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: Stock-based compensation expenses
B. Stock-based compensation expenses. NetApp excludes stock-based compensation expenses from its non- GAAP measures primarily because the amount can fluctuate based on variables unrelated to the performance of the underlying business. While management views stock-based compensation as a key element
Slide 3: Reconciliation of GAAP to Non-GAAP Income Statement Information
NETAPP, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME STATEMENT INFORMATION (In millions, except net income per share amounts) FY2023 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 FY2024 Q1'FY25 NET INCOME $ 1,274 $ 149 $ 233 $ 313 $ 291 $ 986 $ 248 Adjustments: Amortization of intangible assets 68 15 14 14 14 5
Slide 4: Research and Development Expenses
RESEARCH AND DEVELOPMENT EXPENSES $ 956 $ 247 $ 262 $ 249 $ 271 $ 1,029 $ 252 Adjustments: Stock-based compensation (111) (32) (35) (32) (33) (132) (31) NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES $ 845 $ 215 $ 227 $ 217 $ 238 $ 897 $ 221 GENERAL AND ADMINISTRATIVE EXPENSES $ 265 $ 74 $ 75 $ 81 $ 78
Slide 5: Reconciliation of GAAP to Non-GAAP Income Statement Information
NETAPP, INC. RECONCILIATION OF GAAP TO NON-GAAP INCOME STATEMENT INFORMATION (In millions, except net income per share amounts) FY2023 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 FY2024 Q1'FY25 RESTRUCTURING CHARGES $ 120 $ 26 $ 5 $ 13 $ - $ 44 $ 17 Adjustments: Restructuring charges (120) (26) (5) (13) - (44)
Slide 6: Provision (Benefit) for Income Taxes
PROVISION (BENEFIT) FOR INCOME TAXES $ (208) $ 37 $ 82 $ 69 $ 89 $ 277 $ 51 Adjustments: Income tax effects 51 31 9 22 12 74 35 Income tax benefits (expenses) from integration of acquired companies 27 - - - - - - Resolution of income tax matters (69) - - - - - - Income tax benefit from intra-entity
Slide 7: Reconciliation of GAAP to Non-GAAP Gross Margin
RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN ($ in millions) FY2023 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 FY2024 Q1'FY25 Gross margin-GAAP 66.2% 69.6% 71.1% 71.7% 70.5% 70.7% 71.3% Cost of revenues adjustments 1.0% 1.1% 1.0% 1.0% 1.0% 1.0% 0.9% Gross margin-Non-GAAP 67.2% 70.7% 72.0% 72.7% 71.5% 71.7%
Slide 8: Reconciliation of GAAP to Non-GAAP Operating Margin
RECONCILIATION OF GAAP TO NON-GAAP Operating Margin ($ in millions) FY2023 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 FY2024 Q1'FY25 Operating margin-GAAP 16.0% 12.4% 19.5% 22.8% 21.9% 19.4% 18.3% Adjustments: 8.2% 9.1% 7.4% 7.4% 6.2% 7.5% 7.6% Operating margin Non-GAAP 24.2% 21.6% 26.8% 30.2% 28.1% 26.8% 25.9
Slide 9: Reconciliation of Cash, Cash Equivalents and Short-Term Investments
RECONCILIATION OF CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS TO NET CASH (NON-GAAP) (In millions) Q1 FY'24 Q2'FY24 Q3'FY24 Q4'FY24 Q1'FY25 Cash, cash equivalents and investments $ 2,975 $ 2,620 $ 2,917 $ 3,252 $ 3,017 Current portion of long-term debt - (400) (400) (400) (1,149) Long-term deb
Slide 10: 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 FY2023 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 FY2024 Q1'FY25 Revenues by Segment Product $ 3,049 $ 590 $ 706 $ 747 $ 806 $ 2,849
Slide 11: Geographic Mix
Geographic Mix % of FY 2023 % of Q1 FY 2024 % of Q2 FY 2024 % of Q3 FY 2024 % of Q4 FY 2024 % of FY 2024 % of Q1 FY 2025 Revenue Revenue Revenue Revenue Revenue Revenue Revenue Americas 51% 53% 50% 50% 51% 51% 50% Americas Commercial 40% 41% 37% 41% 41% 40% 39% U.S. Public Sector 11% 12% 13% 9% 10%
Slide 12: Select Cash Flow Statement Items
Select Cash Flow Statement Items FY2023 Q1'FY24 Q2 FY'24 Q3 FY'24 Q4 FY'24 FY2024 Q1'FY25 Net Cash Provided by Operating Activities $1,107 $453 $135 $484 $613 $1,685 $341 Purchases of Property and Equipment $239 $35 $38 $36 $46 $155 $41 Free Cash Flow $868 $418 $97 $448 $567 $1,530 $300 Free Cash Fl
Slide 13: Reconciliation of GAAP Guidance to Non-GAAP Second Quarter Fiscal 2025
NETAPP, INC. RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP SECOND QUARTER FISCAL 2025 (Unaudited) Second Quarter Fiscal 2025 Gross Margin - GAAP Guidance 70% - 71% Adjustment: Cost of revenues adjustments 1% Gross Margin - Non-GAAP Guidance 71% - 72% Second Quarter Fiscal 2025 Operating Margin - GAAP
Slide 14: Reconciliation of GAAP Guidance to Non-GAAP Fiscal 2025
NETAPP, INC. RECONCILIATION OF GAAP GUIDANCE TO NON-GAAP FISCAL 2025 (Unaudited) Fiscal 2025 Gross Margin - GAAP Guidance 70% - 71% Adjustment: Cost of revenues adjustments 1% Gross Margin - Non-GAAP Guidance 71% - 72% Fiscal 2025 Operating Margin - GAAP Guidance 20% - 21% Adjustments: Amortization