NetApp Announces Results for Fourth Quarter and Fiscal Year 2009

NetApp (NASDAQ:NTAP) today reported results for the fourth fiscal quarter and fiscal year 2009. Revenues for the fourth fiscal quarter of 2009 totaled $880 million compared to revenues of $938 million for the same period a year ago.

For the fourth fiscal quarter, GAAP net income was $75 million, or $0.23 per share(1) compared to GAAP net income of $90 million, or $0.26 per share for the same period in the prior year. Non-GAAP(2) net income for the fourth fiscal quarter was $103 million, or $0.31 per share, compared to non-GAAP net income of $131 million, or $0.38 per share for the same period a year ago.

For fiscal year 2009, GAAP revenues totaled $3.4 billion, an increase of 3% compared to GAAP revenues of $3.3 billion for fiscal year 2008. Non-GAAP revenues for fiscal year 2009, excluding the impact of the $129 million GSA settlement, were $3.5 billion. For fiscal year 2009, GAAP net income was $87 million, or $0.26 per share, compared to GAAP net income of $310 million, or $0.86 per share for fiscal year 2008. Non-GAAP net income for fiscal year 2009 was $364 million, or $1.09 per share, compared to non-GAAP net income of $455 million, or $1.26 per share for fiscal year 2008.

“The NetApp team performed admirably to close a challenging fiscal year 2009,” said Dan Warmenhoven, chairman and CEO. “With revenues up and expenses well contained, NetApp has delivered three consecutive quarters of increasing operating margins. Storage efficiency and storage for virtual server environments continue to be the primary demand drivers during this difficult economic period. Customers are increasingly turning to NetApp for help solving their storage and data management challenges in the face of shrinking budgets.”

Outlook

Given the reduced visibility caused by the recent changes in the macroeconomic environment, NetApp will not be providing revenue guidance for the first quarter of fiscal year 2010.

– NetApp estimates non-GAAP gross margins for the first quarter of fiscal year 2010 to be around 61%.

– NetApp estimates non-GAAP operating expenses for the first quarter of fiscal year 2010 to increase by about $10 million to $15 million from the $426 million reported in the fourth quarter of fiscal year 2009.

– NetApp estimates non-GAAP operating expense levels for the second and third quarters of fiscal year 2010 to average approximately $405 to $410 million.

Quarterly Highlights

In the fourth quarter of fiscal year 2009, NetApp introduced several new solutions to help customers transform their data center architectures through greater storage efficiency, greater power and space savings, and innovative data management techniques. The company also received industry recognition for its market leadership, product performance, and channel success.

This quarter, NetApp and Cisco announced that they are teaming up to provide customers with unified, dynamic data center solutions that are based on the Cisco Unified Computing System and NetApp(R) unified storage architecture.

NetApp announced new storage and data management advances for VMware(R) View(TM) to help customers deploy and operate virtual desktop environments faster and more efficiently, including NetApp’s new Rapid Cloning Utility 2.0, which simplifies the way administrators clone VMware virtual machines and datastores. NetApp also announced the integration and certification of its storage platforms with VMware vSphere(TM) 4, which provides a path to virtualized data centers and cloud computing.

During the quarter, NetApp extended its virtualization guarantee to include EMC, IBM, HP, and HDS storage systems by offering a guarantee(3) that customers will decrease their non-NetApp primary storage capacity for virtual server environments by 35% using NetApp V-Series and deduplication technology. NetApp deduplication has been delivered to more than 5,000 customers worldwide, comprising more than 30,000 systems containing 385PB of storage capacity.

NetApp unveiled V-Series support for Texas Memory Systems’ RamSan-500 solid-state disk (SSD) array. NetApp V-Series and Texas Memory Systems combine the full benefits of the NetApp Data ONTAP(R) operating system with SSD storage to improve application performance and offer advanced features such as thin provisioning, Snapshot(TM) copies, and deduplication to improve storage efficiency and management.

Also this quarter, NetApp introduced new functionalities for NetApp MetroCluster that offer customers continuous data availability in virtualized environments, the ability to perform nondisruptive software and hardware upgrades, and integration with NetApp deduplication technology for enhanced storage efficiency.

During the quarter, NetApp received the following third party recognitions:

– “Magic Quadrant for Midrange and High-End NAS Solutions(4)” – Gartner, Inc. positioned NetApp in the Leaders quadrant for Midrange and High-End NAS Solutions.

– Network World’s 2009 Best of the Tests Awards – Citing consistently higher performance, a mix of NAS and SAN features, high availability, and NetApp Snapshot(TM) capabilities, Network World’s Lab Alliance members named the FAS2050 the best of the 12 systems they tested during year-long trials.

– 2009 Everything Channel Five-Star Partner Program Guide Certification – NetApp was recognized as one of North America’s top information technology (IT) vendors for its VIP Partner Program and US Public Sector VIP Partner Program.

– 2009 CRN Channel Champion – NetApp was named a 2009 CRN Channel Champion in the category of Network Storage.

– 2009 Channel Chiefs by the Everything Channel’s CRN – NetApp executives Julie Parrish, vice president of Worldwide Channel Sales, and Todd Palmer, vice president of Americas Channel Sales, were named 2009 Channel Chiefs by the Everything Channel’s CRN.

– Best Workplaces in France – NetApp ranked number 14 on a list of the Best Workplaces in France published by Reussir/L’EXPRESS, based on a survey by the Great Place to Work(R) Institute France.

Webcast and Conference Call Information

The NetApp quarterly results conference call will be broadcast live on the Internet at http://investors.netapp.com on Wednesday, May 20, 2009, at 2:00 p.m. Pacific Time. This press release and any other information related to the call will also be posted on the Web site at that location. The conference call will also be available live in a listen-only format at (800) 638-4930 in the United States and (617) 614-3944 outside the United States. The pass code for both numbers is 57400475. A replay will be available for 72 hours following the completion of the live call by dialing (888) 286-8010 in the United States and (617) 801-6888 outside the United States, using replay code 92143343. The Webcast replay will be posted on our Web site for at least one year.

About NetApp

NetApp creates innovative storage and data management solutions that accelerate business breakthroughs and deliver outstanding cost efficiency. Discover NetApp’s passion for helping companies around the world go further, faster at www.netapp.com.