NetApp Reports Second Quarter Fiscal Year 2018 Results

View Financial Tables (PDF)

Net Revenues of $1.42 Billion Grew 6% Year-over-Year

Second Quarter Fiscal 2018 Highlights

Product revenue increased 14% year-over-year

All-flash array annualized net revenue run rate of $1.7 billion increased 58% year-over-year

GAAP EPS of $0.64 and non-GAAP EPS of $0.81 increased 68% and 35% year-over-year, respectively

Sunnyvale, Calif.- November 15, 2017-NetApp (NASDAQ: NTAP) today reported financial results for the second quarter fiscal year 2018, ended October 27, 2017.

In the second quarter, NetApp again delivered strong operating results on the top and bottom lines. We also introduced a number of industry-leading innovations that position us for continued growth and expand our leadership position in the growth segments of the market, said George Kurian, chief executive officer. Our strong performance was driven by excellent execution and reflects our customers' clear and growing preference for the value of our Data Fabric strategy. We are winning because we enable our customers' success through data.

Second Quarter Fiscal 2018 Financial Results

Net Revenues: $1.42 billion, increased 6% year-over-year from $1.34 billion in the second quarter of fiscal 2017

Net Income: GAAP net income of $175 million, compared to GAAP net income of $109 million in the second quarter of fiscal 2017; non-GAAP net income1 of $223 million, compared to non-GAAP net income of $169 million in the second quarter of fiscal 2017

Earnings per Share: GAAP earnings per share2 of $0.64, compared to GAAP earnings per share of $0.38 in the second quarter of fiscal 2017; non-GAAP earnings per share of $0.81, compared to non-GAAP earnings per share of $0.60 in the second quarter of fiscal 2017

Cash, Cash Equivalents and Investments: $6.0 billion at the end of the second quarter fiscal year 2018

Cash from Operations: $314 million, compared to $158 million in the second quarter of fiscal 2017

Share Repurchase and Dividend: Returned $204 million to shareholders through share repurchases and a cash dividend

Third Quarter Fiscal 2018 Financial Outlook

The Company provided the following financial guidance for the third quarter of fiscal year 2018:

Net revenues are expected to be in the range of $1.425 billion to $1.575 billion

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

GAAPNon-GAAP

$1.18-$1.26* $0.86-$0.94

*GAAP earnings per share includes an expected $0.50 per share benefit, after tax, from gains on the sale of certain properties.

Dividend

Next cash dividend of $0.20 per share to be paid on January 24, 2018, to shareholders of record as of the close of business on January 5, 2018

Second Quarter Fiscal 2018 Business Highlights

New Solutions Expand NetApp Impact in Flash, Next-Generation Data Center, and Cloud

NetApp EF570 all-flash system is the storage industry's price/performance leader as demonstrated by SPC-1 and SPC-2 benchmark tests. 3

NetApp E5700 Series hybrid flash system accelerates performance and increases density with a hybrid flash system optimal for modern enterprise applications.

NetApp SANtricity Cloud Connector enables Data Fabric capabilities by providing cost-effective backup and recovery to the cloud from NetApp E-Series and EF-Series systems.

NetApp SANtricity 11.4 software now comes with security enhancements such as role-based access control and audit log, Active Directory support, and an external key manager.

NetApp Converged Infrastructure Solution for Data Analytics brings together the latest storage, networking, and server technologies to help simplify deployment of data analytics environments.

NetApp introduces new AI-enabled virtual support assistant, Elio, and Active IQ cloud-based analytics to help companies gain intelligent insights

NetApp expands collaboration with Microsoft Azure to deliver the industrys first Azure enterprise NFS service.

NetApp SolidFire Element OS 10 supports data movement from Element OS systems to ONTAP systems across the Data Fabric and helps customers align IT service levels to business goals.

NetApp HCI, built on SolidFire Element OS, the world's first enterprise-scale hyper converged solution, became generally available in October 2017.

StorageGRID Webscale 11 simplifies the creation of next-generation data center cloud architecture by enabling easy implementation of hybrid cloud data pipelines with AWS.

NetApp ONTAP 9.3 software offers 40% increased performance over earlier versions, further optimizes deduplication, and enhances security and compliance.

OnCommand Insight updated with new cloud cost monitoring provides a complete picture of IT infrastructure.

NetApp Enables Customers to Improve Their Performance Through Cloud and Flash Services

NetApp SolidFire enables Ensono to deliver more value with fewer resources allowing their clients to focus on accelerating their businesses and leave the burden of managing IT to Ensono.

NetApp Data Fabric solutions allow Renown Health to reduce downtime and performance concerns, while enabling the integrated healthcare network to deliver leading-edge services and care to more patients.

CloudOps leverages NetApp SolidFire as the storage foundation for CloudMC, the IaaS platform that enables users such as cloud.ca to rapidly grow secure, successful cloud-based businesses.

Healthix enlists NetApp as a strategic partner to build a nondisruptive solution for sharing patient data among unrelated healthcare organizations, while remaining compliant with patient privacy laws and regulations.

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

LINK:	http://www.netapp.com/us/company/news/press-releases/news-rel-20171115...
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