NetApp: Fiscal 4Q16 Financial Results

Highlights

• Clustered Data ONTAP node shipments increased in fiscal year 2016 by 85% year-over-year
• All Flash FAS units for fiscal year 2016 grew 345% year-over-year
• Deferred revenue and financed unearned services revenue for fiscal year 2016 up 6% year-over-year
• Authorized an increase in the quarterly cash dividend to $0.19 per share for the first quarter of fiscal year 2017
• $1.17 billion returned to shareholders in share repurchases and cash dividends; 144% of free cash flow1 in fiscal year 2016
         

NetApp, Inc. reported financial results for the fourth quarter and fiscal year 2016, ended April 29, 2016.

Fourth Quarter Financial Results
Net revenues were $1.38 billion. GAAP net loss was $8 million, or $0.03 loss per share, compared to GAAP net income of $135 million, or $0.43 income per share, for the comparable period of the prior year. Non-GAAP net income was $157 million, or $0.55 income per share,4 compared to non-GAAP net income of $202 million, or $0.65 income per share, for the comparable period of the prior year.

Fiscal Year 2016 Financial Results
Net revenues were $5.55 billion. GAAP net income was $229 million, or $0.77 per share, compared to GAAP net income of $560 million, or $1.75 per share, for the comparable period of the prior year. Non-GAAP net income was $633 million, or $2.13 per share, compared to non-GAAP net income of $865 million, or $2.70 per share, for the comparable period of the prior year.

Cash, Cash Equivalents and Investments
NetApp ended fiscal year 2016 with $5.3 billion in total cash, cash equivalents and investments. During the fourth quarter of fiscal year 2016, the company generated $345 million in cash from operations and returned $313 million to shareholders through share repurchases and a cash dividend.

The company will increase the first quarter fiscal year 2017 dividend by 6% to $0.19 per share. The quarterly dividend will be paid on July 27, 2016, to shareholders of record as of the close of business on July 18, 2016.

“We executed well in the fourth quarter and I’m pleased with the progress we are making with our strategic solutions portfolio in addressing customers’ needs,” said George Kurian, CEO. “We continue to advance our pivot to the growth segments of the market while, at the same time, streamlining the business and reducing our cost base. The team remains sharply focused on disciplined execution and is fully committed to return the company to long-term growth.”

Q1 Fiscal Year 2017 Outlook

• Net revenues are expected to be in the range of $1.20 billion to $1.35 billion.
• GAAP earnings per share is expected to be in the range of $0.13 to $0.18 per share.
• Non-GAAP earnings per share is expected to be in the range of $0.34 to $0.39 per share.

Business Highlights

Leading the All-Flash-Array Market

• All-flash systems product of the year. Storage Magazine/SearchStorage.com recognize SolidFire’s high-capacity SF9605 node as a gold winner in the competitive all-flash systems category.
• NetApp and Cisco’s FlexPod advantage initiative removes constraints for the modern enterprise data center. An all-flash converged infrastructure enables partners such as Citrix to accelerate time-to-market and help customers to fast track their journey to a modern data center.
• Increased the performance of data analytics applications by more than 50%. New SANtricity software for NetApp EF-Series all-flash and E-Series storage arrays dramatically boosts the performance and value of big data analytics applications.
• Faster coding and better performance. New SolidFire Python SDK reduces the amount of additional time and coding required for integration and orchestration between SolidFire’s platform and third-party applications.

Customers and Partners Achieve Success Through NetApp

• Media companies adopt NetApp StorageGRID Webscale. In the past 12 months, media vendors – Aspera, Cantemo, Dalet, OpenText (through CyanGate), Primestream, Signiant, Silvertrak, Spectra Logic, and Vidispine – have validated their Amazon Simple Storage Service (S3) interface with StorageGRID Webscale.
• Mansfield Oil delivers new applications and services up to 50% faster with NetApp. Transition to new redundant data and DR center keeps mission-critical data safe and improves customer service by eliminating downtime for core business applications.
• DARZ makes secure hybrid cloud and multicloud a reality with NetApp Private Storage (NPS). NPS as a Service from DARZ makes it possible for its customer Helpium to leverage the elasticity, cost and performance benefits of public cloud providers without putting its data – or its business – at risk.
• Top-ranked financial fund administrator HedgeServ deploys SolidFire. By delivering scalable storage to keep pace with HedgeServ’s business growth and expanded offerings, SolidFire has transformed storage from a significant cost and management burden into an innovation enabler.
• Denver Broncos deploy business-critical applications with NetApp. NetApp FAS systems power the Bronco’s entire infrastructure, including data analysis used from draft day to the stadium on game day, as well as to support over 330 events throughout the year. Regardless of location, the Broncos have been able to deploy mobile tablets to players, coaches, managers and support staff enabling them to view footage within hours of a game.

Technology and Business Leaders Join NetApp

• Ron Pasek, EVP, CFO. He manages several finance and business functions while helping drive a portfolio management approach to enable growth.
• Henri Richard, EVP, WW field and customer operations. He leads relationships with NetApp’s strategic technology partners, resellers, and customers across the globe.