NetApp (NASDAQ:NTAP) today reported financial results for the first
quarter fiscal year 2017, ended July 29, 2016.
First Quarter Financial ResultsNet revenues for
the first quarter of fiscal year 2017 were $1.29 billion. GAAP net
income for the first quarter of fiscal year 2017 was $64 million,
or $0.23 income per share,2 compared to GAAP net loss of $30
million, or $0.10 loss per share,3 for the comparable period of the
prior year. Non-GAAP net income for the first quarter of fiscal
year 2017 was $129 million, or $0.46 income per share,4 compared to
non-GAAP net income of $89 million, or $0.29 income per share, for
the comparable period of the prior year.
Cash, Cash Equivalents and Investments NetApp
ended the first quarter of fiscal year 2017 with $4.4 billion in
total cash, cash equivalents and investments. During the first
quarter of fiscal year 2017, the Company generated $228 million in
cash from operations and returned $228 million to shareholders
through share repurchases and a cash dividend.
The Company announced the next cash dividend of $0.19 per share.
The quarterly dividend will be paid on October 26, 2016, to
shareholders of record as of the close of business on October 7,
2016.
“We are pleased with our first quarter results. Our focus on
disciplined execution of our strategy is yielding results and
starting to change the trajectory of our business,” said George
Kurian, chief executive officer. “We remain sharply focused on
operating more efficiently while delivering market-leading
innovations that are aligned to our customers' business and IT
transformation priorities.”
Q2 Fiscal Year 2017 OutlookThe Company provided
the following financial guidance for the second quarter of fiscal
year 2017:
- Net revenues are expected to be in the range of $1.265 billion
to $1.415 billion.
- GAAP earnings per share is expected to be in the range of $0.31
to $0.36 per share.
- Non-GAAP earnings per share is expected to be in the range of
$0.51 to $0.56 per share.
Business Highlights
- Continued Leadership in Flash
- NetApp Flash Accelerates Docker Ecosystem with Native
Storage Integration. Integration of the NetApp flash
storage portfolio with the NetApp Docker Volume Plug-In (nDVP)
allows containerized applications to take advantage of solid-state
performance with true deployment flexibility.
- NetApp SolidFire Unveils Innovative Storage Purchasing
Model for the Next-Generation Data Center. FlashForward
Capacity Licensing creates significant flexibility and investment
protection for customers to purchase storage infrastructure in
alignment with the dynamic and growing nature of their
businesses.
- NetApp SolidFire Introduces New Highest-Density
SF-Series. The latest addition to the NetApp SolidFire
SF-Series product line delivers twice the performance and capacity
and version 9 of the SolidFire Element operating system (Fluorine)
simplifies customers’ transitions to service delivery-oriented
infrastructure.
- NetApp FlashAdvantage 3-4-5 Makes the All-Flash Data
Center a Reality. The new FlashAdvantage 3-4-5 program now
includes the industry’s only guaranteed efficiency data reduction
of 4:1. This program, combined with the new NetApp 15TB solid state
drives, will make flash the ideal workload consolidation platform
for customers’ infrastructure needs.
- Strength Within the Hybrid Cloud
- NetApp Strengthens the Enterprise’s Ability to Protect
and Manage Data Across the Hybrid Cloud. New enhancements
to NetApp data protection software, including NetApp OnCommand™
Insight and new NetApp Data Protection Solutions for Microsoft
Office 365, help customers reduce the risk of data loss while
enabling business continuity with the right mix of cloud
resources.
- NetApp Simplifies Transition to Hybrid Cloud,
Next-Generation Data Center. With ONTAP 9
software, enterprises can quickly integrate the best of traditional
and emerging technologies, incorporating flash, the cloud, and
software-defined architectures to build a Data Fabric foundation
across on-premises and cloud resources.
- Customers and Partners Achieve Success Through
NetApp
- NetApp Helps Protect NASA Johnson Space Center’s
Mission-Critical Data. With one of the largest cloud
footprints of any U.S. federal government agency, NASA chose NetApp
AltaVault™ to help protect NASA’s mission-critical data, optimize
its cloud footprint, and drive down cost.
- NetApp Builds Momentum Within the Education
Industry. NetApp AFF enabled the University of Scranton to
enhance e-learning with a “bring your own device” program, which
helped connect students and teachers anywhere in the world at any
time. In addition, Seminole County Public Schools used NetApp
FAS8040HA storage and AltaVault backup-to-cloud solutions to
provide nonstop, secure data access and fast application response
to more than 40 departments.
- Citrix Speeds Mobile Application Delivery with NetApp
FlexPod with All Flash FAS. Citrix chose NetApp to support
automated testing on a large scale, drive down latency, and work
with the Citrix XenServer and NFS shared storage. NetApp’s
performance, flexibility, rich data management features, and
previous partnership with Citrix were key reasons NetApp was
selected.
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 NetAppLeading organizations worldwide
count on NetApp for software, systems and services to manage and
store their data. Customers value our teamwork, expertise and
passion for helping them succeed now and into the future. To learn
more, visit www.netapp.com.
“Safe Harbor” Statement Under U.S. Private Securities
Litigation Reform Act of 1995This 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 Q2
Fiscal Year 2017 Outlook section, statements made about our
ability to operate more efficiently, deliver market-leading
innovations and return the company to 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 understand, and effectively
respond to changes affecting our market environment, product,
technologies and customer requirements, including the impact of the
cloud, customer demand for and acceptance of our products and
services, our ability to reduce our cost structure, streamline the
business and improve efficiency, our ability to effectively
integrate the SolidFire acquisition, 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 Annual Report on Form 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.
1 Free cash flow is a non-GAAP measure and is defined as
net cash provided by operating activities less cash used to acquire
property and equipment.2 GAAP net income per share is calculated
using the diluted number of shares.3 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.4 Non-GAAP net income excludes, when applicable,
(a) amortization of intangible assets, (b) stock-based
compensation expenses, (c) acquisition-related income and
expenses, (d) restructuring and other charges, (e) asset
impairments, (f) gains/losses on the sale of properties, and (g)
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. Non-GAAP earnings per share is
calculated using the diluted number of shares for all periods
presented. 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.
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 and non-GAAP
net income, non-GAAP effective tax rate, non-GAAP inventory turns,
and free cash flow; and historical and projected non-GAAP net
income per diluted share.
NetApp believes that the presentation of non-GAAP net income,
non-GAAP effective tax rates, and non-GAAP net income 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. In addition, NetApp believes
that the presentation of non-GAAP inventory turns provides useful
information to investors and management regarding financial and
business trends relating to inventory management based on the
operating activities of the periods presented. 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, after deducting capital
expenditures. 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. In
addition, these non-GAAP financial measures are used to measure
company performance for the purposes of determining employee
incentive plan compensation.
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. Acquisition-related income and expenses. NetApp excludes
acquisition-related income and expenses, including (a) merger
termination proceeds, (b) due diligence, legal and other one-time
integration charges, (c) the impact of inventory step-ups, and (d)
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.
D. Restructuring and other charges. These charges include
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. These items are not
ordinarily included in our annual operating plan and related budget
due to the unpredictability of the timing and size of these events.
We therefore exclude them in our assessment of operational
performance.
E. 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.
F. 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.
G. 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) |
|
|
|
|
|
July 29,2016 |
|
|
April 29,2016 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash,
cash equivalents and investments |
|
$ |
4,421 |
|
|
$ |
5,303 |
|
Accounts
receivable |
|
|
501 |
|
|
|
813 |
|
Inventories |
|
|
81 |
|
|
|
98 |
|
Other
current assets |
|
|
220 |
|
|
|
234 |
|
Total
current assets |
|
|
5,223 |
|
|
|
6,448 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
942 |
|
|
|
937 |
|
Goodwill and purchased
intangible assets, net |
|
|
1,845 |
|
|
|
1,856 |
|
Other non-current
assets |
|
|
777 |
|
|
|
796 |
|
Total
assets |
|
$ |
8,787 |
|
|
$ |
10,037 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
239 |
|
|
$ |
254 |
|
Accrued
expenses |
|
|
561 |
|
|
|
765 |
|
Short-term loan |
|
|
— |
|
|
|
849 |
|
Short-term deferred revenue and financed unearned services
revenue |
|
|
1,724 |
|
|
|
1,794 |
|
Total
current liabilities |
|
|
2,524 |
|
|
|
3,662 |
|
Long-term debt |
|
|
1,491 |
|
|
|
1,490 |
|
Other long-term
liabilities |
|
|
404 |
|
|
|
413 |
|
Long-term deferred
revenue and financed unearned services revenue |
|
|
1,576 |
|
|
|
1,591 |
|
Total
liabilities |
|
|
5,995 |
|
|
|
7,156 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
|
|
2,792 |
|
|
|
2,881 |
|
Total
liabilities and stockholders' equity |
|
$ |
8,787 |
|
|
$ |
10,037 |
|
NETAPP, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In millions, except per
share amounts) (Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
|
July 29,2016 |
|
|
July 31,2015 |
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
Product |
|
$ |
660 |
|
|
$ |
664 |
|
Software
maintenance |
|
|
241 |
|
|
|
248 |
|
Hardware
maintenance and other services |
|
|
393 |
|
|
|
423 |
|
Net
revenues |
|
|
1,294 |
|
|
|
1,335 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Cost of
product |
|
|
359 |
|
|
|
345 |
|
Cost of
software maintenance |
|
|
8 |
|
|
|
10 |
|
Cost of
hardware maintenance and other services |
|
|
130 |
|
|
|
164 |
|
Total
cost of revenues |
|
|
497 |
|
|
|
519 |
|
Gross
profit |
|
|
797 |
|
|
|
816 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Sales and
marketing |
|
|
429 |
|
|
|
492 |
|
Research
and development |
|
|
207 |
|
|
|
244 |
|
General
and administrative |
|
|
68 |
|
|
|
79 |
|
Restructuring and other charges |
|
|
— |
|
|
|
27 |
|
Total
operating expenses |
|
|
704 |
|
|
|
842 |
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
|
93 |
|
|
|
(26 |
) |
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
|
|
(1 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
|
92 |
|
|
|
(22 |
) |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
|
28 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
64 |
|
|
$ |
(30 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.23 |
|
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.23 |
|
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
Shares used in net
income (loss) per share calculations: |
|
|
|
|
|
|
|
|
Basic |
|
|
279 |
|
|
|
304 |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
282 |
|
|
|
304 |
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share |
|
$ |
0.190 |
|
|
$ |
0.180 |
|
NETAPP, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In millions)
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
|
July 29,2016 |
|
|
July 31,2015 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
64 |
|
|
$ |
(30 |
) |
Adjustments to reconcile net income (loss) to net cash provided
by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
60 |
|
|
|
69 |
|
Stock-based compensation |
|
|
52 |
|
|
|
77 |
|
Other
non-cash items, net |
|
|
12 |
|
|
|
(36 |
) |
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
311 |
|
|
|
361 |
|
Inventories |
|
|
17 |
|
|
|
(47 |
) |
Accounts
payable |
|
|
(30 |
) |
|
|
(33 |
) |
Accrued
expenses |
|
|
(198 |
) |
|
|
(119 |
) |
Deferred
revenue and financed unearned services revenue |
|
|
(83 |
) |
|
|
(121 |
) |
Changes
in other operating assets and liabilities, net |
|
|
23 |
|
|
|
8 |
|
Net cash
provided by operating activities |
|
|
228 |
|
|
|
129 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Redemptions of investments, net |
|
|
313 |
|
|
|
778 |
|
Purchases
of property and equipment |
|
|
(36 |
) |
|
|
(38 |
) |
Other
investing activities, net |
|
|
(1 |
) |
|
|
2 |
|
Net cash
provided by investing activities |
|
|
276 |
|
|
|
742 |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Issuance
of common stock under employee stock award plans |
|
|
9 |
|
|
|
19 |
|
Repurchase of common stock |
|
|
(175 |
) |
|
|
(430 |
) |
Repayment
of short-term loan |
|
|
(850 |
) |
|
|
— |
|
Dividends
paid |
|
|
(53 |
) |
|
|
(54 |
) |
Other
financing activities, net |
|
|
(2 |
) |
|
|
1 |
|
Net cash
used in financing activities |
|
|
(1,071 |
) |
|
|
(464 |
) |
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
(574 |
) |
|
|
402 |
|
Cash and cash
equivalents: |
|
|
|
|
|
|
|
|
Beginning
of period |
|
|
2,868 |
|
|
|
1,922 |
|
End of
period |
|
$ |
2,294 |
|
|
$ |
2,324 |
|
NETAPP, INC. |
|
SUPPLEMENTAL DATA |
|
(In millions except net income per share,
percentages, DSO and Inventory Turns) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY'17 |
|
|
Q4 FY'16 |
|
|
Q1 FY'16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
660 |
|
|
$ |
757 |
|
|
$ |
664 |
|
Strategic |
|
$ |
400 |
|
|
$ |
468 |
|
|
$ |
323 |
|
Mature |
|
$ |
260 |
|
|
$ |
289 |
|
|
$ |
341 |
|
Software
Maintenance |
|
$ |
241 |
|
|
$ |
234 |
|
|
$ |
248 |
|
Hardware Maintenance
and Other Services: |
|
$ |
393 |
|
|
$ |
389 |
|
|
$ |
423 |
|
Hardware
Maintenance Support Contracts |
|
$ |
323 |
|
|
$ |
318 |
|
|
$ |
346 |
|
Professional and Other Services |
|
$ |
70 |
|
|
$ |
71 |
|
|
$ |
77 |
|
Net Revenues |
|
$ |
1,294 |
|
|
$ |
1,380 |
|
|
$ |
1,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic
Mix |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of
Q1FY'17Revenue |
|
|
% of Q4FY'16Revenue |
|
|
% of Q1FY'16Revenue |
|
Americas |
|
|
57 |
% |
|
|
54 |
% |
|
|
56 |
% |
Americas
Commercial |
|
|
44 |
% |
|
|
43 |
% |
|
|
44 |
% |
U.S.
Public Sector |
|
|
13 |
% |
|
|
12 |
% |
|
|
12 |
% |
EMEA |
|
|
30 |
% |
|
|
33 |
% |
|
|
31 |
% |
Asia Pacific |
|
|
13 |
% |
|
|
13 |
% |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pathways
Mix |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of
Q1FY'17Revenue |
|
|
% of Q4FY'16Revenue |
|
|
% of Q1FY'16Revenue |
|
Direct |
|
|
23 |
% |
|
|
26 |
% |
|
|
22 |
% |
Indirect |
|
|
77 |
% |
|
|
74 |
% |
|
|
77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
Margins |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY'17 |
|
|
Q4 FY'16 |
|
|
Q1 FY'16 |
|
Non-GAAP Gross
Margin |
|
|
62.4 |
% |
|
|
61.1 |
% |
|
|
63.6 |
% |
Product |
|
|
46.7 |
% |
|
|
46.8 |
% |
|
|
51.2 |
% |
Software
Maintenance |
|
|
96.7 |
% |
|
|
96.2 |
% |
|
|
96.2 |
% |
Hardware
Maintenance and Other Services |
|
|
67.9 |
% |
|
|
67.9 |
% |
|
|
64.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income
from Operations, Income before Income Taxes & Effective Tax
Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY'17 |
|
|
Q4 FY'16 |
|
|
Q1 FY'16 |
|
Non-GAAP Income from
Operations |
|
$ |
156 |
|
|
$ |
185 |
|
|
$ |
103 |
|
% of Net
Revenues |
|
|
12.1 |
% |
|
|
13.4 |
% |
|
|
7.7 |
% |
Non-GAAP Income before
Income Taxes |
|
$ |
155 |
|
|
$ |
181 |
|
|
$ |
107 |
|
Non-GAAP Effective Tax
Rate |
|
|
16.6 |
% |
|
|
13.1 |
% |
|
|
17.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY'17 |
|
|
Q4 FY'16 |
|
|
Q1 FY'16 |
|
Non-GAAP Net
Income |
|
$ |
129 |
|
|
$ |
157 |
|
|
$ |
89 |
|
Non-GAAP Weighted
Average Common Shares Outstanding, Diluted |
|
|
282 |
|
|
|
287 |
|
|
|
308 |
|
Non-GAAP Income per
Share, Diluted |
|
$ |
0.46 |
|
|
$ |
0.55 |
|
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Balance
Sheet Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY'17 |
|
|
Q4 FY'16 |
|
|
Q1 FY'16 |
|
Deferred Revenue and
Financed Unearned Services Revenue |
|
$ |
3,300 |
|
|
$ |
3,385 |
|
|
$ |
3,066 |
|
DSO (days) |
|
|
35 |
|
|
|
54 |
|
|
|
30 |
|
Inventory Turns |
|
|
24 |
|
|
|
22 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days sales outstanding (DSO) is defined as accounts receivable
divided by net revenues, multiplied by the number of days in the
quarter. |
|
Inventory turns is defined as annualized non-GAAP cost of
revenues divided by net inventories. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select Cash
Flow Statement Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 FY'17 |
|
|
Q4 FY'16 |
|
|
Q1 FY'16 |
|
Net Cash Provided by
Operating Activities |
|
$ |
228 |
|
|
$ |
345 |
|
|
$ |
129 |
|
Purchases of Property
and Equipment |
|
$ |
36 |
|
|
$ |
35 |
|
|
$ |
38 |
|
Free Cash Flow |
|
$ |
192 |
|
|
$ |
310 |
|
|
$ |
91 |
|
Free Cash Flow as a %
of Net Revenues |
|
|
14.8 |
% |
|
|
22.5 |
% |
|
|
6.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) |
|
$ |
64 |
|
|
$ |
(8 |
) |
|
$ |
(30 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
11 |
|
|
|
25 |
|
|
|
14 |
|
Stock-based compensation |
|
|
52 |
|
|
|
61 |
|
|
|
77 |
|
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Restructuring and other charges |
|
|
— |
|
|
|
80 |
|
|
|
27 |
|
Acquisition-related expense |
|
|
— |
|
|
|
6 |
|
|
|
— |
|
Gain on
sale of properties |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
Income
tax effect of non-GAAP adjustments |
|
|
2 |
|
|
|
(20 |
) |
|
|
(23 |
) |
Income
tax expenses from integration of intellectual properties from
acquisition |
|
|
— |
|
|
|
64 |
|
|
|
— |
|
Settlement of income tax audit |
|
|
— |
|
|
|
— |
|
|
|
13 |
|
NON-GAAP NET
INCOME |
|
$ |
129 |
|
|
$ |
157 |
|
|
$ |
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUES |
|
$ |
497 |
|
|
$ |
562 |
|
|
$ |
519 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(6 |
) |
|
|
(20 |
) |
|
|
(14 |
) |
Stock-based compensation |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
NON-GAAP COST
OF REVENUES |
|
$ |
486 |
|
|
$ |
537 |
|
|
$ |
486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF PRODUCT
REVENUES |
|
$ |
359 |
|
|
$ |
424 |
|
|
$ |
345 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(6 |
) |
|
|
(20 |
) |
|
|
(14 |
) |
Stock-based compensation |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
NON-GAAP COST
OF PRODUCT REVENUES |
|
$ |
352 |
|
|
$ |
403 |
|
|
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF HARDWARE
MAINTENANCE AND OTHER SERVICES REVENUES |
|
$ |
130 |
|
|
$ |
129 |
|
|
$ |
164 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(6 |
) |
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
NON-GAAP COST OF
HARDWARE MAINTENANCE AND OTHER SERVICES REVENUES |
|
$ |
126 |
|
|
$ |
125 |
|
|
$ |
152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
$ |
797 |
|
|
$ |
818 |
|
|
$ |
816 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
6 |
|
|
|
20 |
|
|
|
14 |
|
Stock-based compensation |
|
|
5 |
|
|
|
5 |
|
|
|
8 |
|
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
NON-GAAP GROSS
PROFIT |
|
$ |
808 |
|
|
$ |
843 |
|
|
$ |
849 |
|
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
INCOME STATEMENT INFORMATION |
|
(In millions, except net income per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES AND
MARKETING EXPENSES |
|
$ |
429 |
|
|
$ |
434 |
|
|
$ |
492 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
— |
|
Stock-based compensation |
|
|
(23 |
) |
|
|
(26 |
) |
|
|
(31 |
) |
NON-GAAP SALES
AND MARKETING EXPENSES |
|
$ |
401 |
|
|
$ |
403 |
|
|
$ |
461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESEARCH AND
DEVELOPMENT EXPENSES |
|
$ |
207 |
|
|
$ |
201 |
|
|
$ |
244 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(15 |
) |
|
|
(20 |
) |
|
|
(26 |
) |
NON-GAAP
RESEARCH AND DEVELOPMENT EXPENSES |
|
$ |
192 |
|
|
$ |
181 |
|
|
$ |
218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENERAL AND
ADMINISTRATIVE EXPENSES |
|
$ |
68 |
|
|
$ |
84 |
|
|
$ |
79 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(9 |
) |
|
|
(10 |
) |
|
|
(12 |
) |
NON-GAAP
GENERAL AND ADMINISTRATIVE EXPENSES |
|
$ |
59 |
|
|
$ |
74 |
|
|
$ |
67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESTRUCTURING
AND OTHER CHARGES |
|
$ |
— |
|
|
$ |
80 |
|
|
$ |
27 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges |
|
|
— |
|
|
|
(80 |
) |
|
|
(27 |
) |
NON-GAAP
RESTRUCTURING AND OTHER CHARGES |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACQUISITION-RELATED EXPENSE |
|
$ |
— |
|
|
$ |
6 |
|
|
$ |
— |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related expense |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
NON-GAAP
ACQUISITION-RELATED EXPENSE |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIN ON SALE OF
PROPERTIES |
|
$ |
— |
|
|
$ |
(51 |
) |
|
$ |
— |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of properties |
|
|
— |
|
|
|
51 |
|
|
|
— |
|
NON-GAAP GAIN
ON SALE OF PROPERTIES |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
$ |
704 |
|
|
$ |
754 |
|
|
$ |
842 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
— |
|
Stock-based compensation |
|
|
(47 |
) |
|
|
(56 |
) |
|
|
(69 |
) |
Restructuring and other charges |
|
|
— |
|
|
|
(80 |
) |
|
|
(27 |
) |
Acquisition-related expense |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
Gain on
sale of properties |
|
|
— |
|
|
|
51 |
|
|
|
— |
|
NON-GAAP
OPERATING EXPENSES |
|
$ |
652 |
|
|
$ |
658 |
|
|
$ |
746 |
|
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
INCOME STATEMENT INFORMATION |
|
(In millions, except net income per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
FROM OPERATIONS |
|
$ |
93 |
|
|
$ |
64 |
|
|
$ |
(26 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
11 |
|
|
|
25 |
|
|
|
14 |
|
Stock-based compensation |
|
|
52 |
|
|
|
61 |
|
|
|
77 |
|
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Restructuring and other charges |
|
|
— |
|
|
|
80 |
|
|
|
27 |
|
Acquisition-related expense |
|
|
— |
|
|
|
6 |
|
|
|
— |
|
Gain on
sale of properties |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
NON-GAAP INCOME
FROM OPERATIONS |
|
$ |
156 |
|
|
$ |
185 |
|
|
$ |
103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAXES |
|
$ |
92 |
|
|
$ |
60 |
|
|
$ |
(22 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
11 |
|
|
|
25 |
|
|
|
14 |
|
Stock-based compensation |
|
|
52 |
|
|
|
61 |
|
|
|
77 |
|
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Restructuring and other charges |
|
|
— |
|
|
|
80 |
|
|
|
27 |
|
Acquisition-related expense |
|
|
— |
|
|
|
6 |
|
|
|
— |
|
Gain on
sale of properties |
|
|
— |
|
|
|
(51 |
) |
|
|
— |
|
NON-GAAP INCOME
BEFORE INCOME TAXES |
|
$ |
155 |
|
|
$ |
181 |
|
|
$ |
107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR
INCOME TAXES |
|
$ |
28 |
|
|
$ |
68 |
|
|
$ |
8 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Income
tax effect of non-GAAP adjustments |
|
|
(2 |
) |
|
|
20 |
|
|
|
23 |
|
Income
tax expenses from integration of intellectual properties from
acquisition |
|
|
— |
|
|
|
(64 |
) |
|
|
— |
|
Settlement of income tax audit |
|
|
— |
|
|
|
— |
|
|
|
(13 |
) |
NON-GAAP
PROVISION FOR INCOME TAXES |
|
$ |
26 |
|
|
$ |
24 |
|
|
$ |
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) PER SHARE |
|
$ |
0.23 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.10 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
0.04 |
|
|
|
0.09 |
|
|
|
0.05 |
|
Stock-based compensation |
|
|
0.18 |
|
|
|
0.21 |
|
|
|
0.25 |
|
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
Restructuring and other charges |
|
|
— |
|
|
|
0.28 |
|
|
|
0.09 |
|
Acquisition-related expense |
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
Gain on
sale of properties |
|
|
— |
|
|
|
(0.18 |
) |
|
|
— |
|
Income
tax effect of non-GAAP adjustments |
|
|
0.01 |
|
|
|
(0.07 |
) |
|
|
(0.08 |
) |
Income
tax expenses from integration of intellectual properties from
acquisition |
|
|
— |
|
|
|
0.23 |
|
|
|
— |
|
Settlement of income tax audit |
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
NON-GAAP NET
INCOME PER SHARE |
|
$ |
0.46 |
|
|
$ |
0.55 |
|
|
$ |
0.29 |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
GROSS MARGIN |
|
($ in millions) |
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin-GAAP |
|
|
61.6 |
% |
|
|
59.3 |
% |
|
|
61.1 |
% |
Cost of
revenues adjustments |
|
|
0.9 |
% |
|
|
1.8 |
% |
|
|
2.5 |
% |
Gross
margin-Non-GAAP |
|
|
62.4 |
% |
|
|
61.1 |
% |
|
|
63.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
revenues |
|
$ |
497 |
|
|
$ |
562 |
|
|
$ |
519 |
|
Cost of revenues
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(6 |
) |
|
|
(20 |
) |
|
|
(14 |
) |
Stock-based compensation |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
Non-GAAP cost of
revenues |
|
$ |
486 |
|
|
$ |
537 |
|
|
$ |
486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
1,294 |
|
|
$ |
1,380 |
|
|
$ |
1,335 |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
PRODUCT GROSS MARGIN |
|
($ in millions) |
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product gross
margin-GAAP |
|
|
45.6 |
% |
|
|
44.0 |
% |
|
|
48.0 |
% |
Cost of
product revenues adjustments |
|
|
1.1 |
% |
|
|
2.8 |
% |
|
|
3.2 |
% |
Product gross
margin-Non-GAAP |
|
|
46.7 |
% |
|
|
46.8 |
% |
|
|
51.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of product
revenues |
|
$ |
359 |
|
|
$ |
424 |
|
|
$ |
345 |
|
Cost of product
revenues adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(6 |
) |
|
|
(20 |
) |
|
|
(14 |
) |
Stock-based compensation |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
Non-GAAP cost of
product revenues |
|
$ |
352 |
|
|
$ |
403 |
|
|
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenues |
|
$ |
660 |
|
|
$ |
757 |
|
|
$ |
664 |
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
HARDWARE MAINTENANCE AND OTHER SERVICES GROSS
MARGIN |
|
($ in millions) |
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware maintenance and other services gross
margin-GAAP |
|
|
66.9 |
% |
|
|
66.8 |
% |
|
|
61.2 |
% |
Cost of hardware maintenance and other services revenues
adjustments |
|
|
1.0 |
% |
|
|
1.0 |
% |
|
|
2.8 |
% |
Hardware maintenance and other services gross
margin-Non-GAAP |
|
|
67.9 |
% |
|
|
67.9 |
% |
|
|
64.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost
of hardware maintenance and other services revenues |
|
$ |
130 |
|
|
$ |
129 |
|
|
$ |
164 |
|
Cost of
hardware maintenance and other services revenues adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(6 |
) |
Asset impairment |
|
|
— |
|
|
|
— |
|
|
|
(6 |
) |
Non-GAAP
cost of hardware maintenance and other services revenues |
|
$ |
126 |
|
|
$ |
125 |
|
|
$ |
152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware
maintenance and other services revenues |
|
$ |
393 |
|
|
$ |
389 |
|
|
$ |
423 |
|
|
|
|
|
RECONCILIATION OF NON-GAAP TO
GAAP |
|
EFFECTIVE TAX RATE |
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective
tax rate |
|
|
30.4 |
% |
|
|
113.3 |
% |
|
|
(36.4 |
%) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax
effect of non-GAAP adjustments |
|
|
(13.8 |
%) |
|
|
(64.9 |
%) |
|
|
65.5 |
% |
Income
tax expenses from integration of intellectual properties from
acquisition |
|
|
— |
% |
|
|
(35.4 |
%) |
|
|
— |
% |
Settlement of income tax audit |
|
|
— |
% |
|
|
— |
% |
|
|
(12.1 |
%) |
Non-GAAP
effective tax rate |
|
|
16.6 |
% |
|
|
13.1 |
% |
|
|
17.0 |
% |
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES |
|
TO FREE CASH FLOW (NON-GAAP) |
|
(In millions) |
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
Net cash provided by
operating activities |
|
$ |
228 |
|
|
$ |
345 |
|
|
$ |
129 |
|
Purchases of property
and equipment |
|
|
(36 |
) |
|
|
(35 |
) |
|
|
(38 |
) |
Free cash
flow |
|
$ |
192 |
|
|
$ |
310 |
|
|
$ |
91 |
|
INVENTORY TURNS AND RECONCILIATION OF NON-GAAP
TO GAAP |
|
COST OF REVENUES USED IN INVENTORY
TURNS |
|
(In millions, except annualized inventory
turns) |
|
|
|
|
|
|
|
Q1'FY17 |
|
|
Q4'FY16 |
|
|
Q1'FY16 |
|
Annualized
inventory turns-GAAP |
|
|
25 |
|
|
|
23 |
|
|
|
11 |
|
Cost of
revenues adjustments |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Annualized
inventory turns-Non-GAAP |
|
|
24 |
|
|
|
22 |
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
revenues |
|
$ |
497 |
|
|
$ |
562 |
|
|
$ |
519 |
|
Cost of revenues
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
(6 |
) |
|
|
(20 |
) |
|
|
(14 |
) |
Stock-based compensation |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
Asset
impairment |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
Non-GAAP cost of
revenues |
|
$ |
486 |
|
|
$ |
537 |
|
|
$ |
486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory |
|
$ |
81 |
|
|
$ |
98 |
|
|
$ |
193 |
|
|
Some items
may not add or recalculate due to rounding. |
NETAPP, INC. |
|
RECONCILIATION OF NON-GAAP GUIDANCE TO
GAAP |
|
EXPRESSED AS EARNINGS PER SHARE |
|
SECOND QUARTER FISCAL 2017 |
|
|
|
|
|
|
|
|
Second Quarter |
|
|
|
Fiscal 2017 |
|
|
|
|
|
|
Non-GAAP Guidance - Net
Income Per Share |
|
$0.51 - $0.56 |
|
|
|
|
|
|
Adjustments of Specific
Items to Net Income |
|
|
|
|
Per Share
for the Second Quarter Fiscal 2017: |
|
|
|
|
Amortization of intangible assets |
|
|
(0.04 |
) |
Stock-based compensation expense |
|
|
(0.19 |
) |
Income
tax effect of non-GAAP adjustments |
|
|
0.03 |
|
Total Adjustments |
|
|
(0.20 |
) |
|
|
|
|
|
GAAP Guidance - Net
Income Per Share |
|
$0.31 - $0.36 |
|
Press Contact:
Kristin Bleier
NetApp
1 408 419 3098
kristin.bleier@netapp.com
Investor Contact:
Kris Newton
NetApp
1 408 822 3312
kris.newton@netapp.com
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