NetApp
NetApp, Inc. (Form: 8-K, Received: 02/14/2018 19:20:22)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):   February 14, 2018

 

 

 

NetApp, Inc.

(Exact name of Registrant as specified in its charter)

 

Delaware

 

0-27130

 

77-0307520

(State or other jurisdiction of

incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

1395 Crossman Avenue

Sunnyvale, CA 94089

(Address of principal executive offices) (Zip Code)

 

(408) 822-6000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 


 


 

 

Item 2.02     Results of Operations and Financial Condition.

 

On February 14, 2018, NetApp, Inc. (“NetApp” or the “Company”) issued a press release reporting financial results for the third quarter ended January 26, 2018. The press release is furnished herewith as Exhibit 99.1, and is incorporated herein by reference. 

The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing. The information in this report, including the exhibits hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

 

Item 9.01     Financial Statements and Exhibits.

 

  (d) Exhibits.

 

 

 

 

 

 


 

 


 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

  NETAPP, INC.

 

  (Registrant)

 

 

 

February 14, 2018

By:

/s/ Matthew K. Fawcett

 

 

Matthew K. Fawcett

 

 

Senior Vice President, General Counsel and Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

 

NetApp Reports Third Quarter Fiscal Year 2018 Results

 

Net Revenues of $1.52 Billion Grew 8% Year-over-Year

 

 

Third Quarter Fiscal 2018 Highlights

Product revenue increased 17% year-over-year

 

All-flash array annualized net revenue run rate of $2.0 billion increased almost 50% year-over-year

 

Expanded Cloud Data Services with introduction of NetApp Cloud Volumes for AWS

 

Free cash flow was 25% of revenue and increased 104% year-over-year

 

 

Sunnyvale, Calif.—February 14, 2018— NetApp (NASDAQ: NTAP) today reported financial results for the third quarter fiscal year 2018, ended January 26, 2018.

“NetApp again delivered strong results in the third quarter with accelerating revenue and strong cash generation. It is rewarding to see the results of our improved execution as we transform NetApp to deliver sustained and profitable growth,” said George Kurian, chief executive officer. “We saw a solid demand environment and customer momentum, landing wins and footprint expansions with leading organizations in all geographies. With our Data Fabric Strategy and industry-leading solutions, we are winning new customers and expanding our business opportunity.”

 

 

Third Quarter Fiscal 2018 Financial Results

Net Revenues: $1.52 billion, increased 8% year-over-year from $1.40 billion in the third quarter of fiscal 2017

 

Net Income: GAAP net loss of $506 million*, compared to GAAP net income of $146 million in the third quarter of fiscal 2017; non-GAAP net income 1 of $273 million, compared to non-GAAP net income of $231 million in the third quarter of fiscal 2017

 

Earnings per Share: GAAP net loss per share 2 of $1.89*, compared to GAAP net income per share 3 of $0.52 in the third quarter of fiscal 2017; non-GAAP net income per share 4 of $0.99, compared to non-GAAP net income per share of $0.82 in the third quarter of fiscal 2017

 

Cash, Cash Equivalents and Investments: $5.6 billion at the end of the third quarter of fiscal 2018

 

Cash from Operations: $420 million, compared to $235 million in the third quarter of fiscal 2017

 


Share Repurchase and Dividend: Returned $203 million to shareholders through share repurchases and a cash dividend

 

*On December 22, 2017, The 2017 Tax Reform Reconciliation Act was enacted into law. This tax reform legislation contains several key tax provisions that affected the company, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the U.S. corporate income tax rate to 21% effective January 1, 2018, among others. GAAP net loss in the third quarter of fiscal 2018 includes a resulting one-time charge of $856 million.

 

 

Fourth Quarter Fiscal 2018 Financial Outlook

The Company provided the following financial guidance for the fourth quarter of fiscal year 2018:  

Net revenues are expected to be in the range of $1.525 billion to $1.675 billion

 

 

 

 

 

 

GAAP

Non-GAAP

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

$0.75–$0.83

$0.95–$1.03

 

 

Dividend  

Next cash dividend of $0.20 per share to be paid on April 25, 2018, to shareholders of record as of the close of business on April 6, 2018

 

 

 

Third Quarter Fiscal 2018 Business Highlights

New NetApp Product Updates and Offerings

New NetApp AltaVault software updates provide customers with faster ingest performance, multifactor authentication, increased security enhancements and Microsoft Azure Archive Blob Storage tier support.

NetApp introduces SnapMirror for SolidFire Element OS , which supports disparate system data movement from Element OS systems to ONTAP 9.3 systems, allowing companies to remain agile while still protecting their data.

NetApp Cloud Volumes for AWS enables both NFSv3 and NFSv4 with fully featured Snapshot™ copies and is available in cloud-only and hybrid cloud deployments, with integration into on-premises systems and seamless data migration and synchronization between on-premises and the cloud.


NetApp Enables Customers to Improve Their Business Performance

JFK Medical Center , part of the Hackensack Meridian Health Network, leverages NetApp technology to increase stability and reliability and achieve a higher performance level for its critical infrastructure.

Safelight leverages NetApp to transform the delivery of its auto glass services, surpass competitors, and expand its customer base during one of the worst recorded hurricane seasons.

NetApp Strengthens Partnerships

NetApp strengthens its 20-year partnership with Fujitsu by introducing the NFLEX™ converged infrastructure, which combines Fujitsu’s server PRIMERGY CX compute platform and NetApp ONTAP.

NetApp announces support for VMware Cloud on AWS to allow customers more flexibility when deploying ONTAP Cloud to deliver seamlessly integrated hybrid cloud architectures that extend on-premises vSphere environments to a VMware SDDC running on AWS elastic bare-metal infrastructure.

NetApp Strengthens Board and Leadership Team

NetApp strengthens its board of directors with two new members:

 

-

Deborah Kerr , who brings insights into how customers buy, deploy, manage, and use IT to NetApp; and

 

-

Scott Schenkel, CFO of eBay, who brings current C-level experience to NetApp’s board, with his understanding of the technology landscape and market forces, capital structure, and modern financial reporting

NetApp appoints Brad Anderson as SVP and GM of the NetApp Cloud Infrastructure business unit to help customers build out their next-generation data centers.

 

 

Webcast and Conference Call Information

NetApp will host a conference call to discuss these results today at 2:30 p.m. Pacific Time. To access the live webcast of this event, visit the NetApp Investor Relations website at investors.netapp.com . In addition, this press release, historical supplemental data tables, and other information related to the call will be posted on the Investor Relations website. An audio replay will also be available on the website after 4:30 p.m. Pacific Time today.

 

About NetApp

NetApp is the data authority for hybrid cloud. We provide a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with our partners, we empower global organizations to unleash the full potential of their data to expand customer touchpoints, foster greater innovation and optimize their operations. For more information, visit www.netapp.com . #DataDriven


 

“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, all of the statements made under the Fourth Quarter Fiscal 2018 Financial Outlook section, statements about our ability to deliver sustained and profitable growth as well as statements about winning new customers and expanding our business opportunity. All of these forward-looking statements involve risk and uncertainty. Actual results may differ materially from these statements for a variety of reasons, including, without limitation, general global political, macroeconomic and market conditions, changes in U.S. government spending, revenue seasonality and matters specific to our business, such as our ability to expand our total available market and grow our portfolio of products, customer demand for and acceptance of our products and services, our ability to successfully execute new business models, our ability to successfully execute on our Data Fabric strategy to generate profitable growth and stockholder return and our ability to manage our gross profit margins. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the factors described under the section titled “Risk Factors” in our most recently submitted reports on Form 10-Q and 10-K. We disclaim any obligation to update information contained in this press release whether as a result of new information, future events, or otherwise.

###

NetApp and the NetApp logo and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.

 

Footnotes

1 Non-GAAP net income excludes, when applicable, (a) amortization of intangible assets, (b) stock-based compensation expenses, (c) litigation settlements, (d) acquisition-related expenses, (e) restructuring charges, (f) asset impairments, (g) gains/losses on the sale of properties, and (h) our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. NetApp makes additional adjustments to the non-GAAP tax provision for certain tax matters as described below. A detailed reconciliation of our non-GAAP to GAAP results can be found at http://investors.netapp.com . NetApp’s management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance.

2 GAAP net loss per share is calculated using the basic number of shares and excludes common stock equivalents because the impact would be anti-dilutive.


3 GAAP net income per share is calculated using the diluted number of shares.

4 Non-GAAP net income per share is calculated using the diluted number of shares for all periods.

 

 

NetApp Usage of Non-GAAP Financial Information

To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in the United States (GAAP), NetApp provides investors with certain non-GAAP measures, including, but not limited to, historical non-GAAP operating results, non-GAAP net income, non-GAAP effective tax rate and free cash flow, and historical and projected non-GAAP earnings per diluted share.

NetApp believes that the presentation of non-GAAP net income, non-GAAP effective tax rates, and non-GAAP earnings per share data when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. NetApp believes that the presentation of free cash flow, which it defines as the net cash provided by operating activities less cash used to acquire property and equipment, to be a liquidity measure that provides useful information to management and investors because it reflects cash that can be used to, among other things, invest in its business, make strategic acquisitions, repurchase common stock, and pay dividends on its common stock. As free cash flow is not a measure of liquidity calculated in accordance with GAAP, free cash flow should be considered in addition to, but not as a substitute for, the analysis provided in the statement of cash flows.

NetApp’s management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance. These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results and (3) allow greater transparency with respect to information used by management in financial and operational decision making. 

NetApp excludes the following items from its non-GAAP measures when applicable:

A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its business combinations. The amortization of intangible assets varies depending on the level of acquisition activity. Management finds it useful to exclude these charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods and in measuring operational performance.

B. Stock-based compensation expenses. NetApp excludes stock-based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses. While management views stock-based


compensation as a key element of our employee retention and long-term incentives, we do not view it as an expense to be used in evaluating operational performance in any given period.

C. Litigation settlements. NetApp may periodically incur charges or benefits related to litigation settlements. NetApp excludes these charges and benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.

D. Acquisition-related expenses. NetApp excludes acquisition-related expenses, including (a) due diligence, legal and other one-time integration charges and (b) write down of assets acquired that NetApp does not intend to use in its ongoing business, from its non-GAAP measures, primarily because they are not related to our ongoing business or cost base and, therefore, cannot be relied upon for future planning and forecasting.

E. Restructuring charges. These charges consist of restructuring charges that are incurred based on the particular facts and circumstances of restructuring decisions, including employment and contractual settlement terms, and other related charges, and can vary in size and frequency. We therefore exclude them in our assessment of operational performance. 

F. Asset impairments. These are non-cash charges to write down assets when there is an indication that the asset has become impaired. Management finds it useful to exclude these non-cash charges due to the unpredictability of these events in its assessment of operational performance.

G. Gains/losses on the sale of properties. These are gains/losses from the sale of our properties. Management believes that these transactions do not reflect the results of our underlying, on-going business and, therefore, cannot be relied upon for future planning or forecasting.

H. Income tax adjustments . NetApp’s non-GAAP tax provision is based upon a projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-recurring book and/or tax accounting method changes, (c) tax charges that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) tax charges resulting from the integration of intellectual properties from acquisitions. Management believes that the use of non-GAAP tax provisions provides a more meaningful measure of the Company’s operational performance.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or


principles. NetApp believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. NetApp management compensates for these limitations by analyzing current and projected results on a GAAP basis as well as a non-GAAP basis. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures.

 

 


 

NETAPP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

 

 

January 26,

2018

 

 

April 28,

2017

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

5,619

 

 

$

4,921

 

Accounts receivable

 

 

754

 

 

 

731

 

Inventories

 

 

98

 

 

 

163

 

Other current assets

 

 

295

 

 

 

383

 

Total current assets

 

 

6,766

 

 

 

6,198

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

741

 

 

 

799

 

Goodwill and purchased intangible assets, net

 

 

1,845

 

 

 

1,815

 

Other non-current assets

 

 

435

 

 

 

681

 

Total assets

 

$

9,787

 

 

$

9,493

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

458

 

 

$

347

 

Accrued expenses

 

 

739

 

 

 

782

 

Commercial paper notes

 

 

632

 

 

 

500

 

Current portion of long-term debt

 

 

 

 

 

749

 

Short-term deferred revenue and financed unearned services revenue

 

 

1,719

 

 

 

1,744

 

Total current liabilities

 

 

3,548

 

 

 

4,122

 

Long-term debt

 

 

1,540

 

 

 

744

 

Other long-term liabilities

 

 

973

 

 

 

249

 

Long-term deferred revenue and financed unearned services revenue

 

 

1,550

 

 

 

1,598

 

Total liabilities

 

 

7,611

 

 

 

6,713

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

2,176

 

 

 

2,780

 

Total liabilities and stockholders' equity

 

$

9,787

 

 

$

9,493

 

 

 

 


 

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

January 26,

2018

 

 

January 27,

2017

 

 

January 26,

2018

 

 

January 27,

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

920

 

 

$

784

 

 

$

2,450

 

 

$

2,154

 

Software maintenance

 

 

237

 

 

 

240

 

 

 

711

 

 

 

723

 

Hardware maintenance and other services

 

 

366

 

 

 

380

 

 

 

1,109

 

 

 

1,161

 

Net revenues

 

 

1,523

 

 

 

1,404

 

 

 

4,270

 

 

 

4,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product

 

 

468

 

 

 

435

 

 

 

1,238

 

 

 

1,170

 

Cost of software maintenance

 

 

6

 

 

 

7

 

 

 

19

 

 

 

22

 

Cost of hardware maintenance and other services

 

 

108

 

 

 

111

 

 

 

336

 

 

 

369

 

Total cost of revenues

 

 

582

 

 

 

553

 

 

 

1,593

 

 

 

1,561

 

Gross profit

 

 

941

 

 

 

851

 

 

 

2,677

 

 

 

2,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

423

 

 

 

381

 

 

 

1,268

 

 

 

1,228

 

Research and development

 

 

193

 

 

 

181

 

 

 

580

 

 

 

588

 

General and administrative

 

 

72

 

 

 

64

 

 

 

209

 

 

 

201

 

Restructuring charges

 

 

 

 

 

52

 

 

 

 

 

 

52

 

Gain on sale of properties

 

 

(218

)

 

 

(10

)

 

 

(218

)

 

 

(10

)

Total operating expenses

 

 

470

 

 

 

668

 

 

 

1,839

 

 

 

2,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

471

 

 

 

183

 

 

 

838

 

 

 

418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

14

 

 

 

 

 

 

25

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

485

 

 

 

183

 

 

 

863

 

 

 

417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

991

 

 

 

37

 

 

 

1,058

 

 

 

98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(506

)

 

$

146

 

 

$

(195

)

 

$

319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.89

)

 

$

0.53

 

 

$

(0.72

)

 

$

1.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

(1.89

)

 

$

0.52

 

 

$

(0.72

)

 

$

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in net income (loss) per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

268

 

 

 

274

 

 

 

269

 

 

 

277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

268

 

 

 

281

 

 

 

269

 

 

 

282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.20

 

 

$

0.19

 

 

$

0.60

 

 

$

0.57

 

 

 

 


 

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

January 26,

2018

 

 

January 27,

2017

 

 

January 26,

2018

 

 

January 27,

2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(506

)

 

$

146

 

 

$

(195

)

 

$

319

 

Adjustments to reconcile net income (loss) to net cash

   provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

48

 

 

 

56

 

 

 

150

 

 

 

173

 

Stock-based compensation

 

 

38

 

 

 

46

 

 

 

125

 

 

 

149

 

Deferred income taxes

 

 

214

 

 

 

45

 

 

 

258

 

 

 

73

 

Gain on sale of properties

 

 

(218

)

 

 

(10

)

 

 

(218

)

 

 

(10

)

Other items, net

 

 

(3

)

 

 

7

 

 

 

(8

)

 

 

(8

)

Changes in assets and liabilities, net of acquisitions of businesses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(157

)

 

 

(56

)

 

 

(8

)

 

 

208

 

Inventories

 

 

10

 

 

 

(28

)

 

 

65

 

 

 

(27

)

Accounts payable

 

 

81

 

 

 

26

 

 

 

115

 

 

 

13

 

Accrued expenses

 

 

126

 

 

 

17

 

 

 

58

 

 

 

(121

)

Deferred revenue and financed unearned services

  revenue

 

 

81

 

 

 

31

 

 

 

(102

)

 

 

(148

)

Long-term taxes payable

 

 

721

 

 

 

(9

)

 

 

723

 

 

 

(16

)

Changes in other operating assets and liabilities, net

 

 

(15

)

 

 

(36

)

 

 

21

 

 

 

16

 

Net cash provided by operating activities

 

 

420

 

 

 

235

 

 

 

984

 

 

 

621

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redemptions (purchases) of investments, net

 

 

(226

)

 

 

(188

)

 

 

(178

)

 

 

2

 

Purchases of property and equipment

 

 

(32

)

 

 

(45

)

 

 

(97

)

 

 

(137

)

Proceeds from sale of properties

 

 

210

 

 

 

 

 

 

210

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

 

 

 

 

 

 

 

(75

)

 

 

 

Other investing activities, net

 

 

(6

)

 

 

3

 

 

 

(1

)

 

 

2

 

Net cash used in investing activities

 

 

(54

)

 

 

(230

)

 

 

(141

)

 

 

(133

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock under employee

  stock award plans

 

 

100

 

 

 

51

 

 

 

157

 

 

 

112

 

Payments for taxes related to net share settlement of stock

  awards

 

 

(7

)

 

 

(6

)

 

 

(67

)

 

 

(42

)

Repurchase of common stock

 

 

(150

)

 

 

(284

)

 

 

(450

)

 

 

(576

)

Proceeds from (repayments of) commercial paper notes,

  net

 

 

(86

)

 

 

392

 

 

 

132

 

 

 

392

 

Issuance of long-term debt, net

 

 

 

 

 

 

 

 

795

 

 

 

 

Repayment of short-term loan

 

 

 

 

 

 

 

 

 

 

 

(850

)

Repayment of long-term debt

 

 

(750

)

 

 

 

 

 

(750

)

 

 

 

Dividends paid

 

 

(53

)

 

 

(52

)

 

 

(161

)

 

 

(157

)

Other financing activities, net

 

 

(5

)

 

 

(4

)

 

 

(6

)

 

 

(7

)

Net cash provided by (used in) financing activities

 

 

(951

)

 

 

97

 

 

 

(350

)

 

 

(1,128

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

24

 

 

 

(2

)

 

 

37

 

 

 

(15

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(561

)

 

 

100

 

 

 

530

 

 

 

(655

)

Cash and cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of period

 

 

3,535

 

 

 

2,113

 

 

 

2,444

 

 

 

2,868

 

End of period

 

$

2,974

 

 

$

2,213

 

 

$

2,974

 

 

$

2,213

 

 

 

 


 

NETAPP, INC.

 

SUPPLEMENTAL DATA

 

(In millions except net income per share, percentages, DSO, DIO, DPO, CCC and Inventory Turns)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 FY'18

 

 

Q2 FY'18

 

 

Q3 FY'17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

920

 

 

$

807

 

 

$

784

 

Strategic

 

$

647

 

 

$

557

 

 

$

512

 

Mature

 

$

273

 

 

$

250

 

 

$

272

 

Software Maintenance

 

$

237

 

 

$

240

 

 

$

240

 

Hardware Maintenance and Other Services

 

$

366

 

 

$

375

 

 

$

380

 

Hardware Maintenance Support Contracts

 

$

299

 

 

$

306

 

 

$

313

 

Professional and Other Services

 

$

67

 

 

$

69

 

 

$

67

 

Net Revenues

 

$

1,523

 

 

$

1,422

 

 

$

1,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Geographic Mix

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Q3 FY'18 Revenue

 

 

% of Q2 FY'18 Revenue

 

 

% of Q3 FY'17 Revenue

 

Americas

 

 

54

%

 

 

56

%

 

 

55

%

Americas Commercial

 

 

44

%

 

 

40

%

 

 

44

%

U.S. Public Sector

 

 

10

%

 

 

16

%

 

 

10

%

EMEA

 

 

32

%

 

 

30

%

 

 

33

%

Asia Pacific

 

 

14

%

 

 

14

%

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathways Mix

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Q3 FY'18 Revenue

 

 

% of Q2 FY'18 Revenue

 

 

% of Q3 FY'17 Revenue

 

Direct

 

 

22

%

 

 

22

%

 

 

21

%

Indirect

 

 

78

%

 

 

78

%

 

 

79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Gross Margins

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 FY'18

 

 

Q2 FY'18

 

 

Q3 FY'17

 

Non-GAAP Gross Margin

 

 

62.6

%

 

 

64.3

%

 

 

61.5

%

Product

 

 

50.2

%

 

 

51.8

%

 

 

45.7

%

Software Maintenance

 

 

97.5

%

 

 

97.5

%

 

 

97.1

%

Hardware Maintenance and Other Services

 

 

71.3

%

 

 

69.9

%

 

 

71.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Income from Operations, Income before Income Taxes & Effective Tax Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 FY'18

 

 

Q2 FY'18

 

 

Q3 FY'17

 

Non-GAAP Income from Operations

 

$

310

 

 

$

272

 

 

$

284

 

% of Net Revenues

 

 

20.4

%

 

 

19.1

%

 

 

20.2

%

Non-GAAP Income before Income Taxes

 

$

324

 

 

$

278

 

 

$

284

 

Non-GAAP Effective Tax Rate

 

 

15.7

%