NetApp Announces Results For Fourth Quarter And Fiscal Year 2011

Company Reports Q4 FY'11 Revenues of $1.428 Billion; Fiscal Year Revenues of $5.123 Billion

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Sunnyvale, Calif.-May 25, 2011-NetApp (NASDAQ: NTAP) today reported results for the fourth quarter and fiscal year 2011, which ended April 29, 2011. Revenues for the fourth quarter of fiscal year 2011 totaled $1.428 billion compared to revenues of $1.172 billion for the same period one year ago.

For the fourth quarter of fiscal year 2011, GAAP net income was $160.6 million, or $0.40 per share[1] compared to GAAP net income of $145.1 million, or $0.40 per share for the same period a year ago. Non-GAAP net income for the fourth quarter of fiscal year 2011 was $236.7 million, or $0.59 per share[2], compared to non-GAAP net income of $183.1 million, or $0.50 per share for the same period a year ago.

Revenues for fiscal year 2011 totaled $5.123 billion compared to revenues of $3.931 billion for fiscal year 2010. GAAP net income for fiscal year 2011 was $673.1 million, or $1.71 per share, compared to GAAP net income of $400.4 million, or $1.13 per share for fiscal year 2010. Non-GAAP net income for fiscal year 2011 totaled $865.7 million, or $2.20 per share, compared to non-GAAP net income of $533.0 million, or $1.51 per share for fiscal year 2010.

NetApp delivered 30% revenue growth, 38% growth in cash from operations and over $1B in non-GAAP operating profit during fiscal 2011. We achieved the largest market share gains in our history and closed a record number of million dollar deals, demonstrating our momentum in the market as enterprise customers increasingly choose NetApp as their vendor of choice for storage virtualization and cloud deployments, said Tom Georgens, president and CEO. Together with our partners we create unmatched IT efficiency and flexibility with innovative solutions that solve the biggest and hardest problems in accessing and protecting business-critical information.

In the fourth quarter of fiscal year 2011, NetApp adopted mandatory new accounting standards related to revenue recognition for transactions originating or materially modified in fiscal year 2011. We implemented these standards retrospectively to the beginning of fiscal year 2011; therefore the full year and previously reported quarterly results for fiscal 2011 have been adjusted to reflect the adoption of these new standards. An analysis of the impact of the new accounting standards can be found on page 3 of the Supplemental Commentary and the adjusted Statements of Operations for prior quarters can be found on page 14 of the Supplemental Commentary and on our website at investors.netapp.com.

Outlook

NetApp estimates revenue for the first quarter of fiscal year 2012 to be approximately $1.500 billion, plus or minus 3%, which equates to approximately 2% to 8% sequential revenue growth and approximately 26% to 34% year over year revenue growth.

NetApp estimates that first quarter fiscal year 2012 GAAP earnings per share will be approximately $0.31 to $0.36 per share. NetApp estimates that first quarter fiscal year 2012 non-GAAP earnings per share will be approximately $0.52 to $0.57 per share.

NetApp estimates that share count for the first quarter of fiscal year 2012 will increase to approximately 410 million shares, including an estimated 16 million shares from the companys outstanding convertible notes[3] and 9 million shares from outstanding warrants. Share count does not include the companys outstanding note hedges that are expected to offset 80% of the dilution from the convertible notes at maturity or conversion.

The above guidance reflects the new accounting standards related to revenue recognition.

Business Highlights

In its fourth quarter of fiscal year 2011, NetApp continued to demonstrate its commitment to providing customers and partners with the solutions and technologies that are foundational to their success. During the quarter, NetApp entered into a definitive agreement to purchase the Engenio external storage systems business from LSI Corporation to enable NetApp to expand its addressable market and generate greater revenue growth with a strategic storage platform intended to capitalize on new high-growth opportunities for big-bandwidth and high-performance applications. Additionally, NetApp continues to enable enterprises to make the transition to a flexible and shared IT infrastructure and once again received numerous awards honoring its product innovation, executive leadership, and culture. Highlights included the following:

NetApp to Address Emerging, Fast-Growing Market Segments for Big-Bandwidth and High-Performance Applications

The purchase of the Engenio external storage systems business provides NetApp with a storage platform that is complementary to its existing NetApp Data ONTAP platform and is targeted to address emerging customer needs around big-bandwidth and high-performance applications such as full-motion video and digital video surveillance. The purchase will help enable NetApp to capitalize on the expected growth within this emerging market and help it further diversify its channels to market through a proven, mature OEM business.

NetApp Enables Transition to a Shared IT Infrastructure

NetApp helps Suncorp Group spark innovation on shared IT infrastructure. The Suncorp Group, a provider of diversified financial services and one of Australias largest companies, recently made a strategic bet on storage to fuel its growth and transformation as a company. With NetApp as its storage foundation, Suncorp migrated 80% of its entire IT environment to a shared infrastructure, creating a culture of innovation throughout the company and enabling it to scale rapidly.

NetApp enables leading service providers to deliver innovative cloud services. Expanding on its strategy to broaden and leverage its diverse pathways to reach customers, NetApp is

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