Click here to close now.

Welcome!

.NET Authors: Liz McMillan, PagerDuty Blog, Jackie Kahle, Esmeralda Swartz, Kyle Samani

News Feed Item

NetApp Reports First Quarter Fiscal Year 2015 Results

Net Revenues of $1.49 Billion; Non-GAAP EPS of $0.60, Up 13% Year-Over-Year

SUNNYVALE, CA -- (Marketwired) -- 08/13/14 -- NetApp (NASDAQ: NTAP)

  • Completed refresh of FAS product line and introduced new all-flash products
  • Clustered Data ONTAP® node shipments increased 177% year-over-year
  • Flash capacity shipped more than doubled year-over-year

NetApp (NASDAQ: NTAP) today reported financial results for the first quarter of fiscal year 2015 ended July 25, 2014.

First Quarter Financial Results
Net revenues for the first quarter of fiscal year 2015 were $1.49 billion. GAAP net income for the first quarter of fiscal year 2015 was $88 million, or $0.27 per share,(1) compared to GAAP net income of $82 million, or $0.23 per share, for the comparable period of the prior year. Non-GAAP net income for the first quarter of fiscal year 2015 was $198 million, or $0.60 per share,(2) compared to non-GAAP net income of $192 million, or $0.53 per share, for the comparable period of the prior year.

Cash, Cash Equivalents and Investments
NetApp ended the first quarter of fiscal year 2015 with $5.56 billion of total cash, cash equivalents and investments and during the quarter generated $216 million in cash from operations. The company returned $172 million to shareholders during the quarter through share repurchases and a cash dividend. The next dividend in the amount of $0.165 per share will be paid on October 22, 2014 to shareholders of record as of the close of business on October 10, 2014.

"More large enterprises are relying on NetApp to help them bridge the on-premises architectures of today with the requirement to leverage multiple cloud services in the future," said Tom Georgens, Chairman and CEO. "Our best-in-class portfolio is driving momentum, enabling us to invest in continued innovation while delivering shareholder value."

Q2 Fiscal Year 2015 Outlook
The Company provided the following financial guidance for the second quarter of fiscal year 2015:

  • Net revenues are expected to be in the range of $1.49 billion to $1.59 billion
  • GAAP earnings per share is expected to be in the range of $0.45 to $0.50 per share
  • Non-GAAP earnings per share is expected to be in the range of $0.66 to $0.71 per share

Business Highlights

  • NetApp Delivers New Products:
    • NetApp® FAS8080 EX. The unified FAS8080 EX array is purpose-built for the most demanding business-critical applications with advanced quality-of-service capabilities to enable predictable performance.
    • NetApp FAS2500. The FAS2500 delivers optimal price/performance at an entry-level price point, while simplifying storage management operations.
    • All-flash FAS Products. New NetApp all-flash FAS products combine the high performance and low latency of flash with the enterprise reliability and extensive data management of NetApp Data ONTAP® software.
    • Updated OnCommand® Portfolio. OnCommand enables customers to better control clustered Data ONTAP and multivendor storage environments, driving down storage costs, improving service delivery through open integration, and maximizing investment by providing flexible reporting and cost analysis.
  • NetApp Strengthens Partnerships:
    • Delivered NetApp Private Storage (NPS) for Microsoft Azure. Building on its portfolio of Microsoft Cloud solutions, NetApp introduced NPS for Microsoft Azure, enabling customers to extend their IT infrastructure to Microsoft Azure to create a seamless, secure hybrid cloud environment.
    • Deepened Equinix Hybrid Cloud Partnership. The Equinix Cloud Exchange can dynamically connect NetApp Private Storage customers to multiple public clouds so that they can confidently explore multi-cloud deployments to handle large, complex workflows more efficiently.
    • Achieved $3 billion in FlexPod® Joint Sales for NetApp and Cisco. The industry's leading integrated infrastructure solution has generated $3 billion in joint sales since its launch in 2010.
  • NetApp Provides Cloud Service Architecture:
    • State Government Agency Implements NetApp Private Cloud Architecture. The State of California Natural Resources Agency is a model for cloud service architectures deploying NetApp's clustered Data ONTAP operating system, OnCommand System Manager, and FAS hybrid storage systems as part of its multitenant private cloud.

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

About NetApp
NetApp creates innovative storage and data management solutions that deliver outstanding cost efficiency and accelerate business breakthroughs. Our commitment to living our core values and consistently being recognized as a great place to work around the world are fundamental to our long-term growth and success, as well as the success of our pathway partners and customers. Discover our passion for helping companies around the world at www.netapp.com.

"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 all of the statements under the Q2 Fiscal Year 2015 Outlook section relating to the financial guidance for the second quarter of fiscal year 2015 and statements regarding the benefits to us and our customers of our products and partnerships, including those statements under the Business Highlights section. 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 economic and market conditions, changes in U.S. government spending, revenue seasonality, and matters specific to our business, such as customer demand for and acceptance of our products and services and changes in storage consumption models. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the sections titled "Risk Factors" in our most recently submitted Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

NetApp, the NetApp logo, Data ONTAP, Flex Pod, and OnCommand are trademarks of NetApp, Inc. All other marks are the property of their respective owners.

(1) GAAP earnings per share is calculated using the diluted number of shares for all periods presented.
(2) Non-GAAP net income excludes, when applicable, the amortization of intangible assets, stock-based compensation, acquisition-related income and expenses, restructuring and other charges, asset impairments, non-cash interest expense associated with our debt, net losses or gains on investments, and our GAAP tax provision, but includes a non-GAAP tax provision 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. Effective the first quarter of fiscal 2015, 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-reoccurring 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) the impact of a temporary lapse of tax law, such as the federal R&D credit, if such extensions have routinely been granted based on past legislative history and are expected to be reinstated in the near future. Non-GAAP earnings per share is calculated using the diluted number of share for all periods presented. A detailed reconciliation of our non-GAAP to GAAP results can be found at http://investors.netapp.com.

NetApp Usage of Non-GAAP Financials
The Company refers to the non-GAAP financial measures in making operating decisions because they provide meaningful supplemental information regarding the Company's ongoing operational performance. Non-GAAP net income excludes, when applicable, the amortization of intangible assets, stock-based compensation, acquisition-related income and expenses, restructuring and other charges, asset impairments, non-cash interest expense associated with our debt, net losses or gains on investments, and 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. Effective the first quarter of fiscal 2015, 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-reoccurring 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) the impact of a temporary lapse of tax law, such as the federal R&D credit, if such extensions have routinely been granted based on past legislative history and are expected to be reinstated in the near future.

We have excluded these items in order to enhance investors' understanding of our ongoing operations. The use of these non-GAAP financial measures has limitations and they should not solely be used to evaluate our Company without reference to their corresponding GAAP financial measures. As such, we provide both non-GAAP financial measures in conjunction with GAAP financial measures.

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, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In millions)
                                 (Unaudited)

                                                July 25, 2014 April 25, 2014
                                                ------------- --------------

ASSETS

Current assets:
  Cash, cash equivalents and investments        $     5,564.2 $      5,003.3
  Accounts receivable, net                              585.4          855.9
  Inventories                                           104.2          122.4
  Other current assets                                  494.3          489.7
                                                ------------- --------------
    Total current assets                              6,748.1        6,471.3

Property and equipment, net                           1,098.0        1,108.8
Goodwill and purchased intangible assets, net         1,095.1        1,109.6
Other non-current assets                                531.2          529.5
                                                ------------- --------------
      Total assets                              $     9,472.4 $      9,219.2
                                                ============= ==============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                              $       183.1 $        247.0
  Accrued compensation and other current
   liabilities                                          561.4          793.8
  Short-term deferred revenue                         1,656.4        1,653.8
                                                ------------- --------------
    Total current liabilities                         2,400.9        2,694.6

Long-term debt                                        1,494.1          995.5
Other long-term liabilities                             320.8          296.2
Long-term deferred revenue                            1,419.9        1,446.4
                                                ------------- --------------
    Total liabilities                                 5,635.7        5,432.7

Stockholders' equity                                  3,836.7        3,786.5
                                                ------------- --------------
      Total liabilities and stockholders'
       equity                                   $     9,472.4 $      9,219.2
                                                ============= ==============



                                NETAPP, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In millions, except per share amounts)
                                (Unaudited)

                                                 Three Months Ended
                                         ----------------------------------
                                           July 25, 2014     July 26, 2013
                                         ----------------  ----------------

Revenues:
  Product                                $          882.6  $          930.8
  Software entitlements and maintenance             221.3             228.5
  Service                                           385.3             356.9
                                         ----------------  ----------------
    Net revenues                                  1,489.2           1,516.2
                                         ----------------  ----------------

Cost of revenues:
  Cost of product                                   394.2             449.9
  Cost of software entitlements and
   maintenance                                        8.2               7.5
  Cost of service                                   148.7             149.2
                                         ----------------  ----------------
    Total cost of revenues                          551.1             606.6
                                         ----------------  ----------------
      Gross profit                                  938.1             909.6
                                         ----------------  ----------------

Operating expenses:
  Sales and marketing                               480.2             467.8
  Research and development                          228.0             228.1
  General and administrative                         70.0              68.4
  Restructuring and other charges                       -              48.4
                                         ----------------  ----------------
    Total operating expenses                        778.2             812.7
                                         ----------------  ----------------

Income from operations                              159.9              96.9

Other income/(expense), net:
  Interest income                                     8.3              10.0
  Interest expense                                   (9.0)            (16.5)
  Other income, net                                   0.5               1.9
                                         ----------------  ----------------
    Total other income/(expense), net                (0.2)             (4.6)
                                         ----------------  ----------------

Income before income taxes                          159.7              92.3

Provision for income taxes                           71.3              10.7
                                         ----------------  ----------------

Net income                               $           88.4  $           81.6
                                         ================  ================

Net income per share:
  Basic                                  $           0.27  $           0.23
                                         ================  ================
  Diluted                                $           0.27  $           0.23
                                         ================  ================

Shares used in net income per share
 calculations:
  Basic                                             323.5             350.9
                                         ================  ================
  Diluted                                           329.1             359.9
                                         ================  ================

Cash dividends declared per share        $          0.165  $          0.150
                                         ================  ================



                                NETAPP, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                               (In millions)
                                (Unaudited)

                                                    Three Months Ended
                                               ----------------------------
                                               July 25, 2014  July 26, 2013
                                               -------------  -------------

Cash flows from operating activities:
  Net income                                   $        88.4  $        81.6
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation and amortization                       77.5           85.9
    Stock-based compensation                            62.3           66.3
    Accretion of discount and issuance costs
     on debt                                             0.6            8.2
    Excess tax benefit from stock-based
     compensation                                      (42.6)          (0.1)
    Other, net                                          45.1          (35.4)
  Changes in assets and liabilities, net of
   acquired businesses:
    Accounts receivable                                271.5          265.2
    Inventories                                         18.1           22.9
    Accounts payable                                   (62.3)         (37.9)
    Accrued compensation and other current
     liabilities                                      (227.1)        (175.4)
    Deferred revenue                                   (26.5)         (54.3)
    Changes in other operating assets and
     liabilities, net                                   10.5           58.8
                                               -------------  -------------
      Net cash provided by operating
       activities                                      215.5          285.8
                                               -------------  -------------
Cash flows from investing activities:
  Redemptions (purchases) of investments, net          191.2          390.0
  Purchases of property and equipment                  (58.4)         (65.3)
  Other investing activities, net                        0.2            1.2
                                               -------------  -------------
      Net cash provided by investing
       activities                                      133.0          325.9
                                               -------------  -------------
Cash flows from financing activities:
  Issuance of common stock                              28.4           71.5
  Repurchase of common stock and forward
   contract                                           (118.9)        (849.5)
  Excess tax benefit from stock-based
   compensation                                         42.6            0.1
  Repayment of debt                                        -       (1,264.9)
  Issuance of long-term debt, net                      494.7              -
  Dividends paid                                       (53.4)         (51.4)
  Other financing activities, net                       (1.8)           9.5
                                               -------------  -------------
      Net cash provided by (used in) financing
       activities                                      391.6       (2,084.7)
                                               -------------  -------------

Effect of exchange rate changes on cash and
 cash equivalents                                        0.5           (7.3)

Net increase (decrease) in cash and cash
 equivalents                                           740.6       (1,480.3)
Cash and cash equivalents:
  Beginning of period                                2,291.0        3,277.1
                                               -------------  -------------
  End of period                                $     3,031.6  $     1,796.8
                                               =============  =============



                                NETAPP, INC.
                             SUPPLEMENTAL DATA
  (In millions except net income per share, percentages, DSO and Inventory
                                   Turns)
                                (Unaudited)


                                             Q1 FY'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
  Revenues
Product Revenue                             $   882.6  $ 1,042.8  $   930.8
Software Entitlements & Maintenance Revenue
 (SEM)                                          221.3      227.5      228.5
Service Revenue:                                385.3      378.7      356.9
  Hardware Maintenance Support Contracts
   Revenue                                      302.8      293.7      273.6
  Professional & Other Services Revenue          82.5       85.0       83.2
                                            ---------  ---------  ---------
    Net Revenues                            $ 1,489.2  $ 1,649.0  $ 1,516.2

Branded and OEM Revenues
                                             Q1 FY'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
Branded Revenue                             $ 1,360.5  $ 1,539.2  $ 1,349.7
OEM Revenue                                     128.7      109.8      166.5
                                            ---------  ---------  ---------
    Net Revenues                            $ 1,489.2  $ 1,649.0  $ 1,516.2

Branded revenue includes revenue from all products and services sold
directly by us or our partners under the NetApp brand, including NetApp
branded E-Series products and solutions.
OEM revenue comprises revenue from the sale of our products by other
companies under their brands and includes revenue from IBM, Fujitsu, and
other E-Series OEM relationships.

  Geographic Mix
                                              % of Q1    % of Q4    % of Q1
                                                FY'15      FY'14      FY'14
                                              Revenue    Revenue    Revenue
                                            ---------  ---------  ---------
Americas                                           56%        56%        57%
    Americas Commercial                            44%        43%        44%
    U.S. Public Sector                             12%        12%        12%
EMEA                                               30%        31%        30%
Asia Pacific                                       14%        13%        14%

  Pathways Mix
                                              % of Q1    % of Q4    % of Q1
                                                FY'15      FY'14      FY'14
                                              Revenue    Revenue    Revenue
                                            ---------  ---------  ---------
Direct                                             21%        17%        20%
Indirect                                           79%        83%        80%

Direct revenues are those sold through our direct sales force. Indirect
revenues include those sold through value-added resellers, system
integrators, OEMs and distributors.
Indirect revenue mix reflects order fulfillment and is not reflective of
who is responsible for the customer relationship.

  Non-GAAP Gross Margins
                                             Q1 FY'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
Non-GAAP Gross Margin                            64.3%      64.4%      61.3%
    Product                                      57.1%      58.0%      53.3%
    Software Entitlements & Maintenance
     (SEM)                                       96.3%      96.5%      96.7%
    Service                                      62.7%      62.7%      59.5%


  Non-GAAP Income from Operations, Income
   before Income Taxes & Effective Tax Rate
                                             Q1 FY'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
Non-GAAP Income from Operations             $   236.7  $   344.4  $   226.5
    % of Net Revenue                             15.9%      20.9%      14.9%
Non-GAAP Income before Income Taxes         $   236.5  $   347.2  $   230.1
Non-GAAP Effective Tax Rate                      16.5%      18.1%      16.6%



  Non-GAAP Net Income
                                             Q1 FY'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
Non-GAAP Net Income                         $   197.5  $   284.2  $   191.9
Weighted Average Common Shares Outstanding,
 Diluted                                        329.1      336.4      359.9
Non-GAAP Net Income per Share, Diluted      $    0.60  $    0.84  $    0.53



  Select Balance Sheet Items
                                             Q1 FY'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
Deferred Revenue                            $ 3,076.3  $ 3,100.2  $ 2,941.3
DSO (days)                                         36         47         32
Inventory Turns                                    20         19         20


Days sales outstanding (DSO) is defined as accounts receivable, net divided
by net revenue, 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'15   Q4 FY'14   Q1 FY'14
                                            ---------  ---------  ---------
Net Cash Provided by Operating Activities   $   215.5  $   369.5  $   285.8
Purchases of Property and Equipment         $    58.4  $    56.0  $    65.3
Free Cash Flow                              $   157.1  $   313.5  $   220.5
Free Cash Flow as % of Total Revenue             10.5%      19.0%      14.5%

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'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------

NET INCOME                                 $    88.4   $   197.0  $    81.6
Adjustments:
  Amortization of intangible assets             14.5        14.6       14.9
  Stock-based compensation                      62.3        67.2       66.3
  Restructuring and other charges                  -        38.8       48.4
  Non-cash interest expense                        -           -        8.2
  Income tax effect of non-GAAP
   adjustments                                 (15.1)      (33.4)     (27.5)
  Settlement of income tax audit                47.4           -          -
                                           ---------   ---------  ---------
NON-GAAP NET INCOME                        $   197.5   $   284.2  $   191.9
                                           =========   =========  =========

COST OF REVENUES                           $   551.1   $   607.0  $   606.6
Adjustments:
  Amortization of intangible assets            (14.3)      (14.3)     (14.3)
  Stock-based compensation                      (5.9)       (5.3)      (5.3)
                                           ---------   ---------  ---------
NON-GAAP COST OF REVENUES                  $   530.9   $   587.4  $   587.0
                                           =========   =========  =========

COST OF PRODUCT REVENUES                   $   394.2   $   453.2  $   449.9
Adjustments:
  Amortization of intangible assets            (13.7)      (13.7)     (13.7)
  Stock-based compensation                      (1.5)       (1.4)      (1.3)
                                           ---------   ---------  ---------
NON-GAAP COST OF PRODUCT REVENUES          $   379.0   $   438.1  $   434.9
                                           =========   =========  =========

COST OF SERVICE REVENUES                   $   148.7   $   145.8  $   149.2
Adjustments:
  Amortization of intangible assets             (0.6)       (0.6)      (0.6)
  Stock-based compensation                      (4.4)       (3.9)      (4.0)
                                           ---------   ---------  ---------
NON-GAAP COST OF SERVICE REVENUES          $   143.7   $   141.3  $   144.6
                                           =========   =========  =========

GROSS PROFIT                               $   938.1   $ 1,042.0  $   909.6
Adjustments:
  Amortization of intangible assets             14.3        14.3       14.3
  Stock-based compensation                       5.9         5.3        5.3
                                           ---------   ---------  ---------
NON-GAAP GROSS PROFIT                      $   958.3   $ 1,061.6  $   929.2
                                           =========   =========  =========

SALES AND MARKETING EXPENSES               $   480.2   $   475.0  $   467.8
Adjustments:
  Amortization of intangible assets             (0.2)       (0.3)      (0.6)
  Stock-based compensation                     (27.0)      (30.4)     (30.5)
                                           ---------   ---------  ---------
NON-GAAP SALES AND MARKETING EXPENSES      $   453.0   $   444.3  $   436.7
                                           =========   =========  =========

RESEARCH AND DEVELOPMENT EXPENSES          $   228.0   $   230.7  $   228.1
Adjustment:
  Stock-based compensation                     (21.5)      (21.1)     (21.4)
                                           ---------   ---------  ---------
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES $   206.5   $   209.6  $   206.7
                                           =========   =========  =========

GENERAL AND ADMINISTRATIVE EXPENSES        $    70.0   $    73.7  $    68.4
Adjustment:
  Stock-based compensation                      (7.9)      (10.4)      (9.1)
                                           ---------   ---------  ---------
NON-GAAP GENERAL AND ADMINISTRATIVE
 EXPENSES                                  $    62.1   $    63.3  $    59.3
                                           =========   =========  =========



                                NETAPP, INC.
                     RECONCILIATION OF NON-GAAP TO GAAP
                        INCOME STATEMENT INFORMATION
             (In millions, except net income per share amounts)

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------

RESTRUCTURING AND OTHER CHARGES            $       -   $    38.8  $    48.4
Adjustment:
  Restructuring and other charges                  -       (38.8)     (48.4)
                                           ---------   ---------  ---------
NON-GAAP RESTRUCTURING AND OTHER CHARGES   $       -   $       -  $       -
                                           =========   =========  =========

OPERATING EXPENSES                         $   778.2   $   818.2  $   812.7
Adjustments:
  Amortization of intangible assets             (0.2)       (0.3)      (0.6)
  Stock-based compensation                     (56.4)      (61.9)     (61.0)
  Restructuring and other charges                  -       (38.8)     (48.4)
                                           ---------   ---------  ---------
NON-GAAP OPERATING EXPENSES                $   721.6   $   717.2  $   702.7
                                           =========   =========  =========

INCOME FROM OPERATIONS                     $   159.9   $   223.8  $    96.9
Adjustments:
  Amortization of intangible assets             14.5        14.6       14.9
  Stock-based compensation                      62.3        67.2       66.3
  Restructuring and other charges                  -        38.8       48.4
                                           ---------   ---------  ---------
NON-GAAP INCOME FROM OPERATIONS            $   236.7   $   344.4  $   226.5
                                           =========   =========  =========

TOTAL OTHER INCOME (EXPENSE), NET          $    (0.2)  $     2.8  $    (4.6)
Adjustment:
  Non-cash interest expense                        -           -        8.2
                                           ---------   ---------  ---------
NON-GAAP TOTAL OTHER INCOME, NET           $    (0.2)  $     2.8  $     3.6
                                           =========   =========  =========

INCOME BEFORE INCOME TAXES                 $   159.7   $   226.6  $    92.3
Adjustments:
  Amortization of intangible assets             14.5        14.6       14.9
  Stock-based compensation                      62.3        67.2       66.3
  Restructuring and other charges                  -        38.8       48.4
  Non-cash interest expense                        -           -        8.2
                                           ---------   ---------  ---------
NON-GAAP INCOME BEFORE INCOME TAXES        $   236.5   $   347.2  $   230.1
                                           =========   =========  =========

PROVISION FOR INCOME TAXES                 $    71.3   $    29.6  $    10.7
Adjustment:
  Income tax effect of non-GAAP
   adjustments                                  15.1        33.4       27.5
  Settlement of income tax audit               (47.4)          -          -
                                           ---------   ---------  ---------
NON-GAAP PROVISION FOR INCOME TAXES        $    39.0   $    63.0  $    38.2
                                           =========   =========  =========

NET INCOME PER SHARE                       $    0.27   $    0.59  $    0.23
Adjustments:
  Amortization of intangible assets             0.04        0.04       0.04
  Stock-based compensation                      0.19        0.20       0.18
  Restructuring and other charges                  -        0.11       0.13
  Non-cash interest expense                        -           -       0.02
  Income tax effect of non-GAAP
   adjustments                                 (0.04)      (0.10)     (0.08)
  Settlement of income tax audit                0.14           -          -
                                           ---------   ---------  ---------
NON-GAAP NET INCOME PER SHARE              $    0.60   $    0.84  $    0.53
                                           =========   =========  =========



                     RECONCILIATION OF NON-GAAP TO GAAP
                                GROSS MARGIN
                              ($ in millions)

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------

Gross margin-GAAP                               63.0%       63.2%      60.0%
  Cost of revenues adjustments                   1.4%        1.2%       1.3%
                                           ---------   ---------  ---------
Gross margin-Non-GAAP                           64.3%       64.4%      61.3%

GAAP cost of revenues                      $   551.1   $   607.0  $   606.6
Cost of revenues adjustments:
  Amortization of intangible assets            (14.3)      (14.3)     (14.3)
  Stock-based compensation                      (5.9)       (5.3)      (5.3)
                                           ---------   ---------  ---------
Non-GAAP cost of revenues                  $   530.9   $   587.4  $   587.0
                                           ---------   ---------  ---------

Revenues                                   $ 1,489.2   $ 1,649.0  $ 1,516.2



                     RECONCILIATION OF NON-GAAP TO GAAP
                            PRODUCT GROSS MARGIN
                              ($ in millions)

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------

Product gross margin-GAAP                       55.3%       56.5%      51.7%
  Cost of product revenues adjustments           1.7%        1.4%       1.6%
                                           ---------   ---------  ---------
Product gross margin-Non-GAAP                   57.1%       58.0%      53.3%

GAAP cost of product revenues              $   394.2   $   453.2  $   449.9
Cost of product revenues adjustments:
  Amortization of intangible assets            (13.7)      (13.7)     (13.7)
  Stock-based compensation                      (1.5)       (1.4)      (1.3)
                                           ---------   ---------  ---------
Non-GAAP cost of product revenues          $   379.0   $   438.1  $   434.9
                                           ---------   ---------  ---------

Product revenues                           $   882.6   $ 1,042.8  $   930.8



                     RECONCILIATION OF NON-GAAP TO GAAP
                           SERVICES GROSS MARGIN
                              ($ in millions)

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------

Services gross margin-GAAP                      61.4%       61.5%      58.2%
  Cost of service revenues adjustments           1.3%        1.2%       1.3%
                                           ---------   ---------  ---------
Services gross margin-Non-GAAP                  62.7%       62.7%      59.5%

GAAP cost of service revenues              $   148.7   $   145.8  $   149.2
Cost of product revenues adjustments:
  Amortization of intangible assets             (0.6)       (0.6)      (0.6)
  Stock-based compensation                      (4.4)       (3.9)      (4.0)
                                           ---------   ---------  ---------
Non-GAAP cost of service revenues          $   143.7   $   141.3  $   144.6
                                           ---------   ---------  ---------

Service revenues                           $   385.3   $   378.7  $   356.9



                     RECONCILIATION OF NON-GAAP TO GAAP
                             EFFECTIVE TAX RATE

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------

GAAP effective tax rate                         44.6%       13.1%      11.6%
Adjustments:
  Tax effect of non-GAAP adjustments            (8.1%)       5.1%       5.0%
  Settlement of income tax audit               (20.0%)         -          -
                                           ---------   ---------  ---------
Non-GAAP effective tax rate                     16.5%       18.1%      16.6%



        RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
                        TO FREE CASH FLOW (NON-GAAP)
                               (In millions)

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------
Net cash provided by operating activities  $   215.5   $   369.5  $   285.8
Purchases of property and equipment            (58.4)      (56.0)     (65.3)
                                           ---------   ---------  ---------
Free cash flow                             $   157.1   $   313.5  $   220.5



           INVENTORY TURNS AND RECONCILIATION OF NON-GAAP TO GAAP
                  COST OF REVENUES USED IN INVENTORY TURNS
              (In millions, except annualized inventory turns)

                                             Q1'FY15     Q4'FY14    Q1'FY14
                                           ---------   ---------  ---------
Annualized inventory turns- GAAP                  21          20         21
  Cost of revenues adjustments                    (1)         (1)        (1)
                                           ---------   ---------  ---------
Annualized inventory turns-Non-GAAP               20          19         20

GAAP cost of revenues                      $   551.1   $   607.0  $   606.6
Cost of revenues adjustments:
  Amortization of intangible assets            (14.3)      (14.3)     (14.3)
  Stock-based compensation                      (5.9)       (5.3)      (5.3)
                                           ---------   ---------  ---------
Non-GAAP cost of revenues                  $   530.9   $   587.4  $   587.0
                                           ---------   ---------  ---------

Inventory                                  $   104.2   $   122.4  $   116.5

  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 2015



                                                          Second Quarter
                                                            Fiscal 2015
                                                      ----------------------

Non-GAAP Guidance - Net Income Per Share                   $0.66 - $0.71


Adjustments of Specific Items to
  Net Income Per Share for the Second
  Quarter Fiscal 2015:

  Amortization of intangible assets                           (0.05)
  Stock-based compensation expense                            (0.20)
  Income tax effect of non-GAAP adjustments                    0.04
                                                      ----------------------
Total Adjustments                                             (0.21)

GAAP Guidance - Net Income Per Share                       $0.45 - $0.50


Press Contact:
Meghan Fintland
NetApp
408-822-1389
Email Contact

Investor Contact:
Kris Newton
NetApp
408-822-3312
Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
The list of ‘new paradigm’ technologies that now surrounds us appears to be at an all time high. From cloud computing and Big Data analytics to Bring Your Own Device (BYOD) and the Internet of Things (IoT), today we have to deal with what the industry likes to call ‘paradigm shifts’ at every level of IT. This is disruption; of course, we understand that – change is almost always disruptive.
SYS-CON Events announced today that Cisco, the worldwide leader in IT that transforms how people connect, communicate and collaborate, has been named “Gold Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cisco makes amazing things happen by connecting the unconnected. Cisco has shaped the future of the Internet by becoming the worldwide leader in transforming how people connect, communicate and collaborate. Cisco and our partners are building the platform for the Internet of Everything by connecting the...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product. Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things compatible devices.
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Docker is an excellent platform for organizations interested in running microservices. It offers portability and consistency between development and production environments, quick provisioning times, and a simple way to isolate services. In his session at DevOps Summit at 16th Cloud Expo, Shannon Williams, co-founder of Rancher Labs, will walk through these and other benefits of using Docker to run microservices, and provide an overview of RancherOS, a minimalist distribution of Linux designed expressly to run Docker. He will also discuss Rancher, an orchestration and service discovery platf...
SYS-CON Events announced today that Aria Systems, the leading innovator in recurring revenue, has been named “Bronze Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Proven by the world’s most demanding enterprises, including AAA NCNU, Constant Contact, Falck, Hootsuite, Pitney Bowes, Telekom Denmark, and VMware, Aria helps enterprises grow their recurring revenue businesses. With Aria’s end-to-end active monetization platform, global brands can get to market faster with a wider variety of products and services, while maximizin...
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes for use cases across the industrial, enterprise, and consumer segments.
SYS-CON Events announced today that Akana, formerly SOA Software, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Akana’s comprehensive suite of API Management, API Security, Integrated SOA Governance, and Cloud Integration solutions helps businesses accelerate digital transformation by securely extending their reach across multiple channels – mobile, cloud and Internet of Things. Akana enables enterprises to share data as APIs, connect and integrate applications, drive part...
After making a doctor’s appointment via your mobile device, you receive a calendar invite. The day of your appointment, you get a reminder with the doctor’s location and contact information. As you enter the doctor’s exam room, the medical team is equipped with the latest tablet containing your medical history – he or she makes real time updates to your medical file. At the end of your visit, you receive an electronic prescription to your preferred pharmacy and can schedule your next appointment.
SYS-CON Events announced today that Solgenia will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Solgenia is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between Personal and Professional Social, Mobile and Cloud user experiences, our solutions help large and medium-sized organizations dr...
SYS-CON Events announced today that Liaison Technologies, a leading provider of data management and integration cloud services and solutions, has been named "Silver Sponsor" of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York, NY. Liaison Technologies is a recognized market leader in providing cloud-enabled data integration and data management solutions to break down complex information barriers, enabling enterprises to make smarter decisions, faster.
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
SYS-CON Events announced today that CommVault has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. A singular vision – a belief in a better way to address current and future data management needs – guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and sim...
Cloud is not a commodity. And no matter what you call it, computing doesn’t come out of the sky. It comes from physical hardware inside brick and mortar facilities connected by hundreds of miles of networking cable. And no two clouds are built the same way. SoftLayer gives you the highest performing cloud infrastructure available. One platform that takes data centers around the world that are full of the widest range of cloud computing options, and then integrates and automates everything. Join SoftLayer on June 9 at 16th Cloud Expo to learn about IBM Cloud's SoftLayer platform, explore se...
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SYS-CON Media announced today that 9 out of 10 " most read" DevOps articles are published by @DevOpsSummit Blog. Launched in October 2014, @DevOpsSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce softw...
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE