Slide 1: NetApp usage of non-GAAP financial information
NetApp usage of non-GAAP financial information To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in the United States (GAAP), NetApp provides investors with certain non-GAAP measures, including, but not
Slide 2: Non-GAAP adjustment definitions (C-J)
C. Litigation settlements. NetApp may periodically incur charges or benefits related to litigation settlements. NetApp excludes these charges and benefits, when significant, because it does not believe they are reflective of ongoing business and operating results. D. Acquisition-related expenses. Ne
Slide 3: Reconciliation of non-GAAP to GAAP income statement information
NETAPP, INC. RECONCILIATION OF NON-GAAP TO GAAP INCOME STATEMENT INFORMATION (In millions, except net income per share amounts) FY2022 Q1'FY23 Q2 FY'23 Q3'FY23 Q4'FY23 FY2023 Q1 FY'24 NET INCOME $ 937 $ 214 $ 750 $ 65 $ 245 $ 1,274 $ 149 Adjustments: Amortization of intangible assets 46 17 17 17 17
Slide 4: Gross profit and operating expense reconciliation
GROSS PROFIT $ 4,220 $ 1,046 $ 1,087 $ 1,001 $ 1,075 $ 4,209 $ 996 Adjustments: Amortization of intangible assets 33 11 10 11 10 42 9 Stock-based compensation 17 5 5 8 6 24 7 NON-GAAP GROSS PROFIT $ 4,270 $ 1,062 $ 1,102 $ 1,020 $ 1,091 $ 4,275 $ 1,012 SALES AND MARKETING EXPENSES $ 1,857 $ 458 $ 47
Slide 5: Operating expenses and income from operations
OPERATING EXPENSES $ 3,063 $ 791 $ 805 $ 829 $ 766 $ 3,191 $ 818 Adjustments: Amortization of intangible assets (13) (6) (7) (6) (7) (26) (6) Stock-based compensation (228) (62) (73) (85) (68) (288) (80) Litigation settlements (2) - - - - - - Restructuring charges (33) (11) (11) (87) (11) (120) (26)
Slide 6: Net income per share and gross margin reconciliation
NET INCOME PER SHARE $ 4.09 $ 0.96 $ 3.41 $ 0.30 $ 1.13 $ 5.79 $ 0.69 Adjustments: Amortization of intangible assets 0.20 0.08 0.08 0.08 0.08 0.31 0.07 Stock-based compensation 1.07 0.30 0.35 0.42 0.34 1.42 0.40 Litigation settlements 0.01 - - - - - - Restructuring charges 0.14 0.05 0.05 0.40 0.05 0
Slide 7: Product and services gross margin reconciliation
GAAP cost of product revenues $ 1,554 $ 397 $ 418 $ 367 $ 335 $ 1,517 $ 265 Cost of product revenues adjustments: Amortization of intangible assets (9) (1) - - - (1) - Stock-based compensation (4) (1) (1) (2) (1) (5) (1) Non-GAAP cost of product revenues $ 1,541 $ 395 $ 417 $ 365 $ 334 $ 1,511 $ 264
Slide 8: Free cash flow and billings reconciliation
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW (NON-GAAP) (In millions) FY 2022 Q1 FY'23 Q2 FY'23 Q3 FY'23 Q4 FY'23 FY 2023 Q1 FY'24 Net cash provided by operating activities $ 1,211 $ 281 $ 214 $ 377 $ 235 $ 1,107 $ 453 Purchases of property and equipment (2
Slide 9: Supplemental data: segment revenues and gross profit
NETAPP, INC. SUPPLEMENTAL DATA (In millions except net income per share, percentages, DSO, DPO and Inventory Turns) RECONCILIATION OF SEGMENTS GROSS PROFIT TO TOTAL GROSS PROFIT* FY2022 Q1'FY23 Q2 FY'23 Q3'FY23 Q4'FY23 FY2023 Q1 FY'24 Revenues by Segment Product $ 3,284 $ 786 $ 837 $ 682 $ 744 $ 3,0
Slide 10: Software and recurring support and public cloud revenue
FY 2022 Q1 FY'23 Q2 FY'23 Q3 FY'23 Q4'FY23 FY2023 Q1 FY'24 Software and recurring Support and public cloud revenue Product - Software $1,926 $476 $495 $390 $437 $1,798 $342 Support $2,344 $598 $607 $616 $598 $2,419 $611 Public Cloud $396 $132 $142 $150 $151 $575 $154 Software and recurring Support a
Slide 11: Select balance sheet and cash flow items
Select Balance Sheet Items Q1 FY'23 Q2 FY'23 Q3 FY'23 Q4'FY23 Q1 FY'24 Deferred Revenue and Financed Unearned Services Revenue $4,170 $4,051 $4,216 $4,313 $4,182 DSO (days) 49 50 49 57 41 DPO (days) 86 92 75 70 72 Inventory Turns 9 9 12 12 13 Days sales outstanding (DSO) is defined as accounts recei
Slide 12: Reconciliation of non-GAAP guidance to GAAP, Q2 fiscal 2024
NETAPP, INC. RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP SECOND QUARTER FISCAL 2024 (Unaudited) Second Quarter Fiscal 2024 Gross Margin - Non-GAAP Guidance ~70% Adjustment: Cost of revenues adjustments (1)% Gross Margin - GAAP Guidance ~69% Second Quarter Fiscal 2024 Operating Margin - Non-GAAP Guid
Slide 13: Reconciliation of non-GAAP guidance to GAAP, fiscal 2024
NETAPP, INC. RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP FISCAL 2024 (Unaudited) Fiscal 2024 Gross Margin - Non-GAAP Guidance ~70% Adjustment: Cost of revenues adjustments (1)% Gross Margin - GAAP Guidance ~69% Fiscal 2024 Product Margin - Non-GAAP Guidance ~55% Adjustments: - Product Margin - GAAP