Sunnyvale, Calif.- November 16, 2011
- NetApp (NASDAQ: NTAP) today reported results for the
second quarter of fiscal year 2012, which ended October 28, 2011.
Revenues for the second quarter of fiscal year 2012 totaled $1.507
billion compared to revenues of $1.251 billion for the same period
one year ago.
For the second quarter of fiscal year 2012,
GAAP net income was $165.6 million, or $0.44 per share, compared to GAAP net income of
$175.4 million, or $0.45 per share, for the same period a year ago.
Non-GAAP net income for the second quarter of fiscal year 2012 was
$235.5 million, or $0.63 per share, compared to non-GAAP net income of $212.2
million, or $0.54 per share, for the same period a year ago.
Revenues for the first six months of fiscal
year 2012 totaled $2.965 billion compared to revenues of $2.405
billion for the first six months of the prior fiscal year, an
increase of 23% year over year. GAAP net income for the first six
months of fiscal year 2012 totaled $305.1 million, or $0.78 per
share, compared to GAAP net income of $326.1 million, or $0.85 per
share for the first six months of the prior fiscal year. Non-GAAP
net income for the first six months of fiscal year 2012 totaled
$457.8 million, or $1.17 per share, compared to non-GAAP net income
of $403.1 million, or $1.05 per share for the first six months of
the prior fiscal year.
"NetApp produced record non-GAAP earnings per
share in the second quarter. In aggregate, we saw strong revenue
growth across most areas of our business, offset by some unexpected
weakness in a handful of our largest accounts," said Tom Georgens,
president and CEO. "NetApp achieved the highest number of net new
customer wins in more than two and a half years this quarter, and
in our 'Smart Decisions are Built on NetApp' campaign we just
launched the new FAS2000 series platform built on our Data
ONTAP® 8.1 operating system-all of which will drive market
share gains going forward."
- NetApp estimates revenue for the third quarter of fiscal year
2012 to be in the range of $1.520 billion to $1.610 billion, which
equates to approximately 1% to 7% sequential revenue growth and
approximately 18 % to 25% year-over-year revenue growth.
- NetApp estimates that third quarter fiscal year 2012 GAAP
earnings per share will be approximately $0.36 to $0.40 per share.
NetApp estimates that third quarter fiscal year 2012 non-GAAP
earnings per share will be approximately $0.56 to $0.60 per
- NetApp estimates that share count for the third quarter of
fiscal year 2012 will increase to approximately 380 million shares,
including an estimated 9 million shares from the company's
outstanding convertible notes and 0.5 million shares from outstanding warrants.
Share count does not include the company's outstanding note hedges
which are expected to offset 80% of the dilution from the
convertible notes at maturity or conversion.
During the second quarter of fiscal year 2012, NetApp once again
was recognized for its unique corporate culture and demonstrated
its commitment to delivering the solutions and technologies that
help customers and partners accelerate their business. NetApp
further cemented its position as a great place to work by ranking
#3 on the inaugural "World's Best Multinational Workplaces" list
due to its culture of innovation focused on helping customers and
partners thrive. Additionally, NetApp continued to provide the
storage foundation for customers across all industries who want to
achieve the flexibility and efficiency required in today's
challenging business and IT landscape. NetApp also expanded its
existing solution portfolio to help customers transition to the
cloud and address growing big-bandwidth requirements. Highlights
for the quarter included the following:
Milestones and Awards
- NetApp named one of the best workplaces in the
world. Thanks to its culture of innovation focused on
customer and partner success, NetApp was named the #3 best
workplace in the world by the Great Place to Work® Institute,
Inc. NetApp joins an elite group of 25 multinational companies on
the inaugural list that have been recognized by their employees for
their company culture and workplace environment.
- NetApp continues to rank as one of the best places to
work in the United States. In addition to its global
recognition, NetApp was once again named a "best place to work,"
ranking #1 in Research Triangle Park in the giant companies
category and one of 50 best places to work in the Washington, DC,
area. The honors are a testament to NetApp's model company
approach, strong culture, and talented employees.
Enterprise, Government, and Education
Customers Build on NetApp Foundation to Dramatically Increase IT
Efficiency and Flexibility
- Thomson Reuters leverages NetApp to transform how the
legal industry gets information. Thomson Reuters built on
a NetApp® shared storage infrastructure to create WestlawNext,
an innovative and intuitive research tool that has set a new
standard for online professional search. The NetApp foundation
enables WestlawNext to search up to 50 times more data than before,
return results 64% faster than other online search platforms, and
meet or exceed a 99.9% uptime target that is critical for the legal
community. Furthermore, improved storage performance helped Thomson
Reuters save nearly $65 million in additional data center
- U.S. Department of Energy selects NetApp as storage
foundation for one of the world's most powerful
supercomputers. The Sequoia supercomputer, which will be
deployed in 2012 at Lawrence Livermore National Laboratory (LLNL),
will leverage NetApp as its storage foundation. Sequoia is expected
to be twice as fast as today's most powerful system and will manage
massive compute workloads in which real-time analytics, scalable
performance, and secure storage are mission critical.
- California universities manage skyrocketing data growth
and dramatically reduce costs with NetApp. The University
of San Diego (USD) recently turned to NetApp to help it effectively
manage growing storage requirements as a result of an increase in
high-bandwidth education applications and everyday administrative
tasks. Building on a NetApp platform enabled USD to improve
operational efficiencies and gain the flexibility necessary to meet
its evolving IT needs. Art Center College of Design in Pasadena
consolidated its storage resources onto a single, unified NetApp
platform, allowing the school to more effectively manage its
overall IT environment and save more than $135,000 in additional
NetApp Helps Customers Transition to
the Cloud and Manage Big-Bandwidth Requirements
- NetApp partners with VMware to help make cloud a
reality. NetApp collaborated with VMware to deliver VMware
cloud infrastructure and management on NetApp. The joint solution
enables organizations to evolve to a secure cloud computing model
at their own pace, gaining greater flexibility and efficiency
without needing to rip and replace their existing infrastructure.
With this new solution customers are able to invest resources back
into the business to drive innovation and manage for the
- NetApp media and entertainment solution delivers
extreme performance and scalability. The NetApp media
content management solution, which expands on NetApp's existing
big-bandwidth portfolio, is optimal for bandwidth-intensive
environments and offers leaders in the media and entertainment
industries high performance and always-available data access to
maximize their collaborative efforts and workflow processes.
Webcast and Conference Call
The NetApp second quarter fiscal year 2012 results conference call
will be broadcast live on the Internet at investors.netapp.com on
Wednesday, November 16, 2011, at 2 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 be available after 4 p.m. Pacific Time on the Web site.
NetApp uses a hybrid format for disclosing
key financial information associated with our quarterly results.
Concurrent with the press release, NetApp posts a supplemental
commentary with financial information and statistics to our Web
site at investors.netapp.com.
NetApp creates innovative storage and data management solutions
that deliver outstanding cost efficiency and accelerate business
breakthroughs. Discover our passion for helping companies around
the world go further, faster at www.netapp.com.
NetApp, the NetApp logo, Go further, faster,
and Data ONTAP are trademarks or registered trademarks of NetApp,
Inc. All other marks are the property of their respective owners
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 third quarter of fiscal year 2012, as well as
our expectations regarding our future market share and regarding
our partnerships and strategic alliances and the benefits that we
expect our customers to realize from using our products and 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 include, but are not limited to, general macroeconomic and
market conditions, particularly the continuing fiscal challenges in
the U.S. and Europe; the effects of the flooding in Thailand;
customer demand for our products and services, including our
recently announced new product introductions and other important
factors 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 titled "Risk
Factors" in our most recently submitted Annual and Quarterly
Reports on Forms 10-K and 10-Q, respectively. We disclaim any
obligation to update information contained in these forward-looking
statements whether as a result of new information, future events,
NetApp 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 ongoing
operational performance. Non-GAAP net income excludes 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 convertible 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. 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. 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.
GAAP earnings per share is calculated using the
diluted number of shares for all periods presented.
Non-GAAP net income excludes 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
convertible 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. Non-GAAP earnings per
share is calculated using the diluted number of shares for all
80% hedged on maturity or conversion of the