NetApp Reports Third Quarter Fiscal Year 2018 Results

Third Quarter Fiscal 2018 Highlights

• Product revenue increased 17% year-over-year
• All-flash array annualized net revenue run rate of $2.0 billion increased almost 50% year-over-year
• Expanded Cloud Data Services with introduction of NetApp Cloud Volumes for AWS
• Free cash flow was 25% of revenue and increased 104% year-over-year

February 15, 2018—NetApp (NASDAQ: NTAP) today reported financial results for the third quarter fiscal year 2018, ended January 26, 2018.

“NetApp again delivered strong results in the third quarter with accelerating revenue and strong cash generation. It is rewarding to see the results of our improved execution as we transform NetApp to deliver sustained and profitable growth,” said George Kurian, chief executive officer. “We saw a solid demand environment and customer momentum, landing wins and footprint expansions with leading organizations in all geographies. With our Data Fabric Strategy and industry-leading solutions, we are winning new customers and expanding our business opportunity.”

Third Quarter Fiscal 2018 Financial Results

• Net Revenues: $1.52 billion, increased 8% year-over-year from $1.40 billion in the third quarter of fiscal 2017
• Net Income: GAAP net loss of $506 million*, compared to GAAP net income of $146 million in the third quarter of fiscal 2017; non-GAAP net income1 of $273 million, compared to non-GAAP net income of $231 million in the third quarter of fiscal 2017
• Earnings per Share: GAAP net loss per share2 of $1.89*, compared to GAAP net income per share3 of $0.52 in the third quarter of fiscal 2017; non-GAAP net income per share4 of $0.99, compared to non-GAAP net income per share of $0.82 in the third quarter of fiscal 2017
• Cash, Cash Equivalents and Investments: $5.6 billion at the end of the third quarter of fiscal 2018
• Cash from Operations: $420 million, compared to $235 million in the third quarter of fiscal 2017
• Share Repurchase and Dividend: Returned $203 million to shareholders through share repurchases and a cash dividend

*On December 22, 2017, The 2017 Tax Reform Reconciliation Act was enacted into law. This tax reform legislation contains several key tax provisions that affected the company, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the U.S. corporate income tax rate to 21% effective January 21, 2018, among others. GAAP net loss in the third quarter of fiscal 2018 includes a resulting one-time charge of $856 million.

Fourth Quarter Fiscal 2018 Financial Outlook

The Company provided the following financial guidance for the fourth quarter of fiscal year 2018: 

·   Net revenues are expected to be in the range of $1.525 billion to $1.675 billion

GAAP

Non-GAAP

Earnings per share is expected to be in the range of:
$0.75–$0.83

$0.95–$1.03

Dividend 

Next cash dividend of $0.20 per share to be paid on April 25, 2018, to shareholders of record as of the close of business on April 6, 2018

Third Quarter Fiscal 2018 Business Highlights

New NetApp Product Updates and Offerings

New NetApp™ AltaVault™ software updates provide customers with faster ingest performance, multifactor authentication, increased security enhancements and Microsoft Azure Archive Blob Storage tier support.
NetApp introduces SnapMirror™ for SolidFire™ Element™ OS, which supports disparate system data movement from Element OS systems to ONTAP™ 9.3 systems, allowing companies to remain agile while still protecting their data.
NetApp Cloud Volumes for AWS enables both NFSv3 and NFSv4 with fully featured Snapshot™ copies and is available in cloud-only and hybrid cloud deployments, with integration into on-premises systems and seamless data migration and synchronization between on-premises and the cloud.
NetApp Enables Customers to Improve Their Business Performance

JFK Medical Center, part of the Hackensack Meridian Health Network, leverages NetApp technology to increase stability and reliability and achieve a higher performance level for its critical infrastructure.
Safelight leverages NetApp to transform the delivery of its auto glass services, surpass competitors, and expand its customer base during one of the worst recorded hurricane seasons.
NetApp Strengthens Partnerships

NetApp strengthens its 20-year partnership with Fujitsu by introducing the NFLEX™ converged infrastructure, which combines Fujitsu’s server PRIMERGY CX compute platform and NetApp ONTAP.
NetApp announces support for VMware Cloud on AWS to allow customers more flexibility when deploying ONTAP Cloud to deliver seamlessly integrated hybrid cloud architectures that extend on-premises vSphere environments to a VMware SDDC running on AWS elastic bare-metal infrastructure.NetApp Strengthens Board and Leadership Team
NetApp strengthens its board of directors with two new members:
-  Deborah Kerr, who brings insights into how customers buy, deploy, manage, and use IT to NetApp; and

-  Scott Schenkel, CFO of eBay, who brings current C-level experience to NetApp’s board, with his understanding of the technology landscape and market forces, capital structure, and modern financial reporting

NetApp appoints Brad Anderson as SVP and GM of the NetApp Cloud Infrastructure business unit to help customers build out their next-generation data centers.