NetApp: Fiscal 4Q08 Financial Results

(in $ millions)	4Q07	4Q08	FY07	FY08
Revenues	801.2	937.7	2,804.3	3,303.2
*Growth*		17%		*18%*
Net income	89.6	89.8	297.7	309.7

NetApp, Inc. reported results for the fourth quarter of fiscal year 2008 ending on April 25, 2008. Revenues for the fourth fiscal quarter were $938 million, an increase of 17% compared to revenues of $801 million for the same period a year ago and an increase of 6% compared to $884 million in the prior quarter.

For the fourth fiscal quarter, GAAP net income was $90 million, or $0.26 per share compared to GAAP net income of $90 million, or $0.23 per share for the same period in the prior year. Non-GAAP net income for the fourth fiscal quarter was $131 million, or $0.38 per share, compared to non-GAAP net income of $114 million, or $0.30 per share for the same period a year ago.

Revenues for fiscal year 2008 totaled $3.3 billion, an increase of 18% compared to revenues of $2.8 billion for fiscal year 2007. For fiscal year 2008, GAAP net income increased 4% to $310 million, or $0.86 per share, compared to GAAP net income of $298 million, or $0.77 per share for fiscal year 2007. Non-GAAP net income for fiscal year 2008 increased 6% to $455 million, or $1.26 per share, compared to non-GAAP net income of $431 million, or $1.11 per share for fiscal year 2007.

"NetApp posted a strong finish to the fiscal year, ending the fourth quarter with 17% growth in revenue and 23% growth in storage systems," said Dan Warmenhoven, chairman and chief executive officer. "With solid performance from most areas around the world, customers continue to validate that NetApp provides them with comprehensive storage and data management solutions at the lowest cost of ownership in the industry."

Outlook

NetApp estimates revenue for the first quarter of fiscal year 2009 to be between $845 million and $875 million.
NetApp estimates that the first quarter fiscal year 2009 GAAP earnings per share will be approximately $0.09 to $0.13 per share. NetApp estimates first quarter fiscal year 2009 non-GAAP earnings per share to be approximately $0.20 to $0.23 per share.
As presented at their analyst day in March 2008, NetApp reiterates estimated revenue for the full fiscal year to be between $3.79 billion and $3.95 billion.
As presented at their analyst day in March 2008, NetApp reiterates estimated GAAP earnings per share for the full fiscal year to be approximately $0.92 to $0.98 per share and non-GAAP earnings per share to be approximately $1.40 to $1.46 per share.

Comments

Here are some abstracts of the NetApp 4Q08 Earnings Call Transcript:

"64% of total revenue came through indirect sources. We’re pleased to see our in direct channel continue to outpace our overall growth as a means for getting valuable and sustainable leverage for our partners. Arrow and Avnet had another record quarter growing to 18% of total revenue. IBM was below 5% this quarter reflecting the seasonally lighter first fiscal quarter. For the full fiscal year IBM contributed over 4% of revenue and brought us in to more than 900 new to NetApp accounts. As we highlighted at our analyst day, we expect IBM to grow to 6% of total revenue in fiscal year 09."

"Total petabytes increased 15% sequentially and marked our first quarter shipping over 200 petabytes."

"In terms of de-duplication with over 60,000 systems actively running de-duplication on over 100 petabytes of physical storage we believe we have the largest installed base in the industry."

"We hired 500 people this past quarter. We’re going to hire another 500 in the upcoming quarter."

Glenn Hanus, analyst at Needham and Company, asked the following question: "What about solid state?". Tom Georgens, NetApp president and COO, answered:
"I guess I could say stay tuned. I think solid state technology and flash technology is going to be relevant and increasingly so as time comes on and we attempt to incorporate that into our products and leverage it as appropriate. But I’m not going to pre-announce anything at this point."