NetApp beats revenue estimates on robust demand for cloud services

NETAPP-RESULTS:NetApp beats revenue estimates on robust demand for cloud services

Reuters
First Published31 May 2024
NetApp beats revenue estimates on robust demand for cloud services
NetApp beats revenue estimates on robust demand for cloud services

(Reuters) - NetApp topped fourth-quarter revenue estimates on Thursday on strong demand for its cloud-based data management services, while the company also approved a new share buyback plan worth an additional $1 billion.

Enterprise spending on cloud has remained robust as businesses upgrade their technology infrastructure, while advances in artificial intelligence have boosted demand for cloud computing.

Companies are increasingly moving from traditional to cloud-based solutions, looking to integrate more cost-effective processes.

The company, which has clients such as Amazon.com's Amazon Web Services, Google Cloud and Microsoft's Azure, helps businesses improve efficiency of their data storage infrastructure.

In April, NetApp announced an expansion of its tieup with Google Cloud called the Flex service level, which supports storage volumes of nearly any size, making it easier for firms to leverage data for generative AI and other hybrid cloud workloads.

The company expects 2025 revenue to be between $6.45 billion and $6.65 billion. Its midpoint was $6.55 billion, above estimates of $6.53 billion, according to LSEG data.

It expects adjusted profit per share between $6.80 and $7, above expectations of $6.74.

For the first quarter, NetApp expects to report net revenue between $1.46 billion and $1.61 billion, with the midpoint above estimates of $1.52 billion.

It expects adjusted profit per share between $1.40 to $1.50.

Net revenue for the fourth quarter came in at $1.67 billion, slightly above analysts' estimate of $1.66 billion.

NetApp's Hybrid Cloud segment, which accounts for almost all of its revenue, recorded sales of $1.52 billion in the quarter.

On an adjusted basis, it earned $1.80 per share compared with $1.54 a year ago.

(Reporting by Juby Babu in Mexico City; Editing by Mohammed Safi Shamsi and Arun Koyyur)

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