Q2 2025 NetApp Inc Earnings Call Transcript
Key Points
- NetApp Inc (NTAP) reported a 19% year-over-year increase in all flash storage, contributing to strong revenue growth.
- The company achieved record Q2 operating margin and EPS, exceeding expectations.
- NetApp Inc (NTAP) was recognized as a leader in the 2024 Gartner Magic Quadrant for primary storage platforms for the 12th consecutive year.
- Keystone, the storage as a service offering, saw revenue growth of approximately 55% year-over-year.
- Public cloud segment revenue grew 9% year-over-year, with first-party and marketplace cloud storage services increasing by 43%.
- Operating cash flow decreased to $105 million from $135 million a year ago, and free cash flow was down to $60 million from $97 million.
- The company experienced higher inventory levels due to strategic SSD purchases, reducing inventory turns to six times in Q2.
- Despite strong performance, the macroeconomic environment remains unchanged, posing potential challenges.
- The public cloud subscription services segment is declining, impacting overall cloud revenue growth.
- Free cash flow for fiscal year 2025 is expected to be slightly lower year-over-year due to timing of cash payments.
Good day and welcome to the NetApp second quarter of fiscal year 2025 earnings call.
All participants will be in a listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.
I would now like to turn the conference over to Chris Newen, Vice President, Investor Relations. Please go ahead.
Hi, everyone. Thanks for joining us with me. Today are our CEO George Curian and CFO Mike Barry. This call is being webcast live and will be available for replay on our website at Netapp dotcom.
During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects including without limitation, our guidance for the third quarter. In fiscal year 2025 our expectations regarding future revenue, profitability and shareholder returns and other growth
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