NetApp Inc.(NASDAQ: NTAP) stock rose over 11.7% in the after-hours session on November 15th, 2017 driven by the second quarter of 2018 performance.
The group’s Product revenue surged 14% on a year-over-year basis during the second quarter of 2017 while the all-flash array annualized net revenue run rate rose 58% yoy to $1.7 billion. The group’s cloud strategy is paying off driven by their relationship with Microsoft Azure and the industry’s first Azure enterprise NFS service.
The group built a competitive edge for their services as they help firms unify their data across the widest range of cloud and on-premises environments as compared to the traditional players approaches, which are siloed and do not embrace the cloud. They built a strong expertise in data management.
Their structural technological advantages as compared to their competitors’ SAN products is enabling them to enhance their SAN market share. The all-flash FlexPod enabled them to strengthen their position in the converged infrastructure market and contributed to the 20% year-over-year growth of FlexPod revenue as per IDC’s Quarterly Converged Systems Tracker for calendar Q2 2017. The group’s latest version of ONTAP enhanced the performance by 40% as compared to the earlier versions, enabling them to enhance capacity savings by 30%. The group continues to strengthen their business and technical partnerships with our SSD suppliers.
NetApp has $6 billion of cash and short-term investments as of the second quarter of 2017 and bought $150 million worth of their shares while paid over $54 million in cash dividends. They are paying a cash dividend of $0.20 per share, on January 24, 2018. They enhanced their cash flow from operations by 99% yoy to $314 million during the quarter.
The group forecasts net revenues in the range of $1.425 billion and $1.575 billion during the third quarter of 2017 which is a 6.8% increase year-over-year, based on the midpoint. They forecast a better consolidated gross margin in the range of over 62.5% to 63.5%, driven by a higher mix of product revenue on a quarter-to-quarter basis. They forecast their operating margins of over 20% while earnings per share is forecasted to be in the range of $0.86 and $0.94 per share.