NetApp Reports Third Quarter of Fiscal Year 2020 Results
SUNNYVALE, Calif., Feb. 13, 2020 -- NetApp today reported financial results for the third quarter of fiscal year 2020, which ended on January 24, 2020.
“Our third quarter results, highlighted by strong gross margins, cash flow and operating leverage, reflect our continued operational discipline. Customers are on a journey to the cloud and are looking to NetApp to help them address the complexities of data management in hybrid multicloud,” said George Kurian, chief executive officer. “We see significant opportunity ahead and are focused on replicating the areas where we have proven success. Our strong business model enables us to navigate the market dynamics, while making the strategic investments necessary to position the company for long-term growth.”
Third Quarter of Fiscal Year 2020 Financial Results
- Net Revenues: $1.40 billion, compared to $1.56 billion in the third quarter of fiscal 2019
- Net Income: GAAP net income of $277 million, compared to GAAP net income of $249 million in the third quarter of fiscal 2019; non-GAAP net income1 of $265 million, compared to non-GAAP net income of $305 million in the third quarter of fiscal 2019
- Earnings per Share: GAAP net income per share2 of $1.21 compared to GAAP net income per share of $0.98 in the third quarter of fiscal 2019; non-GAAP net income per share of $1.16, compared to non-GAAP net income per share of $1.20 in the third quarter of fiscal 2019
- Cash, Cash Equivalents and Investments: $3.0 billion at the end of the third quarter of fiscal 2020
- Cash Provided by Operations: $420 million, compared to $451 million in the third quarter of fiscal 2019
- Share Repurchase and Dividend: Returned $608 million to shareholders through share repurchases and cash dividends
Ron Pasek, EVP, Chief Financial Officer, has informed NetApp of his intent to retire by the end of the fiscal year after a successful four-year tenure. Pasek will remain on to ensure a transition to his successor, which the Company expects to name prior to the end of the fiscal year. Pasek joined NetApp in April 2016, assuming leadership of the company's finance, customer leasing, workplace resources, internal audit, and IT functions. “Ron has been an integral part of the NetApp executive leadership team. He has helped increase product margins by 10 points, nearly doubled our earnings power and raised our dividend by over 100%,” said George Kurian, chief executive officer. “We are grateful for Ron’s achievements at NetApp and wish him well in his future endeavors.”
Fourth Quarter of Fiscal Year 2020 Financial Outlook
The Company provided the following financial guidance for the fourth quarter of fiscal year 2020:
||$1.455 billion to $1.605 billion|
||$1.11 - $1.19||$1.28 - $1.36|
Full Fiscal Year 2020 Financial Outlook
The Company updated the following financial guidance for the full fiscal year 2020:
||66% - 67%||67% - 68%|
Next cash dividend of $0.48 per share to be paid on April 22, 2020, to shareholders of record as of the close of business on April 3, 2020.
Third Quarter of Fiscal Year 2020 Business Highlights
Consistently Delivering Groundbreaking Innovations
- NetApp announced its reinvention of the customer experience with the NetApp Keystone program which offers a range of flexible solutions for customers, whether they choose to build or to buy their cloud infrastructure, on or off their premises.
- To meet the increasing demand for object storage, NetApp announced new NetApp StorageGRID enhancements: StorageGRID 11.3 software, SGF6024 all-flash appliance, SG6060 expansion appliance, SG1000 service appliance, and StorageGRID tiering to Azure Blob storage.
- NetApp Cloud Manager 3.7.5 (formerly OnCommand Cloud Manager) offers new features and tighter integration with the NetApp cloud portfolio which enables customers to get more out of their data.
- NetApp enhanced NetApp Cloud Volumes ONTAP for AWS with new NetApp Cloud Backup Service, the new NetApp Cloud Compliance service, and the ability to leverage NVMe flash available on virtual compute instances.
- NetApp has expanded its multiprotocol file services to encompass NFSv4.1, NFSv3, and SMB for both Azure NetApp Files and NetApp Cloud Volumes Service for AWS. With this expansion, NetApp now delivers the widest range of support for Microsoft Windows and Linux workloads.
- NetApp introduced new storage systems: the NetApp AFF A400 end-to-end NVMe all-flash system, the NetApp FAS8700 high-end hybrid flash array, and the FAS8300 next-generation midrange hybrid flash array.
- NetApp ONTAP 9.7 offers expanded integration of hybrid cloud, with seamless and efficient migration of tiered data between private and public clouds by using FabricPool, symmetric active-active host-to-LUN access, and extended scale-out NAS deployments.
- Three new features for NetApp Cloud Insights were announced, including Kubernetes Topology Visualization, NetApp Cloud Secure Insider Threat Detection, and NetApp Active IQ Integration.
- NetApp Active IQ Unified Manager 9.7 (formerly OnCommand Unified Manager) delivers enhanced simplicity, automation, active management, and virtualization layer monitoring and reporting, along with strengthened dark site support.
- With the release of NetApp ONTAP Select 9.7, NetApp has introduced support for software RAID configurations backed by NVMe drives.
- NetApp announced that NFS-based NetApp Cloud Volumes has been added to its cloud services offerings on premises in preview mode.
Growing Partnerships and Distinguished Awards
- NetApp and Google Cloud announced an expanded partnership, including the general availability of NetApp Cloud Volumes ONTAP and Cloud Volumes Service for Google Cloud. The expansion also includes the availability of Cloud Volumes Service in the U.K. region and support for Anthos on Cloud Volumes ONTAP, Cloud Volumes Service, and NetApp HCI.
- Enterprise Networking Solutions, Inc. (ENS-Inc.) was granted a 3-year contract by the State of California Department of General Services to deliver NetApp data center modernization and hybrid cloud infrastructure solutions to the State of California.
- NetApp and NVIDIA unveiled the NVIDIA DGX SuperPOD, which helps simplify supercomputing and enables AI for high-performance computing (HPC) teams. NetApp and NVIDIA also announced their collaboration on the NVIDIA Magnum IO, a multi-GPU, multinode networking and storage I/O optimization stack.
- NetApp was named a leader of Scale-Out NAS (File-Based Storage) in the IDC MarketScape: Worldwide Scale-Out File-Based Storage 2019 Vendor Assessment.3
- NetApp was again named a leader in object storage in the IDC MarketScape: Worldwide Object-Based Storage 2019 Vendor Assessment.4
NetApp Executive Team Grows with the Company
- NetApp appointed James Whitemore as the Company’s senior vice president and chief marketing officer, reporting to CEO George Kurian.
- NetApp appointed Kim Stevenson as senior vice president and general manager of the NetApp Foundational Data Services business unit, reporting to Brad Anderson.
Webcast and Conference Call Information
NetApp will host a conference call to discuss these results today at 2:30 p.m. Pacific Time. To access the live webcast of this event, go to the NetApp Investor Relations website at investors.netapp.com. In addition, this press release, historical supplemental data tables, and other information related to the call will be posted on the Investor Relations website. An audio replay will be available on the website after 4:30 p.m. Pacific Time today.
1Non-GAAP net income excludes, when applicable, (a) amortization of intangible assets, (b) stock-based compensation expenses, (c) litigation settlements, (d) acquisition-related expenses, (e) restructuring charges, (f) asset impairments, (g) gains/losses on the sale or derecognition of assets, and (h) our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. NetApp makes additional adjustments to the non-GAAP tax provision for certain tax matters as described below. A detailed reconciliation of our non-GAAP to GAAP results can be found at http://investors.netapp.com. NetApp’s management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance.
2GAAP net income per share and non-GAAP net income per share are calculated using the diluted number of shares.
3NetApp was named a leader of Scale-Out NAS (File-Based Storage) in the IDC MarketScape: Worldwide Scale-Out File-Based Storage 2019 Vendor Assessment, https://www.netapp.com/us/media/ar-idc-marketscape-worldwide-scale-out-vendor-assessment.pdf.
4NetApp was named a leader in object storage in the IDC MarketScape: Worldwide Object-Based Storage 2019 Vendor Assessment, https://www.netapp.com/us/media/idc-marketscape-worldwide-object-based-storage-2019-vendor-assessment.pdf.
NetApp is the leader in cloud data services, empowering global organizations to change their world with data. Together with our partners, we are the only ones who can help you build your unique data fabric. Simplify hybrid multicloud and securely deliver the right data, services and applications to the right people at the right time. Learn more at www.netapp.com.