Net revenues of $1.56 billion for the second quarter

  • Introduced substantial innovation including the ASA C-Series, the extension of the Company’s Ransomware Recovery Guarantee, and performance and availability guarantees for NetApp Keystone storage as a service
  • Record Q2 GAAP consolidated gross margins of 71%; record non-GAAP consolidated gross margins1 of 72%
  • Q2 GAAP operating margins of 20%; record non-GAAP operating margins1 of 27%
  • Q2 GAAP net income per share2 of $1.10; record non-GAAP net income3 per share of $1.58
  • $403 million returned to stockholders in share repurchases and cash dividends in the second quarter

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 28, 2023-- NetApp (NASDAQ: NTAP), the intelligent data infrastructure company, today reported financial results for the second quarter of fiscal year 2024, which ended on October 27, 2023.

“We delivered another strong quarter, with revenue above the midpoint of our guidance and all-time highs for gross margins, operating margins, and EPS,” said George Kurian, chief executive officer. “We are at the forefront of the evolution of the storage industry, helping our customers turn disruption into opportunity. Our modern approach to intelligent data infrastructure helps customers operate with seamless flexibility to deploy new applications, unify their data for artificial intelligence (AI), and simplify data protection in a world of limited IT resources, rapid data growth, and increased cybersecurity threats.”

Second quarter of fiscal year 2024 financial results

  • Net revenues: $1.56 billion, compared to $1.66 billion in the second quarter of fiscal year 2023; a year-over-year decrease of 6%, or 8% in constant currency4.
    • Hybrid Cloud segment revenue: $1.41 billion, compared to $1.52 billion in the second quarter of fiscal year 2023.
    • Public Cloud segment revenue: $154 million, compared to $142 million in the second quarter of fiscal year 2023.
  • Billings1: $1.45 billion, compared to $1.60 billion in the second quarter of fiscal year 2023; a year-over-year decrease of 9%, or 11% in constant currency.
  • NetApp Public Cloud annualized revenue run rate (ARR)5: $609 million, compared to $603 million in the second quarter of fiscal year 2023; a year-over-year increase of 1%.
  • All-flash array ARR6: $3.2 billion, compared to $3.1 billion in the second quarter of fiscal year 2023; a year-over-year increase of 1%.
  • Net income: GAAP net income of $233 million, compared to $750 million in the second quarter of fiscal year 2023; non-GAAP net income3 of $334 million, compared to $326 million in the second quarter of fiscal year 2023. The year-over-year fluctuations in GAAP and Non-GAAP net income each include a favorable impact of approximately $15 million from foreign currency exchange rate changes.
  • Earnings per share: GAAP net income per share of $1.10 compared to $3.41 in the second quarter of fiscal year 2023; non-GAAP net income per share of $1.58 compared to $1.48 in the second quarter of fiscal year 2023. The year-over-year fluctuations in GAAP and Non-GAAP net income per share each include a favorable impact of approximately $0.07 from foreign currency exchange rate changes.
  • Cash, cash equivalents and investments: $2.62 billion at the end of the second quarter of fiscal year 2024.
  • Cash provided by operations: $135 million, compared to $214 million in the second quarter of fiscal year 2023.
  • Share repurchase and dividends: Returned $403 million to stockholders through share repurchases and cash dividends.

Third quarter of fiscal year 2024 financial outlook

The Company provided the following financial guidance for the third quarter of fiscal year 2024:

Net revenues are expected to be in the range of:

$1.51 billion - $1.67 billion

GAAP

Non-GAAP

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

$1.17 - $1.27

$1.64 - $1.74

Full fiscal year 2024 financial outlook

The Company provided an update to their financial guidance for the full fiscal year 2024:

Net revenues are expected to be down approximately 2% year-over-year

GAAP

Non-GAAP

Consolidated gross margins are expected to be:

~70%

~71%

Operating margins are expected to be:

~19%

~26%

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

$4.15 - $4.35

$6.05 - $6.25

Dividend

The next cash dividend of $0.50 per share is to be paid on January 24, 2024, to stockholders of record as of the close of business on January 5, 2024.