What to Expect From NetApp’s Upcoming Q3 Earnings Report?

Deutsche Bank provided its outlook on NetApp, Inc. (NASDAQ:NTAP) ahead of the company’s upcoming Q3 earnings announcement on Feb 22.

The analysts expect Q3 results to be in line with or slightly below the mid-point of guidance but turned more cautious on the revenue outlook for 2023 given the company's headcount reduction announced on Jan 31.

While the analysts had expected storage demand to be resilient, large-scale layoffs in recent weeks by technology companies suggest that the macro environment is expected to remain challenging. Deutsche Bank now believes the company's storage hardware could see a correction for 4-6 quarters, and its Public Cloud business could also see slower growth due to shrinking IT budgets. Therefore, the analysts lowered their 2023/2024 growth rates from -2%/+7% to -5%/+3%.