NetApp(US:NTAP)2024-08-28 20:05Financial Performance - Net revenues for Q1 FY2025 were $1.54 billion, an 8% increase year-over-year from $1.43 billion in Q1 FY2024[3] - GAAP net income for Q1 FY2025 was $248 million, compared to $149 million in Q1 FY2024, with GAAP earnings per share at $1.17, up from $0.69[5] - Billings for Q1 FY2025 were $1.45 billion, a 12% increase from $1.30 billion in Q1 FY2024[5] - Net income for the quarter was $248 million, translating to a diluted earnings per share of $1.17, compared to $149 million and $0.69 per share in the same quarter last year, reflecting a 66.4% increase in net income[53] - Total net revenues for Q1 FY25 were $1,541 million, compared to $1,432 million in Q1 FY24, reflecting a growth of 7.6%[56] - Non-GAAP net income for Q1 FY25 was $330 million, an increase from $249 million in Q1 FY24, marking a 32.5% rise[62] - Gross profit for Q1 FY25 was $1,098 million, compared to $996 million in Q1 FY24, indicating a 10.3% increase[57] - Free cash flow for Q1 FY25 was $300 million, which is 19.5% of net revenues, down from 29.2% in Q1 FY24[65] Revenue Segments - Hybrid Cloud segment revenue reached $1.38 billion, up from $1.28 billion in the same quarter last year[3] - The Hybrid Cloud Segment net revenues were $1,382 million in Q1 FY25, compared to $1,278 million in Q1 FY24, showing an 8.1% increase[56] - Product revenues increased to $669 million, up 13.4% from $590 million year-over-year, while services revenues rose to $872 million, a 3.6% increase from $842 million[53] Shareholder Returns - The company returned $507 million to stockholders through share repurchases and cash dividends[4] - The next cash dividend of $0.52 per share is scheduled for payment on October 23, 2024[8] - The company repurchased $400 million of common stock in Q1 FY25, consistent with Q4 FY24[65] Financial Outlook - The financial outlook for Q2 FY2025 projects net revenues between $1.565 billion and $1.715 billion[6] - Full fiscal year 2025 net revenues are expected to be in the range of $6.480 billion to $6.680 billion[7] - The company provided guidance for Q2 FY25 with GAAP net income per share expected to be between $1.27 and $1.37, and Non-GAAP net income per share expected to be between $1.73 and $1.83[88] - For Fiscal 2025, the company expects GAAP gross margin guidance of 70% to 71% and Non-GAAP gross margin guidance of 71% to 72%[90] - The company anticipates GAAP operating margin guidance of 20% to 21% and Non-GAAP operating margin guidance of 27% to 28% for Fiscal 2025[90] Operational Metrics - Gross profit for the quarter was $1,098 million, resulting in a gross margin of approximately 71.4%, compared to a gross profit of $996 million and a margin of 69.5% in the prior year[53] - Total operating expenses were $816 million, slightly down from $818 million year-over-year, with research and development expenses increasing to $252 million from $247 million[53] - Days sales outstanding (DSO) improved to 40 days in Q1 FY25 from 41 days in Q1 FY24[63] - Gross margin for Q1 FY25 was 71.3% (GAAP) and 72.2% (Non-GAAP), compared to 70.5% and 71.5% in Q4 FY24, and 69.6% and 70.7% in Q1 FY24, indicating a positive trend[74] Asset and Liability Management - NetApp's total assets decreased to $9,311 million as of July 26, 2024, down from $9,887 million as of April 26, 2024[51] - Current liabilities increased to $4,512 million from $4,106 million, primarily due to an increase in the current portion of long-term debt[51] Product Development - NetApp introduced several new products, including the AFF A-Series family of all-flash arrays and the NetApp GenAI Toolkit for Azure, enhancing its product offerings in the AI and cloud storage markets[13] - The company is focusing on driving growth in total product revenues through the sale of configured storage systems, emphasizing the importance of software as a primary value driver[28] - The company is considering opportunities to simplify pricing for certain products, which may impact the allocation between hardware and software components in the future[29] Taxation - The effective tax rate for Q1 FY25 was 17.1%, compared to 23.4% in Q4 FY24 and 19.9% in Q1 FY24, indicating a decrease in the tax burden[82]