NetApp: Fiscal 4Q18 Financial Results

Net revenues of $1.64 billion for the fourth quarter
and $5.91 billion for fiscal year 2018
• Net revenue for fiscal year 2018 increased 7% year-over-year
• Product revenue for fiscal year 2018 grew 15% year-over-year
• All-flash array annualized net revenue run rate of $2.4 billion increased 43% year-over-year
• Free cash flow was 23% of revenue for fiscal year 2018 and increased 64% year-over-year
• $1.01 billion returned to shareholders in share repurchases and cash dividends in fiscal year 2018

NetApp, Inc. reported financial results for the fourth quarter and fiscal year 2018, ended April 27, 2018.

“The fourth quarter marked a great finish to a strong year. We successfully pivoted to the growth areas of the market, expanded our opportunity with HCI and new cloud partnerships, and improved operational discipline to deliver sustained and profitable growth,” said George Kurian, CEO. “Clear innovation leadership, coupled with strong go-to-market execution, has enabled us to gain share in all key product categories and in every geography. Our momentum with customers continues to accelerate and we are increasingly viewed as a critical strategic partner for data-driven digital transformations.”

Fourth Quarter Fiscal Year 2018 Financial Results
• Net Revenues: $1.64 billion, increased 11% year-over-year from $1.48 billion in the fourth quarter of fiscal 2017
• Net Income: GAAP net income of $271 million, compared to GAAP net income of $190 million in the fourth quarter of fiscal 2017; non-GAAP net income of $288 million, compared to non-GAAP net income of $239 million in the fourth quarter of fiscal 2017
• Earnings per Share: GAAP earnings per share of $0.99 compared to GAAP earnings per share of $0.68 in the fourth quarter of fiscal 2017; non-GAAP earnings per share of $1.05, compared to non-GAAP earnings per share of $0.86 in the fourth quarter of fiscal 2017
• Cash, Cash Equivalents and Investments: $5.4 billion at the end of fiscal 2018
• Cash from Operations: $494 million, compared to $365 million in the fourth quarter of fiscal 2017
• Share Repurchase and Dividend: Returned $397 million to shareholders through share repurchases and a cash dividend

Fiscal Year 2018 Financial Results
• Net Revenues: $5.91 billion, increased 7% year-over-year from $5.52 billion in fiscal 2017
• Net Income: GAAP net income of $76 million, compared to GAAP net income of $509 million in fiscal 2017; non-GAAP net income of $957 million, compared to non-GAAP net income of $768 million in fiscal 2017
• Earnings per Share: GAAP earnings per share of $0.28, compared to GAAP earnings per share of $1.81 in fiscal 2017; non-GAAP earnings per share of $3.47, compared to non-GAAP earnings per share of $2.73 in fiscal 2017
• Cash from Operations: $1.48 billion, compared to $986 million in fiscal year 2017
• Share Repurchase and Dividend: Returned $1.01 billion to shareholders through share repurchases and cash dividends

On December 22, 2017, The 2017 Tax Reform Reconciliation Act was enacted into law. This tax reform legislation contains several key tax provisions that affected the company, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the U.S. corporate income tax rate to 21% effective January 1, 2018, among others. GAAP net income in fiscal year 2018 was impacted by a resulting one-time charge of approximately $850 million.

First Quarter Fiscal Year 2019 Financial Outlook

• Net revenues expected to be in the range of $1.365 billion to $1.465 billion

Full Fiscal Year 2019 Financial Outlook

• Net revenues are expected to grow in the mid-single digits

Fourth Quarter Fiscal Year 2018 Business Highlights
• Ducati partners to drive digital transformation of motorcycle racing in the MotoGP World Championship, counting on the NetApp Data Fabric as it participates in 19 races in 15 countries on 5 continents around the globe. Ducati will use company’s technologies to modernize its IT and data protection infrastructure, enhancing data protection and security.
• Helps customers build General Data Protection Regulation (GDPR)-compliant processes. It helps customers integrate NetApp and partner technologies to enable them to identify where personal information is held, improve their data management and governance processes, and build GDPR-compliant processes into their day-to-day activities.
• The firm is one of the few data management companies with a dedicated healthcare solutions team and is positioned to assist healthcare organizations providing secure access to critical information, so customers can quickly accelerate workloads and analytics and can integrate cloud data services with simplicity and efficiency.