NetApp: Fiscal 4FQ23 Financial Results

NetApp, Inc. reported financial results for the fourth quarter and fiscal year 2023, which ended on April 28, 2023.

“Our sharpened focus and disciplined execution yielded solid Q4 results in a dynamic environment. Digital transformation projects involving business analytics, AI, data security, and application modernization, both on premises and in the cloud, remain top IT priorities,” said George Kurian, CEO. “We deliver significant value to customers on their transformation journeys with a modern approach to hybrid, multicloud infrastructure and data management. We are entering FY24 with substantial new innovations and a more focused operating model to better address the areas of priority spending. I am confident in our ability to drive long-term growth, extend our leadership position, and deliver increasing value for customers, partners, and shareholders.”

4FQ23 financial results
• Net revenue: $1.58 billion, compared to $1.68 billion in 4FQ22; a Y/Y decrease of 6%, or 4% in constant currency.

Hybrid Cloud segment revenue: $1.43 billion, compared to $1.56 billion in 4FQ22

Public Cloud segment revenue: $151 million, compared to $120 million in 4FQ22

• Billings: $1.67 billion, compared to $2.02 billion in 4FQ22; a Y/Y decrease of 17%, or 15% in constant currency.
• Public Cloud annualized revenue run rate (ARR): $620 million, compared to $505 million in 4FQ22; a Y/Y increase of 23%.
• All-flash array ARR: 4 $3.1 billion, compared to $3.2 billion in 4FQ22; a Y/Y decrease of 4%.
• Net income: GAAP net income of $245 million, compared to $259 million in 4FQ22; non-GAAP net income 5 of $334 million, compared to $324 million in 4FQ22. The Y/Y fluctuations in GAAP and Non-GAAP net income each include an unfavorable impact of approximately $18 million from foreign currency exchange rate changes.
• Earnings per share: GAAP net income per share 6 of $1.13 compared to $1.14 in 4FQ22; non-GAAP net income per share of $1.54 compared to $1.42 in 4FQ22. The Y/Y fluctuations in GAAP and Non-GAAP net income per share each include an unfavorable impact of approximately $0.08 from foreign currency exchange rate changes.
• Cash, cash equivalents and investments: $3.07 billion at the end of 4FQ23.
• Cash provided by operations: $235 million, compared to $411 million in 4FQ22.
• Share repurchase and dividends: Returned $256 million to shareholders through share repurchases and cash dividends.

FY23 financial results
• Net revenue: $6.36 billion, compared to $6.32 billion in FY22; a Y/Y increase of 1%, or 4% in constant currency.

Hybrid Cloud segment revenue: $5.79 billion, compared to $5.92 billion in FY22

Public Cloud segment revenue: $575 million, compared to $396 million in FY22

• Billings: $6.41 billion, compared to $6.70 billion in FY22, a Y/Y decrease of 4%, or 1% in constant currency.
• Net income: GAAP net income of $1.27 billion, compared to $937 million in FY22; non-GAAP net income of $1.23 billion, compared to $1.21 billion in FY22. The Y/Y fluctuations in GAAP and Non-GAAP net income each include an unfavorable impact of approximately $126 million from foreign currency exchange rate changes.
• Earnings per share: GAAP net income per share of $5.79 compared to $4.09 in FY22; non-GAAP net income per share of $5.59 compared to $5.28 in FY22. The Y/Y fluctuations in GAAP and non-GAAP net income per share each include an unfavorable impact of approximately $0.57 from foreign currency exchange rate changes.
• Cash provided by operations: $1.11 billion compared to $1.21 billion in FY22.
• Share repurchase and dividends: Returned $1.28 billion to shareholders through share repurchases and cash dividends.

1FQ24 outlook
Net revenues are expected to be in the range of $1.325 billion to $1.475 billion

FY24 outlook
Net revenues are expected to be down Y/Y in the low-to-mid single digits.