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2019 Press Releases

August 16, 2019

NetApp Reports First Quarter of Fiscal Year 2020 Results

NetApp today reported financial results for the first quarter of fiscal year 2020, which ended on July 26, 2019.

“I am clearly disappointed with our Q1 top line results but remain confident in our strategy and the fundamentals of our business model. The gross margin and cost structure improvements we’ve made provide support for our free cash flow generation and enable us to navigate the ongoing macroeconomic headwinds while making the strategic moves that position us well to return to growth,” said George Kurian, chief executive officer. “We consistently receive positive feedback from our customers and partners on the value of our Data Fabric strategy and the strong performance of our best teams demonstrates our ability to capitalize on this strength.”

First Quarter of Fiscal Year 2020 Financial Results

  • Net Revenues: $1.24 billion, compared to $1.47 billion* in the first quarter of fiscal 2019

  • Net Income: GAAP net income of $103 million, compared to GAAP net income of $283 million in the first quarter of fiscal 2019; non-GAAP net income1 of $157 million, compared to non-GAAP net income of $281 million in the first quarter of fiscal 2019

  • Earnings per Share: GAAP net income per share2 of $0.42 compared to GAAP net income per share of $1.05 in the first quarter of fiscal 2019; non-GAAP net income per share of $0.65, compared to non-GAAP net income per share of $1.04 in the first quarter of fiscal 2019

  • Cash, Cash Equivalents and Investments: $3.5 billion at the end of the first quarter of fiscal 2020

  • Cash from Operations: $310 million, compared to $326 million in the first quarter of fiscal 2019

  • Share Repurchase and Dividend: Returned $365 million to shareholders through share repurchases and cash dividends

*Net revenues in the first quarter of fiscal year 2019 included $90 million from enterprise software license agreements which did not repeat in the first quarter of fiscal year 2020.

Second Quarter of Fiscal Year 2020 Financial Outlook
The Company provided the following financial guidance for the second quarter of fiscal year 2020:

  • Net revenues are expected to be in the range of:

 

$1.325 billion to $1.475 billion

 

 

GAAP

 

Non-GAAP

  • Earnings per share is expected to be in the range of:

 

$0.86 - $0.94

 

$0.91 - $0.99

Full Fiscal Year 2020 Financial Outlook
The Company updated the following financial guidance for the full fiscal year 2020:

  • Net revenues are expected to decline 5% - 10% year-over-year

 

 

GAAP

 

Non-GAAP

  • Consolidated gross margins are expected to be:

 

65% - 66%

 

66% - 67%

  • Operating margins are expected to be in the range of:

 

16% - 19%

 

19% - 22%

  • Effective tax rate is expected to be:

 

19% - 20%

 

18% - 19%

Dividend
The next cash dividend of $0.48 per share will be paid on October 23, 2019, to shareholders of record as of the close of business on October 4, 2019.

First Quarter of Fiscal Year 2020 Business Highlights
Spearheading Innovation

  • NetApp presented a bold vision for a hybrid multicloud world, with a range of new and updated offerings: NetApp™ Kubernetes Service on NetApp HCICloud Volumes on NetApp HCI, a beta release of Cloud Volumes Service for Google Cloud PlatformCloud Volumes ONTAP™ for Google Cloud PlatformFabric Orchestrator, new pay-per-use offerings for Cloud Consumption for NetApp HCI and Cloud Volumes Service On-PremisesNetApp Cloud Insights as a “freemium” offering, and NetApp Professional Services for the Data Fabric.

  • NetApp released the NetApp AFF C190 system, a simple, smart, and secure all-flash storage solution that enables channel partners to expand their market share by helping smaller organizations modernize their IT infrastructure.

  • The NetApp Cloud Tiering service is generally available now on AWS and Azure. With this service, customers can leverage the benefits of cloud economics while making space available on high-performance NetApp AFF and FAS solid-state drive systems.

  • NetApp announced a new update to its growing data management software series, NetApp ONTAP 9.6. The Company also announced the new midrange, end-to-end-NVMe NetApp AFF A320 all-flash storage system and an expanded portfolio of services to help businesses maximize the value of their data and drive efficiency.

Expanding Partnerships

  • NetApp completed support for Cloud Volumes across public clouds and hybrid environments with Cloud Volumes ONTAP for Google Cloud Platform and with the general availability of Azure NetApp Files.

  • NetApp announced NetApp HCI for Private Cloud with Red Hat at the Red Hat Summit, offering a modern, open-source-based, true cloud solution that works in conjunction with the Red Hat OpenStack Platform.

Earning Prestigious Awards

  • NetApp continues to grow its reputation as a data authority, receiving the AIconics award for Corporate Innovation in AIand earning the AI Breakthrough award for the Best AI Solution for Big Data.