NetApp Reports Mix Q3 Results & Soft Full-Year Guidance

NetApp (NASDAQ:NTAP) shares soared 18% in pre-market today following the announcement of its Q3 results, which surpassed expectations in terms of earnings, revenue, and operating margin expansion.

The company recorded earnings per share of $1.94, outperforming the forecasted $1.69 by analysts. Quarterly revenue reached $1.61 billion, exceeding the anticipated $1.59 billion.

Additionally, NetApp achieved historical highs with a gross margin of 73% and an operating margin of 30%.

For the upcoming Q4/24, NetApp projects EPS to fall between $1.73 and $1.83, compared to the analysts' expectation of $1.73. The company estimates Q4 revenue to range from $1.59 billion to $1.74 billion, against a consensus of $1.64 billion.

For the full fiscal year, NetApp revised its adjusted EPS forecast upwards to $6.40-$6.50 from the previously estimated range of $6.05-$6.25.

NetApp (NASDAQ:NTAP) released its Q1 results that exceeded expectations. The company achieved an earnings per share (EPS) of $1.15, surpassing the Street estimate of $1.07. The revenue experienced a year-over-year decline of 10%, amounting to $1.43 billion, which still managed to exceed the Street estimate of $1.41 billion. Billings also showed a decrease, reaching $1.30 billion, reflecting a year-over-year drop of 17%.

For the upcoming second quarter of 2024, NetApp projects an EPS range between $1.35 and $1.45, which compares to the Street estimate of $1.38. Additionally, the company anticipates revenue to fall within the range of $1.455 billion to $1.605 billion, compared to the Street estimate of $1.51 billion.

Looking at the full fiscal year, NetApp expects its EPS to range from $5.65 to $5.85, compared to the Street estimate of $5.70.

NetApp (NASDAQ:NTAP) reported its Q3 results and lighter-than-expected Q4 outlook on Wednesday.

Q3 EPS came in at $1.37, better than the Street estimate of $1.31, while revenue was $1.53 billion, missing the Street estimate of $1.61 billion. The company expects Q4/23 EPS to be in the range of $1.30-$1.40, compared to the Street estimate of $1.43. For the full year, they expect EPS in the range of $5.30-$5.50, compared to the Street estimate of $5.41.

Looking beyond Q4, analysts at Deutsche Bank expect demand weakness to persist, but are encouraged that there could be multiple gross margin tailwinds (FX, component premiums, NAND costs and product mix) in 2024, and believe OPEX will be in check given the recent headcount reduction.

Post results, the analysts lowered their 2023 EPS estimate from $5.60 to $5.40, but maintained 2024 EPS at $6.00. However, they lowered the price target from $74 to $70 as they await the company's key growth driver (i.e. public cloud service) to resume growth.

Deutsche Bank provided its outlook on NetApp, Inc. (NASDAQ:NTAP) ahead of the company’s upcoming Q3 earnings announcement on Feb 22.

The analysts expect Q3 results to be in line with or slightly below the mid-point of guidance but turned more cautious on the revenue outlook for 2023 given the company's headcount reduction announced on Jan 31.

While the analysts had expected storage demand to be resilient, large-scale layoffs in recent weeks by technology companies suggest that the macro environment is expected to remain challenging. Deutsche Bank now believes the company's storage hardware could see a correction for 4-6 quarters, and its Public Cloud business could also see slower growth due to shrinking IT budgets. Therefore, the analysts lowered their 2023/2024 growth rates from -2%/+7% to -5%/+3%.

NetApp (NASDAQ:NTAP) shares were down more than 11% pre-market today after the company reported its Q2 results, with revenue coming in at $1.66 billion (up 6% year-over-year), missing the Street estimate of $1.68 billion. EPS was $1.48, compared to the Street estimate of $1.33.

The company anticipates Q3 EPS to be in the range of $1.25-$1.35, worse than the consensus estimate of $1.44, and revenue of $1.525-1.675 billion, compared to the consensus estimate of $1.71 billion.

Fiscal 2023 EPS is expected to be in the range of $5.30-$5.50, missing the consensus estimate of $5.52. Management expects net revenue to grow in the range of 2-4% in 2023.

Analysts at Deutsche Bank provided their views on the company, expecting slower growth for the business over the next few quarters despite some positive demand indicators. Post results, the analysts reduced their 2023 EPS estimate from $6.00 to $5.60 and cut their price target from $84 to $78, while reiterating the Buy rating.

NetApp (NASDAQ:NTAP) shares were down more than 11% pre-market today after the company reported its Q2 results, with revenue coming in at $1.66 billion (up 6% year-over-year), missing the Street estimate of $1.68 billion. EPS was $1.48, compared to the Street estimate of $1.33.

The company anticipates Q3 EPS to be in the range of $1.25-$1.35, worse than the consensus estimate of $1.44, and revenue of $1.525-1.675 billion, compared to the consensus estimate of $1.71 billion.

Fiscal 2023 EPS is expected to be in the range of $5.30-$5.50, missing the consensus estimate of $5.52. Management expects net revenue to grow in the range of 2-4% in 2023.

Analysts at Deutsche Bank provided their views on the company, expecting slower growth for the business over the next few quarters despite some positive demand indicators. Post results, the analysts reduced their 2023 EPS estimate from $6.00 to $5.60 and cut their price target from $84 to $78, while reiterating the Buy rating.