NetApp reports strong earnings as pivot to hybrid cloud services pays off

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NetApp’s bid to transform itself from a storage maker to a hybrid cloud data services and data management provider continues to progress. The company recorded fiscal Q2 earnings of $1.28 per share, up 22% from the same time last year and ahead of analysts estimates that put it at $1.21.

Revenues went up 10.6% from the same quarter last year to hit $1.57 billion and narrowly ahead of analysts’ expectations that estimated $1.55 billion.

Billings of $1.55 billion the quarter went up 7%. Annual recurring revenue in the company’s public cloud services line went up 80% to reach $388 million, showing NetApp is becoming increasingly stable.

NetApp’s performance

Chief Executive George Kurian said that all-flash arrays now make up about 30% of installed systems. He added that he is confident that the company gained a share in enterprise storage at all-flash array markets.

Product revenue went up 9% to reach $814 million, thanks to a 22% surge in annualized net revenue run rate for its all-flash array system, to reach $3.1billion.

NetApp increased earlier guidance for the fiscal Q3 of earnings per share (from $1.21 to $1.31) in revenues of between $1.525 billion and $1.675 billion, representing growth of between 9 and 10%.

Hopeful outlook

Kurian said that cloud storage is a fast-growing, multibillion-dollar opportunity that he says NetApp is positioned to capitalize on. He added that cloud compute and cost management is also a massive opportunity for which Spot and CloudCheckr provide use cases.

The belief is that the company can continue to manage through supply chain headwinds and address the substantial customer demand.

The company also confirmed that the expansion to cloud services is bearing fruits across the board, with expectations that it could continue to perform well.