NetApp’s Strong Quarter Led By All-Flash Storage, Cloud Revenue Growth

‘We are gaining share in the key markets of all-flash and object storage, while rapidly scaling our public cloud business. Our industry-leading innovation and unique and deep cloud partnerships position us well to capitalize on significant opportunity ahead,’ says NetApp CEO George Kurian.

Strong all-flash storage array sales and a huge boost in public cloud annualized revenue led NetApp to what turned out to be a very good second fiscal quarter 2022.

Revenue and both GAAP earnings for the quarter, which ended Oct. 29, were all up over last year, and they solidly beat analysts’ expectations as well.

NetApp’s performance for its second fiscal quarter 2022 reflected a strong demand environment, a clear vision and solid execution, NetApp CEO George Kurian said in prepared remarks released Tuesday prior to the company’s quarterly financial analyst conference call.

[Related: 10 Key Takeaways From NetApp CEO George Kurian: Cloud, Coronavirus And Growth]

“We are gaining share in the key markets of all-flash and object storage, while rapidly scaling our public cloud business,” Kurian said. ”Our industry-leading innovation and unique and deep cloud partnerships position us well to capitalize on significant opportunity ahead.”

NetApp said its public cloud annualized revenue run rate was $388 million, up 80 percent over last year, while its all-flash array annual net revenue run rate hit $3.1 billion, up 22 percent year over year.

The quarter’s results also let NetApp raise its full-year guidance for revenue, earnings per share and public cloud annualized revenue run rate, Kurian said.

NetApp is now expecting total net revenue growth for full fiscal year 2022 of 9 percent to 10 percent, compared with its previous guidance given during its first fiscal quarter 2022 of 8 percent to 9 percent.

The company is also now expecting a public cloud annual revenue run rate of $510 million to $540 million, up from its previous guidance of $450 million to 500 million.

Earnings per share on a GAAP basis are now expected to reach $3.80 to $4.00, down slightly from the previous guidance of $3.83 to $4.03 per share. On a non-GAAP basis, the company is now expecting earnings of $4.90 to $5.10 per share, up from its prior guidance of $4.85 to $5.05 per share.

For its second fiscal quarter 2022, NetApp Tuesday reported total revenue of $1.57 billion, up from the $1.42 billion the company reported for its second fiscal quarter of 2021. That beat analysts’ expectations by about $20 million, according to Seeking Alpha.

This included product revenue of $814 million, up from last year’s $7.49 million, and services revenue of $752 million, up from last year’s $667 million.

The Americas commercial market accounted for 43 percent of NetApp’s revenue, while the U.S. public sector contributed 12 percent. About 29 percent of revenue came from Europe, Middle East and Africa, while 15 percent came from the Asia-Pacific region, NetApp reported.

About 76 percent of all revenue came from indirect sales.

For the quarter, NetApp reported second fiscal quarter 2022 GAAP net income of $224 million, or 98 cents per share, up strongly from last year’s net income of $137 million, or 61 cents per share. Analysts had been expecting 95 cents per share, according to Seeking Alpha. On a non-GAAP basis, NetApp reported $292 million, or $1.28 per share, beating analysts’ expectations of $1.21 per share.

NetApp Tuesday saw share prices drop 2.88 percent to $88.88 per share at the close of the trading day. Share prices in after-hours trading briefly rose to $92.85 per share before settling in the $89.50 per share range.