Second Quarter Fiscal 2018 Highlights
NetApp (NASDAQ:NTAP) today reported financial results for the
second quarter fiscal year 2018, ended October 27, 2017. “In the
second quarter, NetApp again delivered strong operating results on
the top and bottom lines. We also introduced a number of
industry-leading innovations that position us for continued growth
and expand our leadership position in the growth segments of the
market,” said George Kurian, chief executive officer. “Our strong
performance was driven by excellent execution and reflects our
customers’ clear and growing preference for the value of our Data
Fabric strategy. We are winning because we enable our customers’
success through data.”
Second Quarter Fiscal 2018 Financial
Results
- Net Revenues: $1.42 billion, increased 6%
year-over-year from $1.34 billion in the second quarter of fiscal
2017
- Net Income: GAAP net income of $175 million,
compared to GAAP net income of $109 million in the second quarter
of fiscal 2017; non-GAAP net income1 of $223 million, compared to
non-GAAP net income of $169 million in the second quarter of fiscal
2017
- Earnings per Share: GAAP earnings per share2
of $0.64, compared to GAAP earnings per share of $0.38 in the
second quarter of fiscal 2017; non-GAAP earnings per share of
$0.81, compared to non-GAAP earnings per share of $0.60 in the
second quarter of fiscal 2017
- Cash, Cash Equivalents and Investments: $6.0
billion at the end of the second quarter fiscal year 2018
- Cash from Operations: $314 million, compared
to $158 million in the second quarter of fiscal 2017
- Share Repurchase and Dividend: Returned $204
million to shareholders through share repurchases and a cash
dividend
Third Quarter Fiscal 2018 Financial OutlookThe
Company provided the following financial guidance for the third
quarter of fiscal year 2018:
- Net revenues are expected to be in the range of $1.425 billion
to $1.575 billion
|
GAAP |
Non-GAAP |
- Earnings per share is expected to be in the range of:
|
$1.18–$1.26* |
$0.86–$0.94 |
*GAAP earnings per share includes an expected $0.50 per share
benefit, after tax, from gains on the sale of certain
properties.
Dividend
- Next cash dividend of $0.20 per share to be paid on January 24,
2018, to shareholders of record as of the close of business on
January 5, 2018
Second Quarter Fiscal 2018 Business
Highlights
New Solutions Expand NetApp Impact in Flash,
Next-Generation Data Center, and Cloud
- NetApp™ EF570 all-flash system is the storage
industry’s price/performance leader as demonstrated by SPC-1 and
SPC-2 benchmark tests.3
- NetApp E5700 Series hybrid flash system
accelerates performance and increases density with a hybrid flash
system optimal for modern enterprise applications.
- NetApp SANtricity™ Cloud Connector enables
Data Fabric capabilities by providing cost-effective backup and
recovery to the cloud from NetApp E-Series and EF-Series
systems.
- NetApp SANtricity 11.4 software now comes with
security enhancements such as role-based access control and audit
log, Active Directory support, and an external key manager.
- NetApp Converged Infrastructure Solution for
Data Analytics brings together the latest storage, networking, and
server technologies to help simplify deployment of data analytics
environments.
- NetApp introduces new AI-enabled virtual support
assistant, Elio, and Active IQ™ cloud-based analytics to
help companies gain intelligent insights.
- NetApp expands collaboration with Microsoft
Azure to deliver the industry's first Azure enterprise NFS
service.
- NetApp SolidFire™ Element™ OS 10 supports data
movement from Element OS systems to ONTAP™ systems across the Data
Fabric and helps customers align IT service levels to business
goals.
- NetApp HCI, built on SolidFire Element OS, the
world’s first enterprise-scale hyper converged solution, became
generally available in October 2017.
- StorageGRID™ Webscale 11 simplifies the
creation of next-generation data center cloud architecture by
enabling easy implementation of hybrid cloud data pipelines with
AWS.
- NetApp ONTAP 9.3 software offers 40% increased
performance over earlier versions, further optimizes deduplication,
and enhances security and compliance.
- OnCommand™ Insight updated with new cloud cost
monitoring provides a complete picture of IT infrastructure.
NetApp Enables Customers to
Improve Their Performance Through Cloud and Flash
Services
- NetApp SolidFire enables Ensono to
deliver more value with fewer resources allowing their
clients to focus on accelerating their businesses and leave the
burden of managing IT to Ensono.
- NetApp Data Fabric solutions allow Renown Health to
reduce downtime and performance concerns, while enabling
the integrated healthcare network to deliver leading-edge services
and care to more patients.
- CloudOps leverages NetApp SolidFire as the
storage foundation for CloudMC, the IaaS platform that enables
users such as cloud.ca to rapidly grow secure, successful
cloud-based businesses.
- Healthix enlists NetApp as a strategic partner
to build a nondisruptive solution for sharing patient data among
unrelated healthcare organizations, while remaining compliant with
patient privacy laws and regulations.
Webcast and Conference Call InformationNetApp
will host a conference call to discuss these results today at 2:30
p.m. Pacific Time. To access the live webcast of this event, visit
the NetApp Investor Relations website at investors.netapp.com. In
addition, this press release, historical supplemental data tables,
and other information related to the call will be posted on the
Investor Relations website. An audio replay will also be available
on the website after 4:30 p.m. Pacific Time today.
About NetAppNetApp is the data authority for
hybrid cloud. We provide a full range of hybrid cloud data services
that simplify management of applications and data across cloud and
on-premises environments to accelerate digital transformation.
Together with our partners, we empower global organizations to
unleash the full potential of their data to expand customer
touchpoints, foster greater innovation and optimize their
operations. For more information, visit www.netapp.com.
#DataDriven
“Safe Harbor” Statement Under U.S. Private Securities
Litigation Reform Act of 1995This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include,
but are not limited to, all of the statements made under the Third
Quarter Fiscal Year 2018 Financial Outlook section, statements
about our innovations positioning us for continued growth and
expanding our leadership position in the growth segments of the
market as well as statements about our customers’ growing
preference for the value of our Data Fabric strategy. All of these
forward-looking statements involve risk and uncertainty. Actual
results may differ materially from these statements for a variety
of reasons, including, without limitation, general global
political, macroeconomic and market conditions, changes in U.S.
government spending, revenue seasonality and matters specific to
our business, such as our ability to expand our total available
market and grow our portfolio of products, customer demand for and
acceptance of our products and services, our ability to
successfully execute new business models, our ability to
successfully execute on our Data Fabric strategy to generate
profitable growth and stockholder return and our ability to manage
our gross profit margins. These and other equally important factors
are described in reports and documents we file from time to time
with the Securities and Exchange Commission, including the factors
described under the section titled “Risk Factors” in our most
recently submitted reports on Form 10-Q and 10-K. We disclaim any
obligation to update information contained in this press release
whether as a result of new information, future events, or
otherwise.
NetApp and the NetApp logo and the marks listed at
http://www.netapp.com/TM are trademarks of NetApp, Inc. Other
company and product names may be trademarks of their respective
owners.
Footnotes1Non-GAAP net income excludes, when
applicable, (a) amortization of intangible assets, (b)
stock-based compensation expenses, (c) acquisition-related
expenses, (d) restructuring charges, (e) asset impairments, (f)
gains/losses on the sale of properties, and (g) 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. NetApp makes additional
adjustments to the non-GAAP tax provision for certain tax matters
as described below. A detailed reconciliation of our non-GAAP to
GAAP results can be found at http://investors.netapp.com. NetApp’s
management uses these non-GAAP measures in making operating
decisions because it believes the measurements provide meaningful
supplemental information regarding NetApp’s ongoing operational
performance. 2GAAP earnings per share and non-GAAP earnings per
share are calculated using the diluted number of shares for all
periods presented.3Storage Performance Council, NetApp
EF570 SPC-1, September 18, 2017, and NetApp EF570
SPC-2, September 18, 2017. Full Disclosure Reports.
NetApp Usage of Non-GAAP Financial Information
To supplement NetApp’s condensed consolidated financial
statement information presented in accordance with generally
accepted accounting principles in the United States (GAAP), NetApp
provides investors with certain non-GAAP measures, including, but
not limited to, historical non-GAAP operating results, non-GAAP net
income, non-GAAP effective tax rate and free cash flow, and
historical and projected non-GAAP earnings per diluted share.
NetApp believes that the presentation of non-GAAP net income,
non-GAAP effective tax rates, and non-GAAP earnings per share data
when shown in conjunction with the corresponding GAAP measures,
provides useful information to investors and management regarding
financial and business trends relating to its financial condition
and results of operations. NetApp believes that the presentation of
free cash flow, which it defines as the net cash provided by
operating activities less cash used to acquire property and
equipment, to be a liquidity measure that provides useful
information to management and investors because it reflects cash
that can be used to, among other things, invest in its business,
make strategic acquisitions, repurchase common stock, and pay
dividends on its common stock. As free cash flow is not a measure
of liquidity calculated in accordance with GAAP, free cash flow
should be considered in addition to, but not as a substitute for,
the analysis provided in the statement of cash flows.NetApp’s
management uses these non-GAAP measures in making operating
decisions because it believes the measurements provide meaningful
supplemental information regarding NetApp’s ongoing operational
performance. 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. NetApp excludes the following items from its non-GAAP
measures when applicable:A. Amortization of intangible assets.
NetApp records amortization of intangible assets that were acquired
in connection with its business combinations. The amortization of
intangible assets varies depending on the level of acquisition
activity. Management finds it useful to exclude these charges to
assess the appropriate level of various operating expenses to
assist in budgeting, planning and forecasting future periods and in
measuring operational performance.B. Stock-based compensation
expenses. NetApp excludes stock-based compensation expenses from
its non-GAAP measures primarily because they are non-cash expenses.
While management views stock-based compensation as a key element of
our employee retention and long-term incentives, we do not
view it as an expense to be used in evaluating operational
performance in any given period. C. Acquisition-related expenses.
NetApp excludes acquisition-related expenses, including (a) due
diligence, legal and other one-time integration charges and (b)
write down of assets acquired that NetApp does not intend to use in
its ongoing business, from its non-GAAP measures, primarily because
they are not related to our ongoing business or cost base and,
therefore, cannot be relied upon for future planning and
forecasting.D. Restructuring charges. These charges consist of
restructuring charges that are incurred based on the particular
facts and circumstances of restructuring decisions, including
employment and contractual settlement terms, and other related
charges, and can vary in size and frequency. We therefore exclude
them in our assessment of operational performance. E. Asset
impairments. These are non-cash charges to write down assets when
there is an indication that the asset has become impaired.
Management finds it useful to exclude these non-cash charges due to
the unpredictability of these events in its assessment of
operational performance.F. Gains/losses on the sale of properties.
These are gains/losses from the sale of our properties. Management
believes that these transactions do not reflect the results of our
underlying, on-going business and, therefore, cannot be relied upon
for future planning or forecasting.G. Income tax adjustments.
NetApp’s non-GAAP tax provision is based upon a 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. The non-GAAP tax provision also
excludes, when applicable, (a) tax charges or benefits in the
current period that relate to one or more prior fiscal periods that
are a result of events such as changes in tax legislation,
authoritative guidance, income tax audit settlements and/or court
decisions, (b) tax charges or benefits that are attributable to
unusual or non-recurring book and/or tax accounting method changes,
(c) tax charges that are a result of a non-routine foreign cash
repatriation, (d) tax charges or benefits that are a result of
infrequent restructuring of the Company’s tax structure, (e) tax
charges or benefits that are a result of a change in valuation
allowance, and (f) tax charges resulting from the integration of
intellectual properties from acquisitions. Management believes that
the use of non-GAAP tax provisions provides a more meaningful
measure of the Company’s operational
performance. These
non-GAAP measures are not in accordance with, or an alternative
for, measures prepared in accordance with GAAP, and may be
different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. NetApp
believes that non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with the Company’s
results of operations as determined in accordance with GAAP and
that these measures should only be used to evaluate the Company’s
results of operations in conjunction with the corresponding GAAP
measures. NetApp management compensates for these limitations by
analyzing current and projected results on a GAAP basis as well as
a non-GAAP basis. The presentation of non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with generally accepted accounting principles in the
United States. The non-GAAP financial measures are meant to
supplement, and be viewed in conjunction with, GAAP financial
measures.
|
NETAPP, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In millions) |
(Unaudited) |
|
|
October 27,2017 |
|
|
April 28,2017 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash,
cash equivalents and investments |
|
$ |
5,965 |
|
|
$ |
4,921 |
|
Accounts
receivable |
|
|
584 |
|
|
|
731 |
|
Inventories |
|
|
108 |
|
|
|
163 |
|
Other
current assets |
|
|
363 |
|
|
|
383 |
|
Total
current assets |
|
|
7,020 |
|
|
|
6,198 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
795 |
|
|
|
799 |
|
Goodwill and purchased
intangible assets, net |
|
|
1,859 |
|
|
|
1,815 |
|
Other non-current
assets |
|
|
634 |
|
|
|
681 |
|
Total
assets |
|
$ |
10,308 |
|
|
$ |
9,493 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
379 |
|
|
$ |
347 |
|
Accrued
expenses |
|
|
722 |
|
|
|
782 |
|
Commercial paper notes |
|
|
718 |
|
|
|
500 |
|
Current
portion of long-term debt |
|
|
750 |
|
|
|
749 |
|
Short-term deferred revenue and financed unearned services
revenue |
|
|
1,645 |
|
|
|
1,744 |
|
Total
current liabilities |
|
|
4,214 |
|
|
|
4,122 |
|
Long-term debt |
|
|
1,540 |
|
|
|
744 |
|
Other long-term
liabilities |
|
|
255 |
|
|
|
249 |
|
Long-term deferred
revenue and financed unearned services revenue |
|
|
1,522 |
|
|
|
1,598 |
|
Total
liabilities |
|
|
7,531 |
|
|
|
6,713 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
2,777 |
|
|
|
2,780 |
|
Total
liabilities and stockholders' equity |
|
$ |
10,308 |
|
|
$ |
9,493 |
|
|
|
NETAPP, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In millions, except per share
amounts) |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
October 27,2017 |
|
|
October 28,2016 |
|
|
October 27,2017 |
|
|
October 28,2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
807 |
|
|
$ |
710 |
|
|
$ |
1,530 |
|
|
$ |
1,370 |
|
Software
maintenance |
|
|
240 |
|
|
|
242 |
|
|
|
474 |
|
|
|
483 |
|
Hardware
maintenance and other services |
|
|
375 |
|
|
|
388 |
|
|
|
743 |
|
|
|
781 |
|
Net
revenues |
|
|
1,422 |
|
|
|
1,340 |
|
|
|
2,747 |
|
|
|
2,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
product |
|
|
399 |
|
|
|
376 |
|
|
|
770 |
|
|
|
735 |
|
Cost of
software maintenance |
|
|
6 |
|
|
|
7 |
|
|
|
13 |
|
|
|
15 |
|
Cost of
hardware maintenance and other services |
|
|
115 |
|
|
|
128 |
|
|
|
228 |
|
|
|
258 |
|
Total
cost of revenues |
|
|
520 |
|
|
|
511 |
|
|
|
1,011 |
|
|
|
1,008 |
|
Gross
profit |
|
|
902 |
|
|
|
829 |
|
|
|
1,736 |
|
|
|
1,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
|
420 |
|
|
|
418 |
|
|
|
845 |
|
|
|
847 |
|
Research
and development |
|
|
194 |
|
|
|
200 |
|
|
|
387 |
|
|
|
407 |
|
General
and administrative |
|
|
69 |
|
|
|
69 |
|
|
|
137 |
|
|
|
137 |
|
Total
operating expenses |
|
|
683 |
|
|
|
687 |
|
|
|
1,369 |
|
|
|
1,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
219 |
|
|
|
142 |
|
|
|
367 |
|
|
|
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
|
6 |
|
|
|
— |
|
|
|
11 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
225 |
|
|
|
142 |
|
|
|
378 |
|
|
|
234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
50 |
|
|
|
33 |
|
|
|
67 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
175 |
|
|
$ |
109 |
|
|
$ |
311 |
|
|
$ |
173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.65 |
|
|
$ |
0.39 |
|
|
$ |
1.15 |
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.64 |
|
|
$ |
0.38 |
|
|
$ |
1.12 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in net
income per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
269 |
|
|
|
278 |
|
|
|
270 |
|
|
|
278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
275 |
|
|
|
284 |
|
|
|
277 |
|
|
|
283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share |
|
$ |
0.200 |
|
|
$ |
0.190 |
|
|
$ |
0.400 |
|
|
$ |
0.380 |
|
|
|
NETAPP, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
October 27,2017 |
|
|
October 28,2016 |
|
|
October 27,2017 |
|
|
October 28,2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
175 |
|
|
$ |
109 |
|
|
$ |
311 |
|
|
$ |
173 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
51 |
|
|
|
57 |
|
|
|
102 |
|
|
|
117 |
|
Stock-based compensation |
|
|
39 |
|
|
|
51 |
|
|
|
87 |
|
|
|
103 |
|
Other
items, net |
|
|
32 |
|
|
|
1 |
|
|
|
39 |
|
|
|
13 |
|
Changes
in assets and liabilities, net of acquisitions of businesses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(69 |
) |
|
|
(47 |
) |
|
|
149 |
|
|
|
264 |
|
Inventories |
|
|
35 |
|
|
|
(16 |
) |
|
|
55 |
|
|
|
1 |
|
Accounts
payable |
|
|
92 |
|
|
|
17 |
|
|
|
34 |
|
|
|
(13 |
) |
Accrued
expenses |
|
|
67 |
|
|
|
60 |
|
|
|
(68 |
) |
|
|
(138 |
) |
Deferred
revenue and financed unearned services revenue |
|
|
(76 |
) |
|
|
(96 |
) |
|
|
(183 |
) |
|
|
(179 |
) |
Changes
in other operating assets and liabilities, net |
|
|
(32 |
) |
|
|
22 |
|
|
|
38 |
|
|
|
45 |
|
Net cash
provided by operating activities |
|
|
314 |
|
|
|
158 |
|
|
|
564 |
|
|
|
386 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemptions (purchases) of investments, net |
|
|
(64 |
) |
|
|
(123 |
) |
|
|
48 |
|
|
|
190 |
|
Purchases
of property and equipment |
|
|
(29 |
) |
|
|
(56 |
) |
|
|
(65 |
) |
|
|
(92 |
) |
Acquisitions of businesses, net of cash acquired |
|
|
(51 |
) |
|
|
— |
|
|
|
(75 |
) |
|
|
— |
|
Other
investing activities, net |
|
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
(1 |
) |
Net cash
provided by (used in) investing activities |
|
|
(144 |
) |
|
|
(179 |
) |
|
|
(87 |
) |
|
|
97 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from issuance of common stock under employee stock award
plans |
|
|
9 |
|
|
|
19 |
|
|
|
57 |
|
|
|
61 |
|
Payments
for taxes related to net share settlement of stock awards |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(60 |
) |
|
|
(36 |
) |
Repurchase of common stock |
|
|
(150 |
) |
|
|
(117 |
) |
|
|
(300 |
) |
|
|
(292 |
) |
Proceeds
from (repayments of) commercial paper notes, net |
|
|
(176 |
) |
|
|
— |
|
|
|
218 |
|
|
|
— |
|
Issuance
of long-term debt, net |
|
|
795 |
|
|
|
— |
|
|
|
795 |
|
|
|
— |
|
Repayment
of short-term loan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(850 |
) |
Dividends
paid |
|
|
(54 |
) |
|
|
(52 |
) |
|
|
(108 |
) |
|
|
(105 |
) |
Other
financing activities, net |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
Net cash
provided by (used in) financing activities |
|
|
420 |
|
|
|
(154 |
) |
|
|
601 |
|
|
|
(1,225 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
13 |
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
584 |
|
|
|
(181 |
) |
|
|
1,091 |
|
|
|
(755 |
) |
Cash and cash
equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
of period |
|
|
2,951 |
|
|
|
2,294 |
|
|
|
2,444 |
|
|
|
2,868 |
|
End of
period |
|
$ |
3,535 |
|
|
$ |
2,113 |
|
|
$ |
3,535 |
|
|
$ |
2,113 |
|
|
|
|
NETAPP, INC. |
|
SUPPLEMENTAL DATA |
|
(In millions except net income per share,
percentages, DSO, DIO, DPO, CCC and Inventory Turns) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY'18 |
|
|
Q1 FY'18 |
|
|
Q2 FY'17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Product (1) |
|
$ |
807 |
|
|
$ |
723 |
|
|
$ |
710 |
|
Strategic |
|
$ |
557 |
|
|
$ |
500 |
|
|
$ |
452 |
|
Mature |
|
$ |
250 |
|
|
$ |
223 |
|
|
$ |
258 |
|
Software
Maintenance |
|
$ |
240 |
|
|
$ |
234 |
|
|
$ |
242 |
|
Hardware Maintenance
and Other Services |
|
$ |
375 |
|
|
$ |
368 |
|
|
$ |
388 |
|
Hardware
Maintenance Support Contracts |
|
$ |
306 |
|
|
$ |
298 |
|
|
$ |
316 |
|
Professional and Other Services |
|
$ |
69 |
|
|
$ |
70 |
|
|
$ |
72 |
|
Net Revenues |
|
$ |
1,422 |
|
|
$ |
1,325 |
|
|
$ |
1,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Mix |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of
Q2FY'18Revenue |
|
|
% of Q1FY'18Revenue |
|
|
% of Q2FY'17Revenue |
|
Americas |
|
|
56 |
% |
|
|
55 |
% |
|
|
57 |
% |
Americas
Commercial |
|
|
40 |
% |
|
|
42 |
% |
|
|
42 |
% |
U.S.
Public Sector |
|
|
16 |
% |
|
|
13 |
% |
|
|
16 |
% |
EMEA |
|
|
30 |
% |
|
|
30 |
% |
|
|
30 |
% |
Asia Pacific |
|
|
14 |
% |
|
|
15 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pathways Mix |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of
Q2FY'18Revenue |
|
|
% of Q1FY'18Revenue |
|
|
% of Q2FY'17Revenue |
|
Direct |
|
|
22 |
% |
|
|
20 |
% |
|
|
22 |
% |
Indirect |
|
|
78 |
% |
|
|
80 |
% |
|
|
78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY'18 |
|
|
Q1 FY'18 |
|
|
Q2 FY'17 |
|
Non-GAAP Gross
Margin |
|
|
64.3 |
% |
|
|
63.8 |
% |
|
|
62.7 |
% |
Product |
|
|
51.8 |
% |
|
|
49.9 |
% |
|
|
48.2 |
% |
Software
Maintenance |
|
|
97.5 |
% |
|
|
97.0 |
% |
|
|
97.1 |
% |
Hardware
Maintenance and Other Services |
|
|
69.9 |
% |
|
|
70.1 |
% |
|
|
67.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income from Operations, Income before Income Taxes
& Effective Tax Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY'18 |
|
|
Q1 FY'18 |
|
|
Q2 FY'17 |
|
Non-GAAP Income from
Operations |
|
$ |
272 |
|
|
$ |
209 |
|
|
$ |
204 |
|
% of Net
Revenues |
|
|
19.1 |
% |
|
|
15.8 |
% |
|
|
15.2 |
% |
Non-GAAP Income before
Income Taxes |
|
$ |
278 |
|
|
$ |
214 |
|
|
$ |
204 |
|
Non-GAAP Effective Tax
Rate |
|
|
19.4 |
% |
|
|
19.4 |
% |
|
|
17.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY'18 |
|
|
Q1 FY'18 |
|
|
Q2 FY'17 |
|
Non-GAAP Net
Income |
|
$ |
223 |
|
|
$ |
173 |
|
|
$ |
169 |
|
Non-GAAP Weighted
Average Common Shares Outstanding, Diluted |
|
|
275 |
|
|
|
278 |
|
|
|
284 |
|
Non-GAAP Income per
Share, Diluted |
|
$ |
0.81 |
|
|
$ |
0.62 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Balance Sheet Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY'18 |
|
|
Q1 FY'18 |
|
|
Q2 FY'17 |
|
Deferred Revenue and
Financed Unearned Services Revenue |
|
$ |
3,167 |
|
|
$ |
3,251 |
|
|
$ |
3,201 |
|
DSO (days) |
|
|
37 |
|
|
|
36 |
|
|
|
37 |
|
DIO (days) |
|
|
19 |
|
|
|
27 |
|
|
|
17 |
|
DPO (days) |
|
|
66 |
|
|
|
54 |
|
|
|
45 |
|
CCC (days) |
|
|
(10 |
) |
|
|
9 |
|
|
|
9 |
|
Inventory Turns |
|
|
19 |
|
|
|
14 |
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days sales outstanding (DSO) is defined as accounts receivable
divided by net revenues, multiplied by the number of days in the
quarter. |
|
Days inventory outstanding (DIO) is defined as net inventories
divided by cost of revenues, multiplied by the number of days in
the quarter. |
|
Days payables outstanding (DPO) is defined as accounts payable
divided by cost of revenues, multiplied by the number of days in
the quarter. |
|
Cash conversion cycle (CCC) is defined as DSO plus DIO minus
DPO. |
|
Inventory turns is defined as annualized cost of revenues
divided by net inventories. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Cash Flow Statement Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY'18 |
|
|
Q1 FY'18 |
|
|
Q2 FY'17 |
|
Net Cash Provided by
Operating Activities |
|
$ |
314 |
|
|
$ |
250 |
|
|
$ |
158 |
|
Purchases of Property
and Equipment |
|
$ |
29 |
|
|
$ |
36 |
|
|
$ |
56 |
|
Free Cash Flow |
|
$ |
285 |
|
|
$ |
214 |
|
|
$ |
102 |
|
Free Cash Flow as a %
of Net Revenues |
|
|
20.0 |
% |
|
|
16.2 |
% |
|
|
7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow is a non-GAAP measure and is defined as net
cash provided by operating activities less purchases of property
and equipment. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Sales of certain products which should have been reported
as strategic products were improperly reported as mature product
revenues in Q2 FY'17. That period has been recast to reflect the
appropriate classification. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Some items may not add or recalculate due to rounding. |
|
|
|
|
|
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
INCOME STATEMENT INFORMATION |
|
(In millions, except net income per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME |
|
$ |
175 |
|
|
$ |
136 |
|
|
$ |
109 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
14 |
|
|
|
13 |
|
|
|
11 |
|
Stock-based compensation |
|
|
39 |
|
|
|
48 |
|
|
|
51 |
|
Income
tax effect of non-GAAP adjustments |
|
|
(5 |
) |
|
|
(24 |
) |
|
|
(2 |
) |
NON-GAAP NET
INCOME |
|
$ |
223 |
|
|
$ |
173 |
|
|
$ |
169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUES |
|
$ |
520 |
|
|
$ |
491 |
|
|
$ |
511 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(9 |
) |
|
|
(8 |
) |
|
|
(7 |
) |
Stock-based compensation |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
NON-GAAP COST
OF REVENUES |
|
$ |
508 |
|
|
$ |
479 |
|
|
$ |
500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF PRODUCT
REVENUES |
|
$ |
399 |
|
|
$ |
371 |
|
|
$ |
376 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(9 |
) |
|
|
(8 |
) |
|
|
(7 |
) |
Stock-based compensation |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
NON-GAAP COST
OF PRODUCT REVENUES |
|
$ |
389 |
|
|
$ |
362 |
|
|
$ |
368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
HARDWARE MAINTENANCE AND OTHER SERVICES REVENUES |
|
$ |
115 |
|
|
$ |
113 |
|
|
$ |
128 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
NON-GAAP COST
OF HARDWARE MAINTENANCE AND OTHER SERVICES REVENUES |
|
$ |
113 |
|
|
$ |
110 |
|
|
$ |
125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
$ |
902 |
|
|
$ |
834 |
|
|
$ |
829 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
9 |
|
|
|
8 |
|
|
|
7 |
|
Stock-based compensation |
|
|
3 |
|
|
|
4 |
|
|
|
4 |
|
NON-GAAP GROSS
PROFIT |
|
$ |
914 |
|
|
$ |
846 |
|
|
$ |
840 |
|
|
|
|
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
INCOME STATEMENT INFORMATION |
|
(In millions, except net income per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES AND
MARKETING EXPENSES |
|
$ |
420 |
|
|
$ |
425 |
|
|
$ |
418 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(4 |
) |
Stock-based compensation |
|
|
(16 |
) |
|
|
(21 |
) |
|
|
(21 |
) |
NON-GAAP SALES
AND MARKETING EXPENSES |
|
$ |
399 |
|
|
$ |
399 |
|
|
$ |
393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESEARCH AND
DEVELOPMENT EXPENSES |
|
$ |
194 |
|
|
$ |
193 |
|
|
$ |
200 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(12 |
) |
|
|
(15 |
) |
|
|
(17 |
) |
NON-GAAP
RESEARCH AND DEVELOPMENT EXPENSES |
|
$ |
182 |
|
|
$ |
178 |
|
|
$ |
183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENERAL AND
ADMINISTRATIVE EXPENSES |
|
$ |
69 |
|
|
$ |
68 |
|
|
$ |
69 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(8 |
) |
|
|
(8 |
) |
|
|
(9 |
) |
NON-GAAP
GENERAL AND ADMINISTRATIVE EXPENSES |
|
$ |
61 |
|
|
$ |
60 |
|
|
$ |
60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
$ |
683 |
|
|
$ |
686 |
|
|
$ |
687 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(4 |
) |
Stock-based compensation |
|
|
(36 |
) |
|
|
(44 |
) |
|
|
(47 |
) |
NON-GAAP
OPERATING EXPENSES |
|
$ |
642 |
|
|
$ |
637 |
|
|
$ |
636 |
|
|
|
|
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
INCOME STATEMENT INFORMATION |
|
(In millions, except net income per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
$ |
219 |
|
|
$ |
148 |
|
|
$ |
142 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
14 |
|
|
|
13 |
|
|
|
11 |
|
Stock-based compensation |
|
|
39 |
|
|
|
48 |
|
|
|
51 |
|
NON-GAAP INCOME
FROM OPERATIONS |
|
$ |
272 |
|
|
$ |
209 |
|
|
$ |
204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
INCOME TAXES |
|
$ |
225 |
|
|
$ |
153 |
|
|
$ |
142 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
14 |
|
|
|
13 |
|
|
|
11 |
|
Stock-based compensation |
|
|
39 |
|
|
|
48 |
|
|
|
51 |
|
NON-GAAP INCOME
BEFORE INCOME TAXES |
|
$ |
278 |
|
|
$ |
214 |
|
|
$ |
204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR
INCOME TAXES |
|
$ |
50 |
|
|
$ |
17 |
|
|
$ |
33 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax effect of non-GAAP adjustments |
|
|
5 |
|
|
|
24 |
|
|
|
2 |
|
NON-GAAP
PROVISION FOR INCOME TAXES |
|
$ |
55 |
|
|
$ |
41 |
|
|
$ |
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER
SHARE |
|
$ |
0.64 |
|
|
$ |
0.49 |
|
|
$ |
0.38 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
0.05 |
|
|
|
0.05 |
|
|
|
0.04 |
|
Stock-based compensation |
|
|
0.14 |
|
|
|
0.17 |
|
|
|
0.18 |
|
Income
tax effect of non-GAAP adjustments |
|
|
(0.02 |
) |
|
|
(0.09 |
) |
|
|
(0.01 |
) |
NON-GAAP NET
INCOME PER SHARE |
|
$ |
0.81 |
|
|
$ |
0.62 |
|
|
$ |
0.60 |
|
|
|
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
GROSS MARGIN |
|
($ in millions) |
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin-GAAP |
|
|
63.4 |
% |
|
|
62.9 |
% |
|
|
61.9 |
% |
Cost of
revenues adjustments |
|
|
0.8 |
% |
|
|
0.9 |
% |
|
|
0.8 |
% |
Gross
margin-Non-GAAP |
|
|
64.3 |
% |
|
|
63.8 |
% |
|
|
62.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
revenues |
|
$ |
520 |
|
|
$ |
491 |
|
|
$ |
511 |
|
Cost of revenues
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(9 |
) |
|
|
(8 |
) |
|
|
(7 |
) |
Stock-based compensation |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
Non-GAAP cost of
revenues |
|
$ |
508 |
|
|
$ |
479 |
|
|
$ |
500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
1,422 |
|
|
$ |
1,325 |
|
|
$ |
1,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
PRODUCT GROSS MARGIN |
|
($ in millions) |
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product gross
margin-GAAP |
|
|
50.6 |
% |
|
|
48.7 |
% |
|
|
47.0 |
% |
Cost of
product revenues adjustments |
|
|
1.2 |
% |
|
|
1.2 |
% |
|
|
1.1 |
% |
Product gross
margin-Non-GAAP |
|
|
51.8 |
% |
|
|
49.9 |
% |
|
|
48.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of product
revenues |
|
$ |
399 |
|
|
$ |
371 |
|
|
$ |
376 |
|
Cost of product
revenues adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(9 |
) |
|
|
(8 |
) |
|
|
(7 |
) |
Stock-based compensation |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Non-GAAP cost of
product revenues |
|
$ |
389 |
|
|
$ |
362 |
|
|
$ |
368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues |
|
$ |
807 |
|
|
$ |
723 |
|
|
$ |
710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
HARDWARE MAINTENANCE AND OTHER SERVICES GROSS
MARGIN |
|
($ in millions) |
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware
maintenance and other services gross margin-GAAP |
|
|
69.3 |
% |
|
|
69.3 |
% |
|
|
67.0 |
% |
Cost of
hardware maintenance and other services revenues adjustment |
|
|
0.5 |
% |
|
|
0.8 |
% |
|
|
0.8 |
% |
Hardware
maintenance and other services gross margin-Non-GAAP |
|
|
69.9 |
% |
|
|
70.1 |
% |
|
|
67.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of hardware
maintenance and other services revenues |
|
$ |
115 |
|
|
$ |
113 |
|
|
$ |
128 |
|
Cost of hardware
maintenance and other services revenues adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
Non-GAAP cost of
hardware maintenance and other services revenues |
|
$ |
113 |
|
|
$ |
110 |
|
|
$ |
125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware maintenance
and other services revenues |
|
$ |
375 |
|
|
$ |
368 |
|
|
$ |
388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
EFFECTIVE TAX RATE |
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective
tax rate |
|
|
22.2 |
% |
|
|
11.1 |
% |
|
|
23.2 |
% |
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax
effect of non-GAAP adjustments |
|
|
(2.8 |
)% |
|
|
8.3 |
% |
|
|
(5.9 |
)% |
Non-GAAP
effective tax rate |
|
|
19.4 |
% |
|
|
19.4 |
% |
|
|
17.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES |
|
TO FREE CASH FLOW (NON-GAAP) |
|
(In millions) |
|
|
|
|
|
|
|
Q2'FY18 |
|
|
Q1'FY18 |
|
|
Q2'FY17 |
|
Net cash provided by
operating activities |
|
$ |
314 |
|
|
$ |
250 |
|
|
$ |
158 |
|
Purchases of property
and equipment |
|
|
(29 |
) |
|
|
(36 |
) |
|
|
(56 |
) |
Free cash
flow |
|
$ |
285 |
|
|
$ |
214 |
|
|
$ |
102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Some items may not add
or recalculate due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP GUIDANCE TO
GAAP |
|
EXPRESSED AS EARNINGS PER SHARE |
|
THIRD QUARTER FISCAL 2018 |
|
|
|
|
|
|
|
|
Third Quarter |
|
|
|
Fiscal 2018 |
|
|
|
|
|
|
Non-GAAP Guidance - Net
Income Per Share |
|
$0.86 - $0.94 |
|
|
|
|
|
|
Adjustments of Specific
Items to Net Income |
|
|
|
|
Per Share
for the Third Quarter Fiscal 2018: |
|
|
|
|
Amortization of intangible assets |
|
|
(0.05 |
) |
Stock-based compensation expense |
|
|
(0.14 |
) |
Gain on
sale of properties |
|
|
0.80 |
|
Income
tax effect of non-GAAP adjustments |
|
|
(0.29 |
) |
Total Adjustments |
|
|
0.32 |
|
|
|
|
|
|
GAAP Guidance - Net
Income Per Share |
|
$1.18 - $1.26 |
|
|
|
|
|
Press Contact:Madge MillerNetApp1 408 419
5263madge.miller@netapp.com
Investor Contact:Kris NewtonNetApp1 408 822
3312kris.newton@netapp.com
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