NetApp, Inc. (NTAP): history, ownership, mission, how it works & makes money

A Brief History of NetApp, Inc.

NetApp, Inc., founded in 1992, has grown to become a prominent player in the data storage and management industry. As of 2024, the company continues to innovate within the Hybrid Cloud and Public Cloud segments, reflecting its commitment to providing cutting-edge data solutions.

Company Overview

NetApp operates primarily in the data storage and management sector, focusing on hybrid cloud solutions that help organizations manage their data across multiple environments. As of July 26, 2024, NetApp reported total revenues of $1.541 billion for the quarter ended, an increase of 8% from $1.432 billion in the same period the previous year.

Financial Performance

In the first quarter of fiscal 2025, NetApp achieved a net income of $248 million, compared to $149 million in the prior year. This resulted in a net income per share of $1.20, up from $0.70. The company's growth in product revenues was notable, with a 13% increase to $669 million from $590 million year-over-year.

Stock Performance and Dividends

As of July 26, 2024, NetApp's stock repurchase program has authorized up to $17.1 billion. The company repurchased approximately 3 million shares at an average price of $120.46 during the first quarter. Additionally, a cash dividend of $0.52 per share was declared, payable on October 23, 2024.

Cash Flow Analysis

NetApp generated $341 million from operating activities in the first quarter of fiscal 2025, reflecting a decrease from $453 million in the same quarter of fiscal 2024. The company reported a net change in cash and cash equivalents of $(250) million.

Debt and Liabilities

As of July 26, 2024, NetApp's long-term debt totaled approximately $1.244 billion, with a fair value of $2.254 billion. The company continues to manage its liabilities effectively, with total liabilities reported at $8.382 billion.

Market Position and Future Outlook

NetApp's focus on hybrid cloud solutions positions it well in a rapidly evolving market. The company's strategy emphasizes growth in product revenues while maintaining operational discipline. With a strong financial foundation and innovative product offerings, NetApp is poised to continue its growth trajectory in the coming years.

A Who Owns NetApp, Inc. (NTAP)

Major Shareholders

As of 2024, NetApp, Inc. (NTAP) has several major institutional shareholders that hold significant stakes in the company. The following table summarizes the top shareholders and their respective ownership percentages:

Insider Ownership

Insiders, including executives and board members, also hold a significant portion of NetApp's shares. As of July 26, 2024, the insider ownership is as follows:

Stock Repurchase Program

NetApp has an active stock repurchase program, which allows the company to buy back its shares from the market. As of July 26, 2024, NetApp's board has authorized repurchases totaling up to $17.1 billion. The following table summarizes the recent stock repurchase activities:

Dividends

NetApp has consistently paid dividends to its shareholders. The most recent dividend declared was:

Financial Overview

The financial performance of NetApp, Inc. has shown growth, with net revenues of $1.541 billion reported for the three months ended July 26, 2024, representing an 8% increase from the previous year. The following table highlights key financial metrics:

Conclusion on Ownership Structure

As of 2024, the ownership of NetApp, Inc. is characterized by a mix of institutional and insider ownership, with a significant focus on stock repurchases and dividend payments to enhance shareholder value.

NetApp, Inc. (NTAP) Mission Statement

Mission Statement

NetApp, Inc. aims to empower organizations to harness the power of their data. The company focuses on providing innovative cloud data services and storage solutions that enable businesses to accelerate their digital transformation and drive operational efficiency.

Financial Overview

As of July 26, 2024, NetApp reported net revenues of $1.541 billion for the first quarter of fiscal 2025, an increase of 8% compared to $1.432 billion in the same period of the previous year. The breakdown of revenues is as follows:

Operating Performance

NetApp's gross profit for the first quarter of fiscal 2025 was $1.098 billion, resulting in a gross margin of 71.3%, compared to $996 million and a gross margin of 69.6% in the same period of the prior year. The operating income for the quarter was $282 million, with a net income of $248 million.

Stock and Dividends

During the first quarter of fiscal 2025, NetApp repurchased approximately 3 million shares of its common stock at an average price of $120.46 per share, totaling $400 million. The company also declared a cash dividend of $0.52 per share, amounting to $107 million in total dividends paid.

Segment Performance

NetApp operates primarily in two segments: Hybrid Cloud and Public Cloud. For the first quarter of fiscal 2025, the financial performance by segment is detailed below:

Liquidity and Capital Resources

As of July 26, 2024, NetApp’s cash, cash equivalents, and short-term investments totaled $3.017 billion. The company’s long-term debt amounted to $2.400 billion, with a net working capital deficit of $191 million.

Conclusion

NetApp continues to focus on strengthening its position in the cloud data services market, driving growth through product innovation, and maintaining strong financial health.

How NetApp, Inc. (NTAP) Works

Business Segments

NetApp, Inc. operates primarily through two segments: Hybrid Cloud and Public Cloud.

• Hybrid Cloud: This segment offers a unified data storage portfolio that supports both structured and unstructured data. It includes hardware, software, and related support services.
• Public Cloud: This segment focuses on cloud storage and CloudOps services delivered primarily as-a-service.

Financial Performance

For the three months ended July 26, 2024, NetApp reported the following financial results (in millions):

Net Income and Earnings Per Share

Net income for the three months ended July 26, 2024, was $248 million, resulting in:

• Basic Earnings Per Share: $1.20
• Diluted Earnings Per Share: $1.17

Cash Flow Activities

Net cash provided by operating activities for the three months ended July 26, 2024, was $341 million. The breakdown is as follows (in millions):

Stock Repurchase and Dividend Activity

During the first three months of fiscal 2025, NetApp repurchased approximately 3 million shares at an average price of $120.46 per share, totaling $400 million. In this period, a cash dividend of $0.52 per share was declared, amounting to $107 million in total payments.

Balance Sheet Highlights

As of July 26, 2024, NetApp's total assets and liabilities were as follows (in millions):

Segment Revenue by Geography

NetApp's revenues for the three months ended July 26, 2024, by geographic region (in millions) were:

Debt Information

As of July 26, 2024, NetApp's long-term debt totaled approximately $2,400 million, with future principal debt maturities as follows (in millions):

Tax Information

The effective tax rate for the three months ended July 26, 2024, was 17.1%, reflecting various tax benefits and liabilities.

Unrecognized Tax Benefits

As of July 26, 2024, NetApp had $221 million of gross unrecognized tax benefits, with $158 million potentially affecting the provision for income taxes if recognized.

How NetApp, Inc. (NTAP) Makes Money

Revenue Overview

As of Q1 2025, NetApp, Inc. reported total net revenues of $1.541 billion, marking an 8% increase from $1.432 billion in Q1 2024. This growth is attributed to both product and service revenue increases.

Product Revenue Breakdown

NetApp's product revenues are primarily generated through its Hybrid Cloud solutions, which include:

• Configured all-flash array systems
• Hybrid systems (bundled hardware and software products)
• Storage management software

In Q1 2025, product revenues increased due to higher sales of C-Series all-flash array systems.

Service Revenue Breakdown

Service revenues include:

• Support revenues: $631 million (up from $611 million in Q1 2024)
• Professional services: $82 million (up from $77 million)
• Public Cloud services: $159 million (up from $154 million)

Support revenues increased due to a higher aggregate support contract value for the installed base.

Cost Structure

The cost of revenues for Q1 2025 was $443 million, with the following breakdown:

Gross Profit and Margins

NetApp's gross profit for Q1 2025 was $1.098 billion, with a gross margin of 71.3% compared to 69.6% in Q1 2024.

Operating Expenses

Operating expenses totaled $816 million in Q1 2025, slightly down from $818 million in the previous year. The breakdown is as follows:

Net Income

Net income for Q1 2025 was $248 million, translating to a net income per share of $1.20 (basic) and $1.17 (diluted). This is an increase from $149 million in Q1 2024.

Geographic Revenue Distribution

NetApp's revenues by geographic region for Q1 2025 are as follows:

Cash Flow and Liquidity

As of July 26, 2024, NetApp had cash, cash equivalents, and short-term investments totaling $3.017 billion, a decrease from $3.252 billion at the end of Q4 2024. Cash flow activities included:

• Net cash provided by operating activities: $341 million
• Net cash used in investing activities: ($51 million)
• Net cash used in financing activities: ($548 million)

Stock Repurchase and Dividends

In Q1 2025, NetApp repurchased approximately 3 million shares at an average price of $120.46 per share, totaling $400 million. The company declared a dividend of $0.52 per share, totaling $107 million for the quarter.