Netapp Announces Results for Fourth Quarter and Fiscal Year 2010
Sydney, AUSTRALIA - 26 May
2010 - NetApp (NASDAQ: NTAP) today reported results for
the fourth fiscal quarter and fiscal year 2010, which ended April
30, 2010. Revenues for the fourth fiscal quarter of 2010 totaled
$1.17 billion compared to revenues of $880 million for the same
period one year ago.
For the fourth fiscal quarter, GAAP net
income was $145 million, or $.40 per share[1] compared to GAAP net income of $68 million,
or $0.21 per share for the same period in the prior year. Non-GAAP
net income for the fourth fiscal quarter was $183 million, or $0.50
per share[2], compared to
non-GAAP net income of $103 million, or $0.31 per share for the
same period a year ago.
For fiscal year 2010, GAAP and non-GAAP
revenues totaled $3.93 billion, an increase of 15% compared to GAAP
revenues of $3.41 billion and an increase of 11% compared to
non-GAAP revenue of $3.54 billion for fiscal year 2009. For fiscal
year 2010, GAAP net income was $400 million, or $1.13 per share,
compared to GAAP net income of $65 million, or $0.19 per share for
fiscal year 2009. Non-GAAP net income for fiscal year 2010 was $533
million, or $1.51 per share, compared to non-GAAP net income of
$364 million, or $1.09 per share for fiscal year 2009.
"With 50% growth in product revenue this
quarter, NetApp significantly outperformed the competition. With
accelerating revenue growth every quarter, we culminated our fiscal
year with record levels of revenue, earnings per share, and free
cash flow," said Tom Georgens, president & CEO. "The server
virtualization and cloud computing trends are driving significant
business for us, as our competitive advantages in those areas lead
more customers to choose NetApp storage efficiency solutions for
larger and larger data center projects."
Outlook
- NetApp estimates revenue for the first quarter of fiscal year
2011 to be in the range of $1.10 billion to $1.14 billion.
- NetApp estimates share count for the first quarter of fiscal
year 2011 to increase by about 6 million shares.
- NetApp estimates that the first quarter of fiscal year 2011
GAAP earnings per share will be approximately $0.31 to $0.35 per
share. NetApp estimates that the first quarter fiscal year 2011
non-GAAP earnings per share will be approximately $0.43 to $0.47
per share.
Business Highlights
In
the fourth quarter of fiscal year 2010, NetApp expanded key
partnerships and introduced new solutions to enable customers'
virtualization and cloud-based infrastructures, as well as help
service providers deliver compelling cloud services for
enterprise information technology. NetApp also reached several
significant milestones during the quarter related to the adoption
and deployment of its storage solutions. In addition, several new
customer deployments demonstrated how NetApp storage efficiency
technologies can help customers reach never-before-seen levels of
efficiency. Key business highlights included the following.
New Solutions and Expanded
Partnerships
- New service provider solutions. NetApp
unveiled new design guides and capabilities geared specifically for
service providers that will help them deliver greater value to
their cloud customers. NetApp® service-oriented
infrastructure, data protection as a service, backup and recovery
as a service, and NetApp Open Management will help service
providers differentiate their cloud services, accelerate their
services' time to market, and achieve industry-leading cost and
service-level benefits.
- CA, Inc. and NetApp build solutions for cloud
infrastructures. CA and NetApp extended their multiyear
solutions partnership to develop management solutions for public
and private cloud environments. The companies will integrate CA
Spectrum® Automation Manager, CA Spectrum Service Assurance,
CA Spectrum Infrastructure Manager, and CA eHealth®
Performance Manager with NetApp's storage management solutions,
including NetApp Provisioning Manager and NetApp
SANscreen®.
- NetApp, Brocade, Emulex, and VMware expand options for
FCoE and DCB customers. NetApp will resell a new Converged
Network Adapter from Emulex, and is among the first storage vendors
to support VMware® vSphere™ 4 in a Fibre Channel over Ethernet (FCoE)
host environment. NetApp also augmented its FCoE portfolio from
Brocade and introduced a DCB-only version of the Brocade 8000. Now
customers have even more options to build complete end-to-end FCoE
infrastructures and unify their Ethernet and Fibre Channel
architectures.
Milestones and Awards
- NetApp reaches milestone of 150,000 unified storage
systems deployed. This historic milestone underscores
NetApp's long standing commitment and significant industry
innovation in making unified
storage a reality for customers. Customers worldwide are
leveraging NetApp's unified storage solutions to simplify
operations, achieve business breakthroughs, increase productivity,
and recognize significant cost savings.
- NetApp gains leadership in SAN market and reaches
significant milestone with more than 30,000 deployments
worldwide. NetApp has more than doubled its SAN business
in just two years by providing customers with an impressive list of
technologies and maximizing strong solution partnerships with
companies such as Brocade, Cisco, Microsoft, and VMware. According
to IDC's Worldwide Quarterly Disk Storage Systems Tracker, Q3 2009,
NetApp grew faster than the FC SAN market year over year.
- Customers help NetApp pass milestone of 5,000 V-Series
units shipped. Customers made V-Series one of NetApp's
fastest growing products, with 70% year-over-year growth and more
than 5,000 units shipped. More customers are turning to NetApp
V-Series to unify their non NetApp storage environments and
increase efficiency, reduce costs, and improve data
protection.
- NetApp positioned in Leaders Quadrant in top analyst
firm's Magic Quadrant. Gartner, Inc. positioned NetApp in
the Leaders Quadrant for Midrange and High-End NAS
Solutions[3]. NetApp NAS
solutions are built on a unified storage platform,
providing customers of all sizes with increased flexibility and
performance along with industry-leading storage efficiency
capabilities.
- NetApp ranked #2 on "Best Workplaces in Canada"
list. NetApp was ranked #2 on the "Best Workplaces in
Canada" list for 2010 and was also recognized as the top workplace
in Canada in the Respect category. NetApp now ranks in the top 20
places to work in 9 different regions, including #7 in the United
States.
Mergers and Acquisitions
- NetApp acquires Bycast. On May 13, 2010,
NetApp completed its acquisition of Bycast Inc., a privately held
company headquartered in Vancouver, British Columbia, Canada, in an
all-cash transaction. Bycast extends NetApp's leadership position
in unified storage by
adding an object-based storage software offering.
Businesses Built on
NetApp
- Weta Digital, a world leader in visual effects, relied on
NetApp storage in the production of the record-breaking film
Avatar. NetApp helped reduce Weta's data management overhead by 95%
and increase its storage price-to-performance ratio by 40%.
- J&B Group turned to NetApp for its storage to support its
perishable foods production and distribution business. NetApp's
storage efficiency technology helped increase utilization to 67%,
and storage requirements for VMware virtual servers dropped from
4.5TB to 1.5TB, a 66% reduction.
- The College of Saint Rose implemented NetApp and VMware
virtualization solutions to tackle the challenges of data growth,
availability, and reliability. NetApp thin provisioning and
deduplication technologies helped improve the college's storage
efficiency, increasing utilization rates by up to 85% and deferring
$134,000 in hardware costs each year.
Webcast and Conference Call
Information
The NetApp fourth quarter and fiscal
year 2010 results conference call will be broadcast live on the
Internet at investors.netapp.com on
Wednesday, May 26, 2010, at 2:00 p.m. Pacific Time. This press
release and any other information related to the call will also be
posted on the Web site at that location. An audio replay Webcast
will also be available after 4:00 p.m. Pacific Time on our web site
at investors.netapp.com.
NetApp is now using a new hybrid format for
disclosing key financial information associated with our quarterly
results. Concurrent with the press release, NetApp will post and
distribute a separate document with financial commentary and
statistics that were previously disclosed during our earnings
calls. These prepared remarks will be available prior to the
conference call in order to provide the investment community with
additional time to analyze our results. This commentary will not be
read during the earnings call.
About NetApp
NetApp creates innovative storage and data management solutions
that accelerate business breakthroughs and deliver outstanding cost
efficiency. Discover our passion for helping companies around the
world go further, faster at www.netapp.com/au.
NetApp, the NetApp logo, Go further,
faster, and SANscreen are trademarks or registered trademarks of
NetApp, Inc. in the United States and/or other countries. VMware is
a registered trademark and vSphere is a trademark of VMware, Inc.
All other brands or products are trademarks or registered
trademarks of their respective holders and should be treated as
such.
"Safe Harbor" Statement Under U.S.
Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements include all of the statements under the Outlook
section relating to our forecasted operating results, share count,
and metrics for the first quarter of fiscal year 2011, our
expectations regarding our current and new partnerships and
strategic alliances and the benefits that we expect our customers
to realize from using our products and those from our strategic
alliances and partnerships. These forward-looking statements
involve risks and uncertainties, and actual results could vary.
Important factors that could cause actual results to differ
materially from those in the forward-looking statements include
customer demand for our products and services; our ability to
increase revenue and manage our operating costs; increased
competition risks associated with the anticipated growth in network
storage market; our ability to deliver new product architectures
and enterprise service offerings; our ability to design products
and services that compete effectively from a price and performance
perspective; our reliance on a limited number of suppliers; our
ability to accurately forecast demand for our products; and other
important factors as described in NetApp reports and documents
filed from time to time with the Securities and Exchange Commission
(SEC), including the factors described under the sections captioned
"Risk Factors" in our most recently submitted 10-K and 10-Q. We
disclaim any obligation to update information contained in these
forward-looking statements whether as a result of new information,
future events, or otherwise.
NetApp Usage of Non-GAAP
Financials
The Company refers to the non-GAAP financial measures cited above
in making operating decisions because they provide meaningful
supplemental information regarding the Company's ongoing
operational performance. Non-GAAP results of operations exclude the
GSA settlement, amortization of intangible assets, stock-based
compensation expenses, acquisition related income and expenses,
restructuring and other charges, asset impairments, non-cash
interest expense associated with our convertible debt, net losses
or gains on investments, and our GAAP tax provision, including
discrete items, 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. We have
excluded these items in order to enhance investors' understanding
of our ongoing operations. The use of these non-GAAP financial
measures has material limitations because they should not be used
to evaluate our company without reference to their corresponding
GAAP financial measures. As such, we compensate for these material
limitations by using these non-GAAP financial measures in
conjunction with GAAP financial measures.
These non-GAAP financial measures are used
to: (1) measure company performance against historical results, (2)
facilitate comparisons to our competitors' operating results, and
(3) allow greater transparency with respect to information used by
management in financial and operational decision making. In
addition, these non-GAAP financial measures are used to measure
company performance for the purposes of determining employee
incentive plan compensation. In addition, we have historically
reported similar non-GAAP financial measures to our investors and
believe that the inclusion of comparative numbers provides
consistency in our financial reporting at this time.
[1]
GAAP earnings per share is calculated using the diluted number of
shares for all periods presented.
[2] Non-GAAP results of
operations exclude the GSA settlement, amortization of intangible
assets, stock-based compensation expenses, acquisition related
income and expenses, restructuring and other charges, asset
impairments, non-cash interest expense associated with our
convertible debt, net losses or gains on investments, and our GAAP
tax provision, including discrete items, 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. Non-GAAP earnings per share is calculated using the diluted
number of shares for all periods presented.
[3] Gartner, Inc. Magic
Quadrant for Midrange and High-End NAS Solutions, Pushan Rinnen,
Robert E. Passmore, Roger W. Cox, March 15, 2010.