NetApp, Inc. (NTAP): BCG Matrix [Dec-2025 Updated]

You're looking at NetApp, Inc.'s portfolio right now, and it's a textbook case of a tech pivot in action, moving capital from the old guard to the future; we've got their All-Flash Array business hitting an annualized run rate of $4.1 billion and Cloud Services growing at 32% year-over-year, clearly the Stars funding the next big bets like AI solutions, which are still Question Marks despite closing about 200 AI infrastructure deals in Q2 FY26. Still, the dependable Support Revenue, boasting a 92.1% gross margin, acts as the Cash Cow, while the older disk systems are the Dogs being actively phased out, so let's break down exactly where NetApp, Inc. is placing its bets for maximum return below.

Background of NetApp, Inc. (NTAP)

You're looking at NetApp, Inc. (NTAP) as of late 2025, so let's ground ourselves in the numbers from their most recently completed fiscal year, which ended on April 25, 2025. NetApp, founded back in 1992, is a key player in intelligent data infrastructure, helping large enterprises manage their data both in their own data centers and across public clouds. They've been focusing hard on modernizing their portfolio to capture growth in AI and hybrid cloud environments.

For the full fiscal year 2025, NetApp, Inc. (NTAP) posted total net revenues of $6.57 billion, which represented a 5% year-over-year increase from the $6.27 billion they brought in during fiscal year 2024. This growth shows they are definitely moving in the right direction, even if it's not explosive growth given their scale. Honestly, for a company this size, any consistent growth is a win in this market.

The company organizes its business into two main segments, and the split tells a clear story about where the bulk of the revenue still comes from. The Hybrid Cloud segment was the powerhouse, generating $5.91 billion in revenue for fiscal 2025. That made it nearly 89.88% of the total revenue pie. This segment covers their on-premises storage, like their all-flash arrays, plus support and professional services.

Now, the smaller piece, the Public Cloud segment, is where the real excitement is, even though it only accounted for $665 million in revenue, or about 10.12% of the total for FY2025. What's important here is the momentum; the first-party and marketplace Public Cloud services revenue specifically hit a record $416 million for the year, marking a massive 43% increase year-over-year. That's the area management is definitely leaning into for future expansion.

We can also look at a key product line within the Hybrid Cloud business. The annualized net revenue run rate for their all-flash array business hit a record $4.1 billion by the end of the fiscal year, which was up 14% compared to the prior year. This indicates strong customer adoption of their high-performance storage solutions, which CEO George Kurian has pointed to as a driver for success, especially with AI workloads demanding faster storage.

Operationally, NetApp, Inc. (NTAP) showed improved efficiency in fiscal 2025. They achieved a record GAAP operating margin of 20% for the full year, up from the 18% GAAP operating margin seen in the first quarter of that same year. For instance, in the third quarter of fiscal 2025, their non-GAAP operating margin was 30%, showing they can drive strong profitability when executing well. Finance: draft the Q4 FY25 cash flow variance analysis by next Tuesday.

NetApp, Inc. (NTAP) - BCG Matrix: Stars

You're looking at the engine room of NetApp, Inc.'s current growth, the segments that command high market presence in expanding arenas. These are the Stars, the business units that demand heavy investment to maintain their leading position, but which promise to become the next generation of Cash Cows.

The All-Flash Array (AFA) business is definitely a Star for NetApp, Inc. It posted an annualized net revenue run rate of $4.1 billion as of the second quarter of fiscal year 2026 (Q2 FY26). This segment saw its revenue grow 9% year-over-year in that quarter, reaching $1.0 billion for the quarter itself. This strong performance in AFA is directly tied to driving data infrastructure modernization and serving as a secure base for emerging Artificial Intelligence (AI) workloads, evidenced by NetApp, Inc. closing approximately 200 AI infrastructure and data lake modernization deals in the same period.

Also firmly in the Star quadrant are the cloud storage offerings. First-Party and Marketplace Cloud Storage Services are experiencing high growth, expanding by approximately 32% year-over-year in Q2 FY26. This segment operates within a high-growth market, and its financial performance reflects its leadership. To be fair, these core cloud storage offerings are market leaders in the hybrid cloud niche, boasting a remarkable Q2 FY26 gross margin of 83.0%. The Public Cloud revenue stream, which these services drive, hit $171 million in Q2 FY26.

Here's a quick look at the hard numbers defining these Star segments as of Q2 FY26:

The strategy here is clear: invest heavily to keep the market share lead, because these products are shaping the future of data infrastructure for NetApp, Inc. You want to sustain this success until the high-growth phase naturally slows, turning them into reliable Cash Cows. These Stars are critical for capturing future market share, as NetApp, Inc. noted its confidence in outpacng market growth.

Key characteristics underpinning the Star status include:

• All-Flash Array annualized revenue run rate reached $4.1 billion.
• First-party and marketplace cloud storage services revenue grew approximately 32% year-over-year.
• Public Cloud segment gross margin reached 83.0% in Q2 FY26.
• NetApp, Inc. was recognized as a Leader in the 2025 Gartner Magic Quadrant for Enterprise Storage Platforms.
• Approximately 200 AI infrastructure and data lake modernization deals were closed in the quarter.

Finance: draft the capital allocation plan for AFA expansion by next Tuesday.

NetApp, Inc. (NTAP) - BCG Matrix: Cash Cows

You're looking at the core engine of NetApp, Inc. right here-the business units that print money to fund the riskier bets like AI infrastructure and cloud expansion. These are the mature, high-market-share offerings that generate more cash than they consume. They require minimal new investment to maintain their position, letting you 'milk' the gains passively.

The Support revenue stream is the prime example of this stability within NetApp, Inc. This is a stable, high-margin business that posted a Q4 FY25 revenue of $625 million.

This segment boasts an exceptionally high gross margin of 92.3% in Q4 FY25, generating reliable cash flow for investment. The large installed base of existing customers provides predictable, recurring revenue with minimal new investment required to support it.

Consistent cash generation allows for share repurchases and a sustained dividend, returning $1.57 billion to stockholders in fiscal year 2025.

Here's a quick look at the financial characteristics supporting this Cash Cow status for the Support business in Q4 FY25:

The stability of this segment is key to the overall financial health of NetApp, Inc. You can see how this high-margin recurring revenue contrasts with the growth segments.

• Support Revenue was flat year-over-year in Q4 FY25.
• Professional Services Revenue in Q4 FY25 was $98 million, up 13% year-over-year.
• The company's Free Cash Flow for the full fiscal year 2025 was $1.34 billion.

The strategy here is simple: maintain the infrastructure supporting these contracts to ensure high-margin renewals continue flowing in. Investments should focus on efficiency, not market expansion for this specific line item. Finance: draft 13-week cash view by Friday.

NetApp, Inc. (NTAP) - BCG Matrix: Dogs

Older, Disk-based Storage Systems, which are being actively displaced by the AFA portfolio in the Hybrid Cloud segment.

These legacy systems represent the low-growth, lower-margin portion of the product revenue base.

The non-AFA component of the Hybrid Cloud segment is a drag on overall growth, requiring careful management for maximum cash extraction.

The company's strategic focus is clearly away from these traditional, slower-moving assets.

The contrast between the high-growth areas and the overall Hybrid Cloud segment performance suggests the relative size and low growth of the legacy disk products.

Dogs are units where capital is tied up without significant returns, making divestiture a common strategic move. The focus on driving growth in AFA and Public Cloud inherently de-emphasizes the legacy hardware base.

• Hybrid Cloud Segment Net Revenues (FY2025): $5.91 Billion
• Hybrid Cloud Segment Net Revenues (Q4 FY2025): $1.57 Billion
• Total Net Revenues (FY2025): $6.57 Billion
• Cash provided by operations (FY2025): $1.51 Billion
• Share repurchases and dividends (FY2025): Returned $1.57 Billion to stockholders

NetApp, Inc. (NTAP) - BCG Matrix: Question Marks

You're assessing the newer, high-potential areas of NetApp, Inc.'s portfolio-the ones that demand cash now hoping to become future Stars. These are the Question Marks, operating in markets that are clearly expanding but where NetApp's current foothold is not yet dominant.

The primary focus here is on NetApp AI-Driven Solutions, specifically the NetApp AFX platform and the NetApp AI Data Engine. These are positioned directly into the explosive AI storage market, which demands new infrastructure capabilities for data discovery and GenAI workloads. The market potential is high, but the relative market share for these specific integrated solutions is still being established by NetApp, Inc.

The adoption rate shows significant momentum, which is the key characteristic of a Question Mark needing investment. NetApp, Inc. closed approximately 200 AI infrastructure and data lake modernization deals in Q2 FY26. This represents a clear acceleration, up from closing about 125 deals in the previous quarter, Q1 FY26. This rapid quarter-over-quarter increase signals high market demand for their AI-ready infrastructure.

Another critical area fitting this quadrant is Keystone, NetApp, Inc.'s Storage-as-a-Service (STaaS) offering. While the overall Public Cloud segment revenue grew 32% year-over-year in Q2 FY26, Keystone itself demonstrated even more explosive growth in the first quarter of the fiscal year. For context, in Q1 FY26, Keystone grew approximately 80% compared to the same period in FY25, though this growth originates from a smaller revenue base, keeping it firmly in the Question Mark category for now.

These segments are consuming capital because they require sustained investment to scale the market presence. To convert this high market growth into a dominant market share, significant, ongoing resource allocation is necessary. The strategic imperative is clear: invest heavily to capture share quickly or risk these offerings becoming Dogs if growth stalls.

Here's a quick look at the growth metrics for these high-potential, investment-heavy areas as of the latest reported quarter:

The success of the overall strategy hinges on these new offerings. To be defintely clear, All Flash and Public Cloud solutions combined already comprise 70% of NetApp, Inc.'s total revenue, showing the foundation is strong, but the next leap requires winning these emerging, high-growth AI and consumption-based markets.

• AI Data Engine addresses AI workloads.
• AFX architecture supports STaaS for Enterprise AI.
• High growth requires sustained investment.
• Low relative market share must be addressed.