Network Appliance Reiterates Quarterly and Annual Guidance

Sunnyvale, Calif. - July 22, 2004 -- Network Appliance, Inc. (NASDAQ: NTAP) has announced that it expects revenue and earnings for the first quarter and full fiscal year 2005 to be within the range discussed on its fiscal year 2004 earnings conference call conducted on May 18, 2004. At that time, NetApp stated it expects first quarter revenues to grow sequentially by 4% to 6% from the fiscal fourth quarter. This projection reflects year over year growth rates of 35% to 37%. First quarter non-GAAP earnings are expected to be in the range of 12 cents to 13 cents per share, with GAAP earnings modestly below these levels. For full fiscal year 2005, Network Appliance expects annual revenue to grow by 30% to 32%, and expects non-GAAP earnings of between 52 cents and 54 cents per share.

Network Appliance reconfirmed guidance today, prior to upcoming discussions with shareholders regarding its proxy statement, which was filed on July 15, 2004. Due to the timing of the proxy statement filing, NetApp felt it would be most prudent, in order to comply with Regulation FD, to publicly reiterate prior guidance in the event that questions about current business are raised during the discussions with shareholders. Network Appliance does not intend to provide such updates in the future, but is doing so today due entirely to the timing of meetings regarding the proxy statement.

NetApp expects to release first fiscal quarter earnings on August 17, 2004 after market hours. Management will review first quarter results and discuss the business outlook for the second quarter during a webcast conference call at 2:00 p.m. Pacific time. The webcast will be available on the NetApp website at and dial-in information will be provided in early August.

This press release contains forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995 regarding expected first quarter and full fiscal year 2005 revenues, and GAAP and non-GAAP earnings per share. These forward-looking statements involve risks and uncertainties, and actual results could vary. Factors that could impact our ability to achieve our goals include: general economic and industry conditions, including expenditure trends for storage related products; our ability to deliver new product architectures and products which meet market acceptance; our ability to design products which compete effectively from a price and performance perspective and other important factors as described in Network Appliance, Inc.'s reports and documents filed from time to time with the Securities and Exchange Commission, including our most recently submitted Form 10-K and any subsequent Forms 10-Q or 8-K.

Non-GAAP guidance for all periods presented exclude amortization of intangible assets, stock compensation, and the related effects on income taxes. The impact of these items on GAAP earnings is estimated to be approximately -$0.008 per share in the first quarter and -$0.02 to -$0.03 per share for the full year. Future impacts of in process research and development, restructuring charges, net gain or loss on investments, gain on sale of intangible assets, and the related effects on income taxes are also excluded and cannot be estimated at this time.

The information contained in this press release is accurate only as of the date of issuance. Network Appliance disclaims any duty to update the information contained in this press release.

About Network Appliance

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 continue to drive "The evolution of storage.™" Information about Network Appliance™ solutions and services is available at


Tara Calhoun
Network Appliance, Inc.
Investor Contact
(408) 822-6909

Eric Brown
Network Appliance, Inc.
Press Contact
(408) 822-3463