NetApp Financials Come In Better Than Company’s Expectation

In a preliminary report two weeks ago, NetApp warned of a dramatic fall in revenue and earnings for the quarter. The final results, however, were not nearly as bad as expected.

NetApp did better in its first fiscal quarter 2020 than was expected in the warning the storage and data management company disclosed just two weeks ago.

The company Wednesday reported lower year-over-year revenue and earnings, but they weren't as low as the preliminary results it released earlier this month. The report also highlighted some good news for the quarter, including strong growth in cloud data services recurring revenue.

NetApp on Aug. 1 surprised Wall Street by releasing its preliminary first fiscal quarter 2020 financials about two weeks before their official Aug. 14 release. Executives told analysts in a last-minute conference call that the company expected a 17 percent drop in its first fiscal quarter 2020 revenue to between $1.22 billion and $1.23 billion, and a 50-plus percent drop in GAAP income to the range of 30 cents to 35 cents per share, compared with its previously announced expectations.

[Related: 3 Reasons Why NetApp CEO George Kurian Expects A Revenue Shortfall (And 5 Ways He’ll Turn It Around)]

For its first fiscal quarter 2020, NetApp Wednesday reported revenue of $1.24 billion, compared with $1.47 billion for its first fiscal quarter 2019 revenue. That was above the high end of expected revenue.

NetApp also reported GAAP net income of $103 million, or 42 cents per share, compared with GAAP net income of $283 million, or $1.05 per share, in the first quarter of fiscal 2019. That was well above the modified expectations.

On a non-GAAP basis, net income for the quarter was $157 million, or 65 cents per share, down from last year's $281 million, or $1.04 a share.

NetApp's cloud data services annualized recurring revenue, meanwile, came in at approximately $61 million, an increase of 189 percent over last year.