NetApp: Fiscal 2Q13 Financial Results

NetApp, Inc. reported results for the second quarter of fiscal year 2013, which ended October 26, 2012.

Revenues for the second quarter of fiscal year 2013 totaled $1.541 billion and were in line with prior guidance. Revenues for the same period a year ago totaled $1.507 billion.

For the second quarter of fiscal year 2013, GAAP net income was $110 million, or $0.30 per share, compared to GAAP net income of $166 million, or $0.44 per share for the same period a year ago. Non-GAAP net income for the second quarter of fiscal year 2013 was $189 million, or $0.51 per share,2 compared to non-GAAP net income of $236 million, or $0.63 per share for the same period a year ago.

Revenues for the first six months of fiscal year 2013 totaled $2.986 billion compared to revenues of $2.965 billion for the first six months of the prior fiscal year. GAAP net income for the first six months of fiscal year 2013 totaled $173 million, or $0.47 per share, compared to GAAP net income of $305 million, or $0.78 per share for the first six months of the prior fiscal year. Non-GAAP net income for the first six months of fiscal year 2013 totaled $345 million, or $0.93 per share, compared to non-GAAP net income of $458 million, or $1.17 per share for the first six months of the prior fiscal year.

"NetApp produced healthy financial results in the second quarter with revenue roughly at the midpoint of and EPS above our guidance range, despite a difficult environment. We saw a strong uptake of NetApp Data ONTAP 8 and clustered Data ONTAP, as customers are looking to build agile data infrastructure environments with intelligent data management, nearly unlimited scalability, and nondisruptive operations," said Tom Georgens, president and CEO. "We also saw momentum in our partnering strategy with continued FlexPod growth and a record high revenue contribution from Arrow and Avnet. Our focus on delivering best-of-breed storage solutions and the leverage we gain through go-to-market and channel partners will enable NetApp to grow our business and gain share."

NetApp also announces it will continue its share repurchase program with an additional $1.5 billion authorized. Under this program, NetApp can purchase shares of its outstanding common stock through open market and in privately negotiated transactions at prices deemed appropriate by management. The timing and amount of repurchase transactions under the program will depend on market conditions, corporate considerations, and regulatory requirements. The purchases will be funded from available working capital.

Outlook

• Revenue for the third quarter of fiscal year 2013 to be in the range of $1.575 billion to $1.675 billion.
• GAAP earnings per share for the third quarter of fiscal year 2013 to be approximately $0.29 to $0.34 per share. NetApp estimates non-GAAP earnings per share for the third quarter of fiscal year 2013 to be approximately $0.53 to $0.58 per share.
• Share count for the third quarter of fiscal year 2013 will decrease to approximately 365 million shares.

Business Highlights
NetApp continued to strengthen and extend its partner ecosystem by announcing new joint solutions and key integrations with industry leaders such as Cisco, Microsoft, VMware, Oracle, and Citrix that will help customers of all sizes accelerate their businesses. A foundational component to several of the new joint offerings is NetApp’s Data ONTAP storage OS.

Highlights include:
NetApp Announces Definitive Agreement to Acquire Cache IQ, Inc: NetApp has entered into a definitive agreement to acquire Cache IQ, Inc., a privately-held storage solutions company based in Austin, TX. The acquisition will provide NetApp with IP that extends its capabilities to support nondisruptive operations for enterprise data center environments. NetApp will integrate this IP into its product offerings over time. Financial terms of the acquisition are not being disclosed at this time.

Partner Integration Fuels Innovation for Customers

• NetApp and Cisco expand data center infrastructure solutions for midsized businesses to large enterprises. The FlexPod data center platform now features support and validation for VMware vSphere on NetApp clustered Data ONTAP to help organizations drive growth by adding nodes to their storage cluster creating large storage pools that span storage devices and can scale almost infinitely. The two companies also introduced ExpressPod, a prepackaged and tested solution for growing SMB organizations that require increased IT efficiency and simplicity. Celebrating its two-year anniversary, more than 1,500 organizations in 35 countries are accelerating their transition to the cloud with FlexPod. Additionally, more than 660 certified FlexPod Partners around the world are helping these customers deploy their infrastructures more quickly and easily.
• NetApp and Microsoft technology collaboration drives public, private, and hybrid cloud migration. NetApp announced support for Windows Server 2012 with storage solutions for server and desktop virtualization, storage and availability, Web and application platform development, and private cloud deployment. For organizations of any size and in any industry, this collaboration simplifies and accelerates how storage is pooled, provisioned, accessed, and managed in Windows environments.
• NetApp and VMware team up to accelerate customers’ transition to an agile data infrastructure. NetApp and VMware continue to build on their nearly 10 year partnership by unveiling integration between VMware vSphere 5.1 and NetApp clustered Data ONTAP. The integration will also enable customers to securely manage and deploy infinite storage pools and to deliver non-disruptive migration of data among hundreds of virtual machines at a time. Customers will be able to achieve continuous data access and uninterrupted business operations as their infrastructures grow and scale in capacity and performance.
• NetApp and Oracle integration helps customers reduce cost and complexity of managing business-critical applications. NetApp achieved Oracle Validated Integration of the NetApp Storage System Plug-In version 1.0 with Oracle Enterprise Manager 12c, extending the application-to-disk coverage of Oracle Enterprise Manager environments that include NetApp managed storage. As a result, customers will benefit from improved risk management and smoother upgrade capabilities, leading to lower TCO and greater overall satisfaction.
• NetApp and Citrix collaborate to simplify cloud storage. NetApp and Citrix announced an extension of their current collaboration aimed at accelerating the adoption of enterprise cloud deployments. The two companies will provide an integrated cloud orchestration and storage solution that will address storage automation, resource allocation, and virtual machine backup and recovery. The move simplifies cloud storage deployment for customers and will result in faster transitions to private and hybrid clouds.

NetApp Enhances Flash Portfolio and Ecosystem

• NetApp Flash Accel helps customers enhance application and server performance. NetApp introduced NetApp Flash Accel to speed customer application performance by turning server-side flash into a cache for storing ‘hot,’ frequently accessed data. From servers to their back-end storage, cost- and performance-conscious system architects can now balance how Flash is used within their organizations to maximize application performance, minimize rising IT costs, preserve HA, protect data, and simplify management. NetApp also expanded its Alliance Partner Program to embrace hardware and software server-caching partners looking to develop solutions with NetApp. This will provide the widest coverage for joint customers’ infrastructures as they deploy server-side caching to deliver increased ROI.
• NetApp signs technology reseller agreement with Fusion-io. As part of its commitment to providing customers with end-to-end Flash technologies, NetApp entered into a resale agreement with Fusion-io, a leader in Flash memory solutions. NetApp will continue to resell Fusion-io ioMemory platform products and two server caching software products: ioTurbine for virtualized environments and Direct Cache for non-virtualized environments.

NetApp Recognized for Its Culture and Innovative Spirit

• NetApp repeats as one of the world’s most innovative companies. For the second consecutive year, NetApp made Forbes magazine’s World’s Most Innovative Companies list for 2012. As the only storage vendor to make this year’s list, the recognition is a testament to NetApp’s 20 years of innovation and true innovative spirit which continues to thrive today to help customers and partners achieve great business outcomes.
• NetApp cements its standing as one of the world’s best places to work. NetApp was named the #3 best workplace in the world by the Great Place to Work Institute on November 13, 2012. It marks the second consecutive year that NetApp finished in the top 5 of this exclusive list and is a testament to the company’s unique workplace culture and commitment to employee excellence which help produce great results for NetApp customers and partners.