NetApp quarterly revenue forecast disappoints, shares fall 6%

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(Reuters) -NetApp forecast second-quarter revenue marginally ahead of estimates on Wednesday, as enterprises soften spending on cloud-based storage services in an uncertain economy, sending its shares down nearly 6% in extended trading.

NetApp, which also reported quarterly revenue slightly above estimates, helps businesses improve efficiency of their data storage infrastructure and counts companies including Amazon.com’s Amazon Web Services, Google Cloud and Microsoft’s Azure as clients.

Higher interest rates and sticky inflation have forced clients to rein in tech spending, weighing on demand for companies such as NetApp, which provide cloud-based memory storage products.

For the second quarter, the company expects net revenue between $1.615 billion and $1.765 billion. The forecast’s midpoint of $1.69 billion was slightly above estimates of $1.68 billion, according to data compiled by LSEG.

It expects adjusted profit between $1.84 and $1.94 per share. The forecast range’s midpoint of $1.89 was also slightly ahead of estimates of $1.88.

Net revenue for the first quarter ended July 25 came in at $1.56 billion, compared with analysts’ estimate of $1.55 billion.

The hybrid cloud segment, which accounts for almost all of NetApp’s revenue, recorded a 1% rise in sales to $1.40 billion.

NetApp reaffirmed its fiscal 2026 revenue forecast.

(Reporting by Juby Babu in Mexico City; Editing by Maju Samuel)