.

Good day and welcome to the NetApp fourth quarter and fiscal year 2026 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Chris Newton, Vice President, Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our Q4 and fiscal year 2026 earnings call. With me today are CEO George Kurian and CFO Wissam Jabre. This call is being webcast live and will be available for replay on our website at NetApp.com. During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects. including without limitation, our guidance for the first quarter and fiscal year 2027, our expectations regarding future revenue, profitability, and shareholder returns, and other growth initiatives and strategies. These statements are subject to various risks and uncertainties which may cause our actual results to differ materially. For more information, please refer to the documents we file from time to time with the SEC and on our website, including our most recent Form 10-K and Form 10-Q. We disclaim any obligation to update our forward-looking statements and projections. During the call, all financial measures presented will be non-GAAP unless otherwise indicated. Reconciliations of GAAP to non-GAAP measures are available on our website. I'll now turn the call over to George.

Good afternoon, everyone. Thank you for joining us. FY26 was a landmark year for NetApp. With record results across revenue, gross profit, operating income, cash flow for operations, and free cash flow, supported by strong customer demand in the fourth quarter, our performance demonstrates our ability to capitalize on the accelerating adoption of enterprise AI and cloud. With our differentiated hybrid cloud, intelligent data infrastructure platform, Trusted by the world's leading enterprises and cloud providers, NetApp is increasingly at the center of our customers' data-driven AI transformations. Achieving our full-year target of 30% operating margin underscores our commitment to profitable growth and ongoing innovation. NetApp stands at the forefront of a transformative era driven by rapid AI adoption and explosive cloud growth. Enterprises are reimagining how they operate and compete, and only NetApp delivers truly hybrid intelligent data infrastructure on premises and in the cloud, all flash and hybrid flash, to seamlessly protect, secure, govern, and activate the entire data estate for AI. Our 30 years of innovation and leadership in hybrid multi-cloud environments are more relevant than ever as our vision of a hybrid world is realized. As enterprise AI adoption scales, the primary challenge is not compute, but activating large volumes of unstructured data. A significant share of the world's enterprise unstructured data resides on NetApp solutions And our ability to activate securely and efficiently across hybrid and multi-cloud environments gives us a powerful competitive advantage. As the only true hybrid cloud platform unifying data governance across on-premises and cloud environments, we enable zero-copy data activation. eliminating the cost and risk of moving data and transforming fragmented infrastructure into a secure launchpad for real-time AI and automation. Our value proposition is resonating strongly with customers and the industry. Our storage services on AWS Azure and Google Cloud empower customers to protect, mobilize, and govern their data with unmatched flexibility and consistency regardless of location. This capability is increasingly critical as customers launch and scale their AI initiatives. By integrating our data infrastructure platform with the AI and analytics offerings of leading Cloud providers, customers can activate their data for AI workloads in place where it is created without costly or time-consuming migration or duplication, making NetApp the secure, zero-copy foundation enterprises need to move from fragmented infrastructure to real-time AI at scale. We fueled nearly 50 partner AI factories and labs as they build out their real-world testbeds to accelerate AI deployment. A recent example of this is at Worldwide Technologies' live AI proving ground, where NetApp AFX all-flash storage is featured, allowing customers to test architectures, validate performance, and quickly move from experimentation to deployment. This collaboration highlights the large opportunity ahead as enterprises look for trusted partners to operationalize AI confidently. We see growing opportunity and success with NEO and sovereign cloud providers who recognize the strength of our differentiated solutions and our joint go-to-market initiatives with leading hyperscalers. These partnerships reinforce our position as a trusted collaborator in the evolving cloud ecosystem. A leading neocloud turned to NetApp for intelligent all-flash storage infrastructure, eliminating complexity and powering orchestration at cloud scale. The new deployments will help accelerate AI onboarding and time to value. With this win, we can begin to expand into other workloads to become the foundational data layer. Another significant achievement is our expanded partnership with Google Cloud for Google Distributed Cloud, which underscores both the growing opportunity in AI and sovereign cloud environments and the strength of our technology. This collaboration enables government agencies and regulated enterprises to leverage advanced AI capabilities from Google and NetApp's secure by design data infrastructure platform to modernize operations and accelerate AI-driven insights, even in the most sensitive environments. We achieved record revenue in Q4 and FY26, driven by public cloud, All Flash and Keystone, which all reached all-time highs, reflecting strong demand from customers modernizing infrastructure and scaling AI workloads. Public cloud revenue grew to $688 million in FY26, up 18% year-over-year. normalized for the divestiture of the Spark by NetApp business in March 2025. This growth was driven by first-party and marketplace cloud services, which increased 30% in FY26. We are seeing growing demands from both new and existing customers to extend NetApp's capabilities deeper into their cloud environments. Customers are increasingly choosing NetApp, to simplify and scale their hybrid and multi-cloud environments, leveraging our unified data management capabilities for operational consistency and agility. Our expanding cloud portfolio is unlocking new use cases and verticals, including AI, fueling growth and expanding our addressable market. For example, a leading insurance company accelerated financial risk modeling and data science by connecting Azure Databricks directly to their data in Azure NetApp files, ensuring security, governance, and performance. Similarly, an Asian engineering company streamlined its GenAI chatbot deployment on AWS by leveraging FSx for NetApp on tap. allowing secure, permission-aware access to data in place and reducing operational overhead. Across these wins, the common thread is NetApp's ability to deliver secure, governed, high-performance data access for AI workloads, enabling customers to innovate faster and operate more efficiently, all while maintaining control and compliance. FY26 all-flash revenue was $4.2 billion, an increase of 11% from last year, propelled by robust Q4 performance with revenue of $1.2 billion, up 18% year-over-year. Customers are choosing NetApp to power their most mission-critical workloads, and our momentum in this segment is a testament to the strength of our innovation and go-to-market execution. A prime example of this is a European aerospace company that chose NetApp, displacing competitors in a greenfield win. The data management capabilities of NetApp All Flash Arrays stood out for their high performance, cyber resilience and ransomware protection, as well as seamless integration with a broad ecosystem of partners. Our comprehensive solution delivered the security, simplicity, and strategic value needed to support critical initiatives. Revenue from our Keystone storage as a service offering grew approximately 65% from FY25 as more customers embrace the flexibility and simplicity of a cloud-like experience for their on-premises data. This momentum reflects the broader shift towards consumption-based IT models and our ability to meet customers wherever they are on their transformation journeys. A leading manufacturer chose NetApp Keystone with all flash and storage grid to support its AI strategy, requiring a secure, flexible platform for massive datasets. Keystone delivers secure, governed self-service at scale, enabling rapid collaboration and predictable on-demand performance. Our unified platform streamlined data management with multi-protocol support, native S3 tiering, and cloud integration for maximum efficiency. AI was a clear growth engine for us in FY26. We had approximately 500 AI and data preparation wins in Q4 alone, bringing the FY26 total to over 1,100. Our ability to help customers operationalize AI at scale, accelerate time to insight, and drive real business outcomes is putting us increasingly at the center of our customers' AI journeys. In FY26, we furthered our AI innovation, launching next-generation solutions, including AFX and AI Data Engine, which are seeing strong early momentum and positive feedback from customers and partners. Additionally, we announced enhancements to the performance and capabilities of our all-flash arrays and expanded our converged AI solutions. These offerings help organizations simplify their AI infrastructure, eliminate silos, and accelerate their data pipelines. reinforcing NetApp's role as the data infrastructure platform for AI. Let me walk through a couple of additional customer wins that spotlight NetApp's competitive advantages. A European government agency required real-time situational awareness with ultra-fast, latency-free data processing. NetApp's disaggregated AFX solution for their NVIDIA SuperPOD environment enabled independent scaling of compute and storage, delivering flexible, future-proof infrastructure. Our rapid execution and expertise empowered a robust, mission-critical AI platform to meet evolving operational demands. A global financial leader signed a $20 million deal with NetApp to accelerate its AI-driven fraud detection and customer personalization. NetApp's GPU-ready, low-latency data lake platform delivers high-performance access to multi-petabyte datasets, enabling global, real-time fraud scoring, continuous model retraining, and robust enterprise governance and resiliency. It's high-impact wins like these that helped us achieve record-setting results while navigating a dynamic macro environment. We're managing rising memory and component costs by working closely with our supply chain partners and adjusting pricing to balance growth and margins. Data generation continues unabated, and customers need solutions that best optimize performance and cost. Our ability to offer a broad range of solutions with flexible purchasing options, including cloud, Keystone, and hybrid flash, strengthens our competitive position, resilience, and flexibility. FY26 also set a new bar for cash generation. Our strong free cash flow enables us to invest in innovation while returning value to shareholders through dividends and share repurchases. We remain committed to disciplined capital allocation and long-term value creation. I want to thank the entire NetApp team for their customer-centric focus and hard work in FY26. It was a year of strong execution, innovation, and accelerating growth, clear proof that our strategy is working and our portfolio is resonating in the market. The investments we made this year have expanded our opportunities and set a solid foundation for future growth. Looking ahead, we are encouraged by the robust demand signals we're seeing and are confident in our ability to maintain this momentum as reflected in our fiscal year 27 outlook. Our hybrid multi-cloud leadership, differentiated AI offerings, and flexible storage and consumption offerings Position NetApp for continued success as customers accelerate their data-driven AI transformations. With that, I'll turn the call over to Wissam.