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NTAP · NetApp

33 filings

10-K

NTAP 10-K Annual Reports

NetApp - 33 annual reports

Filing record · 2016–202610-K1110-Q328-K97

2026
NetApp Annual Report, Year Ended Apr 24, 2026
NetApp, Inc. (NASDAQ: NTAP) reported fiscal 2026 (ended April 24, 2026) net revenues of $6.93 billion, up from $6.57 billion, with net income of $1.28 billion ($6.35 diluted EPS) versus $1.19 billion ($5.67) a year earlier. Gross margin was 71% and income from operations rose to $1.67 billion, or 24% of net revenues, from 20%. Product revenues were $3.19 billion and services revenues $3.73 billion. Operating cash flow was $2.07 billion, up from $1.51 billion. Management said inflationary pressures and supply constraints for memory and other components, starting in the second half of fiscal 2026, have affected gross margins, and that it raised prices in the fourth quarter of fiscal 2026 and expects costs to stay elevated. Capital returns and balance sheet activity were significant. NetApp repurchased 9.0 million shares for $950 million, paid $413 million in dividends, and repaid a $750 million senior note at maturity in June 2025. Principal debt fell to $2.5 billion from $3.25 billion. Cash, cash equivalents and short-term investments totaled $3.58 billion. On May 21, 2026, the Board authorized an additional $1.0 billion repurchase and declared a $0.52 quarterly dividend. Two distributors accounted for 43% of net revenues. The filing also flags risks including tariffs and trade controls, dependence on a limited number of suppliers, a transition to consumption-based models that defers revenue recognition, and an ongoing ERP system implementation that disrupted order processing and invoicing. Deloitte & Touche LLP issued an unqualified opinion on the financial statements and on internal control over financial reporting as of April 24, 2026.
Jun 5, 2026
2025
NetApp Annual Report, Year Ended Apr 25, 2025
NetApp, Inc. reported fiscal 2025 (ended April 25, 2025) net revenues of $6,572 million, up from $6,268 million in fiscal 2024, with product revenues of $3,040 million and services revenues of $3,532 million. Gross margin was 70% versus 71% a year earlier, and income from operations rose to $1,337 million (20% of net revenues) from $1,214 million. Net income was $1,186 million, or $5.67 per diluted share, compared with $986 million, or $4.63 per diluted share, in fiscal 2024. Net cash provided by operating activities was $1,506 million. Cash, cash equivalents and short-term investments totaled $3,846 million at year-end, up from $3,252 million. The increase reflected $1.24 billion of net proceeds from March 2025 senior note issuances, offset by $1.2 billion of share repurchases (10.2 million shares at an average price of $112.55), $424 million of dividends, and a $400 million principal repayment. Total principal debt was $3,250 million. The Board authorized an additional $1.1 billion of repurchases on May 22, 2025, and declared a $0.52 quarterly dividend. By segment, Hybrid Cloud generated $5,907 million of revenue and Public Cloud $665 million. Indirect channels accounted for 78% of net revenues, and distributors Arrow Electronics (21%) and TD Synnex (24%) were the two customers at 10% or more. The company also sold its Spot by NetApp business to Flexera for up-front cash of $70 million, with up to $49 million of contingent consideration, and recorded no material gain or loss on the sale.
Jun 9, 2025
2024
NetApp Annual Report, Year Ended Apr 26, 2024
NetApp, Inc. reported fiscal 2024 (year ended April 26, 2024) net revenues of $6,268 million, a decrease from $6,362 million in fiscal 2023, driven by lower product revenues partially offset by higher services revenues. Product revenues fell to $2,849 million from $3,049 million, while services revenues rose to $3,419 million from $3,313 million. Gross margin improved to 71% from 66%, largely due to lower component and freight costs in Hybrid Cloud product revenues, and income from operations increased to $1,214 million from $1,018 million. Net income declined to $986 million from $1,274 million, primarily because fiscal 2023 benefited from a $524 million discrete tax benefit tied to an intra-entity IP transfer, while fiscal 2024 recorded a $277 million tax provision. Management described a weakened demand environment in fiscal 2024, characterized by cloud optimizations and increased budget scrutiny, which resulted in smaller deal sizes, longer selling cycles, and delayed deals. Cash flow from operations was $1,685 million, up from $1,107 million. The company returned capital to shareholders through $900 million of share repurchases and $416 million of dividends, and it authorized an additional $1.0 billion repurchase on May 23, 2024. Cash, cash equivalents and short-term investments totaled $3,252 million, against $2,400 million of senior notes principal, with $400 million of that principal classified as current. The filing highlights the Public Cloud segment, which grew to $611 million of revenue from $575 million, and the company's ongoing investment in research and development, which rose to $1,029 million from $956 million. Management expects fiscal 2025 capital expenditures between $150 million and $200 million and notes that macroeconomic uncertainty could reduce customer demand further.
Jun 10, 2024
2023
NetApp Annual Report, Year Ended Apr 28, 2023
NetApp, Inc. (NASDAQ: NTAP) reported net revenues of $6,362 million for fiscal 2023 (ended April 28, 2023), up from $6,318 million in fiscal 2022, with net income rising to $1,274 million from $937 million and diluted net income per share of $5.79 versus $4.09. The increase in net income was aided by a discrete tax benefit of $524 million from an intra-entity transfer of intellectual property, which produced a benefit from income taxes of $208 million for the year. Income from operations declined to $1,018 million from $1,157 million, and the company cited softening customer demand, lower product revenues (down 7% to $3,049 million), and higher restructuring charges of $120 million, which followed workforce reductions of approximately 8% in the fourth quarter. Services revenues grew 9% to $3,313 million, driven by public cloud revenues of $575 million (up 45%) and support revenues. Cash, cash equivalents and short-term investments fell to $3,070 million from $4,134 million, primarily because of $850 million in share repurchases, $432 million in dividends, and $491 million for the Instaclustr acquisition. Senior notes principal stood at $2,400 million, and the company declared an additional $1.0 billion stock repurchase authorization on May 26, 2023, with $402 million remaining under the existing program as of year-end. Management stated that global economic uncertainty had a material adverse effect on demand in fiscal 2023 and that it may observe further reductions in customer demand in fiscal 2024. The company expects capital expenditures of $175 million to $225 million for fiscal 2024 and has outstanding transition tax payments of approximately $303 million scheduled through fiscal 2026.
Jun 14, 2023
2022
NetApp Annual Report, Year Ended Apr 29, 2022
NetApp, Inc. reported fiscal 2022 (ended April 29, 2022) net revenues of $6.32 billion, up from $5.74 billion in fiscal 2021, with net income of $937 million, or $4.09 per diluted share, compared with $730 million and $3.23 in fiscal 2021. Gross profit rose to $4.22 billion (66.8% gross margin), and income from operations increased to $1.16 billion from $1.03 billion. Growth was driven by higher product revenues, led by all-flash array systems, and services revenues, which increased primarily due to public cloud growth. Public cloud revenues reached $396 million versus $199 million in the prior year. Sales through indirect channels represented 77% of net revenues. Cash flow and capital return remained substantial. Net cash provided by operating activities was $1.21 billion, compared with $1.33 billion in fiscal 2021. The company repurchased about 7 million shares for $600 million, paid $446 million in dividends, and ended the year with $4.13 billion in cash, cash equivalents and short-term investments against $2.65 billion of principal senior notes. Management noted that supply chain constraints, particularly in the second half of fiscal 2022, raised component and freight costs and delayed some customer orders, and it expects these pressures to continue to affect gross margins into fiscal 2023. The company reorganized into two reportable segments, Hybrid Cloud and Public Cloud, effective the first quarter of fiscal 2022. Subsequent to year end, it acquired Instaclustr, Inc. for approximately $500 million, and it declared a quarterly dividend of $0.50 per share. Key risks cited include competition, supply chain disruption, cybersecurity, international operations, and the effects of the COVID-19 pandemic and Russia sanctions.
Jun 16, 2022
2021
NetApp Annual Report, Year Ended Apr 30, 2021
NetApp, Inc. (NASDAQ: NTAP) reported fiscal 2021 net revenues of $5.74 billion, up 6% from $5.41 billion in fiscal 2020, primarily driven by higher hardware and software support revenues, while product revenues were roughly flat at $2.99 billion. Gross profit margin was 66%, down from 67% the prior year, and income from operations rose to $1.03 billion, or 18% of net revenues, helped by a $156 million gain on the sale of Sunnyvale headquarters properties. Net income declined to $730 million from $819 million, and diluted EPS fell to $3.23 from $3.52. The company describes itself as a global cloud-led, data-centric software company and highlights growth in Public Cloud Services, which are included in software support revenues. Cash flow and balance sheet activity were significant during the year. Net cash provided by operating activities was $1.33 billion, and cash, cash equivalents and short-term investments rose to $4.60 billion, supported by $2.0 billion of net proceeds from Senior Notes issued in June 2020. Total Senior Notes principal stood at $2.65 billion as of April 30, 2021. The company acquired Spot, Inc. for $340 million and Cloud Jumper Corporation for $34 million, repurchased $125 million of common stock, and paid $427 million in dividends. Management declared a $0.50 quarterly dividend for the first quarter of fiscal 2022. The filing also flags continuing risks, including a long-term decline in the networked storage hardware market, reliance on indirect channel partners (77% of fiscal 2021 net revenues), concentration with distributors Arrow Electronics (24%) and Tech Data (20%), COVID-19 uncertainty, supply chain constraints, and cybersecurity exposure. Management also notes that a securities class action was dismissed in February 2021 and is under appeal.
Jun 21, 2021
2020
NetApp Annual Report, Year Ended Apr 24, 2020
NetApp, Inc. reported fiscal 2020 (ended April 24, 2020) net revenues of $5.41 billion, down 12% from $6.15 billion in fiscal 2019, driven mainly by a 20% decline in product revenues to $2.99 billion. Software maintenance revenues rose 9% to $1.03 billion, and hardware maintenance and other services fell to $1.38 billion. Gross profit margin improved to 67% from 64%, as maintenance revenues made up a larger share of the mix. Net income fell to $819 million from $1.17 billion, and diluted EPS was $3.52 versus $4.51. Management attributed the weakness to lower enterprise IT spending, go-to-market execution issues in the first quarter, and COVID-19-related delays in the fourth quarter. The company stated it withdrew fourth-quarter guidance and limited fiscal 2021 guidance to the first quarter. Cash, cash equivalents and short-term investments declined to $2.88 billion from $3.90 billion. The decline reflected $1.41 billion in share repurchases, $439 million in dividends, and $400 million to repay Senior Notes. Operating cash flow was $1.06 billion, down from $1.34 billion. The company suspended its stock repurchase program in March 2020 and declared a quarterly dividend of $0.48 per share. Total stockholders' equity fell to $242 million from $1.09 billion, and the company had $1.15 billion in senior notes principal and $523 million of commercial paper outstanding. The filing also describes a shift toward cloud and hybrid cloud data services, the introduction of the Keystone consumption offering, and acquisitions of Cognigo, Talon and Cloud Jumper, plus a definitive agreement to acquire Spot, Inc. announced June 3, 2020. Investors should weigh the revenue decline, the pandemic-related uncertainty the company repeatedly flagged, and the pending shareholder class action tied to fiscal 2020 guidance.
Jun 15, 2020
2019
NetApp Annual Report, Year Ended Apr 26, 2019
NetApp, Inc. (NTAP) reported fiscal 2019 (year ended April 26, 2019) net revenues of $6.146 billion, up from $5.919 billion in fiscal 2018, with product revenues rising to $3.755 billion and hardware maintenance and other services declining to $1.445 billion. Gross profit was $3.945 billion, and net income was $1.169 billion, or $4.51 per diluted share, compared with $116 million in fiscal 2018, which was burdened by a $732 million transition tax charge under U.S. tax reform. The company describes itself as the data authority for hybrid cloud and cites its Data Fabric strategy, with indirect channels representing 76% of net revenues. The filing notes that the networked storage hardware market declined in each of the last three calendar years, and that revenue declined in fiscal years 2015, 2016 and 2017. Cash, cash equivalents and short-term investments fell to $3.899 billion from $5.391 billion, primarily reflecting $2.111 billion of share repurchases, $403 million of dividends, and $136 million of net commercial paper repayments, partly offset by $1.341 billion of operating cash flow. Total debt was $1.793 billion, and stockholders' equity declined to $1.090 billion from $2.276 billion, largely due to repurchases charged to equity. The company declared a quarterly dividend of $0.48 per share for the first quarter of fiscal 2020 and had $1.889 billion remaining under its $13.6 billion repurchase authorization as of April 26, 2019. The filing also highlights a $73 million gain from a joint venture with Lenovo in China, a restructuring plan under which the workforce was reduced by less than 3% in fiscal 2019 with charges of $35 million, and a subsequent event in May 2019 in which NetApp acquired Cognigo Research Ltd. for approximately $56 million in cash.
Jun 18, 2019
2018
NetApp Annual Report, Year Ended Apr 27, 2018
NetApp, Inc. (NTAP) reported fiscal 2018 (ended April 27, 2018) net revenues of $5.91 billion, up 7% from $5.52 billion in fiscal 2017, driven primarily by a 15% increase in product revenues to $3.46 billion. Strategic solutions grew 24% to $2.45 billion and now represent 71% of product revenues, while software maintenance revenues were $958 million and hardware maintenance and other services revenues declined 4% to $1.49 billion. Gross profit margin rose to 63% from 61%, and income from operations increased to $1.13 billion, aided by a $218 million gain on sale of properties. Net income fell sharply to $76 million, or $0.28 per diluted share, from $509 million in fiscal 2017. The decline reflects a $1.09 billion provision for income taxes, which includes a $732 million one-time transition tax and a $126 million charge for remeasurement of deferred tax assets under the Tax Cuts and Jobs Act. The company states it has elected to pay the transition tax over eight years, so operating cash flows will be affected until those payments are complete. Operating cash flow nonetheless rose to $1.48 billion from $986 million. The balance sheet shows cash, cash equivalents and short-term investments of $5.39 billion against $1.93 billion of total debt, and stockholders' equity fell to $2.07 billion. The company repurchased 15 million shares for $794 million, paid $214 million in dividends, and declared a $0.40 quarterly dividend. Its board authorized up to $13.6 billion in repurchases, including a $4.0 billion increase approved in April 2018.
Jun 19, 2018
2017
NetApp Annual Report, Year Ended Apr 28, 2017
NetApp, Inc. reported fiscal 2017 (year ended April 28, 2017) net revenues of $5.52 billion, essentially flat versus $5.55 billion in fiscal 2016, as product revenues rose 1% to $3.01 billion while software and hardware maintenance and other services revenues declined 2%. Gross profit was $3.39 billion, with gross profit margin at 61%, unchanged from the prior year. Income from operations rose to $665 million, or 12% of net revenues, from $348 million (6%) in fiscal 2016, reflecting lower operating expenses from cost reduction initiatives. Net income increased to $509 million, or $1.81 per diluted share, compared with $229 million, or $0.77, in fiscal 2016. Operating cash flow was $986 million. The balance sheet shows cash, cash equivalents and short-term investments of $4.92 billion, against total debt of $1.99 billion. Working capital fell to $2.08 billion, largely because $750 million of senior notes were reclassified to current. The company repaid an $850 million short-term loan used for the SolidFire acquisition, repurchased 22 million shares for $705 million, paid $208 million in dividends, and issued $499 million of net commercial paper. Stockholders' equity declined to $2.78 billion, and $4.5 billion of cash was held by foreign subsidiaries, where repatriation would trigger significant U.S. tax. Management highlights a strategic shift away from mature products: strategic solutions grew 17% to $1.97 billion in product revenue, while mature solutions fell 21% to $1.04 billion, driven by a 57% drop in 7-mode unit volume. Indirect channels generated 78% of net revenues, with distributors Arrow Electronics and Avnet accounting for 22% and 20%. The filing notes that the networked storage hardware market declined in each of the last two calendar years and that revenue declined in fiscal 2015, 2016 and 2017 on a year-over-year basis, so future growth is uncertain.
Jun 20, 2017
2016
NetApp Annual Report, Year Ended Apr 29, 2016
NetApp, Inc. (NASDAQ: NTAP) reported fiscal 2016 (ended April 29, 2016, a 53-week year) with net revenues of $5.55 billion, down 9% from $6.12 billion in fiscal 2015. Product revenues fell 18% to $2.99 billion, while software maintenance ($949 million, up 6%) and hardware maintenance and other services ($1.61 billion, up 3%) partly offset the decline. Gross profit margin declined to 61% from 63%, driven by lower average selling prices from higher discounting and promotions. Income from operations fell to $348 million (6% of revenues) from $716 million, and net income dropped to $229 million, or $0.77 per diluted share, from $560 million. The company is pursuing its Data Fabric hybrid cloud strategy and completed the $850 million cash acquisition of all-flash storage maker SolidFire, Inc. in February 2016, funded by an $870 million short-term loan of which $850 million remained outstanding at year end. A March 2016 restructuring reduced headcount by approximately 11%, with $80 million of employee severance charges recorded in the fourth quarter. Cash, cash equivalents and short-term investments were $5.30 billion, roughly flat year over year, while total debt rose to $2.34 billion and working capital fell to $2.79 billion. The company also sold Sunnyvale properties for $250 million in April 2016 and repurchased $960 million of stock. Investors should note the sharp earnings decline, the increase in leverage (debt equal to 82% of stockholders' equity), and management's stated expectation that the short-term loan will be repaid from global earnings by the start of the third quarter of fiscal 2017. The company also reports that $4.8 billion of its cash and short-term investments is held by foreign subsidiaries, and that repatriation could trigger significant U.S. tax costs.
Jun 22, 2016
2015
NetApp Annual Report, Year Ended Apr 24, 2015
NetApp, Inc. reported fiscal 2015 (year ended April 24, 2015) net revenues of $6.12 billion, down 3% from $6.33 billion in fiscal 2014. Product revenues fell 7% to $3.65 billion, while hardware maintenance and other services revenues rose 7% to $1.57 billion, and software maintenance revenues declined 2% to $898.6 million. Net income was $559.9 million, or $1.75 per diluted share, versus $637.5 million and $1.83 in fiscal 2014. Gross profit margin improved to 63% from 62%, but income from operations was roughly flat at 12% of revenue, and the effective tax rate rose to 21.5% from 13.9%, mainly due to income tax audit settlements. The company ended the year with $5.33 billion in cash, cash equivalents and short-term investments, against $1.5 billion of Senior Notes outstanding, and operating cash flow of $1.27 billion. During the year NetApp repurchased 29.6 million shares for $1.17 billion and paid $207.4 million in dividends. Its board had $2.5 billion remaining under the repurchase authorization, and the company declared a $0.18 quarterly dividend on May 20, 2015. Management also announced a May 2015 realignment expected to cut about 500 employees and cost $25 million to $35 million, mostly in the first quarter of fiscal 2016. Management highlighted its shift toward hybrid cloud, flash, converged infrastructure and software-defined storage, and noted that indirect channels generated 80% of net revenues. George Kurian became chief executive officer on June 1, 2015. Key risks disclosed include a storage market that did not grow in calendar 2013 or 2014, a transition from Data ONTAP 7-Mode to clustered Data ONTAP, heavy reliance on distributors Arrow Electronics (23% of revenue) and Avnet (16%), and $4.7 billion of cash held by foreign subsidiaries, whose repatriation could trigger significant tax costs.
Jun 12, 2015
2014
NetApp Annual Report, Year Ended Apr 25, 2014
NetApp, Inc. (NTAP) reported fiscal 2014 (year ended April 25, 2014) net revenues of $6.33 billion, essentially flat versus fiscal 2013, as product revenues declined while service and software entitlements and maintenance (SEM) revenues grew. Net revenues were $6,325.1 million compared with $6,332.4 million in fiscal 2013, down $7.3 million, or less than 1%. Product revenues fell to $3,943.9 million, while SEM revenues rose to $914.8 million and service revenues rose to $1,466.4 million. Net income increased to $637.5 million, or $1.83 per diluted share, from $505.3 million, or $1.37 per diluted share, the prior year. Gross profit margin improved to 62.0% from 59.4%, driven mainly by lower unit materials costs, and income from operations rose to $734.3 million. Capital allocation was a major theme. The company repaid $1.3 billion of 1.75% Convertible Notes at maturity, repurchased 47.3 million shares for $1.88 billion, and paid $202.3 million in dividends ($0.60 per share) after initiating a quarterly dividend in May 2013. Cash, cash equivalents and short-term investments fell to $5.00 billion from $6.95 billion. Operating cash flow was $1.35 billion. Restructuring charges of $88.3 million were recorded across May 2013 and March 2014 plans, which reduced the global workforce by approximately 11% in aggregate. Shortly after year-end, on June 5, 2014, NetApp issued $500.0 million of 3.375% Senior Notes due 2021. Investors should note the concentration of revenue through distributors, with Arrow Electronics and Avnet accounting for 22% and 16% of net revenues, and indirect channels representing 82% of sales. The filing also discloses a Netherlands tax ruling expiring April 30, 2015, ongoing IRS audits, and $4.3 billion of cash held by foreign subsidiaries, which may trigger significant tax costs if repatriated. Management's stated focus is on the cDOT transition from Data ONTAP 7-Mode, the flash product line, and the planned FlashRay launch in fiscal 2015.
Jun 17, 2014
2013
NetApp Annual Report, Year Ended Apr 26, 2013
NetApp, Inc. (NTAP) reported fiscal 2013 (year ended April 26, 2013) net revenues of $6,332.4 million, up $99.2 million, or 2%, from $6,233.2 million in fiscal 2012. Net income declined to $505.3 million from $605.4 million, and diluted EPS was $1.37 versus $1.58. Gross profit margin was 59.4% (versus 59.6%), and income from operations fell to $607.8 million from $746.5 million, or 9.6% of net revenues versus 12.0%. Product revenues fell 3% to $4,092.3 million, while software entitlements and maintenance (SEM) revenues rose 10% to $893.5 million and service revenues rose 11% to $1,346.6 million. Indirect channel sales represented 81% of net revenues. The balance sheet strengthened: cash, cash equivalents and short-term investments reached $6,952.6 million, against $1,265 million of 1.75% Convertible Notes due June 2013 and $1.0 billion of newly issued Senior Notes due 2017 and 2022. Operating cash flow was $1,386.3 million. Management repurchased 18.1 million shares for $590.0 million during fiscal 2013 and announced a $1.6 billion increase to the repurchase program, a $0.15 quarterly dividend beginning in fiscal 2014, and a $750.0 million collared accelerated share repurchase agreement entered in June 2013. The filing also notes a May 2013 restructuring plan to reduce the global workforce by about 900 employees, with $50.0 million to $60.0 million in expected charges. Key risks cited include European macroeconomic uncertainty, reliance on distributors such as Arrow Electronics (19% of revenues) and Avnet (15%), the transition to clustered Data ONTAP, and a Netherlands tax ruling expiring April 30, 2015.
Jun 17, 2013
2012
NetApp Annual Report, Year Ended Apr 27, 2012
NetApp, Inc. reported fiscal 2012 (year ended April 27, 2012) net revenues of $6,233.2 million, up $1,110.6 million, or 22%, from $5,122.6 million in fiscal 2011. Growth was driven mainly by $656.6 million of E-Series OEM revenue from the Engenio acquisition, completed May 6, 2011 for $480.0 million in cash, along with continued demand for storage efficiency and data management solutions. Product revenues rose 25% to $4,209.7 million, while gross profit margin fell to 59.6% from 65.0%, mainly due to lower-margin E-Series OEM products and higher discounting. Profitability declined despite higher sales. Income from operations was $746.5 million versus $824.3 million in fiscal 2011, and net income was $605.4 million, or $1.58 per diluted share, compared with $673.1 million, or $1.71 per diluted share. Operating expenses rose as average headcount grew, reaching 12,149 employees as of April 27, 2012. Operating cash flow increased to $1,462.6 million from $1,346.3 million, and deferred revenue grew to $2,815.9 million. The balance sheet carries $5.4 billion in cash, cash equivalents and short-term investments, against $1.265 billion of 1.75% Convertible Senior Notes due June 2013, which were convertible at holders' option as of the fiscal year-end because the stock price exceeded the conversion threshold. The company repurchased $600.0 million of stock during the year and has $0.5 billion remaining under its $4.0 billion authorization. Key risks disclosed include dependence on distributors Arrow Electronics and Avnet (17% and 12% of revenue), IRS and Danish tax audits, a U.S. government contracting inquiry involving the DOJ and GSA, and Thailand flooding affecting disk drive supply.
Jun 19, 2012
2011
NetApp Annual Report, Year Ended Apr 29, 2011
NetApp, Inc. reported fiscal 2011 (year ended April 29, 2011) net revenues of $5.12 billion, up $1.2 billion, or 30%, from $3.93 billion in fiscal 2010. Product revenues rose 41% to $3.37 billion, software entitlements and maintenance rose 6% to $720.6 million, and service revenues rose 19% to $1.03 billion. Net income was $673.1 million, or $1.71 per diluted share, versus $400.4 million in fiscal 2010. The filing notes that adoption of new revenue recognition standards added $129.2 million to net revenues and $53.0 million to net income in fiscal 2011. Indirect channels generated 73% of net revenues. The balance sheet strengthened, with cash, cash equivalents and short-term investments of $5.17 billion at April 29, 2011, up from $3.72 billion a year earlier, and stockholders' equity rising to $3.73 billion. However, the $1.265 billion 1.75% Convertible Senior Notes due 2013 became convertible at holders' option through June 30, 2011 because the stock price threshold of $41.41 was exceeded, so the carrying value was reclassified to a current liability of $1.15 billion. The company also disclosed that it completed the acquisition of certain assets of LSI Corporation's Engenio external storage systems business (ESG) on May 6, 2011 for $480 million in cash, which management expects to materially affect fiscal 2012 results and to reduce product gross margin percentage. Risk factors highlighted by the filing include dependence on indirect channels and distributors Arrow Electronics (18% of net revenues) and Avnet (12%), a U.S. government revenue exposure, IRS and Danish tax matters, dilution from the convertible notes, and a derivative lawsuit concerning GSA contracting activities with a hearing scheduled for July 15, 2011.
Jun 23, 2011
2010
NetApp Annual Report, Year Ended Apr 30, 2010
NetApp, Inc. reported net revenues of $3.93 billion for fiscal 2010 (ended April 30, 2010), up $525.0 million, or 15%, from $3.41 billion in fiscal 2009. Income from operations rose to $488.4 million from $47.2 million, and net income was $400.4 million, or $1.13 per diluted share, compared with $64.6 million, or $0.19 per diluted share, in fiscal 2009. Fiscal 2009 was depressed by a $128.7 million GSA settlement and $54.4 million in restructuring charges. Fiscal 2010 was a 53-week year. Indirect channels generated 69% of revenues, and international revenues were 50% of the total. Cash, cash equivalents and investments totaled $3.80 billion at April 30, 2010, up from $2.73 billion a year earlier, supported by operating cash flow of $975.0 million. The company carries $1.265 billion of 1.75% convertible senior notes due June 2013, with a conversion price of $31.85 per share. Because the Lehman OTC hedge was terminated and not replaced, the 20% unhedged portion of the notes remains exposed to dilution. Stockholders' equity rose to $2.53 billion, and the company repurchased no shares in fiscal 2010, leaving $1.1 billion available under its authorization. Key risks disclosed include reliance on distributors Arrow (14% of net revenues) and Avnet (11%), the U.S. government as an important customer, synthetic lease obligations with a $36.9 million expected residual guarantee shortfall, and ongoing patent litigation with Sun Microsystems, now owned by Oracle, for which no accrual has been recorded. Management concluded internal control over financial reporting was effective as of April 30, 2010.
Jun 18, 2010
2009
NetApp Annual Report, Year Ended Apr 24, 2009
NetApp, Inc. reported fiscal 2009 (year ended April 24, 2009) net revenues of $3,406.4 million, up 3.1% from $3,303.2 million in fiscal 2008, but net income fell sharply to $86.5 million ($0.26 per diluted share) from $309.7 million ($0.86 per diluted share). Income from operations was $47.2 million versus $313.6 million a year earlier. The decline reflected a $128.7 million GSA settlement recorded as a reduction of revenue, $54.4 million of restructuring and other charges, a $29.6 million net loss on investments tied largely to Lehman Brothers exposure and auction rate securities, and a $41.7 million income tax benefit. Product revenues fell 4.0% to $2,152.7 million, while software entitlements and maintenance revenues rose 27.0% and service revenues rose 33.2%. The balance sheet strengthened in liquidity terms during the year. Cash, cash equivalents and short-term investments rose to $2,604.2 million, driven largely by the June 2008 issuance of $1.265 billion of 1.75% convertible senior notes due 2013, with a conversion price of $31.85. Stockholders' equity declined to $1,662.3 million, and the company repurchased $400.0 million of common stock during the year, with $1,096.3 million remaining under its authorization. Operating cash flow was $889.2 million, compared with $1,008.9 million in fiscal 2008. The filing also describes a pending acquisition of Data Domain, Inc., announced May 20, 2009 and amended June 3, 2009. The merger consideration was revised to approximately $1.9 billion net of Data Domain's cash, and the transaction is valued at approximately $2 billion and expected to close in 60 to 120 days. Ongoing risks include Sun Microsystems patent litigation with no accrual recorded, a class action filed June 12, 2009 by Data Domain stockholders, and investment exposure to the Reserve Primary Fund, of which NetApp's pro rata share of the $3.5 billion special reserve is approximately $41.5 million.
Jun 17, 2009
2008
NetApp Annual Report, Year Ended Apr 25, 2008
NetApp, Inc. (formerly known as Network Appliance, Inc.) reported fiscal 2008 (year ended April 25, 2008) total revenues of $3,303.2 million, up 17.8% from $2,804.3 million in fiscal 2007, and net income of $309.7 million, or $0.86 per diluted share, compared with $297.7 million in fiscal 2007. Product revenues rose to $2,242.5 million, software entitlements and maintenance revenues increased 42.7% to $486.9 million, and service revenues increased 52.1% to $573.8 million. Gross margin was 60.9% of revenue and income from operations was $313.6 million, or 9.4% of revenue, down from 10.7% in fiscal 2007, as sales and marketing expense rose to 32.6% of revenue. Operating cash flow was $1,008.9 million. The company's balance sheet shows cash, cash equivalents and short-term investments of $1,164.4 million at year end, and $1,700.3 million of stockholders' equity after $903.7 million of share repurchases during the year. Total long-term debt was $172.6 million under a secured credit agreement. In June 2008, after the fiscal year end, NetApp issued $1,265 million of 1.75% convertible senior notes due 2013, and used part of the proceeds to repurchase 11.6 million shares and to enter into note hedge and warrant transactions. The filing also flags several risks for investors. Auction rate securities with a par value of $76.2 million had failed auctions, and the company recorded a temporary impairment of approximately $3.5 million. The company is a defendant in patent litigation brought by Sun Microsystems, and it is cooperating with a GSA and Department of Justice investigation under the False Claims Act, for which no provision has been recorded. Management expects sales and marketing, research and development, and general and administrative expenses to increase in absolute dollars in fiscal 2009.
Jun 24, 2008
2007
NetApp Annual Report, Year Ended Apr 27, 2007
Network Appliance, Inc. (now NetApp, Inc.) reported fiscal 2007 (year ended April 27, 2007) total revenues of $2.80 billion, up from $2.07 billion in fiscal 2006, with net income of $297.7 million, or $0.77 per diluted share, compared with $266.5 million, or $0.69 per diluted share, a year earlier. Product revenues were $2.09 billion, software upgrade and maintenance arrangements revenues were $341.3 million, and service revenues were $377.1 million. Gross margin held roughly flat at 60.8%, while operating expenses rose to 50.1% of revenues from 45.9%, driven by sales and marketing expense of $895.8 million and stock-based compensation of $163.0 million following adoption of SFAS No. 123R. Income from operations was $301.2 million, slightly below the prior year's $308.3 million. Cash flow from operations was $864.5 million, up from $554.3 million. The company repurchased $805.7 million of common stock and closed the Topio acquisition for $131.2 million in cash, while cash, cash equivalents and short-term investments ended the year at $1.31 billion. Deferred revenue rose to $1.10 billion. Management stated that it would slow hiring and investment spending to return to its targeted business model, after fourth-quarter fiscal 2007 bookings finished below forecast and left non-deferred backlog lower than normal, which lowered its first-quarter fiscal 2008 revenue, operating margin and earnings forecasts. The filing also notes that 59.6% of fiscal 2007 revenues came through indirect channels and 44.7% from international customers. A GSA audit of the company's schedule contract records remains ongoing, and management does not expect it to have a material adverse effect.
Jun 26, 2007
2006
NetApp Annual Report, Year Ended Apr 30, 2006
Network Appliance, Inc. reported fiscal 2006 (year ended April 30, 2006) total revenues of $2,066.5 million, up from $1,598.1 million in fiscal 2005, with net income of $266.5 million versus $225.8 million the prior year. Diluted earnings per share were $0.69, compared with $0.59 in fiscal 2005. Product revenues were $1,577.4 million, software subscriptions $239.1 million and service revenues $249.9 million. Gross margin was 60.8% of revenues, and income from operations was $308.3 million. International revenues were $943.8 million, or 45.7% of total revenues. The company's balance sheet at April 30, 2006 showed cash, cash equivalents and short-term investments of $1,322.9 million, and total assets of $3,260.9 million. During the year it repurchased 17.4 million shares for $488.9 million and acquired Decru, Inc. for a total purchase price of $283.2 million. In the fourth quarter it repatriated $405.5 million of foreign earnings under the American Jobs Creation Act, incurring a $22.5 million tax charge, and borrowed $300.0 million in term loans to fund that repatriation. Deferred revenue rose to $681.5 million. Looking ahead, the filing says gross margins are expected to be negatively affected by factors including global service investment cost, competition, indirect and OEM sales, and higher disk content. Management expects service gross margins in the mid 20% range for fiscal 2007 and says the adoption of SFAS No. 123R will reduce reported earnings. The company also agreed on June 22, 2006 to sell certain NetCache assets to Blue Coat Systems, Inc. for $23.9 million in cash and 360 thousand shares of Blue Coat common stock.
Jul 12, 2006
2005
NetApp Annual Report, Year Ended Apr 30, 2005
Network Appliance, Inc. (now NetApp, Inc.) reported fiscal 2005 (year ended April 30, 2005) total revenues of $1,598.1 million, up from $1,170.3 million in fiscal 2004, and net income of $225.8 million, compared with $152.1 million a year earlier. Income from operations rose to $253.2 million, and diluted earnings per share were $0.59 versus $0.42. Product revenue was $1,430.3 million and service revenue was $167.8 million. Overall gross margin was 61.0%, up from 60.2%, driven by a favorable product and add-on software mix and improved services margin. Indirect channels accounted for 51.2% of fiscal 2005 business. The balance sheet remained debt-free apart from $4.5 million of long-term restructuring and deferred rent liabilities. Cash, cash equivalents and short-term investments totaled $1,170.0 million as of April 30, 2005, and operating cash flow was $462.1 million. During fiscal 2005 the company repurchased $192.9 million of common stock, and its board approved an additional $300.0 million repurchase program on May 24, 2005. Deferred revenue grew to $449.2 million, reflecting a shift toward larger enterprise customers. Looking ahead, management expects revenue growth in fiscal 2006, with planned product refreshes, a next-generation operating system with enhanced storage grid functionality, and a comprehensive suite of data protection solutions. The company also disclosed subsequent events: the May 2005 acquisition of Alacritus for about $11 million in cash, and a June 15, 2005 agreement to acquire Decru for approximately $265 million, 80% in stock and 20% in cash. Management expects service margin to be in the low 20% range in fiscal 2006.
Jul 8, 2005
2004
NetApp Annual Report, Year Ended Apr 30, 2004
Network Appliance, Inc. reported fiscal 2004 (year ended April 30, 2004) total revenues of $1,170.3 million, up from $892.1 million in fiscal 2003, with income from operations of $158.5 million and net income of $152.1 million, or $0.42 per diluted share. Product revenue was $1,058.2 million and service revenue was $112.1 million. Product gross margin was 64.9% and service gross margin fell to 15.9% from 26.5%, as the company invested in its global service organization. Sales and marketing expense rose to $349.5 million, and research and development rose to $131.9 million. Net income was helped by a non-recurring $16.8 million income tax benefit from a favorable Dutch tax ruling. International revenues were $551.0 million, or 47.1% of total revenues. The company completed its all-stock acquisition of Spinnaker Networks, Inc. on February 18, 2004, for approximately $305.5 million, which management expects to accelerate its NetApp Storage Grid architecture. Goodwill grew to $291.8 million at April 30, 2004, from $48.2 million a year earlier. Cash, cash equivalents and short-term investments totaled $808.0 million, and the company repurchased 6.9 million shares for $136.2 million during fiscal 2004. In May 2004 the board expanded the buyback authorization by $200.0 million, for total authorized spending of up to $350.0 million. Management believes existing liquidity is sufficient for at least the next twelve months. The filing identifies competition from EMC, Hitachi Data Systems, Hewlett-Packard, IBM and Sun Microsystems in storage, and notes risks including reliance on a single disk drive supplier, dependence on indirect sales channels, and the expiration of the Dutch tax ruling at the end of calendar 2005.
Jun 29, 2004
2003
NetApp Annual Report, Year Ended Apr 25, 2003
Network Appliance, Inc. reported total revenues of $892.1 million for fiscal 2003 (year ended April 30, 2003), up from $798.4 million in fiscal 2002, with net income of $76.5 million, or $0.22 per diluted share, compared with $3.0 million in fiscal 2002. Income from operations was $87.6 million, versus a loss of $1.1 million a year earlier. Product revenue rose to $802.3 million and service revenue to $89.8 million, with international revenues making up 42.1% of the total. Product gross margin improved to 65.1% and service gross margin to 26.5%, while sales and marketing expense stayed the largest operating cost at $304.2 million. Balance sheet strength improved over the year. Total assets reached $1.32 billion and stockholders' equity $987.4 million. Cash, cash equivalents and short-term investments totaled $618.8 million, and working capital rose to $588.5 million. Operating cash flow was $195.3 million. Management believes existing liquidity is sufficient for at least the next twelve months. In May 2003 the board approved a $150.0 million open-ended stock repurchase program. The company flagged risks tied to quarterly fluctuations, dependence on a limited number of suppliers and contract manufacturers, intense competition from EMC, Hitachi Data Systems, HP, IBM and Sun, and the continued growth of the storage and content delivery markets. It also expects interest income to decline in fiscal 2004 and general and administrative expenses to rise in absolute dollars because of its ERP investment.
Jun 25, 2003
2002-A
NetApp Annual Report (Amendment), Year Ended Apr 26, 2002
This Form 10-K/A amends Items 7, 7a, 8 and 14 of Network Appliance, Inc.'s annual report for the fiscal year ended April 30, 2002, originally filed June 28, 2002. The amendment was filed to revise the disclosure of future minimum non-cancelable operating lease payments (Note 14), which were restated downward in total from $154,424 thousand as previously reported to $46,914 thousand as revised, following the company's purchase of its Sunnyvale headquarters site and termination of the related operating leases for $249.8 million. The amendment does not otherwise update disclosures or reflect later events. Fiscal 2002 was a difficult year. Total revenues fell to $798.4 million from $1,006.2 million in fiscal 2001, product revenues declined 23.8% to $729.9 million, and service revenues rose 41.6% to $68.5 million. The company reported net income of $3.0 million, or $0.01 per diluted share, compared with $74.9 million in fiscal 2001. Operating results were hurt by restructuring charges of $12.2 million, a $13.0 million impairment loss on investments, and sales and marketing expenses that stayed high at $284.4 million. Cash flow from operations was $143.9 million, and capital expenditures were $284.2 million, mainly for the Sunnyvale land and buildings. The balance sheet at April 30, 2002 showed cash, cash equivalents and short-term investments of $454.1 million, total assets of $1.11 billion and stockholders' equity of $858.5 million. Management stated that existing liquidity and capital resources are sufficient to fund operations for at least the next twelve months, and it expects about $29.8 million in annual cost savings from the restructuring actions taken in the second and fourth quarters of fiscal 2002.
Dec 6, 2002
2002
NetApp Annual Report, Year Ended Apr 26, 2002
Network Appliance, Inc. reported fiscal 2002 (year ended April 30, 2002) total revenues of $798.4 million, down from $1,006.2 million in fiscal 2001, and net income of $3.0 million, down sharply from $74.9 million. Product revenue was $729.9 million and service revenue was $68.5 million, with service revenue growing as the installed base expanded. Loss from operations was $1.1 million, compared with income from operations of $109.7 million the prior year, as sales and marketing expense ($284.4 million) and restructuring charges ($12.2 million) weighed on results. Management attributed the product revenue decline to reduced demand from Internet-related and technology customers and weaker macroeconomic conditions, with international revenue at $335.2 million, or 42.0% of total revenues. The balance sheet remained strong, with cash, cash equivalents and short-term investments of $454.1 million and stockholders' equity of $858.5 million at April 30, 2002. Operating cash flow was $143.9 million, and capital expenditures were $284.2 million, including $249.8 million to purchase the Sunnyvale headquarters land and buildings and terminate operating leases. Management stated that existing liquidity is sufficient to fund operations for at least the next twelve months. The company took two restructuring actions in fiscal 2002, cutting roughly 200 employees in August 2001 and 34 in April 2002, and recorded a $13.0 million write-down on investments. Management expects annual cost savings of approximately $29.8 million from the restructurings and expects interest income to decline further in fiscal 2003.
Jun 28, 2002
2001
NetApp Annual Report, Year Ended Apr 27, 2001
Network Appliance, Inc. reported net sales of $1,006.2 million for the fiscal year ended April 30, 2001 (fiscal 2001), up from $579.3 million in fiscal 2000, with net sales growth across all geographies, products and markets. Net income was $74.9 million, or $0.21 per diluted share, compared with $73.8 million, or $0.21 per diluted share, in fiscal 2000. Gross margin improved to 60.1% of net sales from 59.3%, while total operating expenses rose to 49.2% of net sales from 41.1%, driven by sales and marketing, research and development, and acquisition-related charges including $26.7 million of in-process research and development from the Orca acquisition and $11.7 million of intangible amortization. Management stated that demand declined in the second half of fiscal 2001 and that the network storage and content delivery market growth declined significantly beginning in the third quarter. Quarterly net income fell to $479 thousand in the fourth quarter from $34.1 million in the third quarter, and management does not expect net sales or international sales to grow in fiscal 2002 at the rate achieved in fiscal 2001. Sales and marketing expenses are not expected to increase materially in fiscal 2002, and research and development expenses are expected to increase moderately. The balance sheet strengthened, with total assets of $1,036.3 million and shareholders' equity of $804.4 million at April 30, 2001. Cash, cash equivalents and short-term investments totaled $364.0 million, and operating cash flow was $218.4 million. However, $193.7 million of cash was classified as restricted to collateralize operating leases tied to the Sunnyvale headquarters, and the company has never paid cash dividends.
Jul 26, 2001
2000-A
NetApp Annual Report (Amendment), Year Ended Apr 28, 2000
This Form 10-K/A from Network Appliance, Inc. (now NetApp, Inc.) is an amended annual report for the fiscal year ended April 28, 2000. The cover page reports an aggregate market value of voting stock held by non-affiliates of $18,217,977,594 as of May 26, 2000, based on the Nasdaq National Market closing price on the last trading day before that date. As of May 26, 2000, 312,417,087 shares of common stock, no par value, were outstanding. The company is a California corporation headquartered at 495 East Java Drive, Sunnyvale, California. The amendment's content centers on Part IV and the exhibit index. It references Schedule II, Valuation and Qualifying Accounts, as the financial statement schedule filed under Item 14(d). It lists restated Financial Data Schedules (Exhibits 27.2 through 27.7) and a Financial Data Schedule (Exhibit 27.1). Part III information is incorporated by reference from the definitive proxy statement for the annual meeting of shareholders scheduled for October 11, 2000. The filing states that the company filed no Form 8-K reports during the period. The exhibit index covers the company's principal agreements, including indemnification agreements, stock plans, facility leases with BNP Leasing Corporation and TRW Inc., OEM distribution agreements with Dell Products L.P. and Fujitsu Limited, and a distributor agreement with Itochu Corporation. Some agreements are marked as having portions omitted under confidential treatment requests. The filing also references the original Annual Report on Form 10-K dated July 12, 2000, for certain exhibits.
Jul 13, 2000
2000
NetApp Annual Report, Year Ended Apr 28, 2000
Network Appliance, Inc. reported fiscal 2000 (year ended April 30, 2000) net sales of $579.3 million, up from $289.4 million in fiscal 1999, with net income of $73.8 million, or $0.21 per diluted share, compared with $35.6 million in fiscal 1999. Growth was attributed mainly to higher unit shipments of its F700 filers, increased demand for NetCache caching appliances, Cluster Failover and SnapMirror software, and expansion of the sales organization to 582 from 309. Gross margin held steady at 59.3% of net sales, while sales and marketing, research and development, and general and administrative expenses all rose sharply in absolute dollars. Operating income reached $105.4 million, and international sales were $177.9 million, or 30.7% of net sales. The balance sheet strengthened over the year. Cash, cash equivalents and short-term investments totaled $353.5 million, working capital was $419.6 million, and operating cash flow was $118.1 million. Shareholders' equity rose to $478.7 million from $295.7 million. The company disclosed that it has agreed to lease Sunnyvale facilities through a third-party entity, with purchase options of $55.0 million and $62.0 million, and that it had total future minimum lease payments of $69.9 million. Management stated that existing liquidity is sufficient for at least the next twelve months. The filing also highlights risk factors that management emphasizes, including quarterly fluctuations, dependence on a single disk drive supplier, competition from Sun, HP, EMC, Dell and others, reliance on OEM partners Dell and Fujitsu that have not yet made purchase commitments, and stock price volatility. Stock traded between $9.91 and $120.19 on a split-adjusted basis during fiscal 2000, and the company reported no legal proceedings.
Jul 12, 2000
1999
NetApp Annual Report, Year Ended Apr 30, 1999
Network Appliance, Inc. (later renamed NetApp, Inc.; ticker NTAP) reported its annual results for the fiscal year ended April 30, 1999, in this Form 10-K. Net sales rose to $289.4 million from $166.2 million in fiscal 1998, an increase of 74.2% stated in the filing. Income from operations was $55.1 million and net income was $35.6 million, or $0.46 per diluted share, compared with $21.0 million, or $0.29 per diluted share, the prior year. Gross margin held roughly flat at 59.2% of net sales. Fiscal 1999 was a 53-week year. The company describes itself as the leading supplier of network attached data storage and access devices, called filers, and also sells NetCache Internet caching appliances. Growth was driven mainly by higher unit volume from the F700 filer family, cluster failover and NetCache solutions, and multi-protocol software licensing. International sales were $88.8 million, or 30.7% of net sales. The company said it expects a modest decline in gross margin and pre-tax income as a percentage of net sales in fiscal 2000, and that research and development expenses will keep rising in absolute dollars. Balance sheet strength improved markedly. Cash, cash equivalents and short-term investments reached $227.1 million, boosted by net proceeds of $138.8 million from a March 1999 follow-on public offering. Shareholders' equity rose to $295.7 million from $86.3 million. Management stated that existing liquidity and capital resources are sufficient for at least the next twelve months. The filing also details several Sunnyvale facility leases and a $5.0 million revolving credit line, and it notes the company has never paid cash dividends.
Jul 12, 1999
1998-A
NetApp Annual Report (Amendment), Year Ended Apr 24, 1998
Network Appliance, Inc. filed this Form 10-K/A (Amendment No. 1) for the fiscal year ended April 24, 1998 (financial statements presented as of April 30). Net sales rose to $166.2 million in fiscal 1998 from $93.3 million in fiscal 1997, an increase of 78.0%, driven mainly by higher filer shipments, the expansion of the direct sales force, and new products introduced in June and July 1997 such as the NetApp F630, F520 and F230. Net income increased to $20.97 million, or $0.58 diluted per share, from $250 thousand in fiscal 1997, which had been burdened by a $10.5 million purchased in-process technology and compensation charge tied to the IMC acquisition and a $4.3 million litigation settlement. Income from operations was $32.7 million, or 19.7% of net sales, compared with $3.1 million in fiscal 1997. Gross margin was essentially flat at 59.3% of net sales versus 59.2% a year earlier. Operating expenses grew as the company invested in sales and marketing ($42.8 million, up 76.3%) and research and development ($16.6 million, up 85.6%), and management stated it expects these expenses to keep rising in absolute dollars. International net sales increased to $37.8 million from $16.1 million, largely from European growth. Cash flow from operations was $22.7 million, and shareholders' equity reached $86.3 million at year-end, with total assets of $115.7 million. Subsequent to year-end, in June and July 1998, the company committed to Sunnyvale, California real estate transactions, including a $5.0 million deposit on an agreement to acquire land and a building for $33.8 million, and a 25-year operating lease with a $4.5 million option deposit, and it obtained a $5.0 million unsecured revolving credit facility. Management stated that existing liquidity is sufficient for at least the next twelve months and described the Year 2000 issue as not expected to have a material adverse impact, while noting it was still assessing supplier exposure.
Sep 4, 1998
1998
NetApp Annual Report, Year Ended Apr 24, 1998
Network Appliance, Inc. reported net sales of $166.2 million for the fiscal year ended April 30, 1998 (fiscal 1998), up from $93.3 million in fiscal 1997, with the filing stating an increase of 78.0%. Net income was $21.0 million, or $0.58 per diluted share, compared with $0.3 million in fiscal 1997, which had been reduced by the IMC acquisition charge and the Whipsaw litigation settlement. Gross margin was essentially flat at 59.3% of net sales, and income from operations rose to $32.7 million from $3.1 million. The growth was attributed mainly to higher filer unit volume, a shift toward higher-end systems, and new products such as the NetApp F630, F520 and F230, with international net sales rising to $37.8 million from $16.1 million. The balance sheet strengthened over the year, with total assets of $115.7 million and shareholders' equity of $86.3 million at April 30, 1998. Cash, cash equivalents and short-term investments increased by $19.7 million to $48.1 million, and operating cash flow was $22.7 million. The company stated that its existing liquidity, including a new $5.0 million unsecured revolving credit facility, is sufficient for at least the next twelve months. Subsequent to year end, in June 1998, the company agreed to acquire a Sunnyvale, California building for a $33.8 million purchase price with a $5.0 million deposit, and signed a 25-year operating lease with an option to purchase land in the same city. The filing also highlights risk factors typical of the sector, including dependence on the network file server market, reliance on a single supplier for most disk drives, intense competition from companies such as Auspex, Sun Microsystems and EMC, and Year 2000 compliance uncertainty. The company has never paid cash dividends and has 284 holders of record. Its common stock trades on the Nasdaq National Market under the symbol NTAP.
Jul 22, 1998
1997
NetApp Annual Report, Year Ended Apr 25, 1997
Network Appliance, Inc. filed its Form 10-K for the fiscal year ended April 25, 1997 (financial statements presented as of April 30, 1997). Net sales rose to $93.3 million from $46.6 million in fiscal 1996, with gross margin improving to 59.2% from 55.9%. However, the company recorded a $10.5 million one-time charge related to the March 1997 acquisition of Internet Middleware Corporation (IMC), consisting of purchased in-process technology and a related compensation charge, plus a $4.3 million litigation settlement (the Whipsaw litigation). As a result, income from operations fell to $3.1 million from $6.0 million, and net income dropped to $250 thousand, or $.01 per share, compared with $6.6 million, or $.42 per share, in fiscal 1996. The company's product strategy centered on its filers, which combine proprietary software (including the WAFL architecture and Data ONTAP) with industry standard hardware to serve NFS, CIFS and HTTP markets. During fiscal 1997 it introduced multiprotocol capabilities, the Web Filer and NetCache proxy-caching software, and in May 1997 it launched four new filers (NetApp F210, F230, F520 and F630). Research and development expenses rose to $9.0 million from $4.8 million, and sales and marketing expenses rose to $24.3 million from $12.7 million, reflecting expansion of the direct sales force. Foreign subsidiaries accounted for approximately 11% of net sales in fiscal 1997. At year end, the company held $21.5 million in cash and cash equivalents and $6.9 million in short-term investments, with shareholders' equity of $54.0 million and total assets of $68.9 million. Operating activities provided $6.3 million in cash in fiscal 1997, and management stated its liquidity is sufficient for at least the next twelve months. The company reported an accumulated deficit of $624 thousand and has never paid cash dividends. The filing also notes that no customer accounted for 10% or more of net sales in fiscal 1997 or 1996, and that the company generally does not maintain a firm backlog.
Jul 23, 1997