The company’s net income for the quarter, which ended April 24, were nearly slashed in half to $196 million, down from $396 million the year prior. Fourth-quarter 2020 revenues were $1.4 billion, falling 11.9% from last year’s $1.59 billion.
During NetApp’s quarterly earnings call, CEO George Kurian lauded the company’s fourth-quarter start for “strong gross margin, cash flow, and operating leverage in Q4 despite the challenging environment.”
Kurian said the company began the quarter on track to hit its targets prior to countries around the globe going into lockdown.
“In April, the pace of business slowed significantly and our visibility was reduced,” said Kurian, citing delays in large deals and customers’ accelerated orders to get ahead of shutdown and meet the remote working and digital business demands.
Additionally, its all-flash array run rate was $2.6 billion as quarterly revenue dropped 3% to $656 million.
In one bright note for the company, NetApp’s cloud data services delivered $111 million in annualized recurring revenue, growing 113% year over year and 34% sequentially. Cloud data services customer count now exceeds 3,500, more than doubling from the fourth-quarter of last year.
Quarterly revenues have been on a downward trend since the fourth-quarter of 2019 – marking this the fifth straight quarter of falling revenues exacerbated by the pandemic. Because of the COVID-19 coronavirus pandemic, NetApp is not providing fiscal year 2021 guidance, said NetApp CFO Mike Berry on his first earnings call with the company.
NetApp Moves to Microservices
NetApp kicked off the project six months ago to address the complications its customers encounter in orchestrating large clusters of software containers, turning to the data storage specialists for the answer to managing thousands of volumes.
Project Astra is the next step in NetApp’s evolution to support stateful, cloud-native applications with any Kubernetes distribution across all clouds. The platform offers a normalized application data management approach that results in the portability of data rich or stateful applications, moving them from one cluster to another.
“While we cannot predict when the world will return to normal, the enduring importance of data is clear,” Kurian said. “We are confident that the demand for our products and services will be strong as we emerge from this crisis.”