NetApp shares jumped seven per cent last night after the firm posted a 44 per cent profit rocket, driven by what it claims as its winning "flagship" customers from rivals, and booming flash sales.
For the three months to 29 July, non-GAAP net income at NetApp rose 44 per cent annually to $129m (£98m), on sales which fell three per cent over the same period to $1.29bn. In after-hours trading, NetApp shares jumped seven per cent to $30.99 per share.
The EMEA market accounted for 30 per cent of the company's revenue, down from 31 per cent a year ago and 33 per cent the previous quarter. Its indirect business made up 77 per cent of sales in Q1, the same as a year ago, but up from 74 per cent last quarter.
Speaking on the earnings call, NetApp's chief executive George Kurian (pictured) said his firm's success has come at the detriment of its rivals.
When asked about the impact of Dell's takeover of rival EMC, he said: "From a technology perspective, we feel very, very good.
"We have taken flagship customers from both EMC and HP this past quarter with our all-flash technology, and we feel that as customers look to build all-flash datacentres, we've got a technological lead that is very strong. The road map of both all-flash and hybrid cloud solutions from us is resonating with customers. Every transaction is competitive. And so to the extent that we are displacing competitors in large accounts, these are highly competitive transactions. We think that that nature of competitive dynamic will continue. So we're building differentiated capacities in software as well as dealing with the cost structure of the company."
The UK voted to leave the EU right in the middle of NetApp's Q1, but Kurian said the impact on foreign exchange and business in general has so far been "immaterial".
NetApp closed its acquisition of all-flash firm SolidFire at the start of this year. Prior to this, the firm had faced some criticism for not getting into the flash market quickly enough, especially when aggressive start-ups were claiming to be cashing in.
Kurian said NetApp's all-flash array business is booming.
"Our advantages in this market are reflected in the continued strong growth of our all-flash array business, which grew approximately 385 per cent year over year to an annualised net revenue run rate of almost $775m, inclusive of all-flash FAS, EF and SolidFire product and services. The majority of this growth was again driven by high demand for the all-flash FAS."
He said that NetApp has managed to win customers away from rivals in the flash space too.
"We are displacing our competitors' legacy SAN frame array architectures with the all-flash FAS," he said. "It enabled us to break into a large US-based healthcare company, which had been a decade-long competitor stronghold. We replaced the competitor's SAN infrastructure for the customer's mission-critical SAP environment.
"The all-flash FAS beat out the incumbent and a newer all-flash competitor on performance, features and resiliency. Not only will we be able to reduce the datacentre floor space required for this workload by 95 per cent, we were also able to provide the customer with a path to the hybrid cloud."
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