Sunnyvale, Calif. - November 18, 2009
-- NetApp (NASDAQ: NTAP) today reported results for the second
quarter of fiscal year 2010, which ended October 30, 2009. Revenues
for the second quarter of fiscal 2010 were $910 million, compared
to revenues of $912 million for the same period one year ago.
For the second fiscal quarter of 2010, GAAP
net income was $96 million, or $0.27 per share1 compared
to GAAP net income of $43 million, or $0.13 per share for the same
period in the prior year. Non-GAAP2 net income for the
second fiscal quarter of 2010 was $130 million, or $0.37 per share,
compared to non-GAAP net income of $92 million, or $0.28 per share
for the same period one year ago.
Revenues for the first six months of the
current fiscal year totaled $1.75 billion, compared to revenues of
$1.78 billion for the first six months of the prior fiscal year, a
decrease of 2% year over year.
GAAP net income for the first six months of
the current fiscal year totaled $147 million, or $0.43 per share,
compared to GAAP net income of $78 million, or $0.23 per share for
the first six months of the prior fiscal year. Non-GAAP net income
for the first six months of the current fiscal year totaled $206
million, or $0.60 per share, compared to non-GAAP net income of
$168 million, or $0.50 per share for the first six months of the
prior fiscal year.
"NetApp delivered a strong quarter with
record gross margins, record revenue from our SAN products, and
overall revenue that exceeded our expectations," said Tom Georgens,
president and chief executive officer. "Our value proposition
resonates particularly well with customers who look to gain
efficiency and streamline operations as they begin to build out
their next-generation virtualized data centers. Driven by this
demand, NetApp is forecasting record revenues for our next fiscal
quarter."
Outlook
- NetApp estimates revenue for the third quarter of fiscal year
2010 to be in a range of $935 million to $955 million.
- NetApp estimates the third quarter of fiscal year 2010 share
count to increase by about 5 million shares.
- NetApp estimates that the third quarter of fiscal year 2010
GAAP earnings per share will be approximately $0.24 to $0.25 per
share. NetApp estimates third quarter fiscal year 2010 non-GAAP
earnings per share to be approximately $0.36 to $0.37 per
share.
Quarterly Highlights
In the second quarter of fiscal year 2010, NetApp unveiled its
cloud strategy and introduced several new products and solutions to
help customers transform their data center architectures to achieve
greater storage efficiency through innovative data management
techniques. NetApp also received numerous industry accolades for
its work environment, products, innovative use of technology, and
executive leadership.
The makeup of the data center is changing
drastically as companies seek to take advantage of virtualization
and highly efficient infrastructures. NetApp is primed to take
advantage of this major shift in the market by offering enterprises
industry-leading storage efficiency and data management solutions
that are well suited for both internal and external cloud
deployments.
This quarter NetApp introduced Data
ONTAP® 8, the culmination of years of engineering effort to
integrate the Data ONTAP 7G operating system with a next-generation
scale-out architecture. Data ONTAP 8 will provide seamless data
mobility and secure multi-tenancy, both of which are key
requirements for the most sophisticated cloud infrastructures. In
addition, Data ONTAP 8 provides a more robust platform for the next
10 years of innovation from NetApp.
NetApp also introduced the following new
products and enhancements that uniquely complement VMware®
vSphere 4 and VMware View to help customers optimize their desktop
and cloud computing environments: Virtual Storage Console,
SnapManager® for Virtual Infrastructure, and Rapid Cloning
Utility.
Showing its commitment to midsize enterprise
and distributed enterprise customers, NetApp announced the new
FAS2040 storage system, providing customers with increased
performance and capacity to handle demanding Microsoft®
Windows® consolidation and virtualization workloads all on the
same system. NetApp also announced significant price reductions for
its FAS2020 systems and associated software, which are now
preconfigured with high-capacity drives and include all
protocols.
During the quarter, NetApp extended its
leadership in Ethernet storage with standards-based products that
support converged Ethernet (FCoE, iSCSI, NFS, CIFS) data access and
help customers streamline their data centers and maximize ROI. With
partners such as Cisco and QLogic, NetApp is expanding Ethernet as
a storage infrastructure.
In an effort to help customers maximize the
value of their existing storage investments, NetApp unveiled a
program to help customers achieve greater storage efficiency in
their data centers. Under the terms of the Zero Investment
Promise3 Program ( "ZIP Program"), customers with EMC and
HP SANs that deploy NetApp® V-Series can reduce storage
capacity and the associated costs of their existing third-party
storage investments. If after 90 days the customer files an
approved claim that the storage savings are not achieved, the
customer will keep the equipment at no charge.
Finally, in addition to NetApp's various
solution and program announcements during the quarter, the company
received the following awards and industry recognition:
- Best Channel Product 2009: The NetApp FAS2000
series was named a "Best Channel Product 2009" in the NAS Storage
category by Business Solutions magazine. The FAS2000 was
cited for its reliability, durability, and ease of upgrade.
- 2009 InformationWeek 500: NetApp ranked 26th
on the 2009 InformationWeek 500, which honors the nation's most
innovative users of information technology. NetApp ranked number
three in the information technology industry.
- Oracle Innovation Award: Recognizing NetApp's
innovative use of Oracle® Business Intelligence software,
Oracle named NetApp a winner of the 2009 Innovation Awards in the
Business Intelligence/Enterprise Performance Management
category.
- Morgan Stanley Leadership Award for Global
Commerce: Dan Warmenhoven and Tom Mendoza received the
Morgan Stanley Leadership Award for Global Commerce, which
recognizes individuals whose personal leadership has made a
critical contribution to the effective use of information
technology throughout the world.
- Washingtonian Magazine's 50 Great Places to
Work: NetApp was selected as a winner in the "Think Big"
category, for large companies, on the basis of such measures as
recognition and respect given employees, great work-life balance,
challenging and interesting opportunities, commitment to community,
and generous pay and benefits.
Webcast and Conference Call
Information
The NetApp quarterly results conference call will be broadcast live
on the Internet at http://investors.netapp.com on
Wednesday, November 18, 2009, 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.
The conference call will also be available
live in a listen-only format at (800) 510-9836 in the United States
and (617) 614-3670 outside the United States. The pass code for
both numbers is 11612732.
A replay will be available for 72 hours
following the completion of the live call by dialing (888) 286-8010
in the United States and (617) 801-6888 outside the United States,
using replay code 30335717. The Webcast replay will be posted on
our Web site for at least one year.
About NetApp
NetApp creates innovative storage and data management solutions
that accelerate business breakthroughs and deliver outstanding cost
efficiency. Discover NetApp's passion for helping companies around
the world go further, faster at www.netapp.com/it.
"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 third quarter of fiscal year 2010 and the
benefits that we expect our customers to realize from using our
products. 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 risks associated with the
anticipated growth in network storage and content delivery markets;
our ability to deliver new product architectures and enterprise
service offerings; competition risks, including 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. We disclaim any obligation to update information
contained in these forward-looking statements whether as a result
of new information, future events, or otherwise.
1 Earnings per share is calculated
using the diluted number of shares for all periods presented.
2 Non-GAAP results of operations exclude amortization of
intangible assets, stock-based compensation expenses, merger
termination proceeds (net of related expenses), restructuring and
other charges, noncash interest expense associated with our
convertible debt, net loss or gain on investments, and our GAAP tax
provision, including discrete items, but includes a proforma tax
provision based upon our projected annual proforma effective tax
rate.
3 The ZIP Program is limited to the terms set forth in
www.netapp.com/zip.
NetApp, the NetApp logo, Go further, faster,
Data ONTAP, and SnapManager are trademarks or registered trademarks
of NetApp, Inc. in the United States and/or other countries. All
other brands or products are trademarks or registered trademarks of
their respective holders and should be treated as such.
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 operational
performance. Non-GAAP results of operations exclude amortization of
intangible assets, stock-based compensation expenses, merger
termination proceeds (net of related expenses), restructuring and
other charges, noncash interest expense associated with our
convertible debt, net loss or gain on investments, and our GAAP tax
provision, including discrete items, but includes a proforma tax
provision based upon our projected annual proforma effective tax
rate. 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 facilitate
management's internal comparisons to the Company's historical
operating results and comparisons to competitors' operating
results. We include these non-GAAP financial measures in our
earnings announcement because we believe they are useful to
investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and
operational decision making, such as employee compensation
planning. 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.
NetApp Use of Corporate Web
Site
In accordance with SEC guidance published on August 22, 2008
(Release No. 34-58288), NetApp will begin to disseminate
material information about the company through its corporate Web
site within the next several fiscal quarters. NetApp intends to
designate a separate portion of its corporate Web site for purposes
of these disclosures and will include a prominent link on its Web
site to allow visitors to locate this material information, which
will be routinely updated. The Web site will supplement, rather
than replace, NetApp's current existing channels of information
distribution.
Press Contact:
NetApp
Jodi Baumann
Ph: (408) 822-3974
Jodi.Baumann@netapp.com
Investor Contacts:
NetApp
Tara Dhillon
Ph: (408) 822-6909
tara@netapp.com
NetApp
Billie Fagenstrom
Ph: (408) 822-6428
billief@netapp.com