Click here to close now.




















Welcome!

Microsoft Cloud Authors: Greg O'Connor, Elizabeth White, Wesley Coelho, Adine Deford, the Editor

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
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be.
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small, but are focused on specific tasks. The ability for developers to deploy multiple containers – thous...
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now 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 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Communication) is an open source project supported by Google, Mozilla and Opera that aims to enable bro...
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of streaming data in the cloud with an enterprise grade SLA. It features built-in integration with Azur...
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and analyzed? As an area of investment, how might a retail company move towards an innovation methodolo...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on demos and comprehensive walkthroughs.
Contrary to mainstream media attention, the multiple possibilities of how consumer IoT will transform our everyday lives aren’t the only angle of this headline-gaining trend. There’s a huge opportunity for “industrial IoT” and “Smart Cities” to impact the world in the same capacity – especially during critical situations. For example, a community water dam that needs to release water can leverage embedded critical communications logic to alert the appropriate individuals, on the right device, as soon as they are needed to take action.
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing these ideas and some early experiments performed in the Kurento open source software community in areas ...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevOps to advance innovation and increase agility. Specializing in designing, imple...
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Treloar, President and COO of Bebaio, will explore examples of brands transforming their businesses by t...
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so they don't have to be replaced and are instantly converted to become smart, connected devices.
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts, GM of Platform at FinancialForce.com, will discuss the value of business applications on wearable ...
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Manufacturing connected IoT versions of traditional products requires more than multiple deep technology skills. It also requires a shift in mindset, to realize that connected, sensor-enabled “things” act more like services than what we usually think of as products. In his session at @ThingsExpo, David Friedman, CEO and co-founder of Ayla Networks, will discuss how when sensors start generating detailed real-world data about products and how they’re being used, smart manufacturers can use the data to create additional revenue streams, such as improved warranties or premium features. Or slash...