Company Reports Q1 FY’12 Revenues of $1.458 Billion; Up 26% Year Over Year

Sunnyvale, Calif.-August 17,2011-NetApp (NASDAQ: NTAP) today reported results for thefirst quarter of fiscal year 2012, which ended July 29, 2011.Revenues for the first quarter of fiscal year 2012 totaled $1.458billion compared to revenues of $1.154 billion for the same periodone year ago.

 

For the first quarter of fiscal year 2012,GAAP net income was $139.5 million, or $0.34 per share[1], compared to GAAP net income of$150.7 million, or $0.40 per share, for the same period a year ago.Non-GAAP net income for the first quarter of fiscal year 2012 was$222.3 million, or $0.55 per share[2], compared to non-GAAP net income of $190.9million, or $0.51 per share, for the same period a year ago.

 

“Despite the challenging macroeconomicenvironment modestly impacting our revenue growth, NetApp stillproduced earnings per share slightly above the midpoint of ourtargeted range. The company achieved record levels of FAS6000systems sales, near record numbers of new enterprise customer wins,and our new E-series sales exceeded our forecast,” said TomGeorgens, president and CEO. “Our gross margin performancedemonstrates the strength of our competitive position in themarket, helping us to achieve healthy operating results andearnings per share.”

 

Outlook

 

  • NetApp estimates revenue for the second quarter of fiscal year2012 to be in the range of $1.500 billion to $1.600 billion, whichequates to approximately 3% to 10% sequential revenue growth andapproximately 20% to 28% year-over-year revenue growth.
  • NetApp estimates that second quarter fiscal year 2012 GAAPearnings per share will be approximately $0.38 to $0.42 per share.NetApp estimates that second quarter fiscal year 2012 non-GAAPearnings per share will be approximately $0.58 to $0.62 pershare.
  • NetApp estimates that share count for the second quarter offiscal year 2012 will decrease to approximately 392 million shares,including an estimated 10 million shares from the company’soutstanding convertible notes[3] and 2 million shares from outstandingwarrants. Share count does not include the company’s outstandingnote hedges which are expected to offset 80% of the dilution fromthe convertible notes at maturity or conversion.

Business Highlights
In the first quarter of fiscal year 2012, NetApp innovationcontinued to help customers and partners more effectively managesignificant data growth and capitalize on tomorrow’s businessopportunities. During the quarter, NetApp completed its purchase ofthe Engenio external storage systems business from LSI Corporationand unveiled new solutions to address growing customer requirementsin the areas of big bandwidth and analytics. Additionally, NetAppcontinued to be a partner of choice for customers in theirtransition to the cloud. NetApp again received several awardshonoring its innovation leadership, channel excellence, andculture, most recently being named one of the world’s mostinnovative companies by Forbes magazine. Highlights forthe quarter included the following:

 

NetApp Builds on E-Series Platform,Delivers Solutions to Help Customers and OEMs Address Big DataRequirements

 

  • The new NetApp® E5400 storage system delivers compellingperformance for big-bandwidth applications, extreme storagedensity, and exceptional uptime, enabling OEMs to address theircustomers’ growing high-performance workload requirements. NetAppalso introduced two new solutions built on the E-Series platform.The Full-Motion Video Storage Solution enables government agenciesto take advantage of full-motion video technology to make betterdecisions in the field. The Hadoop Storage Solution gives customersthe ability to speed deployment and simplify management of Hadoopinfrastructures for improved analytics.

NetApp Accelerates Customers’ Path tothe Cloud

 

  • NetApp bolsters management capabilities to providecommon foundation for enterprise clouds. New technologiesin NetApp OnCommand™ management software enable customers toaccelerate and simplify their transition to public, private, andhybrid cloud models. The NetApp Alliance Technology Partner Programalso now includes cloud management leaders, delivering integrationbetween industry-leading cloud management solutions and NetApp toprovide customers with end-to-end management of the entire cloudinfrastructure.
  • NetApp collaborates with Microsoft and Cisco to helpcustomers transition to a private cloud. The NetAppHyper-V Cloud Fast Track with Cisco data center architecture designoffers customers advanced management and service automationcapabilities to accelerate private cloud deployment and improveoperations. With this new solution NetApp is also now part ofMicrosoft’s Hyper-V Cloud Fast Track program, further strengtheningthe relationship between the two companies.
  • NetApp and Cisco FlexPod data center solution showsstrong market momentum. NetApp and Cisco now have morethan 150 customers who have implemented data center solutions basedon the FlexPod™ design architecture. The pretestedarchitectural design guide combines networking, computing, andstorage in a shared infrastructure and helps channel partnersaccelerate and simplify customers’ transition to the cloud.

Milestones and Awards

 

  • NetApp named one of world’s most innovative companiesby Forbes magazine. NetApp, the only majorstorage vendor to make the list of 100 companies, was recognizedfor building a culture of innovation that has transformed thefoundation of its customers’ business and has been a catalyst totheir success. This innovation has been a major driver behindNetApp’s growth and continued success.
  • NetApp continues to rank as one of the best places towork. NetApp was once again named a “best place to work,”ranking #4 in Minnesota in the small employer category, #5 inWashington, D.C. in the large company category, and #14 in Bostonin the medium-size category. The honors are a testament to NetApp’smodel company approach, strong culture, and talentedemployees.
  • NetApp recognized for continued channelleadership. NetApp was named to Everything Channel’s CRNVirtualization 100 list due to its success in helping resellersgrow their business and support their customers.

Webcast and Conference CallInformation
The NetApp first quarter fiscal year 2012 results conference callwill be broadcast live on the Internet at investors.netapp.com onWednesday, August 17, at 2 p.m. Pacific time. This press releaseand any other information related to the call will also be postedon the Web site at that location. An audio replay Webcast will beavailable after 4 p.m. Pacific time on the Web site.

 

NetApp uses a hybrid format for disclosingkey financial information associated with our quarterly results.Concurrent with the press release, NetApp posts a supplementalcommentary with financial information and statistics to our Website at investors.netapp.com.

 

About NetApp
NetApp creates innovative storage and data management solutionsthat deliver outstanding cost efficiency and accelerate businessbreakthroughs. Discover our passion for helping companies aroundthe world go further, faster at www.netapp.com.

 

 

PressContact: InvestorContact:
Ryan Lowry
NetApp
(408) 822-7544
ryanl@netapp.com
ShaunaO’Boyle
NetApp
(408) 822-7655
oboyle@netapp.com

NetApp, the NetApp logo, Go further, faster,Engenio, FlexPod, and OnCommand are trademarks or registeredtrademarks of NetApp, Inc. All other marks are the property oftheir 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 themeaning of the Private Securities Litigation Reform Act of 1995.These statements include all of the statements under the Outlooksection relating to our forecasted operating results, share count,and metrics for the second quarter of fiscal year 2012, as well asexpectations regarding our partnerships and strategic alliances andthe benefits that we expect our customers to realize from using ourproducts and from our strategic alliances and partnerships. Theseforward-looking statements involve risks and uncertainties, andactual results could vary. Important factors that could causeactual results to differ include, but are not limited to, customerdemand for our products and services and our ability to accuratelyforecast this demand; our ability to effectively integrate therecently acquired Engenio external storage systems business andachieve our anticipated results for such business; our ability toincrease revenue and manage our operating costs; increasedcompetition risks in the markets in which we compete; our relianceon a limited number of suppliers; general economic and marketconditions, particularly U.S. budget and debt considerations andthe continuing fiscal challenges in the Euro zone; our ability todeliver new product architectures and enterprise service offerings;our ability to design products and services that competeeffectively from a price and performance perspective; and otherimportant factors as described in NetApp reports and documentsfiled 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 QuarterlyReports on Forms 10-K and 10-Q, respectively. We disclaim anyobligation to update information contained in these forward-lookingstatements whether as a result of new information, future events,or otherwise.

 

NetApp Usage of Non-GAAPFinancials
The Company refers to the non-GAAP financial measures cited abovein making operating decisions because they provide meaningfulsupplemental information regarding the Company’s ongoingoperational performance. Non-GAAP net income excludes theamortization of intangible assets, stock-based compensationexpenses, acquisition related income and expenses, restructuringand other charges, asset impairments, non-cash interest expenseassociated with our convertible debt, net losses or gains oninvestments, and our GAAP tax provision, but includes a non-GAAPtax provision based upon our projected annual non-GAAP effectivetax rate for the first three quarters of the fiscal year and anactual non-GAAP tax provision for the fourth quarter of the fiscalyear. We have excluded these items in order to enhance investors’understanding of our ongoing operations. The use of these non-GAAPfinancial measures has material limitations because they should notbe used to evaluate our company without reference to theircorresponding GAAP financial measures. As such, we compensate forthese material limitations by using these non-GAAP financialmeasures in conjunction with GAAP financial measures.

 

These non-GAAP financial measures are usedto: (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 bymanagement in financial and operational decision making. Inaddition, these non-GAAP financial measures are used to measurecompany performance for the purposes of determining employeeincentive plan compensation. We have historically reported similarnon-GAAP financial measures to our investors and believe that theinclusion of comparative numbers provides consistency in ourfinancial reporting at this time.

 

[1]GAAP earnings per share is calculated usingthe diluted number of shares for all periods presented.

 

[2]Non-GAAP net income excludes the amortizationof intangible assets, stock-based compensation expenses,acquisition related income and expenses, restructuring and othercharges, asset impairments, non-cash interest expense associatedwith our convertible debt, net losses or gains on investments, andour GAAP tax provision, but includes a non-GAAP tax provision basedupon our projected annual non-GAAP effective tax rate for the firstthree quarters of the fiscal year and an actual non-GAAP taxprovision for the fourth quarter of the fiscal year. Non-GAAPearnings per share is calculated using the diluted number of sharesfor all periods presented.

 

[3]80% hedged on maturity or conversion of theconvertible notes.

NetApp Staff