Artificial intelligence has moved from a long-term goal to a primary engine of growth for NetApp, according to CEO George Kurian. The company reported record revenue and profit for its first fiscal quarter of 2027, driven largely by the rapid adoption of AI technologies. This shift marks a significant departure from previous periods where AI was often discussed as a future aspiration.
Record Results Driven by AI
NetApp’s performance in the quarter was broad-based, spanning various industries and geographies. The company saw multiyear agreements and deeper customer engagement, which officials say are strong indicators of durable growth. Revenue hit $2.03 billion, up about 30 percent from the previous year, while profits also climbed to $375 million in GAAP net income.
This financial success wasn’t just about discipline in a challenging environment. The rapid rollout of AI infrastructure has forced organizations to rethink how they handle data. As companies move from testing AI models to using them in production, they face a specific challenge: making their data ready for AI workloads. NetApp positions itself as a partner in this transition, offering unified storage and security to handle the complexity of hybrid cloud environments.
Specific Wins and Expansion
Several major deals illustrate this trend. A major U.S. utility chose NetApp’s unified infrastructure after a competitive evaluation, while a hospitality company adopted Amazon FSx for NetApp ONTAP to support a large-scale migration to AWS. The company also won approximately 350 AI and data lake modernization deals in the quarter, a significant increase from the previous year.
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Strategic acquisitions are helping the company expand its capabilities. NetApp recently completed deals for DataPelago and JetStream. DataPelago’s software engine focuses on high-performance data processing to eliminate the need for costly data movement. JetStream provides cloud-native protection for VMware workloads. These additions are designed to support the broader AI strategy by making existing data assets more usable and securing cloud migrations.
Outlook and Expectations
Despite global component shortages that typically slow down tech refresh cycles, NetApp saw strong demand across all customer segments. This counter-trend behavior suggests that the pressure to modernize infrastructure for AI is outweighing the cost of new hardware. The company raised its expectations for the full fiscal year, projecting revenue between $7.975 billion and $8.225 billion.
Analysts noted that the company beat expectations by a significant margin. Looking ahead to the second quarter, NetApp expects continued strength, with revenue guidance set between $2.025 billion and $2.175 billion. The focus remains on helping enterprises handle the shift to AI, ensuring they have the infrastructure to support both current operations and future innovation.
