News

posted on 14 February 2008 11:25

Netapp announced a 21 percent year-on-year growth in revenue to $884 million for is third quarter in fiscal 2008 (Q308) results. The year-ago total was $729.3 million. Q3 revenues represented an increase of 12 percent compared to $792.2 million in Q208.

GAAP net income for the quarter was $101.8 million, or $0.29 per share compared to GAAP net income of $66.5 million, or $0.17 per share for the same period in the prior year.

Revenues for the first nine months of the current fiscal year totaled $2.4 billion, compared to revenues of $2.0 billion for the first nine months of the prior fiscal year, an increase of 18% year over year.

Dan Warmenhoven, NetApp's CEO, said: "By providing customers with the best value in the industry, NetApp again achieved record financial results this quarter. Through our efforts to increase our field coverage, expand our product portfolio and diversify our revenue streams, NetApp continues to grow significantly faster than the markets we serve."

Q4 expectations were revised down by NetApp CFO Steve Gomo. In an earnings call he said: "We expect Q4 revenue to be between $915 million and $945 million. This represents about a 3.5% to 7% sequential increase from the third quarter and about a 14% to 18% year-over-year growth rate."

President and COO Tom Georgens said: "Lower end systems accounted for almost half of our units shipped."

"... our fastest growing products this quarter were our high-end systems both in terms of units and dollars, now contributing almost 30% of systems revenue, but mid-range systems still contributing a little over 50% of revenue, the portfolio is very balanced."

"We continue to diversify our product portfolio by investing in emerging products, some of which produce record results this quarter. Revenue from our V-Series virtualization of clients is at an all time high. The V-Series provides customers with a superior NetApp data management functionality in front of arrays for other vendors. Customer gets more efficient storage management and NetApp gets a foot in the in a tranche (of) legacy environments."

"Our VTL solution showed dramatic growth over Q2 and had a record revenue quarter, while our store security business posted its strongest quarter in almost two years. Data ONTAP GX has doubled its number of customers in the last two quarters and has a strong pipeline of financial services, oil and gas and telecom accounts."

"Out total terabytes shipped this quarter grew 26% sequentially to 173 terabytes to storage. Our large contributor to our growth and terabytes shipped is the huge proliferation of storage for backup, disaster recovery and archival purposes."

Concerning the outlook Warmenhoven said: "My guess is this is probably the lowest GDP growth rate we've seen in the same five year period. It's really just not easy, no it's not a function of anything we can put our finger on. It's still early in the year for most of our customers, some of them having quite finalized their spending plans this year. I am sure all of you guys know. But just looking at the macroeconomic conditions, I will have to argue that this quarter doesn’t feel as robust as the last one. Nothing specific to point to you, but I don't think it's going to be at the high end of our growth range relative to previous years that is."

NetApp is back to a steady 20 percent revenue growth rate after a blip last year. Investors will be very pleased and competitors, no dount, disappointed that an apparent chink in NetApp's armour turned out to be ephemeral. They build cheaper products, they say; they build faster products, they say; they build more advanced products, they say, and still NetApp powers on.