NetApp Reports Third Quarter of Fiscal Year 2020 Results
Solid Margins, Cash Flow and Operating Leverage
-
All-flash array annualized net revenue run rate of
$2.3 billion increased 7% quarter-over-quarter -
NetApp ™ cloud data services annualized recurring revenue of approximately$83 million , an increase of 146% year-over-year - Consolidated GAAP gross margin of 67.0%, non-GAAP gross margin of 67.8%*
-
$420 million in cash from operations;$388 million in free cash flow -
$608 million returned to shareholders in share repurchases and cash dividends
*Note:NetApp had no ELA revenue in Q3
“Our third quarter results, highlighted by strong gross margins, cash flow and operating leverage, reflect our continued operational discipline. Customers are on a journey to the cloud and are looking to
Third Quarter of Fiscal Year 2020 Financial Results
-
Net Revenues:
$1.40 billion , compared to$1.56 billion in the third quarter of fiscal 2019 -
Net Income: GAAP net income of
$277 million , compared to GAAP net incomeof$249 million in the third quarter of fiscal 2019; non-GAAP net income1 of$265 million , compared to non-GAAP net income of$305 million in the third quarter of fiscal 2019 -
Earnings per Share: GAAP net income per share2 of
$1.21 compared to GAAP net income per share of$0.98 in the third quarter of fiscal 2019; non-GAAP net income per share of$1.16 , compared to non-GAAP net income per share of$1.20 in the third quarter of fiscal 2019 -
Cash, Cash Equivalents and Investments:
$3.0 billion at the end of the third quarter of fiscal 2020 -
Cash Provided by Operations:
$420 million , compared to$451 million in the third quarter of fiscal 2019 -
Share Repurchase and Dividend: Returned
$608 million to shareholders through share repurchases and cash dividends
Organizational Update
Fourth Quarter of Fiscal Year 2020 Financial Outlook
The Company provided the following financial guidance for the fourth quarter of fiscal year 2020:
|
$1.455 billion to $1.605 billion |
|||
|
GAAP |
NonGAAP |
||
|
$01.11 - $1.19 |
$1.28 - $1.36 |
Full Fiscal Year 2020 Financial Outlook
The Company updated the following financial guidance for the full fiscal year 2020:
|
||||
|
GAAP |
Non-GAAP |
||
|
66% - 67% |
67% - 68% |
||
|
~18% |
~21% |
||
|
Dividend
Next cash dividend of
Third Quarter of Fiscal Year 2020 Business Highlights
Consistently Delivering Groundbreaking Innovations
-
NetApp announced its reinvention of the customer experience with the NetApp Keystone™ program which offers a range of flexible solutions for customers, whether they choose to build or to buy their cloud infrastructure, on or off their premises. -
To meet the increasing demand for object storage,
NetApp announced new NetApp StorageGRID™ enhancements: StorageGRID 11.3 software, SGF6024 all-flash appliance, SG6060 expansion appliance, SG1000 service appliance, and StorageGRID tiering to Azure Blob storage. -
NetApp Cloud Manager 3.7.5 (formerly OnCommand™ Cloud Manager) offers new features and tighter integration with the
NetApp cloud portfolio which enables customers to get more out of their data. -
NetApp enhancedNetApp Cloud Volumes ONTAP™ for AWS with newNetApp Cloud Backup Service, the newNetApp Cloud Compliance service, and the ability to leverage NVMe flash available on virtual compute instances. -
NetApp has expanded its multiprotocol file services to encompass NFSv4.1, NFSv3, and SMB for both Azure NetApp Files and NetApp Cloud Volumes Service for AWS. With this expansion,NetApp now delivers the widest range of support for Microsoft Windows and Linux workloads. -
NetApp introduced new storage systems: theNetApp AFF A400 end-to-end NVMe all-flash system, theNetApp FAS8700 high-end hybrid flash array, and the FAS8300 next-generation midrange hybrid flash array. - NetApp ONTAP 9.7 offers expanded integration of hybrid cloud, with seamless and efficient migration of tiered data between private and public clouds by using FabricPool, symmetric active-active host-to-LUN access, and extended scale-out NAS deployments.
-
Three new features for
NetApp Cloud Insights were announced, including Kubernetes Topology Visualization,NetApp Cloud Secure Insider Threat Detection, andNetApp Active IQ™ Integration. - NetApp Active IQ Unified Manager 9.7 (formerly OnCommand Unified Manager) delivers enhanced simplicity, automation, active management, and virtualization layer monitoring and reporting, along with strengthened dark site support.
-
With the release of
NetApp ONTAP Select 9.7,NetApp has introduced support for software RAID configurations backed by NVMe drives. -
NetApp announced that NFS-based NetApp Cloud Volumes has been added to its cloud services offerings on premises in preview mode.
Growing Partnerships and Distinguished Awards
-
NetApp and Google Cloud announced an expanded partnership, including the general availability of NetApp Cloud Volumes ONTAP and Cloud Volumes Service for Google Cloud. The expansion also includes the availability of Cloud Volumes Service in theU.K. region and support for Anthos on Cloud Volumes ONTAP, Cloud Volumes Service, and NetApp HCI. -
Enterprise Networking Solutions, Inc. (ENS-Inc .) was granted a 3-year contract by theState of California Department of General Services to deliverNetApp data center modernization and hybrid cloud infrastructure solutions to theState of California . -
NetApp andNVIDIA unveiled the NVIDIA DGX SuperPOD, which helps simplify supercomputing and enables AI for high-performance computing (HPC) teams.NetApp andNVIDIA also announced their collaboration on the NVIDIA Magnum IO, a multi-GPU, multinode networking and storage I/O optimization stack. -
NetApp was named a leader of Scale-Out NAS (File-Based Storage) in the IDC MarketScape: Worldwide Scale-Out File-Based Storage 2019 Vendor Assessment.3 -
NetApp was again named a leader in object storage in the IDC MarketScape: Worldwide Object-Based Storage 2019 Vendor Assessment.4
-
NetApp appointedJames Whitemore as the Company’s senior vice president and chief marketing officer, reporting to CEOGeorge Kurian . -
NetApp appointedKim Stevenson as senior vice president and general manager of the NetApp Foundational Data Services business unit, reporting toBrad Anderson .
Webcast and Conference Call Information
About
“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 in the Fourth Quarter of Fiscal Year 2020 Financial Outlook and the Full Fiscal Year 2020 Financial Outlook sections, and statements about our opportunity ahead, our ability to replicate our proven areas of success, and our ability to position the company for long-term growth. 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
Footnotes
1Non-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 or derecognition of assets, 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.
2GAAP net income per share and non-GAAP net income per share are calculated using the diluted number of shares.
3
4
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
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.
A. Amortization of intangible assets.
B. Stock-based compensation expenses.
C. Litigation settlements.
D. Acquisition-related expenses.
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 or derecognition of assets. These are gains/losses from the sale of our properties and other transactions in which we transfer control of assets to a third party. 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, statute lapses 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 property 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, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In millions) |
||||||||
(Unaudited) |
||||||||
|
|
January 24, 2020 |
|
|
April 26, 2019 |
|
||
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash, cash equivalents and investments |
|
$ |
3,008 |
|
|
$ |
3,899 |
|
Accounts receivable |
|
|
821 |
|
|
|
1,216 |
|
Inventories |
|
|
113 |
|
|
|
131 |
|
Other current assets |
|
|
276 |
|
|
|
364 |
|
Total current assets |
|
|
4,218 |
|
|
|
5,610 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
740 |
|
|
|
759 |
|
Goodwill and purchased intangible assets, net |
|
|
1,813 |
|
|
|
1,782 |
|
Other non-current assets |
|
|
712 |
|
|
|
590 |
|
Total assets |
|
$ |
7,483 |
|
|
$ |
8,741 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
381 |
|
|
$ |
542 |
|
Accrued expenses |
|
|
660 |
|
|
|
851 |
|
Commercial paper notes |
|
|
693 |
|
|
|
249 |
|
Current portion of long-term debt |
|
|
— |
|
|
|
400 |
|
Short-term deferred revenue and financed unearned services revenue |
|
|
1,795 |
|
|
|
1,825 |
|
Total current liabilities |
|
|
3,529 |
|
|
|
3,867 |
|
Long-term debt |
|
|
1,146 |
|
|
|
1,144 |
|
Other long-term liabilities |
|
|
748 |
|
|
|
797 |
|
Long-term deferred revenue and financed unearned services revenue |
|
|
1,778 |
|
|
|
1,843 |
|
Total liabilities |
|
|
7,201 |
|
|
|
7,651 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
282 |
|
|
|
1,090 |
|
Total liabilities and stockholders' equity |
|
$ |
7,483 |
|
|
$ |
8,741 |
|
NETAPP, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In millions, except per share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
January 24, 2020 |
|
|
January 25, 2019 |
|
|
January 24, 2020 |
|
|
January 25, 2019 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
787 |
|
|
$ |
967 |
|
|
$ |
2,202 |
|
|
$ |
2,755 |
|
Software maintenance |
|
|
263 |
|
|
|
239 |
|
|
|
767 |
|
|
|
704 |
|
Hardware maintenance and other services |
|
|
354 |
|
|
|
357 |
|
|
|
1,042 |
|
|
|
1,095 |
|
Net revenues |
|
|
1,404 |
|
|
|
1,563 |
|
|
|
4,011 |
|
|
|
4,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product |
|
|
360 |
|
|
|
469 |
|
|
|
1,013 |
|
|
|
1,295 |
|
Cost of software maintenance |
|
|
12 |
|
|
|
10 |
|
|
|
33 |
|
|
|
25 |
|
Cost of hardware maintenance and other services |
|
|
91 |
|
|
|
102 |
|
|
|
283 |
|
|
|
315 |
|
Total cost of revenues |
|
|
463 |
|
|
|
581 |
|
|
|
1,329 |
|
|
|
1,635 |
|
Gross profit |
|
|
941 |
|
|
|
982 |
|
|
|
2,682 |
|
|
|
2,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
402 |
|
|
|
401 |
|
|
|
1,196 |
|
|
|
1,218 |
|
Research and development |
|
|
211 |
|
|
|
203 |
|
|
|
635 |
|
|
|
622 |
|
General and administrative |
|
|
60 |
|
|
|
67 |
|
|
|
200 |
|
|
|
209 |
|
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
21 |
|
|
|
19 |
|
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
— |
|
|
|
(38 |
) |
|
|
— |
|
Total operating expenses |
|
|
673 |
|
|
|
671 |
|
|
|
2,014 |
|
|
|
2,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
268 |
|
|
|
311 |
|
|
|
668 |
|
|
|
851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
8 |
|
|
|
8 |
|
|
|
26 |
|
|
|
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
276 |
|
|
|
319 |
|
|
|
694 |
|
|
|
884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for income taxes |
|
|
(1 |
) |
|
|
70 |
|
|
|
71 |
|
|
|
111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
277 |
|
|
$ |
249 |
|
|
$ |
623 |
|
|
$ |
773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.23 |
|
|
$ |
1.00 |
|
|
$ |
2.67 |
|
|
$ |
3.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
1.21 |
|
|
$ |
0.98 |
|
|
$ |
2.64 |
|
|
$ |
2.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in net income per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
226 |
|
|
|
250 |
|
|
|
233 |
|
|
|
257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
229 |
|
|
|
255 |
|
|
|
236 |
|
|
|
263 |
|
NETAPP, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||
(In millions) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
January 24, 2020 |
|
|
January 25, 2019 |
|
|
January 24, 2020 |
|
|
January 25, 2019 |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
277 |
|
|
$ |
249 |
|
|
$ |
623 |
|
|
$ |
773 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
47 |
|
|
|
51 |
|
|
|
146 |
|
|
|
149 |
|
Non-cash operating lease cost |
|
|
13 |
|
|
|
— |
|
|
|
39 |
|
|
|
— |
|
Stock-based compensation |
|
|
36 |
|
|
|
43 |
|
|
|
118 |
|
|
|
121 |
|
Deferred income taxes |
|
|
— |
|
|
|
4 |
|
|
|
(23 |
) |
|
|
(21 |
) |
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
— |
|
|
|
(38 |
) |
|
|
— |
|
Other items, net |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(16 |
) |
|
|
8 |
|
Changes in assets and liabilities, net of acquisitions of businesses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(41 |
) |
|
|
(104 |
) |
|
|
394 |
|
|
|
165 |
|
Inventories |
|
|
(2 |
) |
|
|
(14 |
) |
|
|
18 |
|
|
|
22 |
|
Accounts payable |
|
|
(1 |
) |
|
|
26 |
|
|
|
(158 |
) |
|
|
(101 |
) |
Accrued expenses |
|
|
42 |
|
|
|
77 |
|
|
|
(273 |
) |
|
|
(85 |
) |
Deferred revenue and financed unearned services revenue |
|
|
104 |
|
|
|
146 |
|
|
|
(93 |
) |
|
|
17 |
|
Long-term taxes payable |
|
|
(84 |
) |
|
|
3 |
|
|
|
(133 |
) |
|
|
(60 |
) |
Changes in other operating assets and liabilities, net |
|
|
32 |
|
|
|
(27 |
) |
|
|
73 |
|
|
|
(46 |
) |
Net cash provided by operating activities |
|
|
420 |
|
|
|
451 |
|
|
|
677 |
|
|
|
942 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemptions of investments, net |
|
|
142 |
|
|
|
172 |
|
|
|
1,288 |
|
|
|
661 |
|
Purchases of property and equipment |
|
|
(32 |
) |
|
|
(31 |
) |
|
|
(100 |
) |
|
|
(138 |
) |
Proceeds from sale of properties |
|
|
— |
|
|
|
— |
|
|
|
96 |
|
|
|
— |
|
Acquisitions of businesses, net of cash acquired |
|
|
— |
|
|
|
— |
|
|
|
(56 |
) |
|
|
(3 |
) |
Other investing activities, net |
|
|
1 |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
1 |
|
Net cash provided by investing activities |
|
|
111 |
|
|
|
140 |
|
|
|
1,227 |
|
|
|
521 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock under employee stock award plans |
|
|
47 |
|
|
|
53 |
|
|
|
102 |
|
|
|
118 |
|
Payments for taxes related to net share settlement of stock awards |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(77 |
) |
|
|
(92 |
) |
Repurchase of common stock |
|
|
(500 |
) |
|
|
(550 |
) |
|
|
(1,250 |
) |
|
|
(1,611 |
) |
Proceeds from (repayments of) commercial paper notes, net |
|
|
194 |
|
|
|
(86 |
) |
|
|
443 |
|
|
|
(221 |
) |
Repayment of long-term debt |
|
|
— |
|
|
|
— |
|
|
|
(400 |
) |
|
|
— |
|
Dividends paid |
|
|
(108 |
) |
|
|
(99 |
) |
|
|
(334 |
) |
|
|
(306 |
) |
Other financing activities, net |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
Net cash used in financing activities |
|
|
(372 |
) |
|
|
(688 |
) |
|
|
(1,520 |
) |
|
|
(2,117 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
1 |
|
|
|
8 |
|
|
|
(4 |
) |
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
160 |
|
|
|
(89 |
) |
|
|
380 |
|
|
|
(671 |
) |
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
2,551 |
|
|
|
2,365 |
|
|
|
2,331 |
|
|
|
2,947 |
|
End of period |
|
$ |
2,711 |
|
|
$ |
2,276 |
|
|
$ |
2,711 |
|
|
$ |
2,276 |
|
NETAPP, INC. |
||||||||||||
SUPPLEMENTAL DATA |
||||||||||||
(In millions except net income per share, percentages, DSO, DIO, DPO, CCC and Inventory Turns) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY'20 |
|
|
Q2 FY'20 |
|
|
Q3 FY'19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
787 |
|
|
$ |
771 |
|
|
$ |
967 |
|
Strategic* |
|
$ |
483 |
|
|
$ |
442 |
|
|
$ |
517 |
|
Mature* |
|
$ |
304 |
|
|
$ |
329 |
|
|
$ |
450 |
|
Software Maintenance |
|
$ |
263 |
|
|
$ |
254 |
|
|
$ |
239 |
|
Hardware Maintenance and Other Services |
|
$ |
354 |
|
|
$ |
346 |
|
|
$ |
357 |
|
Hardware Maintenance Support Contracts |
|
$ |
293 |
|
|
$ |
286 |
|
|
$ |
292 |
|
Professional and Other Services |
|
$ |
61 |
|
|
$ |
60 |
|
|
$ |
65 |
|
Net Revenues |
|
$ |
1,404 |
|
|
$ |
1,371 |
|
|
$ |
1,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* In Q1 FY’20 we made changes to the products and solutions contained in each of the Strategic and Mature product groupings. Strategic now includes All-flash FAS products, including all related add-on hardware and OS software, private cloud solutions, enterprise software license agreements and other optional add-on software products. Mature now includes Hybrid FAS products, including all related add-on hardware and OS software, OEM products, and branded E-Series. Prior to this change, Hybrid FAS and branded E-Series were included in Strategic, while all add-on hardware and OS software were included in Mature. For comparability, Strategic and Mature revenues presented for the prior year period have been recast based on the revised groupings. |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Mix |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Q3
|
|
|
% of Q2 FY'20
|
|
|
% of Q3
|
|
|||
Americas |
|
|
50 |
% |
|
|
56 |
% |
|
|
52 |
% |
Americas Commercial |
|
|
39 |
% |
|
|
42 |
% |
|
|
41 |
% |
U.S. Public Sector |
|
|
11 |
% |
|
|
14 |
% |
|
|
11 |
% |
EMEA |
|
|
35 |
% |
|
|
29 |
% |
|
|
33 |
% |
Asia Pacific |
|
|
15 |
% |
|
|
14 |
% |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pathways Mix |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Q3
|
|
|
% of Q2 FY'20
|
|
|
% of Q3
|
|
|||
Direct |
|
|
21 |
% |
|
|
21 |
% |
|
|
19 |
% |
Indirect |
|
|
79 |
% |
|
|
79 |
% |
|
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY'20 |
|
|
Q2 FY'20 |
|
|
Q3 FY'19 |
|
|||
Non-GAAP Gross Margin |
|
|
67.8 |
% |
|
|
68.6 |
% |
|
|
63.7 |
% |
Product |
|
|
55.4 |
% |
|
|
57.3 |
% |
|
|
52.6 |
% |
Software Maintenance |
|
|
95.4 |
% |
|
|
95.7 |
% |
|
|
95.8 |
% |
Hardware Maintenance and Other Services |
|
|
74.9 |
% |
|
|
73.7 |
% |
|
|
72.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income from Operations, Income before Income Taxes & Effective Tax Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY'20 |
|
|
Q2 FY'20 |
|
|
Q3 FY'19 |
|
|||
Non-GAAP Income from Operations |
|
$ |
312 |
|
|
$ |
309 |
|
|
$ |
367 |
|
% of Net Revenues |
|
|
22.2 |
% |
|
|
22.5 |
% |
|
|
23.5 |
% |
Non-GAAP Income before Income Taxes |
|
$ |
320 |
|
|
$ |
312 |
|
|
$ |
375 |
|
Non-GAAP Effective Tax Rate |
|
|
17.2 |
% |
|
|
17.6 |
% |
|
|
18.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY'20 |
|
|
Q2 FY'20 |
|
|
Q3 FY'19 |
|
|||
Non-GAAP Net Income |
|
$ |
265 |
|
|
$ |
257 |
|
|
$ |
305 |
|
Non-GAAP Weighted Average Common Shares Outstanding, Diluted |
|
|
229 |
|
|
|
236 |
|
|
|
255 |
|
Non-GAAP Income per Share, Diluted |
|
$ |
1.16 |
|
|
$ |
1.09 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Balance Sheet Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY'20 |
|
|
Q2 FY'20 |
|
|
Q3 FY'19 |
|
|||
Deferred Revenue and Financed Unearned Services Revenue |
|
$ |
3,573 |
|
|
$ |
3,468 |
|
|
$ |
3,357 |
|
DSO (days) |
|
|
53 |
|
|
|
52 |
|
|
|
51 |
|
DIO (days) |
|
|
22 |
|
|
|
23 |
|
|
|
16 |
|
DPO (days) |
|
|
75 |
|
|
|
78 |
|
|
|
78 |
|
CCC (days) |
|
|
1 |
|
|
|
(4 |
) |
|
|
(11 |
) |
Inventory Turns |
|
|
16 |
|
|
|
16 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days sales outstanding (DSO) is defined as accounts receivable divided by net revenues, multiplied by the number of days in the quarter. |
|
|||||||||||
Days inventory outstanding (DIO) is defined as net inventories divided by cost of revenues, multiplied by the number of days in the quarter. |
|
|||||||||||
Days payables outstanding (DPO) is defined as accounts payable divided by cost of revenues, multiplied by the number of days in the quarter. |
|
|||||||||||
Cash conversion cycle (CCC) is defined as DSO plus DIO minus DPO. |
|
|||||||||||
Inventory turns is defined as annualized cost of revenues divided by net inventories. |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Cash Flow Statement Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY'20 |
|
|
Q2 FY'20 |
|
|
Q3 FY'19 |
|
|||
Net Cash Provided by (used in) Operating Activities |
|
$ |
420 |
|
|
$ |
(53 |
) |
|
$ |
451 |
|
Purchases of Property and Equipment |
|
$ |
32 |
|
|
$ |
36 |
|
|
$ |
31 |
|
Free Cash Flow |
|
$ |
388 |
|
|
$ |
(89 |
) |
|
$ |
420 |
|
Free Cash Flow as a % of Net Revenues |
|
|
27.6 |
% |
|
|
(6.5 |
)% |
|
|
26.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities less purchases of property and equipment. |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Some items may not add or recalculate due to rounding. |
|
NETAPP, INC. |
||||||||||||
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
INCOME STATEMENT INFORMATION |
||||||||||||
(In millions, except net income per share amounts) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
277 |
|
|
$ |
243 |
|
|
$ |
249 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
8 |
|
|
|
11 |
|
|
|
13 |
|
Stock-based compensation |
|
|
36 |
|
|
|
40 |
|
|
|
43 |
|
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
(38 |
) |
|
|
— |
|
Income tax effects |
|
|
(6 |
) |
|
|
1 |
|
|
|
— |
|
Resolution of income tax matters |
|
|
(50 |
) |
|
|
— |
|
|
|
— |
|
NON-GAAP NET INCOME |
|
$ |
265 |
|
|
$ |
257 |
|
|
$ |
305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES |
|
$ |
463 |
|
|
$ |
446 |
|
|
$ |
581 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
(10 |
) |
Stock-based compensation |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
NON-GAAP COST OF REVENUES |
|
$ |
452 |
|
|
$ |
431 |
|
|
$ |
567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF PRODUCT REVENUES |
|
$ |
360 |
|
|
$ |
341 |
|
|
$ |
469 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
(10 |
) |
Stock-based compensation |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
NON-GAAP COST OF PRODUCT REVENUES |
|
$ |
351 |
|
|
$ |
329 |
|
|
$ |
458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF HARDWARE MAINTENANCE AND OTHER SERVICES REVENUES |
|
$ |
91 |
|
|
$ |
94 |
|
|
$ |
102 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
NON-GAAP COST OF HARDWARE MAINTENANCE AND OTHER SERVICES REVENUES |
|
$ |
89 |
|
|
$ |
91 |
|
|
$ |
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
$ |
941 |
|
|
$ |
925 |
|
|
$ |
982 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
8 |
|
|
|
11 |
|
|
|
10 |
|
Stock-based compensation |
|
|
3 |
|
|
|
4 |
|
|
|
4 |
|
NON-GAAP GROSS PROFIT |
|
$ |
952 |
|
|
$ |
940 |
|
|
$ |
996 |
|
NETAPP, INC. |
||||||||||||
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
INCOME STATEMENT INFORMATION |
||||||||||||
(In millions, except net income per share amounts) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES AND MARKETING EXPENSES |
|
$ |
402 |
|
|
$ |
389 |
|
|
$ |
401 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Stock-based compensation |
|
|
(15 |
) |
|
|
(17 |
) |
|
|
(19 |
) |
NON-GAAP SALES AND MARKETING EXPENSES |
|
$ |
387 |
|
|
$ |
372 |
|
|
$ |
379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESEARCH AND DEVELOPMENT EXPENSES |
|
$ |
211 |
|
|
$ |
209 |
|
|
$ |
203 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(13 |
) |
|
|
(13 |
) |
|
|
(13 |
) |
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES |
|
$ |
198 |
|
|
$ |
196 |
|
|
$ |
190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENERAL AND ADMINISTRATIVE EXPENSES |
|
$ |
60 |
|
|
$ |
69 |
|
|
$ |
67 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(5 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSES |
|
$ |
55 |
|
|
$ |
63 |
|
|
$ |
60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIN ON SALE OR DERECOGNITION OF ASSETS |
|
$ |
— |
|
|
$ |
(38 |
) |
|
$ |
— |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
38 |
|
|
|
— |
|
NON-GAAP GAIN ON SALE OR DERECOGNITION OF ASSETS |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
$ |
673 |
|
|
$ |
629 |
|
|
$ |
671 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
Stock-based compensation |
|
|
(33 |
) |
|
|
(36 |
) |
|
|
(39 |
) |
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
38 |
|
|
|
— |
|
NON-GAAP OPERATING EXPENSES |
|
$ |
640 |
|
|
$ |
631 |
|
|
$ |
629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NETAPP, INC. |
||||||||||||
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
INCOME STATEMENT INFORMATION |
||||||||||||
(In millions, except net income per share amounts) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS |
|
$ |
268 |
|
|
$ |
296 |
|
|
$ |
311 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
8 |
|
|
|
11 |
|
|
|
13 |
|
Stock-based compensation |
|
|
36 |
|
|
|
40 |
|
|
|
43 |
|
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
(38 |
) |
|
|
— |
|
NON-GAAP INCOME FROM OPERATIONS |
|
$ |
312 |
|
|
$ |
309 |
|
|
$ |
367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
$ |
276 |
|
|
$ |
299 |
|
|
$ |
319 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
8 |
|
|
|
11 |
|
|
|
13 |
|
Stock-based compensation |
|
|
36 |
|
|
|
40 |
|
|
|
43 |
|
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
(38 |
) |
|
|
— |
|
NON-GAAP INCOME BEFORE INCOME TAXES |
|
$ |
320 |
|
|
$ |
312 |
|
|
$ |
375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION (BENEFIT) FOR INCOME TAXES |
|
$ |
(1 |
) |
|
$ |
56 |
|
|
$ |
70 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effects |
|
|
6 |
|
|
|
(1 |
) |
|
|
— |
|
Resolution of income tax matters |
|
|
50 |
|
|
|
— |
|
|
|
— |
|
NON-GAAP PROVISION FOR INCOME TAXES |
|
$ |
55 |
|
|
$ |
55 |
|
|
$ |
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE |
|
$ |
1.21 |
|
|
$ |
1.03 |
|
|
$ |
0.98 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
0.03 |
|
|
|
0.05 |
|
|
|
0.05 |
|
Stock-based compensation |
|
|
0.16 |
|
|
|
0.17 |
|
|
|
0.17 |
|
Gain on sale or derecognition of assets |
|
|
— |
|
|
|
(0.16 |
) |
|
|
— |
|
Income tax effects |
|
|
(0.03 |
) |
|
|
— |
|
|
|
— |
|
Resolution of income tax matters |
|
|
(0.22 |
) |
|
|
— |
|
|
|
— |
|
NON-GAAP NET INCOME PER SHARE |
|
$ |
1.16 |
|
|
$ |
1.09 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
GROSS MARGIN |
||||||||||||
($ in millions) |
||||||||||||
|
|
|
|
|||||||||
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin-GAAP |
|
|
67.0 |
% |
|
|
67.5 |
% |
|
|
62.8 |
% |
Cost of revenues adjustments |
|
|
0.8 |
% |
|
|
1.1 |
% |
|
|
0.9 |
% |
Gross margin-Non-GAAP |
|
|
67.8 |
% |
|
|
68.6 |
% |
|
|
63.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenues |
|
$ |
463 |
|
|
$ |
446 |
|
|
$ |
581 |
|
Cost of revenues adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
(10 |
) |
Stock-based compensation |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
Non-GAAP cost of revenues |
|
$ |
452 |
|
|
$ |
431 |
|
|
$ |
567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
1,404 |
|
|
$ |
1,371 |
|
|
$ |
1,563 |
|
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
PRODUCT GROSS MARGIN |
||||||||||||
($ in millions) |
||||||||||||
|
|
|
|
|||||||||
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Product gross margin-GAAP |
|
|
54.3 |
% |
|
|
55.8 |
% |
|
|
51.5 |
% |
Cost of product revenues adjustments |
|
|
1.1 |
% |
|
|
1.6 |
% |
|
|
1.1 |
% |
Product gross margin-Non-GAAP |
|
|
55.4 |
% |
|
|
57.3 |
% |
|
|
52.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of product revenues |
|
$ |
360 |
|
|
$ |
341 |
|
|
$ |
469 |
|
Cost of product revenues adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
(10 |
) |
Stock-based compensation |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Non-GAAP cost of product revenues |
|
$ |
351 |
|
|
$ |
329 |
|
|
$ |
458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues |
|
$ |
787 |
|
|
$ |
771 |
|
|
$ |
967 |
|
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
HARDWARE MAINTENANCE AND OTHER SERVICES GROSS MARGIN |
||||||||||||
($ in millions) |
||||||||||||
|
|
|
|
|||||||||
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware maintenance and other services gross margin-GAAP |
|
|
74.3 |
% |
|
|
72.8 |
% |
|
|
71.4 |
% |
Cost of hardware maintenance and other services revenues adjustment |
|
|
0.6 |
% |
|
|
0.9 |
% |
|
|
0.8 |
% |
Hardware maintenance and other services gross margin-Non-GAAP |
|
|
74.9 |
% |
|
|
73.7 |
% |
|
|
72.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of hardware maintenance and other services revenues |
|
$ |
91 |
|
|
$ |
94 |
|
|
$ |
102 |
|
Cost of hardware maintenance and other services revenues adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(3 |
) |
Non-GAAP cost of hardware maintenance and other services revenues |
|
$ |
89 |
|
|
$ |
91 |
|
|
$ |
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware maintenance and other services revenues |
|
$ |
354 |
|
|
$ |
346 |
|
|
$ |
357 |
|
RECONCILIATION OF NON-GAAP TO GAAP |
||||||||||||
EFFECTIVE TAX RATE |
||||||||||||
|
|
|
|
|||||||||
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate |
|
|
(0.4 |
)% |
|
|
18.7 |
% |
|
|
21.9 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax effects |
|
|
2.0 |
% |
|
|
(1.1 |
)% |
|
|
(2.7 |
)% |
Resolution of income tax matters |
|
|
15.6 |
% |
|
|
— |
% |
|
|
— |
% |
Non-GAAP effective tax rate |
|
|
17.2 |
% |
|
|
17.6 |
% |
|
|
19.3 |
% |
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
|
|||||||||||
TO FREE CASH FLOW (NON-GAAP) |
|
|||||||||||
(In millions) |
|
|||||||||||
|
|
|
|
|||||||||
|
|
Q3'FY20 |
|
|
Q2'FY20 |
|
|
Q3'FY19 |
|
|||
Net cash provided by (used in) operating activities |
|
$ |
420 |
|
|
$ |
(53 |
) |
|
$ |
451 |
|
Purchases of property and equipment |
|
|
(32 |
) |
|
|
(36 |
) |
|
|
(31 |
) |
Free cash flow |
|
$ |
388 |
|
|
$ |
(89 |
) |
|
$ |
420 |
|
Some items may not add or recalculate due to rounding. |
NETAPP, INC. |
||||
RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP |
||||
EXPRESSED AS EARNINGS PER SHARE |
||||
FOURTH QUARTER FISCAL 2020 |
||||
|
|
|
|
|
|
|
Fourth Quarter |
|
|
|
|
Fiscal 2020 |
|
|
|
|
|
|
|
Non-GAAP Guidance - Net Income Per Share |
|
$1.28 - $1.36 |
|
|
|
|
|
|
|
Adjustments of Specific Items to Net Income |
|
|
|
|
Per Share for the Fourth Quarter Fiscal 2020: |
|
|
|
|
Amortization of intangible assets |
|
|
(0.04 |
) |
Stock-based compensation expense |
|
|
(0.17 |
) |
Income tax effects |
|
|
0.04 |
|
Total Adjustments |
|
|
(0.17 |
) |
|
|
|
|
|
GAAP Guidance - Net Income Per Share |
|
$1.11 - $1.19 |
|
NETAPP, INC. |
|
|||
RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP |
|
|||
FISCAL 2020 |
|
|||
(Unaudited) |
|
|||
|
|
|
|
|
|
|
Fiscal 2020 |
|
|
|
|
|
|
|
Gross Margin - Non-GAAP Guidance |
|
67% - 68% |
|
|
Adjustment: |
|
|
|
|
Cost of revenues adjustments |
|
(1)% |
|
|
Gross Margin - GAAP Guidance |
|
66% - 67% |
|
|
|
|
|
|
|
|
|
Fiscal 2020 |
|
|
|
|
|
|
|
Operating Margin - Non-GAAP Guidance |
|
~21% |
|
|
Adjustments: |
|
|
|
|
Amortization of intangible assets |
|
(1)% |
|
|
Stock-based compensation expense |
|
(3)% |
|
|
Gain on sale or derecognition of assets |
|
1% |
|
|
Operating Margin - GAAP Guidance |
|
~18% |
|
|
|
|
|
|
|
|
|
Fiscal 2020 versus
|
|
|
|
|
|
|
|
Year-over-year Decrease in Net Income Per Share - Non-GAAP Guidance |
|
(7)% |
|
|
Adjustments: |
|
|
|
|
Amortization of intangible assets |
|
1% |
|
|
Restructuring charges |
|
1% |
|
|
Gain on sale or derecognition of assets |
|
(3)% |
|
|
Income tax benefit of ASC 606 adoption |
|
(3)% |
|
|
Income tax effects |
|
(5)% |
|
|
Year-over-year Decrease in Net Income Per Share - GAAP Guidance |
|
(16)% |
|
|
|
|
|
|
|
Some items may not add or recalculate due to rounding |
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200212005813/en/
Source:
Press Contact:
Amelia Vierra
NetApp
1 408 822 6403
amelia.vierra@netapp.com
Investor Contact:
Lance Berger
NetApp
1 408 822 6628
lance.berger@netapp.com