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: NetApp excludes the following items from its non-GAAP measures
NetApp excludes the following items from its non-GAAP measures when applicable: A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its business combinations. The amortization of intangible assets varies depending on the level
Slide 3: Debt extinguishment costs and income tax adjustments
I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses incurred as a result of the early extinguishment of debt. Management believes such nonrecurring costs do not reflect the results of its underlying, on-going business and, therefore, are less useful for future planning and f
Slide 4: 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'FY24 Q2'FY24 NET INCOME $ 937 $ 214 $ 750 $ 65 $ 245 $ 1,274 $ 149 $ 233 Adjustments: Amortization of intangible assets 46
Slide 5: Research and development expenses
RESEARCH AND DEVELOPMENT EXPENSES $ 881 $ 240 $ 243 $ 230 $ 243 $ 956 $ 247 $ 262 Adjustments: Stock-based compensation (75) (24) (26) (32) (29) (111) (32) (35) NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES $ 806 $ 216 $ 217 $ 198 $ 214 $ 845 $ 215 $ 227 GENERAL AND ADMINISTRATIVE EXPENSES $ 279 $ 72 $
Slide 6: Other income (expense), net
OTHER INCOME (EXPENSE), NET $ (62) $ 15 $ 23 $ 5 $ 5 $ 48 $ 8 $ 11 Adjustments: Gain on sale of equity investment - (32) - - - (32) - - Litigation settlements - - - - - - - (5) NON-GAAP OTHER INCOME (EXPENSE), NET $ (62) $ (17) $ 23 $ 5 $ 5 $ 16 $ 8 $ 6 INCOME BEFORE INCOME TAXES $ 1,095 $ 270 $ 305
Slide 7: Reconciliation of non-GAAP to GAAP gross margin
RECONCILIATION OF NON-GAAP TO GAAP GROSS MARGIN ($ in millions) FY2022 Q1'FY23 Q2 FY'23 Q3'FY23 Q4'FY23 FY2023 Q1'FY24 Q2'FY24 Gross margin-GAAP 66.8% 65.7% 65.4% 65.6% 68.0% 66.2% 69.6% 71.1% Cost of revenues adjustments 0.8% 1.0% 0.9% 1.2% 1.0% 1.0% 1.1% 1.0% Gross margin-Non-GAAP 67.6% 66.7% 66.3
Slide 8: Reconciliation of non-GAAP to GAAP effective tax rate
RECONCILIATION OF NON-GAAP TO GAAP EFFECTIVE TAX RATE FY2022 Q1'FY23 Q2 FY'23 Q3'FY23 Q4'FY23 FY2023 Q1'FY24 Q2'FY24 GAAP effective tax rate 14.4% 20.7% (145.9%) 63.3% 22.0% (19.5%) 19.9% 26.0% Adjustments: Income tax effects 1.4% 0.8% 41.6% (4.1%) (10.3%) (4.8%) 1.6% (4.6%) Income tax benefits (exp
Slide 9: Reconciliation of cash, cash equivalents and short-term investments to net cash
RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS TO NET CASH (NON-GAAP) (In millions) Q1 FY'24 Q2'FY24 Cash, cash equivalents and investments $ 2,975 $ 2,620 Current portion of long-term debt - (400) Long-term debt (2,390) (1,991) Net Cash $ 585 $ 229 Net cash is a non-GAAP measur
Slide 10: NetApp, Inc. Supplemental Data
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'FY23 Q3'FY23 Q4'FY23 FY2023 Q1'FY24 Q2'FY24 Revenues by Segment Product $ 3,284 $ 786 $ 837 $ 682 $ 744
Slide 11: Software and recurring support and public cloud revenue
FY2022 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 FY2023 Q1'FY24 Q2'FY24 Software and recurring Support and public cloud revenue Product - Software $1,926 $476 $495 $390 $437 $1,798 $342 $398 Support $2,344 $598 $607 $616 $598 $2,419 $611 $623 Public Cloud $396 $132 $142 $150 $151 $575 $154 $154 Software and r
Slide 12: Non-GAAP net income
Non-GAAP Net Income FY2022 Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 FY2023 Q1'FY24 Q2'FY24 Non-GAAP Net Income $1,209 $269 $326 $301 $334 $1,230 $249 $334 Non-GAAP Weighted Average Common Shares Outstanding, Diluted 229 224 220 219 217 220 216 211 Non-GAAP Net Income per Share, Diluted $5.28 $1.20 $1.48 $1.3
Slide 13: Reconciliation of non-GAAP guidance to GAAP third quarter fiscal 2024
NETAPP, INC. RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP THIRD QUARTER FISCAL 2024 (Unaudited) THIRD Quarter Fiscal 2024 Gross Margin - Non-GAAP Guidance ~71% Adjustment: Cost of revenues adjustments (1)% Gross Margin - GAAP Guidance ~70% THIRD Quarter Fiscal 2024 Operating Margin - Non-GAAP Guidanc
Slide 14: 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 ~71% Adjustment: Cost of revenues adjustments (1)% Gross Margin - GAAP Guidance ~70% Fiscal 2024 Product Margin - Non-GAAP Guidance 58% - 60% Adjustments: - Product Margin -