NetApp Reports Fourth Quarter And Fiscal Year 2016 Results

View Financial Tables (PDF)


Net Revenues of $1.38 Billion for the Fourth Quarter and $5.55 Billion for Fiscal Year 2016

  • NetApp™ clustered Data ONTAP™ node shipments increased in fiscal year 2016 by 85% year-over-year
  • All Flash FAS units for fiscal year 2016 grew 345% year-over-year
  • Deferred revenue and financed unearned services revenue for fiscal year 2016 up 6% year-over-year
  • Authorized an increase in the quarterly cash dividend to $0.19 per share for the first quarter of fiscal year 2017
  • $1.17 billion returned to shareholders in share repurchases and cash dividends; 144% of free cash flow[1] in fiscal year 2016

Sunnyvale, Calif.—May 27, 2016—NetApp (NASDAQ: NTAP) today reported financial results for the fourth quarter and fiscal year 2016, ended April 29, 2016.

Fourth Quarter Financial Results 
Net revenues for the fourth quarter of fiscal year 2016 were $1.38 billion. GAAP net loss for the fourth quarter of fiscal year 2016 was $8 million, or $0.03 loss per share,
[2] compared to GAAP net income of $135 million, or $0.43 income per share,[3] for the comparable period of the prior year. Non-GAAP net income for the fourth quarter of fiscal year 2016 was $157 million, or $0.55 income per share,[4] compared to non-GAAP net income of $202 million, or $0.65 income per share, for the comparable period of the prior year.

Fiscal Year 2016 Financial Results 
Net revenues for fiscal year 2016 were $5.55 billion. GAAP net income for fiscal year 2016 was $229 million, or $0.77 per share,
[3] compared to GAAP net income of $560 million, or $1.75 per share, for the comparable period of the prior year. Non-GAAP net income for fiscal year 2016 was $633 million, or $2.13 per share,[4] compared to non-GAAP net income of $865 million, or $2.70 per share, for the comparable period of the prior year.

Cash, Cash Equivalents and Investments 
NetApp ended fiscal year 2016 with $5.3 billion in total cash, cash equivalents and investments.

 

 

During the fourth quarter of fiscal year 2016, the Company generated $345 million in cash from operations and returned $313 million to shareholders through share repurchases and a cash dividend.

The Company will increase the first quarter fiscal year 2017 dividend by 6% to $0.19 per share. The quarterly dividend will be paid on July 27, 2016, to shareholders of record as of the close of business on July 18, 2016.

“We executed well in the fourth quarter and I’m pleased with the progress we are making with our strategic solutions portfolio in addressing customers’ needs,” said George Kurian, chief executive officer. “We continue to advance our pivot to the growth segments of the market while, at the same time, streamlining the business and reducing our cost base. The team remains sharply focused on disciplined execution and is fully committed to return the company to long-term growth.”

Q1 Fiscal Year 2017 Outlook 
The Company provided the following financial guidance for the first quarter of fiscal year 2017:

  • Net revenues are expected to be in the range of $1.20 billion to $1.35 billion.
  • GAAP earnings per share is expected to be in the range of $0.13 to $0.18 per share.
  • Non-GAAP earnings per share is expected to be in the range of $0.34 to $0.39 per share.

Business Highlights 

  • Leading the All-Flash-Array Market
    • All-flash systems product of the year. Storage Magazine/SearchStorage.com recognize SolidFire’s high-capacity SF9605 node as a gold winner in the competitive all-flash systems category.
    • NetApp and Cisco’s FlexPod advantage initiative removes constraints for the modern enterprise data center.An all-flash Converged Infrastructure enables partners such as Citrix to accelerate time-to-market and help customers to fast track their journey to a modern data center.
    • Increased the performance of data analytics applications by more than 50%. New SANtricity™ software for NetApp EF-Series all-flash and E-Series storage arrays dramatically boosts the performance and value of big data analytics applications.
    • Faster coding and better performance. New SolidFire Python SDK dramatically reduces the amount of additional time and coding required for integration and orchestration between SolidFire’s platform and third-party applications.

 

 

  • Customers and Partners Achieve Success Through NetApp
    • Media companies adopt NetApp StorageGRID™ Webscale. In the past 12 months, media vendors—Aspera, Cantemo, Dalet, OpenText (through CyanGate), Primestream, Signiant, Silvertrak, Spectra Logic, and Vidispine—have validated their Amazon Simple Storage Service (S3) interface with StorageGRID Webscale.
    • Mansfield Oil delivers new applications and services up to 50% faster with NetApp. Transition to new fully redundant data and disaster recovery center keeps mission-critical data safe and improves customer service by eliminating downtime for core business applications.
    • DARZ makes secure hybrid cloud and multicloud a reality with NetApp Private Storage (NPS). NPS as a Service from DARZ makes it possible for its customer Helpium to leverage the elasticity, cost and performance benefits of public cloud providers without putting its data—or its business—at risk.
    • Top-ranked financial fund administrator HedgeServ deploys SolidFire. By delivering scalable storage to keep pace with HedgeServ’s business growth and expanded offerings, SolidFire has transformed storage from a significant cost and management burden into an innovation enabler.
    • Denver Broncos deploy business-critical applications with NetApp. NetApp FAS systems power the Broncos' entire infrastructure, including data analysis used from draft day to the stadium on game day, as well as to support over 330 events throughout the year. Regardless of location, the Broncos have been able to deploy mobile tablets to players, coaches, managers and support staff enabling them to view footage within hours of a game.

 

  • Technology and Business Leaders Join NetApp
    • Ron Pasek, executive vice president, chief financial officer. Pasek manages several finance and business functions while helping drive a portfolio management approach to enable growth.
    • Henri Richard, executive vice president, worldwide field and customer operations. Richard leads relationships with NetApp’s strategic technology partners, resellers, and customers across the globe.

 

Webcast and Conference Call Information 

NetApp will host a conference call to discuss these results today at 2 p.m. Pacific Time. To access the live webcast of this event, visit 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 also be available on the website after 4 p.m. Pacific Time today.

About NetApp 
Leading organizations worldwide count on NetApp for software, systems and services to manage and store their data. Customers value our teamwork, expertise and passion for helping them succeed now and into the future. To learn more, visit 
www.netapp.com.

Press Contact:

Investor Contact:

Meghan Fintland 
NetApp 
1 (408) 822-1389 
meghan.fintland@netapp.com

Kris Newton 
NetApp 
1 (408) 822-3312 
kris.newton@netapp.com

NetApp and the NetApp logo are trademarks of NetApp, Inc. All other marks are the property of their respective owners.

"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, but are not limited to, all of the statements made under the Q4 Fiscal Year 2016 Outlook section, statements made about our strategy, reducing our cost structure, our ability to invest in strategic opportunities, our future growth, and our ability to deliver long-term value, and statements made about the benefits to us and our customers of our products and partnerships, including those statements under the Business Highlights section. All of these forward-looking statements involve risk and uncertainty. Actual results may differ materially from these statements for a variety of reasons, including, without limitation, general economic and market conditions, changes in U.S. government spending, revenue seasonality and matters specific to our business, such as changes in storage consumption models, customer demand for and acceptance of our products and services, our ability to effectively integrate the SolidFire acquisition, our ability to successfully execute our transformation program, reduce our costs and pivot to the growth areas of the market and our ability to continue to generate healthy operating cash flow. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the factors described under the section titled “Risk Factors” in our most recently submitted Annual Report on Form 10-K. We disclaim any obligation to update information contained in this press release 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 in making operating decisions because they provide meaningful supplemental information regarding the Company's ongoing operational performance. Non-GAAP net income excludes, when applicable, the amortization of intangible assets, stock-based compensation, acquisition-related income and expenses, restructuring and other charges, asset impairments, non-cash interest expense associated with our debt, net losses or gains on investments, and 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. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements, and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-reoccurring book and/or tax accounting method changes, (c) tax charges that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) the impact of a temporary lapse of tax law, such as the federal research credit, if such extensions have routinely been granted based on past legislative history and are expected to be reinstated in the near future. Non-GAAP earnings per share is calculated using the diluted number of shares for all periods.

We have excluded these items in order to enhance investors’ understanding of our ongoing operations. The use of these non-GAAP financial measures has limitations and they should not solely be used to evaluate our Company without reference to their corresponding GAAP financial measures. As such, we provide 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.

[1] Net income per share is calculated using the diluted number of shares.

[2] Non-GAAP net income excludes, when applicable, the amortization of intangible assets, stock-based compensation, acquisition-related income and expenses, restructuring and other charges, asset impairments, non-cash interest expense associated with our debt, net losses or gains on investments, and our GAAP tax provision, but includes a non-GAAP tax provision based upon a 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. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-reoccurring book and/or tax accounting method changes, (c) tax charges that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) the impact of a temporary lapse of tax law, such as the federal research credit, if such extensions have routinely been granted based on past legislative history and are expected to be reinstated in the near future. Non-GAAP earnings per share is calculated using the diluted number of shares for all periods presented. A detailed reconciliation of our non-GAAP to GAAP results can be found atinvestors.netapp.com.