NetApp: Fiscal 2Q15 Financial Results
Revenue was, is and will be flat.
This is a Press Release edited by StorageNewsletter.com on November 17, 2014 at 2:59 pm| (in $ million) | 2Q14 | 2Q15 | 6 mo. 14 | 6 mo. 15 |
| Revenue | 1,549.9 | 1,542.5 | 3,066.1 | 3,031.7 |
| Growth | -0% | -1% | ||
| Net income (loss) | 168.8 | 159.8 | 248.4 | 248.2 |
NetApp, Inc. reported the results of its second quarter of fiscal year 2015, ended October 24, 2014.
Highlights:
- Clustered Data ONTAP nodes shipped more than tripled year-over-year
- Flash capacity shipped more than doubled year-over-year
- $652 million returned to shareholders in share repurchases and cash dividends
Second Quarter Financial Results
Net revenues were $1.54 billion. GAAP net income for the second quarter of fiscal year 2015 was $160 million, or $0.49 per share, compared to GAAP net income of $167 million, or $0.48 per share, for the comparable period of the prior year. Non-GAAP net income was $226 million, or $0.70 per share,2 compared to non-GAAP net income of $232 million, or $0.66 per share, for the comparable period of the prior year.
Cash, Cash Equivalents and Investments
NetApp ended the second quarter of fiscal year 2015 with $5.27 billion of total cash, cash equivalents and investments and during the quarter generated $381 million in cash from operations. The company returned $652 million to shareholders during the quarter through share repurchases and a cash dividend. The next dividend in the amount of $0.165 per share will be paid on January 22, 2015, to shareholders of record as of the close of business on January 9, 2015.
“We are pleased with our performance in the second quarter with revenue and non-GAAP EPS coming in above the mid-point of our guidance range,” said Tom Georgens, chairman and CEO. “We have dramatically expanded the NetApp portfolio at an unprecedented pace. Our best of breed solutions not only solve the challenges enterprises face today, but ensure a seamless path to the hybrid cloud that enables customers to effectively manage their data across multiple cloud resources.”
Q3 Fiscal Year 2015 Outlook
- Net revenues in the range of $1.56 billion to $1.66 billion
- GAAP earnings per share in the range of $0.52 to $0.57 per share
- Non-GAAP earnings per share in the range of $0.74 to $0.79 per share
Business Highlights
Delivers New Products:
- First Shipments of FlashRay Systems. The purpose-built all-flash storage array, is now shipping with the NetApp Mars OS which improves the performance, efficiency and manageability of all-flash storage architectures used in enterprise application environments.
- Object Storage for the Hybrid Cloud. StorageGRID Webscale object storage software helps organizations leverage the hybrid cloud and manage massive data-sets with reduced cost and secure data management.
- Software Defined Storage Accelerates and Improves cloud Performance. New OnCommand software enables improved monitoring of data center trends across environments flash-optimized FlexPod with VMware Horizon View for end-user computing helps reduce implementation risk and accelerate desktop deployments with a validated architecture.
Strengthens Partnerships:
Extends Alignment with VMware. NetApp and VMware continue their commitment to work together to accelerate hybrid cloud deployment and enable customers to better manage data across any cloud.
Recognition and Awards:
- #3 World’s Best Multinational Workplace. Innovation and teamwork give NetApp a competitive differentiator that enables the company to meet customers’ most challenging storage and data management needs.
- Best of Show for Flash Innovation. NetApp was awarded Best of Show Most Innovative Flash Memory Customer Implementation for its EF-Series all-flash-array deployment at Diamond Light Source. NetApp was also selected by IT pros in the annual SSD survey as the Market Leader favorite for all-flash NAS SSD
Comments
Revenue from 1FQ14 to 2FQ15 in $ Million
| Period | Revenue | Y/Y Growth |
| 1FQ14 | 1,516,2 | 5% |
| 2FQ14 | 1,549.9 | 1% |
| 3FQ14 | 1,610.0 | -1% |
| 4FQ14 | 1,649.0 | -4% |
| FY14 | 6,325.1 | -0% |
| 1FQ15 | 1,489.2 | -2% |
| 2FQ15 | 1,542.5 | -0% |
| 1H15 | 3,031.7 | -1% |
Fiscal 2Q15 revenue is up 4% sequentially and flat on a Y/Y basis.
Product revenue of $929 million was down 3% Y/Y while the combination of software entitlements and maintenance and services revenue of $613 million was up 3%. Branded revenue was 92% of net revenues for the quarter and, at $1.42 billion, was up 5% sequentially and up 2% Y/Y.
The attach rate of clustered ONTAP OS again increased across all of product lines during the quarter. It was 65% for high-end platforms and 50% for the mid-range. And the company sees acceleration in the low-end with attach rates more than doubling from 1Q15.
Total system units shipped increased 6% from 2Q14, with particularly strength in E-Series branded and all-flash FAS. Converged architecture solution FlexPod continues to perform well with shipments up 50% from last year.
OEM sales of $119 million declined 8% sequentially and 22% from the three-month period one year ago. Indirect revenue through the channels and OEMs accounted for 80% of 2Q15 net revenues and was down from last year due to declines in OEM business. Excluding OEM, indirect revenue was flat Y/Y.
Arrow and Avnet contributed 24% and 17% of net revenues, respectively.
Geographic performance included a 51% sequential and 8% Y/Y increase in U.S. public sector revenues, corresponding to the fiscal year end of the U.S. Government.
Target revenue range for next quarter implies between 1% and 8% sequential growth and once more roughly flat Y/Y.
Remember that the amount of FY14 revenue was approximately the same as in FY13 and will also probably be flat in FY15. In brief, NetApp is in a new dangerous trend, not going to grow during three years. Big rival EMC does a little better.
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