NetApp Reports 6% and 7% Revenue Growth, Net Income Increases in Latest Quarter and Six Months

NetApp, Inc. reported a strong financial performance for the three and six months ended October 25, 2024, with net revenues of $1,658 million and $3,199 million, respectively, reflecting increases of 6% and 7% compared to the same periods in the previous fiscal year. The growth was driven by a notable rise in product revenues, which reached $768 million for the quarter (up 9%) and $1,437 million for the six months (up 11%), primarily attributed to higher sales of C-Series all-flash array systems. Services revenues also saw a 4% increase in both the quarterly and semi-annual periods.

Gross profit for the three months ended October 25, 2024, was $1,177 million, up from $1,110 million a year earlier, while gross profit for the six months increased to $2,275 million from $2,106 million. The gross profit margin remained stable at 71% for the quarter. Operating income for the three months was $345 million, compared to $304 million in the prior year, and for the six months, it rose to $627 million from $482 million. Net income for the quarter was $299 million, up from $233 million, and for the six months, it increased to $547 million from $382 million, resulting in basic net income per share of $1.47 for the quarter and $2.67 for the six months.

Total assets decreased to $9,004 million as of October 25, 2024, from $9,887 million at the end of the previous fiscal period, while total liabilities also declined to $8,112 million from $8,741 million. However, total stockholders' equity fell to $892 million from $1,146 million. Cash and cash equivalents decreased to $1,478 million from $1,903 million, and total cash, cash equivalents, and short-term investments were $2,222 million, down from $3,252 million.

In terms of strategic developments, NetApp approved restructuring plans that led to a global workforce reduction of approximately 2%, incurring restructuring charges of $29 million in total for the first six months of fiscal 2025. The company also repurchased approximately 5.8 million shares for $700 million during the first half of the fiscal year, with a total of $17.1 billion authorized for stock repurchases since the program's inception. Cash dividends declared for the six months totaled $213 million, reflecting an increase from the previous year.

NetApp's operations are organized into two segments: Hybrid Cloud and Public Cloud, with the Hybrid Cloud segment contributing significantly to revenue growth. The company continues to focus on maintaining liquidity and managing its capital structure effectively, with no defaults reported on senior securities.