8-K
false000100204700010020472022-06-012022-06-01

 

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): June 01, 2022

 

 

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.)

 

 

 

 

 

3060 Olsen Drive

 

San Jose, California

 

95128

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (408) 822-6000

 

 

(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:

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))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock, $0.001 Par Value

 

NTAP

 

The NASDAQ Stock Market LLC

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 June 1, 2022, NetApp, Inc. (“NetApp” or the “Company”) issued a press release reporting financial results for the fourth quarter and year ended April 29, 2022. 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, 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.

 

Exhibit No.

Description

 

 

99.1

Press release, dated June 1, 2022, reporting earnings for the fourth quarter and year ended April 29, 2022

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


SIGNATURES

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

 

 

 

NETAPP, INC.
(Registrant)

 

 

 

 

Date:

June 1, 2022

By:

/s/ Elizabeth O'Callahan

 

 

 

Elizabeth O'Callahan
Executive Vice President, Chief Legal Officer and Secretary

 


EX-99.1

 

Exhibit 99.1

 

 

NetApp reports fourth quarter and fiscal year 2022 results

Net revenues for the fourth quarter grew 8% year-over-year to $1.68 billion;

Net revenues for fiscal year 2022 grew 10% to $6.32 billion

 

Q4 billings1 were $2.02 billion, an increase of 16% year-over-year
Q4 product revenue grew 6% year-over-year to $894 million, the fifth consecutive quarter of year-over-year growth
NetApp Public Cloud annualized revenue run rate (ARR)2 increased 68% year-over-year to $505 million
All-flash array annualized net revenue run rate3 increased 12% year-over-year to $3.2 billion
$1.05 billion returned to shareholders in fiscal year 2022, 86% of cash from operations 106% of free cash flow

 

SAN JOSE, Calif.—June 1, 2022—NetApp (NASDAQ: NTAP) today reported financial results for the fourth quarter and fiscal year 2022, which ended on April 29, 2022.

 

“Our solid fourth quarter results cap off a strong year. We made sustained progress against our strategic goals: gaining share in enterprise storage, expanding our public cloud business, and, most notably, delivering record levels of gross margin dollars, operating income, and earnings per share,” said George Kurian, chief executive officer. “The strong fundamentals of our business, including our alignment to customer priorities, strong balance sheet, and prudent operational management put NetApp in a position of strength as we scale our Public Cloud services while continuing to drive growth in our Hybrid Cloud solutions.”

 

Fourth quarter of fiscal year 2022 financial results

Net revenues: $1.68 billion, compared to $1.56 billion in the fourth quarter of fiscal year 2021
o
Hybrid Cloud segment revenue: $1.56 billion, compared to $1.49 billion in the fourth quarter of fiscal year 2021
o
Public Cloud segment revenue: $120 million, compared to $66 million in the fourth quarter of fiscal year 2021
Net income: GAAP net income of $259 million, compared to $334 million in the fourth quarter of fiscal year 2021; non-GAAP net income4 of $324 million, compared to $268 million in the fourth quarter of fiscal year 2021
Earnings per share: GAAP net income per share5 of $1.14 compared to $1.46 in the fourth quarter of fiscal year 2021; non-GAAP net income per share of $1.42, compared to $1.17 in the fourth quarter of fiscal year 2021
Cash, cash equivalents and investments: $4.13 billion at the end of the fourth quarter of fiscal year 2022
Cash provided by operations: $411 million, compared to $559 million in the fourth quarter of fiscal year 2021

 


 

Share repurchase and dividends: Returned $361 million to shareholders through share repurchases and cash dividends

 

Fiscal year 2022 financial results

Net revenues: $6.32 billion, compared to $5.74 billion in fiscal year 2021
Hybrid Cloud segment revenue: $5.92 billion, compared to $5.55 billion in the fourth quarter of fiscal year 2021
Public Cloud segment revenue: $396 million, compared to $199 million in the fourth quarter of fiscal year 2021
Net income: GAAP net income of $937 million, compared to $730 million in fiscal year 2021; non-GAAP net income of $1.21 billion, compared to $917 million in fiscal year 2021
Earnings per share: GAAP net income per share of $4.09 compared to $3.23 in fiscal year 2021; non-GAAP net income per share of $5.28, compared to $4.06 in fiscal year 2021
Cash provided by operations: $1.21 billion compared to $1.33 billion in fiscal year 2021
Share repurchase and dividends: Returned $1.05 billion to shareholders through share repurchases and cash dividends

 

First quarter of fiscal year 2023 financial outlook

 

The Company provided the following financial guidance for the first quarter of fiscal year 2023:

Net revenues are expected to be in the range of:

$1.475 billion to $1.625 billion

 

GAAP

Non-GAAP

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

$0.72 - $0.82

$1.05 - $1.15

 

Full fiscal year 2023 financial outlook

 

The Company provided the following financial guidance for the full fiscal year 2023:

Net revenues are expected to grow in the range of:

6% to 8%

Public Cloud ARR is expected to exit the fiscal year in the range of:

$780 million to $820 million

 

GAAP

Non-GAAP

Consolidated gross margins are expected to be in the range of:

65% - 66%

66% - 67%

Operating margins are expected to be in the range of:

18% - 19%

23% - 24%

Effective tax rate is expected to be in the range of

24% - 25%

21% - 22%

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

$3.96 - $4.16

  $5.40 - $5.60

 

Dividend

 

 


 

The next cash dividend of $0.50 per share is to be paid on July 27, 2022, to shareholders of record as of the close of business on July 8, 2022.

 

Fourth quarter of fiscal year 2022 business highlights

 

Leading product innovation

NetApp acquired Fylamynt, a CloudOps automation technology company that enables customers to build, run, manage, and analyze workflows securely in any cloud with little or no code.
NetApp announced the intent to acquire Instaclustr, the industry-leading platform for deploying and managing open-source data and workflow applications as a service. The Instaclustr acquisition closed on May 20, 2022.
NetApp announced the general availability of Ocean for Apache Spark on AWS.
NetApp introduced NetApp Cloud Volumes Edge Cache software as a service with intelligent caching and global file locking, helping customers reduce risk and improve performance of centrally managed files.
NetApp introduced NetApp Cloud Manager Digital Wallet service, which delivers unified license and entitlement management to data storage and data services resources.
NetApp announced updates to NetApp Cloud Insights, leveraging artificial intelligence and machine learning to provide dynamic observability of changing conditions that are out of the normal parameters, and to recommend remediation actions to prevent performance, availability, or breach issues.
NetApp announced that Spot Ocean by NetApp supports Kubernetes pod topology spread constraints, helping users meet different business needs such as high availability, low latency, and controlled saturation of applications.
NetApp announced that Spot by NetApp is available in Azure Marketplace.
Spot by NetApp introduced the first Spot Storage optimization capabilities, available to AWS customers in the Spot console, enabling immediate, actionable insights to reduce costs and improve efficiency for all storage components across the customer’s AWS account.
NetApp announced a new update to Spot Ocean to automate cloud infrastructure for containers with a new “Revert to Lower-Cost Node” optimization process.
NetApp launched a new User Management System for Spot with new capabilities to better manage and control access to the cloud.
NetApp and Cisco introduced FlexPod™ XCS, providing one automated platform for modern applications, data, and hybrid cloud services.
NetApp introduced StorageGRID™ 11.6 with Google Cloud integration, security and compliance enhancements, and faster performance for analytical workloads.

 

NetApp Awards and Recognition

 

NetApp was named as one of Newsweek’s most trustworthy companies in 20226.
NetApp CloudCheckr™ was named by GigaOm as a leader and outperformer in cloud management7.
NetApp AI was named a winner of the Business Intelligence Group’s Artificial Intelligence Excellence Awards8. 

 


 

NetApp was named a winner of the Business intelligence Group’s Excellence in Customer Service Award9.
NetApp was included in CRN’s Storage 100 list10, representing industry leaders offering traditional on-premises and cloud deployments for cutting-edge solutions.

 

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, go to 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 be available on the website after 4:30 p.m. Pacific Time today.

 

“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 First Quarter of Fiscal Year 2023 Financial Outlook section and Full Fiscal Year 2023 Financial Outlook section and statements about the strong fundamentals of our business and resulting position of strength, and our ability to scale our Public Cloud services while driving growth in our Hybrid Cloud solutions. Actual results may differ materially from these statements for a variety of reasons, including, without limitation, customer demand for and acceptance of our products and services, our ability to successfully execute on our data fabric strategy to generate profitable growth and stockholder return, our ability to successfully execute new business models, general global political, macroeconomic and market conditions, changes in U.S. government spending, revenue seasonality, our ability to manage our gross profit margins, the impact of the COVID-19 pandemic on our business operations, including supply chain disruptions, our financial performance and results of operations, and our ability to expand our total available market and grow our portfolio of products. 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 Forms 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, the NetApp logo, and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. All other marks are the property of their respective owners.

 

Footnotes

 


 

 

1Refer to the NetApp Usage of Non-GAAP Financial Information section below for an explanation of billings.

2Public Cloud annualized revenue run rate (ARR) is calculated as the annualized value of all Public Cloud customer commitments with the assumption that any commitment expiring during the next 12 months will be renewed with its existing terms.

3All-flash array annualized net revenue run rate is determined by products and services revenue for the current quarter, multiplied by 4.

4Non-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, (h) gains/losses on the sale of investments in equity securities, (i) debt extinguishment costs, and (j) 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 that the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance.

5GAAP net income per share and non-GAAP net income per share are calculated using the diluted number of shares.

6Newsweek, “America’s Most Trustworthy Companies, 2022,” Nancy Cooper, May 9, 2022. America's Most Trustworthy Companies 2022 - All Winners (newsweek.com).

7GigaOm, “GigaOm Radar for Cloud Platforms for Hybrid Integration and Automation,” Enrico Signoretti, Max Mortillaro, Arjan Timmerman, April 4, 2022. GigaOm Radar for High-Performance Object Storage - Gigaom.

8Business Intelligence Group, “Winners of the 2022 Excellence in Customer Service Awards,” April 12, 2022. Here are the 85 Names Leading the Way in Customer Service in 2022 — Business Intelligence Group (bintelligence.com).

9Business Intelligence Group, “Honoring Achievements in Artificial Intelligence,” March 22, 2022. 6 People, 26 Companies, and 65 Products Awarded for Excellence in Artificial Intelligence — Business Intelligence Group (bintelligence.com).

10CRN’s Storage 100 list, “2022 Storage 100: Who’s Got Your Backup, 2022,” Joseph F. Kovar, April 11, 2022. 2022 Storage 100: Who’s Got Your Backup? (crn.com).

 

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, free cash flow, billings, and historical and projected non-GAAP earnings per diluted share. NetApp also presents the hardware and software components of our GAAP product revenues. Because our revenue recognition policy under GAAP defines a configured storage system, inclusive of the operating system software essential to its functionality, as a single performance obligation, hardware and software components of our product revenues are considered non-GAAP measures. The hardware and software components of our product revenues are derived from an estimated fair value allocation of the transaction price of our contracts with customers, down to the level of the product hardware and software components. This allocation is primarily based on the contractual prices at which NetApp has historically billed customers for such respective components.

 

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 believes that the presentation of the software and hardware components of our product revenues is meaningful to investors and management as it illustrates the significance of the Company’s software and provides improved visibility into the value created by our software innovation and R&D investment.

 

NetApp approximates billings by adding net revenues as reported on our Condensed Consolidated Statements of Operations for the period to the change in total deferred revenue and financed unearned services revenue as reported on our Condensed Consolidated Statements of Cash Flows for the same period. Billings is a performance measure that NetApp believes provides useful information to management and investors because it approximates the amounts under purchase orders received by us during a given period that have been billed.

 

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 the amount can fluctuate based on variables unrelated to the performance of the underlying business. 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, are less useful 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 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 fourth party. Management believes that these

 


 

transactions do not reflect the results of our underlying, on-going business and, therefore, are less useful for future planning and forecasting.

 

H. Gains/losses on the sale of investments in equity securities. These are gains/losses from the sale of our investment in certain equity securities. Typically, such investments are sold as a result of a change in control of the underlying businesses. Management believes that these transactions do not reflect the results of our underlying, on-going business and, therefore, are less useful for future planning and forecasting.

 

I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses incurred as a result of the early extinguishment of debt. Management believes such nonrecurring costs do not reflect the results of its underlying, on-going business and, therefore, are less useful for future planning and forecasting.

 

J. 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 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.

 

About NetApp

 


 

 

In a world full of generalists, NetApp is a specialist. We’re focused on one thing, helping your business get the most out of your data. NetApp brings the enterprise-grade data services you rely on into the cloud, and the simple flexibility of cloud into the data center. Our industry-leading solutions work across diverse customer environments and the world’s biggest public clouds. As a cloud-led, data-centric software company, only NetApp can help build your unique data fabric, simplify and connect your cloud, and securely deliver the right data, services, and applications to the right people—anytime, anywhere.

 

NETAPP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

 

 

April 29,
 2022

 

 

April 30,
 2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

4,134

 

 

$

4,596

 

Accounts receivable

 

 

1,230

 

 

 

945

 

Inventories

 

 

204

 

 

 

114

 

Other current assets

 

 

377

 

 

 

346

 

Total current assets

 

 

5,945

 

 

 

6,001

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

602

 

 

 

525

 

Goodwill and purchased intangible assets, net

 

 

2,488

 

 

 

2,140

 

Other non-current assets

 

 

991

 

 

 

694

 

Total assets

 

$

10,026

 

 

$

9,360

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

607

 

 

$

420

 

Accrued expenses

 

 

925

 

 

 

970

 

Current portion of long-term debt

 

 

250

 

 

 

 

Short-term deferred revenue and financed unearned services revenue

 

 

2,171

 

 

 

2,062

 

Total current liabilities

 

 

3,953

 

 

 

3,452

 

Long-term debt

 

 

2,386

 

 

 

2,632

 

Other long-term liabilities

 

 

788

 

 

 

650

 

Long-term deferred revenue and financed unearned services revenue

 

 

2,061

 

 

 

1,941

 

Total liabilities

 

 

9,188

 

 

 

8,675

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

838

 

 

 

685

 

Total liabilities and stockholders' equity

 

$

10,026

 

 

$

9,360

 

 

 


 

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

April 29, 2022

 

 

April 30, 2021

 

 

April 29, 2022

 

 

April 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

894

 

 

$

840

 

 

$

3,284

 

 

$

2,991

 

Services

 

 

786

 

 

 

715

 

 

 

3,034

 

 

 

2,753

 

Net revenues

 

 

1,680

 

 

 

1,555

 

 

 

6,318

 

 

 

5,744

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product

 

 

446

 

 

 

387

 

 

 

1,554

 

 

 

1,432

 

Cost of services

 

 

145

 

 

 

133

 

 

 

544

 

 

 

497

 

Total cost of revenues

 

 

591

 

 

 

520

 

 

 

2,098

 

 

 

1,929

 

Gross profit

 

 

1,089

 

 

 

1,035

 

 

 

4,220

 

 

 

3,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

480

 

 

 

447

 

 

 

1,857

 

 

 

1,744

 

Research and development

 

 

235

 

 

 

221

 

 

 

881

 

 

 

881

 

General and administrative

 

 

72

 

 

 

66

 

 

 

279

 

 

 

257

 

Restructuring charges

 

 

4

 

 

 

 

 

 

33

 

 

 

42

 

Acquisition-related expense

 

 

5

 

 

 

2

 

 

 

13

 

 

 

16

 

Gain on sale or derecognition of assets

 

 

 

 

 

(156

)

 

 

 

 

 

(156

)

Total operating expenses

 

 

796

 

 

 

580

 

 

 

3,063

 

 

 

2,784

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

293

 

 

 

455

 

 

 

1,157

 

 

 

1,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense, net

 

 

(21

)

 

 

(19

)

 

 

(62

)

 

 

(69

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

272

 

 

 

436

 

 

 

1,095

 

 

 

962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

13

 

 

 

102

 

 

 

158

 

 

 

232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

259

 

 

$

334

 

 

$

937

 

 

$

730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.17

 

 

$

1.50

 

 

$

4.20

 

 

$

3.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

1.14

 

 

$

1.46

 

 

$

4.09

 

 

$

3.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in net income per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

222

 

 

 

222

 

 

 

223

 

 

 

222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

228

 

 

 

229

 

 

 

229

 

 

 

226

 

 

 


 

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

April 29, 2022

 

 

April 30, 2021

 

 

April 29, 2022

 

 

April 30, 2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

259

 

 

$

334

 

 

$

937

 

 

$

730

 

Adjustments to reconcile net income to net cash
   provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

51

 

 

 

48

 

 

 

194

 

 

 

207

 

Non-cash operating lease cost

 

 

15

 

 

 

14

 

 

 

55

 

 

 

52

 

Stock-based compensation

 

 

66

 

 

 

48

 

 

 

245

 

 

 

197

 

Deferred income taxes

 

 

(78

)

 

 

(5

)

 

 

(144

)

 

 

(6

)

Gain on sale or derecognition of assets

 

 

 

 

 

(156

)

 

 

 

 

 

(156

)

Other items, net

 

 

(19

)

 

 

(11

)

 

 

(54

)

 

 

24

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(450

)

 

 

(146

)

 

 

(313

)

 

 

62

 

Inventories

 

 

(37

)

 

 

(8

)

 

 

(90

)

 

 

31

 

Accounts payable

 

 

171

 

 

 

81

 

 

 

181

 

 

 

(11

)

Accrued expenses

 

 

96

 

 

 

195

 

 

 

(111

)

 

 

134

 

Deferred revenue and financed unearned services
  revenue

 

 

338

 

 

 

183

 

 

 

384

 

 

 

193

 

Long-term taxes payable

 

 

21

 

 

 

(6

)

 

 

(45

)

 

 

(57

)

Changes in other operating assets and liabilities, net

 

 

(22

)

 

 

(12

)

 

 

(28

)

 

 

(67

)

Net cash provided by operating activities

 

 

411

 

 

 

559

 

 

 

1,211

 

 

 

1,333

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Redemptions of investments, net

 

 

9

 

 

 

20

 

 

 

45

 

 

 

160

 

Purchases of property and equipment

 

 

(68

)

 

 

(38

)

 

 

(226

)

 

 

(162

)

Proceeds from sale of properties

 

 

 

 

 

365

 

 

 

 

 

 

371

 

Acquisitions of businesses, net of cash acquired

 

 

(21

)

 

 

 

 

 

(380

)

 

 

(350

)

Other investing activities, net

 

 

 

 

 

(6

)

 

 

 

 

 

2

 

Net cash (used in) provided by investing activities

 

 

(80

)

 

 

341

 

 

 

(561

)

 

 

21

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock under employee stock award plans

 

 

 

 

 

6

 

 

 

105

 

 

 

98

 

Payments for taxes related to net share settlement of stock awards

 

 

(5

)

 

 

(4

)

 

 

(74

)

 

 

(42

)

Repurchase of common stock

 

 

(250

)

 

 

(75

)

 

 

(600

)

 

 

(125

)

Repayments of commercial paper notes, original maturities of three months or less, net

 

 

 

 

 

 

 

 

 

 

 

(420

)

Issuances of debt, net of issuance costs

 

 

 

 

 

 

 

 

 

 

 

2,057

 

Repayments and extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

(689

)

Dividends paid

 

 

(111

)

 

 

(106

)

 

 

(446

)

 

 

(427

)

Other financing activities, net

 

 

 

 

 

(1

)

 

 

(2

)

 

 

(8

)

Net cash (used in) provided by financing activities

 

 

(366

)

 

 

(180

)

 

 

(1,017

)

 

 

444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(23

)

 

 

1

 

 

 

(49

)

 

 

71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

(58

)

 

 

721

 

 

 

(416

)

 

 

1,869

 

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of period

 

 

4,177

 

 

 

3,814

 

 

 

4,535

 

 

 

2,666

 

End of period

 

$

4,119

 

 

$

4,535

 

 

$

4,119

 

 

$

4,535

 

 

 

NETAPP, INC.

 

SUPPLEMENTAL DATA

 

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

 

 

 


 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     In the first quarter of fiscal year 2022, the Company introduced two segments for financial reporting purposes: Hybrid Cloud and Public Cloud. Prior period disclosures have been revised for comparability.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues by Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4'FY22

 

 

Q3'FY22

 

 

Q4'FY21

 

 

FY2022

 

 

FY2021

 

Product

 

$

894

 

 

$

846

 

 

$

840

 

 

$

3,284

 

 

$

2,991

 

Support

 

 

590

 

 

 

586

 

 

 

576

 

 

 

2,344

 

 

 

2,277

 

Professional and Other Services

 

 

76

 

 

 

72

 

 

 

73

 

 

 

294

 

 

 

277

 

Hybrid Cloud Segment Net Revenues

 

 

1,560

 

 

 

1,504

 

 

 

1,489

 

 

 

5,922

 

 

 

5,545

 

Public Cloud Segment Net Revenues

 

 

120

 

 

 

110

 

 

 

66

 

 

 

396

 

 

 

199

 

Net Revenues

 

$

1,680

 

 

$

1,614

 

 

$

1,555

 

 

$

6,318

 

 

$

5,744

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit by Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4'FY22

 

 

Q3'FY22

 

 

Q4'FY21

 

 

FY2022

 

 

FY2021

 

Product

 

$

452

 

 

$

442

 

 

$

456

 

 

$

1,743

 

 

$

1,589

 

Support

 

 

547

 

 

 

541

 

 

 

525

 

 

 

2,160

 

 

 

2,076

 

Professional and Other Services

 

 

22

 

 

 

26

 

 

 

18

 

 

 

89

 

 

 

71

 

Hybrid Cloud Segment Gross Profit

 

 

1,021

 

 

 

1,009

 

 

 

999

 

 

 

3,992

 

 

 

3,736

 

Public Cloud Segment Gross Profit

 

 

82

 

 

 

78

 

 

 

47

 

 

 

278

 

 

 

134

 

Total Segments Gross Profit

 

 

1,103

 

 

 

1,087

 

 

 

1,046

 

 

 

4,270

 

 

 

3,870

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of Intangible Assets

 

 

(10

)

 

 

(9

)

 

 

(7

)

 

 

(33

)

 

 

(41

)

Stock-based Compensation

 

 

(4

)

 

 

(5

)

 

 

(4

)

 

 

(17

)

 

 

(14

)

Unallocated Cost of Revenues

 

 

(14

)

 

 

(14

)

 

 

(11

)

 

 

(50

)

 

 

(55

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

1,089

 

 

$

1,073

 

 

$

1,035

 

 

$

4,220

 

 

$

3,815