7 Jun

Can NetApp Return to Revenue Growth in Fiscal 2018?

WRITTEN BY Aditya Raghunath

Revenue was flat YoY in fiscal 2017

In fiscal 2017, NetApp’s (NTAP) revenues fell marginally by 0.5% YoY (year-over-year) to $5.5 billion, down from $5.54 billion in fiscal 2016. In fiscal 4Q17, revenues rose 7.3% YoY to $1.48 billion, but revenues fell 3% YoY in fiscal 1Q17 to $1.29 billion and 2.9% YoY to $1.34 billion in fiscal 2Q17. Its revenues rose during the past two fiscal quarters by 1.3% YoY and 7.3%, respectively.

Can NetApp Return to Revenue Growth in Fiscal 2018?

NetApp’s Strategic Solutions revenues rose 17.2% YoY in fiscal 2017 to $1.97 billion. In fiscal 4Q17, revenues rose 24% YoY to $596 million. This growth offset the decline in NetApp’s Mature Solutions segment, whose revenues fell 20.6% in fiscal 2017 and 7.2% in fiscal 4Q16, to $1.03 billion and $256 million, respectively.

Revenue growth in fiscal 2H17

NetApp had previously expected revenue growth in the second half of fiscal 2017. The firm now expects its all-flash storage portfolio to drive single-digit revenue growth between fiscal 2018 and fiscal 2020.

Meanwhile, customers are gaining economic benefits by replacing hard disk installations with flash storage. NetApp’s flash storage portfolio ensures data management and data protection capabilities.

During NetApp’s earnings call, CEO (chief executive officer) George Kurian stated: “We are winning with flash and expanding our intellectual property in this market, positioning us for success in the multiyear transition from disk to flash. The all-flash FlexPod and our momentum in the channel helped to strengthen our #2 position in the converged infrastructure market and contributed to the 44% year-over-year growth of FlexPod revenue.”

NetApp’s revenue from its all-flash array business rose 160% YoY to an annualized net revenue run rate of $1.7 billion by the end of fiscal 4Q17.

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