SUNNYVALE, Calif. - February 17,
2010 -- NetApp (NASDAQ: NTAP) today reported results for
the third quarter of fiscal year 2010, which ended January 29,
2010. GAAP revenues for the third quarter of fiscal 2010 were $1.01
billion, compared to GAAP and non-GAAP revenues1 of $746
million and $874 million, respectively, for the same period one
year ago.
For the third fiscal quarter of 2010, GAAP
net income was $108 million, or $0.30 per share2
compared to GAAP net loss of $82 million, or ($0.25) per share for
the same period in the prior year. Non-GAAP3 net income
for the third fiscal quarter of 2010 was $144 million, or $0.40 per
share, compared to non-GAAP net income of $93 million, or $0.28 per
share for the same period one year ago.
GAAP revenues for the first nine months of
the current fiscal year totaled $2.76 billion, compared to GAAP and
non-GAAP revenues of $2.5 billion and $2.7 billion, respectively,
for the first nine months of the prior fiscal year.
GAAP net income for the first nine months of
the current fiscal year totaled $255 million, or $0.73 per share,
compared to GAAP net loss of $4 million, or $0.01 per share for the
first nine months of the prior fiscal year. Non-GAAP net income for
the first nine months of the current fiscal year totaled $350
million, or $1.00 per share, compared to non-GAAP net income of
$262 million, or $0.78 per share for the first nine months of the
prior fiscal year.
"The NetApp team demonstrated remarkable
execution this quarter. With record revenues, record profits and
record EPS, the company produced double-digit year over year
revenue growth and our operations team shipped a record number of
systems, despite persistent supply constraints," said Tom Georgens,
president and CEO. "I am very pleased with the breadth of our
progress. Business levels grew in every major geography, we gained
momentum in both our channel and our direct business, and clearly
gained market share this quarter."
Outlook
- NetApp estimates revenue for the fourth quarter of fiscal year
2010 to be in the range of $1.07 billion to $1.10 billion.
- NetApp estimates share count for the fourth quarter of fiscal
year 2010 to increase by about 6 million shares.
- NetApp estimates that the fourth quarter of fiscal year 2010
GAAP earnings per share will be approximately $0.31 to $0.33 per
share. NetApp estimates that the fourth quarter fiscal year 2010
non-GAAP earnings per share to be approximately $0.42 to $0.44 per
share.
Business Highlights
In the third quarter of fiscal year 2010, NetApp made several key
announcements regarding new and expanded alliances with top IT
industry leaders, the delivery of new products and solutions
designed to drive greater efficiency in customers' shared data
center infrastructures, and several industry awards and accolades.
Key business highlights during the quarter included the
following.
New and Expanded Strategic
Alliances
- Cisco, NetApp, and VMware Expand Longstanding
Collaboration. Cisco, NetApp, and VMware collaborated
to deliver new design architectures that help customers make
their virtualized data centers more efficient, dynamic, and secure.
The companies introduced an end-to-end secure multi-tenancy design
architecture that provides enhanced security when sharing data
center resources across virtualized and enterprise cloud
environments. Cisco, NetApp, and VMware will also offer a
cooperative support model for these pretested and validated design
architectures to help customers quickly build a unified,
virtualized infrastructure.
- Microsoft and NetApp Announce Strategic
Alliance. Microsoft and NetApp announced a new
three-year agreement to collaborate on and deliver technology
solutions that span virtualization, private cloud computing, and
storage and data management. This will enable customers to increase
data center management efficiencies, reduce costs, and improve
business agility. The strategic alliance will deepen product
collaboration and technical integration and will extend joint sales
and marketing activities to customers worldwide.
- Fujitsu and NetApp Plan to Expand Their Global
Partnership. Fujitsu and NetApp announced their intention
to deepen their
partnership globally and to provide more tightly integrated and
automated storage and data management solutions. The companies
intend to jointly develop integrated products and services
specifically in the areas of virtualization, storage and data
management, and storage services and solutions. The expanded
relationship will enable customers to derive greater value and
efficiencies from their dynamic infrastructures.
New Products and
Solutions
Industry Awards and
Accolades
- NetApp Named a Great Place to Work. NetApp was ranked #7
in FORTUNE magazine's "100 Best Companies to Work For"
list. This is the second consecutive year that NetApp ranked in the
top 10 and the fourth consecutive year it ranked in the top
15.
- Gartner Positions NetApp as Leader in Midrange
Enterprise Disk Array Magic Quadrant. NetApp was positioned by Gartner,
Inc. in the Leaders quadrant in its recently released research
note "Magic Quadrant for Midrange Enterprise Disk
Arrays."4 Vendors in the Leaders quadrant have the
highest scores for their ability to execute and their completeness
of vision.
- NetApp eBI Project Earns InfoWorld 100 Award.
NetApp's enterprise business intelligence (eBI) project was honored
as part of IDG's InfoWorld 100 Awards
for 2009, which recognize the 100 most innovative uses of IT
initiatives that further business goals.li>
- NetApp Receives WRAP Award for Waste Management
Programs. The California Integrated Waste Management Board
honored NetApp with a 2009 Waste Reduction
Awards Program (WRAP) award. The award recognizes NetApp's
corporate waste and recycling program and its achievements in
minimizing its environmental impact through the conscientious use
of products, activities, and services.
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, February 17, 2010, at 2:30 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 5:30 p.m. Pacific Time on our Web site
at http://investors.netapp.com.
Starting this quarter, NetApp will use a new
hybrid format for disclosing key financial information associated
with our quarterly results. Concurrent with this press release,
NetApp has posted and distributed a separate document with
financial commentary and statistics that previously were disclosed
during our earnings calls. These prepared remarks will now be
available at http://investors.netapp.com 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 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 fourth quarter of fiscal year 2010, our
expectations regarding our new partnership 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.
1 Non-GAAP revenues for the third
quarter and first nine months of fiscal year 2009 exclude the
impact of the $128 million GSA settlement.
2 GAAP earnings per share is calculated using the
diluted number of shares for all periods presented except for the
third quarter of fiscal year 2009, which is calculated using the
basic number of shares.
3 Non-GAAP results of operations exclude the GSA
settlement, amortization of intangible assets, stock-based
compensation expenses, merger termination proceeds (net of related
expenses), restructuring and other charges, asset impairment,
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 non-GAAP tax provision based upon
our projected annual non-GAAP effective tax rate. Non-GAAP earnings
per share is calculated using the diluted number of shares for all
periods presented.
4 "Magic Quadrant for Midrange Enterprise Disk Arrays"
by Roger Cox, Stan Zaffos, and Pushan Rinnen, November 2009.
NetApp, the NetApp logo, Go further, faster,
and SnapManager are trademarks or registered trademarks of NetApp,
Inc. in the United States and/or other countries. VMware is a
registered trademark of VMware, Inc. Microsoft is a registered
trademark and Hyper-V is a trademark of Microsoft Corporation. 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 the GSA
settlement, amortization of intangible assets, stock-based
compensation expenses, merger termination proceeds (net of related
expenses), restructuring and other charges, asset impairment,
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 non-GAAP tax provision based upon
our projected annual non-GAAP 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.
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