01—Abstract
Summary
Summary of the 10-Q filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.
NetApp, Inc. reported results for the third quarter and first nine months of fiscal 2025, ended January 24, 2025.
Net revenues were $1,641 milliona for the quarter, up from $1,606 million a year earlier, and $4,840 million for the nine months, up from $4,600 million. Net income was $299 million for the quarter, versus $313 million a year earlier, and $846 million for the nine months, versus $695 million. Diluted net income per share was $1.44 for the quarter and $4.03 for the nine months.
Income from operations was $362 millionb for the quarter and $989 million for the nine months. Cash, cash equivalents and short-term investments totaled $2,261 million at January 24, 2025, down from $3,252 million at April 26, 2024. The decline reflected $900 million of share repurchases, repayment of a $400 million 3.30% Senior Notes maturity, $319 million of dividends and $133 million of capital expenditures, partly offset by $831 million of operating cash flow.
Total debt principal was $2,000 millionc, and the company reported a net working capital deficit of $287 million. Management stated that its cash requirements are expected to be met for at least the next 12 months.
The company also disclosed a restructuring plan that reduced its global workforce by approximately 4%, and an agreement to sell its Spot by NetApp cloud optimization business to Flexera for $70 million in up-front cash plus up to $49 milliond contingent on performance, with closing expected in the fourth quarter of fiscal 2025. Public Cloud revenues rose to $174 million in the quarter from $151 million, while Hybrid Cloud product revenues rose to $758 million from $747 million.
02—Key points
Key Highlights
- Net revenues rose to $1,641 million in the third quarter of fiscal 2025 from $1,606 million, and to $4,840 million for the nine months from $4,600 million.
- Net income was $299 million for the quarter, down from $313 million, while nine-month net income increased to $846 million from $695 million.
- Diluted net income per share was $1.44 for the quarter and $4.03 for the nine months, compared with $1.48 and $3.26 a year earlier.
- Public Cloud revenues increased to $174 million in the quarter from $151 million and to $501 million for the nine months from $459 million.
- Cash, cash equivalents and short-term investments fell to $2,261 million from $3,252 million, driven by $900 million of share repurchases and $400 million of debt repayment.
- Principal debt outstanding was $2,000 million, with a $1.0 billion revolving credit facility undrawn and a net working capital deficit of $287 million.
- The company agreed to sell its Spot by NetApp business to Flexera for $70 million up front plus up to $49 million contingent, expected to close in the fourth quarter of fiscal 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, NetApp kept $0.18.
- Revenue$1.64B100.0%
- Cost of revenue−$496.0M30.2%
- Gross profit$1.15B69.8%
- Operating costs−$783.0M47.7%
- Operating income$362.0M22.1%
- Interest, other & tax−$63.0M3.8%
- Net income$299.0M18.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed February 27, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.64B$1.61B | +2.2% |
| Cost of Revenue | $496.00M$455.00M | +9.0% |
| Gross Profit | $1.15B$1.15B | −0.5% |
| R&D Expenses | $247.00M$249.00M | −0.8% |
| Operating Expenses | $783.00M$785.00M | −0.3% |
| Operating Income | $362.00M$366.00M | −1.1% |
| Net Income | $299.00M$313.00M | −4.5% |
| EPS (Basic) | $1.47$1.52 | −3.3% |
| EPS (Diluted) | $1.44$1.48 | −2.7% |
| Shares Outstanding (Basic) | 204.00M206.00M | −1.0% |
| Shares Outstanding (Diluted) | 208.00M211.00M | −1.4% |
05—Questions
Frequently Asked Questions
How did NetApp perform in the third quarter of fiscal 2025?
Net revenues were $1,641 million, up from $1,606 million a year earlier, and net income was $299 million, down from $313 million. Income from operations was $362 million, compared with $366 million in the prior-year quarter.
How much cash did NetApp return to shareholders?
During the first nine months of fiscal 2025, NetApp repurchased approximately 7.4 million shares for $900 million and paid $319 million in dividends. The Board declared a $0.52 per share dividend on February 20, 2025, payable April 23, 2025.
What is NetApp's debt position?
Principal amount of senior notes was $2,000 million as of January 24, 2025, down from $2,400 million, after the $400 million 3.30% notes matured in September 2024. The next maturity is $750 million of 1.875% notes due June 2025. No commercial paper was outstanding, and the $1.0 billion revolving credit facility was undrawn.
What is the Spot by NetApp sale?
NetApp agreed with Flexera Software LLC to sell Spot by NetApp, a cloud optimization and management software business in its Public Cloud segment. Consideration is $70 million in up-front cash and up to $49 million contingent on financial performance metrics during calendar 2025. NetApp expects any gain or loss to be immaterial.
Why did cash from operations decline?
Net cash provided by operating activities was $831 million for the nine months, down from $1,072 million. The filing cites a $94 million decrease in accrued expenses, mainly from payment of fiscal 2024 incentive compensation, and a $92 million decrease in deferred revenue, partly offset by a $104 million decrease in accounts receivable.
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