NetApp Reports 2% Revenue Growth to $1.641 Billion in Third Quarter

NetApp, Inc. reported its financial results for the third quarter and nine months ended January 24, 2025, revealing a modest increase in net revenues and net income compared to the previous fiscal year. The company generated net revenues of $1.641 billion for the third quarter, a 2% increase from $1.606 billion in the same period last year. For the nine months, revenues rose 5% to $4.840 billion from $4.600 billion. Net income for the third quarter was $299 million, down from $313 million a year earlier, while net income for the nine months increased to $846 million from $695 million.

The company's product revenues for the third quarter reached $758 million, a 1% increase from $747 million in the prior year, while service revenues rose 3% to $883 million from $859 million. Notably, the Public Cloud segment saw a significant increase in revenues, contributing $174 million in the third quarter, up from $151 million a year ago. This growth reflects the rising demand for cloud services and the company's strategic focus on expanding its cloud offerings.

In terms of operational developments, NetApp has been actively restructuring its workforce, reducing its global headcount by approximately 4% as part of a plan to optimize resources and redirect efforts towards higher return activities. This restructuring is expected to be completed by the end of fiscal 2025. Additionally, the company announced the sale of its cloud optimization and management software business, Spot by NetApp, to Flexera Software LLC for a total consideration of up to $119 million, which includes contingent payments based on performance metrics.

Geographically, NetApp's revenues were primarily driven by the Americas, which accounted for $833 million in the third quarter, followed by EMEA at $559 million and APAC at $249 million. The company reported a decrease in cash and cash equivalents to $1.511 billion as of January 24, 2025, down from $1.903 billion at the end of the previous fiscal year. This decline was attributed to significant cash outflows for stock repurchases, debt repayments, and dividend payments, totaling $1.679 billion in financing activities during the nine months.

Looking ahead, NetApp remains focused on leveraging its cloud capabilities and enhancing its product offerings to drive future growth. The company anticipates that cash provided by operating activities may fluctuate due to various factors, including revenue mix and working capital management. With a strong liquidity position and ongoing investments in its cloud infrastructure, NetApp is well-positioned to navigate the evolving market landscape and capitalize on emerging opportunities.