Network Appliance Announces Results for Fourth Quarter and Fiscal Year 2007
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Sunnyvale, Calif. - May 23, 2007 --
Network Appliance, Inc. (NASDAQ: NTAP), the leader in advanced
networked storage solutions, today reported results for the fourth
quarter and fiscal year 2007. Revenues for the fourth fiscal
quarter were $801.2 million, an increase of 34% compared to
revenues of $598.0 million for the same period a year ago and an
increase of 10% compared to $729.3 million in the prior
For the fourth fiscal quarter, GAAP net income increased 51% to
$89.6 million, or $0.23 per share1 compared to GAAP net
income of $59.2 million, or $0.15 per share for the same period in
the prior year. Non-GAAP2 net income for the fourth
fiscal quarter increased 28% to $114.2 million, or $0.30 per share,
compared to non-GAAP net income of $89.3 million, or $0.23 per
share for the same period a year ago.
Revenues for fiscal year 2007 totaled $2.8 billion, an increase of
36% compared to revenues of $2.07 billion for fiscal year 2006. For
fiscal year 2007, GAAP net income increased 12% to $297.7 million,
or $0.77 per share, compared to GAAP net income of $266.5 million,
or $0.69 per share for fiscal year 2006. Non-GAAP net income for
fiscal year 2007 increased 37% to $430.7 million, or $1.11 per
share, compared to non-GAAP net income of $315.3 million, or $0.81
per share for fiscal year 2006.
"Network Appliance had a great finish to a great year. With 36%
annual growth, NetApp clearly provides to customers the best value
in the industry," said Dan Warmenhoven, chief executive officer.
"And while we weren't immune from the March macroeconomic spending
slowdown, our competitive differentiation and business fundamentals
have never been stronger."
- Network Appliance expects sequential revenue for the first
quarter of fiscal year 2008 to decline by 6% to 7%, which
translates to about 20% to 21% growth year over year.
- Including the implementation of SFAS123(R) and with current
information and assumptions, the company estimates that the first
quarter of fiscal year 2008 GAAP earnings per share will be
approximately $0.14 to $0.15 per share. Network Appliance expects
first quarter non-GAAP earnings per share to be approximately $0.24
to $0.25 per share.
During the fourth quarter of fiscal year 2007, NetApp broadened its
Fibre Channel (FC) storage area network (SAN) portfolio and
enhanced data management and data protection solutions with new
products as well as broader and deeper partnerships. The company
also continued to gain momentum in the SAN market while maintaining
market leadership in both network-attached storage (NAS) and
Continuing its extension into the data center, NetApp announced two
new midrange platforms aimed at making enterprise data center
management easier for customers. The NetApp® FAS3040 and
NetApp V3040 series created additional market opportunities for
NetApp as it broadened its enterprise lineup and added
functionality for FC SAN environments.
The NetApp FC SAN portfolio was further strengthened with the
worldwide availability of new switches, including two new blades
for the Brocade® 48000 Director, and the QLogic®
SANbox® 9000 Core and SANbox 5600 Stackable Series of
switches. NetApp expanded its enterprise-class software line with
NetApp ReplicatorX™ and NetApp SnapManager® software for
use with SAP® solutions. NetApp ReplicatorX (formerly Topio
TDPS) provides continuous data replication and recovery across a
range of locations and storage systems, including EMC, HDS, HP,
IBM, and NetApp. NetApp SnapManager software for use with SAP
enhances application availability and provides increased storage
management flexibility in SAP environments.
From a market perspective, according to IDC's Worldwide Quarterly
Disk Storage Systems Tracker Q4 20063, NetApp continued
to grow faster than the market in FC SAN in both revenue and
capacity, year over year. The company grew FC SAN revenue at more
than seven times the rate of both the market leader and the overall
FC SAN market, and grew FC SAN capacity at more than four times the
rate of the overall market.
In addition to FC SAN, NetApp continued to demonstrate leadership
in the NAS and iSCSI storage markets, maintaining the number-one
market share position in capacity shipped for NAS (38.9%) and in
iSCSI for both capacity and revenue. NetApp also continued to show
significant gains in storage software, growing six times faster
than the overall storage software market from 2005 to 2006,
according to IDC's Worldwide Quarterly Storage Software Tracker Q4
NetApp leadership in innovation remained strong with the news that
it has been positioned by Gartner, Inc., in the "Visionaries"
quadrant in the Gartner Magic Quadrant for Storage Resource
Management (SRM) and SAN Management Software,
On the partner front, NetApp unveiled several new solution
enhancements and partner offerings with Brocade, Cisco, Fujitsu,
Onaro, RSA, SAP, Symantec, and VMware to address a variety of data
concerns, including data management, data protection, and data
In corporate news, NetApp topped the "Most Admired Company" list in
the computer peripherals industry in FORTUNE Magazine's 2007
"America's Most Admired Companies" rankings.
NetApp StoreVault™ S500 also received accolades in the fourth
quarter as it was voted "Best Product of the Year" in Small
Business Computing's 2007 Product Excellence Awards.
Webcast and Conference Call Information
- The NetApp quarterly results conference call will be broadcast
live via the Internet at http://investors.netapp.com on Wednesday, May
23, 2007, at 2:00 p.m. Pacific time. This press release and any
other information related to the call will also be posted on the
Website at that location.
- The conference call will also be available live in a
listen-only format at (800) 901-5231 in the United States and (617)
786-2961 outside the United States. The pass code for both numbers
- 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 37079987. The Webcast replay will be posted on our Website for
at least one year.
Network Appliance is a world leader in unified storage solutions
for today's data-intensive enterprise. Since its inception in 1992,
Network Appliance has delivered technology, product, and partner
firsts that simplify data management. Information about Network
Appliance™ solutions and services is available at www.netapp.com.
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 and metrics
for the first quarter of fiscal 2008; statements regarding the
anticipated benefits of our products, technologies, and services
relative to the offerings of our competitors; and statements
regarding anticipated benefits from partner offerings. 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 our ability to build
non-deferred backlog to levels consistent with our past results and
to increase our revenue over the next several quarters; general
economic and industry conditions, including expenditure trends for
storage-related products; 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; risks with new product introductions; our
reliance on a limited number of suppliers; our ability to
accurately forecast demand for our products and successfully manage
our relationships with our contract manufacturers; our ability to
expand our direct sales operations and reseller distribution
channels; our ability to develop, maintain, and strengthen our
relationships and product offerings with strategic partners; risks
associated with international operations; our ability to
successfully acquire and integrate complementary businesses and
technologies; foreign currency exchange rate fluctuations; and
other important factors as described in Network Appliance, Inc.
reports and documents filed from time to time with the Securities
and Exchange Commission, 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 Earnings per share represents the diluted number of
shares for all periods presented. 2 Non-GAAP results of
operations exclude amortization of intangible assets, stock-based
compensation expenses, other acquisition-related costs, in-process
research and development, restructuring charges/recoveries,
gain/loss on sale of assets and investments, certain other
nonrecurring events, and the related effects on income taxes.
3 IDC's Worldwide Quarterly Disk Storage Systems
Tracker, Q4 2006. 4 IDC's Worldwide Quarterly Storage
Software Tracker, March 2007. 5 Gartner Inc., "Magic
Quadrant for Storage Resource Management (SRM) and SAN Management
Network Appliance Usage of Non-GAAP
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. These non-GAAP financial measures exclude amortization
of intangible assets, in-process research and development, stock
compensation, other acquisition-related cost, restructuring
charges/recoveries, gain/loss on sales of assets and investments,
certain other nonrecurring events, and the related effects on
income taxes as well as certain discrete GAAP provisions for income
tax matters recognized ratably for non-GAAP purposes. 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.
Network Appliance, Inc.
Ph: (408) 822-3974
Network Appliance, Inc.
Ph: (408) 822-6909
Network Appliance, Inc.
Ph: (408) 822-6428