Posts

Posted on

HireRight Announces Participation in Upcoming Investor Conferences

HireRight Announces Participation in Upcoming Investor Conferences

NASHVILLE, Tenn.–(BUSINESS WIRE)–
HireRight (NYSE: HRT) today announced that senior members of its management team will attend the William Blair 43rd Annual Growth Stock Conference on June 6, 2023, and the Baird Global Consumer, Tech & Services Conference on June 7, 2023. The Company’s presentation at the William Blair conference will take place at 11 AM ET on June 6, 2023 and be viewable here and at https://ir.hireright.com/.

About HireRight

HireRight is a leading global provider of technology-driven workforce risk management and compliance solutions. We provide comprehensive background screening, verification, identification, monitoring, and drug and health screening services for approximately 38,000 customers across the globe. We offer our services via a unified global software and data platform that tightly integrates into our customers’ human capital management systems enabling highly effective and efficient workflows for workforce hiring, onboarding, and monitoring. In 2022, we screened over 24 million job applicants, employees and contractors for our customers and processed over 107 million screens.For more information, visit www.HireRight.com.

Investors:

[email protected]

Media:

Monica Soladay

[email protected]

KEYWORDS: United States North America Tennessee

INDUSTRY KEYWORDS: Professional Services Data Management Data Analytics Technology Human Resources Software Consulting

MEDIA:

Logo
Logo
Posted on

MACOM Establishes European Semiconductor Center

MACOM Establishes European Semiconductor Center

LOWELL, Mass.–(BUSINESS WIRE)–
MACOM Technology Solutions Holdings, Inc. (“MACOM”) (NASDAQ: MTSI), a leading supplier of semiconductor products, today announced that it has completed the acquisition of the key manufacturing facilities, capabilities and technologies of OMMIC SAS. Going forward, the facility, which is located near Paris in Limeil-Brévannes, France, will become the foundation for MACOM’s newly established European Semiconductor Center. The center will enable MACOM to offer its customers higher frequency Gallium Arsenide (GaAs) and Gallium Nitride (GaN) monolithic microwave integrated circuits (“MMICs”).

“We are excited to open MACOM’s European Semiconductor Center,” stated Stephen G. Daly, President and Chief Executive Officer, MACOM. “We look forward to building upon the existing team’s expertise in material science, semiconductor wafer processing and millimeter-wave MMIC design.”

MACOM plans to showcase certain European Semiconductor Center product offerings at the International Microwave Symposium (IMS) 2023 in San Diego, California, booth number 1135, from June 13 – June 15, 2023.

About MACOM

MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Datacenter industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts. To learn more visit www.macom.com.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about the potential market and product expansion opportunities resulting from MACOM’s establishment of its European Semiconductor Center, the team’s capabilities and technology and expansion thereof and any potential financial benefits derived by and financial impact to MACOM from the OMMIC SAS asset acquisition and European Semiconductor Center establishment. These forward-looking statements reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those indicated by the forward-looking statements, including, among other things, risks related to the ability of MACOM to realize the anticipated benefits of the transaction, MACOM’s ability to successfully supply, market and distribute its products and other business effects, including the effects of industry, market, economic, political or regulatory conditions, and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Company Contact:

MACOM Technology Solutions Holdings, Inc.

Stephen Ferranti

Vice President, Strategic Initiatives and Investor Relations

P: 978-656-2977

E: [email protected]

KEYWORDS: Massachusetts Europe United States North America France

INDUSTRY KEYWORDS: Data Management Semiconductor Defense Technology Telecommunications Other Defense Hardware

MEDIA:

Posted on

Phreesia Announces First Quarter Fiscal 2024 Results

Phreesia Announces First Quarter Fiscal 2024 Results

WILMINGTON, Del.–(BUSINESS WIRE)–
Phreesia, Inc. (NYSE: PHR) (“Phreesia” or the “Company”) announced financial results today for the fiscal first quarter ended April 30, 2023.

“Our team got off to a solid start in fiscal 2024. Across the organization, we made meaningful progress toward achieving our goals of continued growth and a return to profitability, while maintaining our ongoing commitment to optimal patient outcomes,” said CEO and Co-Founder Chaim Indig.

Please visit the Phreesia investor relations website at ir.phreesia.com to view the Company’s Q1 Fiscal Year 2024 Stakeholder Letter.

Fiscal First Quarter Ended April 30, 2023 Highlights

  • Total revenue was $83.8 million in the quarter as compared to $63.4 million in the same period in the prior year, an increase of 32%.

  • Average number of healthcare services clients (“AHSCs”) was 3,309 in the quarter as compared to 2,526 in the same period in the prior year, an increase of 31%.

  • Healthcare services revenue per AHSC was $18,779 in the quarter as compared to $19,193 in the same period in the prior year, a decrease of 2%. The decline from the first quarter of fiscal 2023 to the first quarter of fiscal 2024 was driven primarily by AHSC growth that outpaced payment processing revenue growth. See “Key Metrics” below for additional information.

  • Total revenue per AHSC was $25,338 in the quarter as compared to $25,081 in the same period in the prior year, an increase of 1%. The increase was driven primarily by network solutions revenue growth that outpaced AHSC growth. See “Key Metrics” below for additional information.

  • Net loss was $37.5 million in the quarter compared to $51.2 million in the same period in the prior year.

  • Adjusted EBITDA was negative $13.8 million in the quarter compared to negative $30.6 million in the same period in the prior year.

  • Cash and cash equivalents as of April 30, 2023 was $149.8 million, down $26.9 million from January 31, 2023.

Recent Events

We are party to the Third SVB Facility, which contains certain restrictive covenants including a covenant that limits our ability to retain specified levels of cash in accounts outside of SVB. On March 10, 2023, we obtained consent from SVB to hold up to $165 million of cash in accounts outside SVB until May 15, 2023. On May 8, 2023, we obtained an extension of the consent through September 15, 2023, provided we continue to hold at least $17 million of cash in accounts at SVB. The consent serves to permit us to borrow against the Third SVB Facility once the cash and cash equivalents retained outside of SVB are compliant with the covenant and so long as we remain in compliance with all other covenants under the Third SVB Facility.

We believe that our cash and cash equivalents along with cash generated in the normal course of business, are sufficient to fund our operations for at least the next 12 months.

Fiscal Year 2024 Outlook

For the full fiscal year 2024 ending January 31, 2024, we expect revenue to be between $353 million and $356 million, implying year-over-year growth of 26% to 27%.

We are raising our Adjusted EBITDA outlook for fiscal year 2024 to a range of negative $60 million and negative $55 million from a previous range of negative $65 million to negative $60 million. The change reflects our strong performance in the first quarter.

We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For further information regarding the non-GAAP financial measures included in this press release, including a reconciliation of GAAP to non-GAAP financial measures and an explanation of these measures, please see “Non-GAAP financial measures” below.

Fiscal Year 2025 Target

We are maintaining our $500 million revenue target to be achieved by annualizing our highest-revenue quarter in fiscal year 20251 and we continue to expect to reach profitability2 in fiscal year 2025. We also believe our cash and cash equivalents, along with cash generated in the normal course of business, can support our path to our fiscal year 2025 targets.

We believe our platform and diverse revenue streams offer us multiple paths for achieving our targets.

1 For our target revenue, annualized is defined as multiplying the highest-revenue quarter in fiscal year 2025 by four.

2 For the purposes of this statement, we define “profitability” in terms of Adjusted EBITDA.

Available Information

We intend to use our Company website (including our Investor Relations website) as well as our Facebook, Twitter, LinkedIn and Instagram accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

Forward Looking Statements

This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. These statements include, but are not limited to, statements regarding: our future financial and operating performance, including our revenue, Adjusted EBITDA and our ability to reach profitability in fiscal year 2025; our ability to finance our plans to achieve our 2025 targets with our current cash balance and cash generated in the normal course of business; our outlook for fiscal year 2024 (including with respect to Adjusted EBITDA) and fiscal year 2025 targets; and our belief that our platform and revenue streams offer us multiple paths for achieving our targets. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, risks associated with: our ability to effectively manage our growth and meet our growth objectives; our focus on the long-term and our investments in growth; the competitive environment in which we operate; our ability to develop and release new products and services; our ability to develop and release successful enhancements, features and modifications to our existing products and services; changes in market conditions and receptivity to our products and services; our ability to maintain the security and availability of our platform; changes in laws and regulations applicable to our business model; our ability to make accurate predictions about our industry and addressable market; the impact of pandemics on our business and economic conditions; our ability to attract, retain and cross-sell to healthcare services clients; our ability to continue to operate effectively with a primarily remote workforce and attract and retain key talent; our ability to realize the intended benefits of our acquisitions and partnerships; the recent high inflationary environment and other general, market, political, economic and business conditions (including as a result of the warfare and/or political and economic instability in Ukraine or elsewhere). The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those listed or described in our filings with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 and in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2023 that will be filed with the SEC following this press release. The forward-looking statements in this press release speak only as of the date on which the statements are made. We undertake no obligation to update, and expressly disclaim the obligation to update, any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

This press release includes certain non-GAAP financial measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, with the exception of our Adjusted EBITDA outlook for the reasons described above.

Conference Call Information

We will hold a conference call on Wednesday May 31, 2023, at 5:00 p.m. Eastern Time to review our fiscal 2024 first quarter financial results. To participate in our live conference call and webcast, please dial (888) 350-3437 (or (646) 960-0153 for international participants) using conference code number 4000153 or visit the “Events & Presentations” section of our Investor Relations website at ir.phreesia.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

ABOUT PHREESIA

Phreesia is the trusted leader in patient activation, giving providers, health plans, life sciences companies and other organizations tools to help patients take a more active role in their care. Founded in 2005, Phreesia enabled more than 120 million patient visits in 2022 – more than 1 in 10 visits across the U.S. – scale that we believe allows us to make meaningful impact. Offering patient-driven digital solutions for intake, outreach, education and more, Phreesia enhances the patient experience, drives efficiency and improves healthcare outcomes. To learn more, visit phreesia.com.

Phreesia, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

 

April 30, 2023

 

January 31, 2023

 

(Unaudited)

 

 

Assets

 

 

 

Current:

 

 

 

Cash and cash equivalents

$

149,767

 

$

176,683

Settlement assets

 

26,539

 

 

22,599

Accounts receivable, net of allowance for doubtful accounts of $1,022 and $1,053 as of April 30, 2023 and January 31, 2023, respectively

 

52,932

 

 

51,394

Deferred contract acquisition costs

 

908

 

 

1,056

Prepaid expenses and other current assets

 

10,002

 

 

10,709

Total current assets

 

240,148

 

 

262,441

Property and equipment, net of accumulated depreciation and amortization of $63,810 and $59,847 as of April 30, 2023 and January 31, 2023, respectively

 

26,228

 

 

21,670

Capitalized internal-use software, net of accumulated amortization of $39,380 and $37,236 as of April 30, 2023 and January 31, 2023, respectively

 

38,152

 

 

35,150

Operating lease right-of-use assets

 

336

 

 

569

Deferred contract acquisition costs

 

1,562

 

 

1,754

Intangible assets, net of accumulated amortization of $2,892 and $2,549 as of April 30, 2023 and January 31, 2023, respectively

 

11,058

 

 

11,401

Deferred tax asset

 

—

 

 

81

Goodwill

 

33,736

 

 

33,736

Other assets

 

2,632

 

 

3,255

Total Assets

$

353,852

 

$

370,057

Liabilities and Stockholders’ Equity

 

 

 

Current:

 

 

 

Settlement obligations

$

26,539

 

$

22,599

Current portion of finance lease liabilities and other debt

 

6,982

 

 

5,172

Current portion of operating lease liabilities

 

692

 

 

934

Accounts payable

 

7,602

 

 

10,836

Accrued expenses

 

23,284

 

 

21,810

Deferred revenue

 

17,881

 

 

17,688

Total current liabilities

 

82,980

 

 

79,039

Long-term finance lease liabilities and other debt

 

6,689

 

 

2,725

Operating lease liabilities, non-current

 

257

 

 

349

Long-term deferred revenue

 

179

 

 

125

Long-term deferred tax liabilities

 

136

 

 

—

Total Liabilities

 

90,241

 

 

82,238

Commitments and contingencies

 

 

 

Stockholders’ Equity:

 

 

 

Common stock, $0.01 par value – 500,000,000 shares authorized as of both April 30, 2023 and January 31, 2023; 54,766,872 and 54,187,172 shares issued as of April 30, 2023 and January 31, 2023, respectively

 

548

 

 

542

Additional paid-in capital

 

947,353

 

 

926,957

Accumulated deficit

 

(643,615)

 

 

(606,084)

Treasury stock, at cost, 1,186,619 and 971,236 shares as of April 30, 2023 and January 31, 2023, respectively

 

(40,675)

 

 

(33,596)

Total Stockholders’ Equity

 

263,611

 

 

287,819

Total Liabilities and Stockholders’ Equity

$

353,852

 

$

370,057

Phreesia, Inc.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

 

Three months ended

April 30,

 

 

2023

 

 

2022

Revenue:

 

 

 

Subscription and related services

$

37,887

 

$

29,101

Payment processing fees

 

24,253

 

 

19,381

Network solutions

 

21,705

 

 

14,872

Total revenues

 

83,845

 

 

63,354

Expenses:

 

 

 

Cost of revenue (excluding depreciation and amortization)

 

14,907

 

 

14,386

Payment processing expense

 

16,090

 

 

12,158

Sales and marketing

 

37,413

 

 

40,031

Research and development

 

26,469

 

 

20,635

General and administrative

 

19,877

 

 

20,855

Depreciation

 

4,504

 

 

4,278

Amortization

 

2,486

 

 

1,604

Total expenses

 

121,746

 

 

113,947

Operating loss

 

(37,901)

 

 

(50,593)

Other expense, net

 

(42)

 

 

(31)

Interest income (expense), net

 

718

 

 

(383)

Total other income (expense), net

 

676

 

 

(414)

Loss before provision for income taxes

 

(37,225)

 

 

(51,007)

Provision for income taxes

 

(306)

 

 

(235)

Net loss

$

(37,531)

 

$

(51,242)

Net loss per share attributable to common stockholders, basic and diluted(1)

$

(0.70)

 

$

(0.99)

Weighted-average common shares outstanding, basic and diluted

 

53,347,709

 

 

51,938,887

(1) Our potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

 

 

 

 

Phreesia, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

Three months ended

April 30,

 

 

2023

 

 

2022

Operating activities:

 

 

 

Net loss

$

(37,531)

 

$

(51,242)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

 

6,990

 

 

5,882

Stock-based compensation expense

 

17,138

 

 

14,151

Amortization of deferred financing costs and debt discount

 

85

 

 

77

Cost of Phreesia hardware purchased by customers

 

416

 

 

277

Deferred contract acquisition costs amortization

 

340

 

 

467

Non-cash operating lease expense

 

233

 

 

289

Deferred taxes

 

217

 

 

224

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(1,538)

 

 

(6,092)

Prepaid expenses and other assets

 

1,152

 

 

(450)

Deferred contract acquisition costs

 

—

 

 

(106)

Accounts payable

 

(2,983)

 

 

123

Accrued expenses and other liabilities

 

1,822

 

 

1,701

Lease liabilities

 

(247)

 

 

(306)

Deferred revenue

 

247

 

 

1,372

Net cash used in operating activities

 

(13,659)

 

 

(33,633)

Investing activities:

 

 

 

Capitalized internal-use software

 

(4,732)

 

 

(5,239)

Purchases of property and equipment

 

(1,347)

 

 

(1,785)

Net cash used in investing activities

 

(6,079)

 

 

(7,024)

Financing activities:

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

 

249

 

 

709

Treasury stock to satisfy tax withholdings on stock compensation awards

 

(6,950)

 

 

(4,307)

Proceeds from employee stock purchase plan

 

967

 

 

1,214

Finance lease payments

 

(1,444)

 

 

(1,468)

Debt issuance costs and loan facility fee payments

 

—

 

 

(113)

Net cash used in financing activities

 

(7,178)

 

 

(3,965)

Net decrease in cash and cash equivalents

 

(26,916)

 

 

(44,622)

Cash and cash equivalents – beginning of period

 

176,683

 

 

313,812

Cash and cash equivalents – end of period

$

149,767

 

$

269,190

 

 

 

 

Supplemental information of non-cash investing and financing information:

 

 

 

Property and equipment acquisitions through finance leases

$

7,067

 

$

140

Purchase of property and equipment and capitalized software included in current liabilities

$

3,485

 

$

1,755

Capitalized stock-based compensation

$

337

 

$

348

Issuance of stock to settle liabilities for stock-based compensation

$

5,297

 

$

6,774

Cash paid for:

 

 

 

Interest

$

58

 

$

128

Non-GAAP financial measures

This press release and statements made during the above-referenced webcast may include certain non-GAAP financial measures as defined by SEC rules.

Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity. We define Adjusted EBITDA as net income or loss before interest (income) expense, net, provision for income taxes, depreciation and amortization, and before stock-based compensation expense and other expense, net.

We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. We have presented Adjusted EBITDA in this press release and our Quarterly Report on Form 10-Q to be filed after this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. We have not reconciled our Adjusted EBITDA outlook to GAAP Net income (loss) because we do not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other (income) expense, net and (Benefit from) provision for income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because we cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss).

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

  • Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

  • Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) the potentially dilutive impact of non-cash stock-based compensation; (3) tax payments that may represent a reduction in cash available to us; or (4) interest (income) expense, net; and

  • Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA to net loss for each of the periods indicated:

Phreesia, Inc.

Adjusted EBITDA

(Unaudited)

 

Three months ended

April 30,

(in thousands)

 

2023

 

 

2022

Net loss

$

(37,531)

 

$

(51,242)

Interest (income) expense, net

 

(718)

 

 

383

Provision for income taxes

 

306

 

 

235

Depreciation and amortization

 

6,990

 

 

5,882

Stock-based compensation expense

 

17,138

 

 

14,151

Other expense, net

 

42

 

 

31

Adjusted EBITDA

$

(13,773)

 

$

(30,560)

Phreesia, Inc.

Reconciliation of GAAP and Adjusted Operating Expenses

(Unaudited)

 

Three months ended

April 30,

(in thousands)

 

2023

 

 

2022

GAAP operating expenses

 

 

 

General and administrative

$

19,877

 

$

20,855

Sales and marketing

 

37,413

 

 

40,031

Research and development

 

26,469

 

 

20,635

Cost of revenue (excluding depreciation and amortization)

 

14,907

 

 

14,386

 

$

98,666

 

$

95,907

Stock compensation included in GAAP operating expenses

 

 

 

General and administrative

$

5,878

 

$

5,128

Sales and marketing

 

6,417

 

 

5,654

Research and development

 

3,878

 

 

2,561

Cost of revenue (excluding depreciation and amortization)

 

965

 

 

808

 

$

17,138

 

$

14,151

Adjusted operating expenses

 

 

 

General and administrative

$

13,999

 

$

15,727

Sales and marketing

 

30,996

 

 

34,377

Research and development

 

22,591

 

 

18,074

Cost of revenue (excluding depreciation and amortization)

 

13,942

 

 

13,578

 

$

81,528

 

$

81,756

Phreesia, Inc.

Key Metrics

(Unaudited)

 

Three months ended

April 30,

 

 

2023

 

 

2022

Key Metrics:

 

 

 

Average number of healthcare services clients (“AHSCs”)

 

3,309

 

 

2,526

Healthcare services revenue per AHSC

$

18,779

 

$

19,193

Total revenue per AHSC

$

25,338

 

$

25,081

We remain focused on building secure and reliable products that derive a strong return on investment for our clients and implementing them with speed and ease. This strategy continues to enable us to grow our network of healthcare services clients. The investments we make to grow, strengthen and sustain our network of healthcare services clients lead to growth in all of our revenue categories.

The definitions of our key metrics are presented below.

  • AHSCs. We define AHSCs as the average number of clients that generate subscription and related services or payment processing revenue each month during the applicable period. In cases where we act as a subcontractor providing white-label services to our partner’s clients, we treat the contractual relationship as a single healthcare services client. We believe growth in AHSCs is a key indicator of the performance of our business and depends, in part, on our ability to successfully develop and market our Platform to healthcare services organizations that are not yet clients. While growth in AHSCs is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future AHSC growth. For example, as AHSCs increase, we may need to add to our customer support team and invest to maintain effectiveness and performance of our Platform and software for our healthcare services clients and their patients.
  • Healthcare services revenue per AHSC. We define Healthcare services revenue as the sum of subscription and related services revenue and payment processing revenue. We define Healthcare services revenue per AHSC as Healthcare services revenue in a given period divided by AHSCs during that same period. We are focused on continually delivering value to our healthcare services clients and believe that our ability to increase Healthcare services revenue per AHSC is an indicator of the long-term value of the Phreesia platform.
  • Total revenue per AHSC. We define Total revenue per AHSC as Total revenue in a given period divided by AHSCs during that same period. Our healthcare services clients directly generate subscription and related services and payment processing revenue. Additionally, our relationships with healthcare services clients who subscribe to the Phreesia Platform give us the opportunity to engage with life sciences companies, health plans and other payer organizations, patient advocacy, public interest and other not-for-profit organizations who deliver direct communication to patients through our Platform. As a result, we believe that our ability to increase Total revenue per AHSC is an indicator of the long-term value of the Phreesia Platform.

Additional Information

(Unaudited)

 

Three months ended

April 30,

 

 

2023

 

 

2022

Patient payment volume (in millions)

$

1,016

 

$

837

Payment facilitator volume percentage

 

82 %

 

80 % 
  • Patient payment volume. We believe that patient payment volume is an indicator of both the underlying health of our healthcare services clients’ businesses and the continuing shift of healthcare costs to patients. We measure patient payment volume as the total dollar volume of transactions between our healthcare services clients and their patients utilizing our payment platform, including via credit and debit cards that we process as a payment facilitator as well as cash and check payments and credit and debit transactions for which we act as a gateway to other payment processors.
  • Payment facilitator volume percentage. We define payment facilitator volume percentage as the volume of credit and debit card patient payment volume that we process as a payment facilitator as a percentage of total patient payment volume. Payment facilitator volume is a major driver of our payment processing revenue. Our payment facilitator volume percentage could decline slightly over time should we increase our penetration of enterprise customers that are less likely to use Phreesia as a payment facilitator.

Investor Contact:

Balaji Gandhi

Phreesia, Inc.

[email protected]

(929) 506-4950

Media Contact:

Nicole Gist

Phreesia, Inc.

[email protected]

(407) 760-6274

KEYWORDS: United States North America Delaware

INDUSTRY KEYWORDS: Technology Hospitals Software Practice Management Networks Internet Managed Care Health Data Management

MEDIA:

Logo
Logo
Posted on

Barnes & Noble Education Announces the Sale of Its DSS Segment and Provides Certain Preliminary Fiscal Year 2023 Results

Barnes & Noble Education Announces the Sale of Its DSS Segment and Provides Certain Preliminary Fiscal Year 2023 Results

  • Sale of DSS segment enables BNED to further prioritize the growth opportunities within its Retail business

  • Expects fiscal 2023 non-GAAP Adjusted EBITDA from continuing operations in the range of $(10) million to $(5) million

BASKING RIDGE, N.J.–(BUSINESS WIRE)–Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today provided a business update andcertain preliminary, unaudited financial results for the twelve months ended April 29, 2023.

Digital Student Solutions (“DSS”) Segment Sale Strengthens Financial Flexibility

The Company announced that it has closed on the sale of its DSS segment, which consists of the Student Brands and bartleby® products, to Learneo, a platform of productivity and learning businesses. Proceeds, net of certain transaction fees, severance costs, escrow, and other considerations, to BNED at closing were approximately $20 million.

“In a period of rapid change in the higher education market, scale and focus are key to driving profitable growth and the best possible experience for our institutions and students. The sale of DSS enables us to deepen our focus and capital allocation on accelerating our transition to our First Day®Complete (“FDC”) equitable access model and growing our general merchandise business,” said Michael P. Huseby, Chief Executive Officer, BNED. “The transaction also positions Student Brands and bartleby® for their next phase of growth. We are confident that DSS will continue to thrive by being part of Learneo’s platform of productivity and learning businesses with the size, scale and technical infrastructure to support its sustained success.”

Net cash proceeds from the sale will be used for debt repayment and will provide additional funds for working capital needs under the Company’s Credit Facility. Additionally, this transaction and cash proceeds satisfy the “liquidity raising milestone” requirements under the Company’s amended and extended Credit Facility Agreement executed on March 8, 2023.

The Company will report the DSS segment as discontinued operations for the year ending April 29, 2023. In Fiscal 2023, DSS segment unaudited non-GAAP adjusted EBITDA is not expected to materially impact consolidated full year non-GAAP adjusted EBITDA.

Houlihan Lokey acted as financial adviser and Paul Hastings acted as legal adviser to BNED on this transaction.

Preliminary Full Year Fiscal 2023 Financial Update

The Company expects to report consolidated full year non-GAAP Adjusted EBITDA from continuing operations in the range of $(10) million to $(5) million, compared to $(10.3) million in the prior year period. The Company’s fiscal 2023 non-GAAP Adjusted EBITDA from continuing operations is below its guidance due to lower than expected fourth quarter revenue and lower fourth quarter gross profits, which included a shift in the mix of buying patterns from physical textbooks to lower-margin digital course materials within the Company’s a la carte course material model.

“While fiscal 2023 did not meet our financial expectations, we believe the strategic actions taken throughout the year position BNED on the path to profitable growth,” said Huseby. “During the second half of fiscal 2023, we made substantial progress on our cost reduction initiatives to better align our overall expenses and resources with the secular trends of declining enrollment and the proliferation of digital course materials.

“We also made meaningful progress with our institutional partners to accelerate their transition to our FDC equitable access model. We expect to launch a significant number of new schools on the FDC model in the Fall of 2023 and remain confident about FDC’s contribution to BNED’s long-term profitable growth.”

Mr. Huseby continued, “As a result of the actions we’ve taken to lower our fixed costs, focus and simplify the business and accelerate the transition to the higher-margin, subscription-like FDC model, we expect to significantly improve adjusted EBITDA in fiscal 2024 and we are positioned to consistently grow adjusted EBITDA over the next several years.”

The Company intends to provide its fiscal 2024 non-GAAP adjusted EBITDA outlook, and additional updates on key strategic financial initiatives, when it reports its fiscal 2023 fourth quarter and year-end results.

Balance Sheet Update

As of April 29, 2023, the Company’s unaudited cash and cash equivalents balance was approximately $24 million and total unaudited outstanding debt was $184 million resulting in net debt of approximately $160 million.

On May 24, 2023, the Company amended its existing credit agreement. The ABL Amendment amends the ABL Credit Agreement to (i) increase the applicable margin with respect to the interest rate under the ABL Credit Agreement to 3.75% per annum, in the case of interest accruing based on a Secured Overnight Financing Rate, and 2.75%, in the case of interest accruing based on an alternative base rate, in each case, without regard to a pricing grid, (ii) defer the reduction of advance rates by an amount equal to 500 basis points previously required on May 31, 2023 to September 1, 2023, (iii) require cash flow reporting and variance testing commencing June 3, 2023 and (iv) defer partial prepayment of the term loan from the DSS segment sale proceeds to September 1, 2023.

The Company is actively pursuing a refinancing of its debt under a new credit facility, or facilities, which, if obtained, will strengthen its capital structure, and provide additional balance sheet flexibility to execute BNED’s transition to its FDC equitable access model.

The results reported in this press release are preliminary and unaudited. The Company has not yet completed its annual financial close process for the fiscal 2023 fourth quarter and full year, and its independent auditors have not completed their audit of the Company’s financial statements for the fiscal 2023 full year. This update does not present all necessary information for an understanding of the Company’s results of operations for the fiscal 2023 fourth quarter or full year. As the Company completes its annual financial close process and finalizes its financial statements for the fiscal 2023 fourth quarter and full year, and as its independent auditors complete their audit of the Company’s financial statements for the fiscal 2023 full year, it is possible the Company may identify items that require adjustments to the preliminary financial information set forth in this press release, and those changes could be material. The Company does not intend to update such financial information prior to the release of its final fourth quarter and full year financial results.

ABOUT BARNES & NOBLE EDUCATION, INC.

Barnes & Noble Education, Inc. (NYSE: BNED) is a leading solutions provider for the education industry, driving affordability, access and achievement at hundreds of academic institutions nationwide and ensuring millions of students are equipped for success in the classroom and beyond. Through its family of brands, BNED offers campus retail services and academic solutions, wholesale capabilities and more. BNED is a company serving all who work to elevate their lives through education, supporting students, faculty and institutions as they make tomorrow a better, more inclusive and smarter world. For more information, visit www.bned.com.

FORWARD-LOOKING STATEMENTS

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us and our business that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this communication, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” and similar expressions, as they relate to us or our management, identify forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make, including any statements made in regards to our response to the COVID-19 pandemic. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Such statements reflect our current views with respect to future events, the outcome of which is subject to certain risks, including, among others: risks associated with public health crises, epidemics, and pandemics, such as the COVID-19 pandemic, including the duration, spread, severity, and any recurrences thereof, and the impact such public health crises have on the overall demand for BNED products and services, our operations, the operations of our suppliers and other business partners, and the effectiveness of our response to these risks; general competitive conditions, including actions our competitors and content providers may take to grow their businesses; a decline in college enrollment or decreased funding available for students; decisions by colleges and universities to outsource their physical and/or online bookstore operations or change the operation of their bookstores; implementation of our digital strategy may not result in the expected growth in our digital sales and/or profitability; risk that digital sales growth does not exceed the rate of investment spend; the performance of our online, digital and other initiatives, integration of and deployment of, additional products and services including new digital channels, and enhancements to higher education digital products, the inability to achieve the expected cost savings during the anticipated time frame, and the inability to implement our cost saving initiatives in a timely and efficient manner; the risk of price reduction or change in format of course materials by publishers, which could negatively impact revenues and margin; the general economic environment and consumer spending patterns; decreased consumer demand for our products, low growth or declining sales; the strategic objectives, successful integration, anticipated synergies, and/or other expected potential benefits of various acquisitions may not be fully realized or may take longer than expected; the integration of the operations of various acquisitions into our own may also increase the risk of our internal controls being found ineffective; changes to purchase or rental terms, payment terms, return policies, the discount or margin on products or other terms with our suppliers; our ability to successfully implement our strategic initiatives including our ability to identify, compete for and execute upon additional acquisitions and strategic investments; risks associated with operation or performance of MBS Textbook Exchange, LLC’s point-of-sales systems that are sold to college bookstore customers; technological changes; risks associated with counterfeit and piracy of digital and print materials; our international operations could result in additional risks; our ability to attract and retain employees; risks associated with data privacy, information security and intellectual property; trends and challenges to our business and in the locations in which we have stores; non-renewal of managed bookstore, physical and/or online store contracts and higher-than-anticipated store closings; disruptions to our information technology systems, infrastructure and data due to computer malware, viruses, hacking and phishing attacks, resulting in harm to our business and results of operations; disruption of or interference with third party web service providers and our own proprietary technology; work stoppages or increases in labor costs; possible increases in shipping rates or interruptions in shipping service; product shortages, including decreases in the used textbook inventory supply associated with the implementation of publishers’ digital offerings and direct to student textbook consignment rental programs, as well as the risks associated with the impacts that public health crises may have on the ability of our suppliers to manufacture or source products, particularly from outside of the United States; changes in domestic and international laws or regulations, including U.S. tax reform, changes in tax rates, laws and regulations, as well as related guidance; enactment of laws or changes in enforcement practices which may restrict or prohibit our use of texts, emails, interest based online advertising, recurring billing or similar marketing and sales activities; the amount of our indebtedness and ability to comply with covenants applicable to any future debt financing; our ability to satisfy future capital and liquidity requirements; our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms; adverse results from litigation, governmental investigations, tax-related proceedings, or audits; changes in accounting standards; and the other risks and uncertainties detailed in the section titled “Risk Factors” in Part I – Item 1A in our Annual Report on Form 10-K for the year ended April 30, 2022. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release.

Media and Investor:

Hunter Blankenbaker

Vice President

Corporate Communications and Investor Relations

908-991-2776

[email protected]

KEYWORDS: United States North America New Jersey

INDUSTRY KEYWORDS: Retail Other Education Publishing Technology Continuing University Primary/Secondary Education Communications Training Online Retail Other Retail Other Technology Specialty Software

MEDIA:

Logo
Logo
Posted on

U.S. Physical Therapy Announces Acquisition of a Four-Clinic Physical Therapy Practice

U.S. Physical Therapy Announces Acquisition of a Four-Clinic Physical Therapy Practice

HOUSTON–(BUSINESS WIRE)–
U.S. Physical Therapy, Inc. (“USPH” or the “Company”) (NYSE: USPH), a national operator of outpatient physical therapy clinics and provider of industrial injury prevention services, today announced an acquisition of a physical therapy practice with four clinics.

USPH and its local partners together acquired a 75% equity interest in the practice for a purchase price of $3.1 million, with the current practice owners retaining a 25% equity interest. The business currently generates approximately $2.6 million in annual revenues and approximately 27,000 annual visits.

About U.S. Physical Therapy, Inc.

Founded in 1990, U.S. Physical Therapy, Inc. operates 655 outpatient physical therapy clinics in 40 states. The Company’s clinics provide preventative and post-operative care for a variety of orthopedic-related disorders and sports-related injuries, treatment for neurologically-related injuries and rehabilitation of injured workers. In addition to owning and operating clinics, the Company manages 34 physical therapy facilities for unaffiliated third parties, including hospitals and physician groups. The Company also has an industrial injury prevention business which provides onsite services for clients’ employees including injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments.

More information about U.S. Physical Therapy, Inc. is available at www.usph.com. The information included on that website is not incorporated into this press release.

U.S. Physical Therapy, Inc.

Carey Hendrickson, Chief Financial Officer

email: [email protected]

Chris Reading, Chief Executive Officer

(713) 297-7000

Three Part Advisors

Joe Noyons

(817) 778-8424

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: General Health Health Nursing Physical Therapy

MEDIA:

Logo
Logo
Posted on

Acorda Therapeutics to Conduct 1-for-20 Reverse Stock Split

Acorda Therapeutics to Conduct 1-for-20 Reverse Stock Split

PEARL RIVER, N.Y.–(BUSINESS WIRE)–
Acorda Therapeutics, Inc. (Nasdaq: ACOR) today announced that it will conduct a reverse stock split of its outstanding and authorized shares of common stock at a ratio of 1-for-20. The reverse stock split will become effective at 4:01 p.m. Eastern Time, on June 2, 2023. The Company’s common stock will begin trading on a post-split basis at the market open on June 5, 2023. The reverse stock split is being effected to regain compliance with the $1.00 per share minimum closing price required to maintain continued listing on The Nasdaq Global Select Market.

The reverse stock split will apply equally to all outstanding shares of the common stock, and each stockholder will hold the same percentage of common stock outstanding immediately following the reverse stock split as that stockholder held immediately prior to the reverse stock split, except for adjustments that may result from the treatment of fractional shares. The Company will not issue any fractional shares in connection with the reverse stock split, and the number of shares issued will be rounded up to the next whole share. The reverse stock split will not modify the rights or preferences of the common stock. As a result of the proportionate reduction in the number of authorized shares of common stock, the reverse stock split will result in the number of authorized shares of common stock being reduced from 61,666,666 to 3,083,333.

As previously reported in the Company’s Current Report on Form 8-K filed on November 14, 2022, on November 11, 2022, the Company’s stockholders approved a proposal to authorize the Company’s board of directors to approve an amendment and restatement of the Company’s certificate of incorporation to effect a reverse stock split of the Company’s common stock by a ratio of any whole number in the range of 1-for-2 to 1-for-20, and a corresponding reduction in the number of authorized shares of the Company’s common stock, within one year following the conclusion of the Special Meeting of Stockholders on November 11, 2022.

About Acorda Therapeutics

Acorda Therapeutics develops therapies to restore function and improve the lives of people with neurological disorders. INBRIJA® is approved for intermittent treatment of OFF episodes in adults with Parkinson’s disease treated with carbidopa/levodopa. INBRIJA is not to be used by patients who take or have taken a nonselective monoamine oxidase inhibitor such as phenelzine or tranylcypromine within the last two weeks. INBRIJA utilizes Acorda’s innovative ARCUS® pulmonary delivery system, a technology platform designed to deliver medication through inhalation. Acorda also markets the branded AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg.

Forward-Looking Statements

This press release includes forward-looking statements. All statements, other than statements of historical facts, regarding management’s expectations, beliefs, goals, plans or prospects should be considered forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including: we may not be able to successfully market INBRIJA, AMPYRA or any other products under development; the COVID-19 pandemic, including related restrictions on in-person interactions and travel, and the potential for illness, quarantines and vaccine mandates affecting our management, employees or consultants or those that work for other companies we rely upon, could have a material adverse effect on our business operations or product sales; our ability to attract and retain key management and other personnel, or maintain access to expert advisors; our ability to raise additional funds to finance our operations, repay outstanding indebtedness or satisfy other obligations, and our ability to control our costs or reduce planned expenditures; the reverse stock split and its impact on the trading of our common stock; risks related to the successful implementation of our business plan, including the accuracy of its key assumptions; risks related to our corporate restructurings, including our ability to outsource certain operations, realize expected cost savings and maintain the workforce needed for continued operations; risks associated with complex, regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of INBRIJA or AMPYRA to meet market demand; our reliance on third-party manufacturers for the timely production of commercial supplies of INBRIJA and AMPYRA; third-party payers (including governmental agencies) may not reimburse for the use of INBRIJA or AMPYRA at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; reliance on collaborators and distributors to commercialize INBRIJA and AMPYRA outside the U.S.; our ability to satisfy our obligations to distributors and collaboration partners outside the U.S. relating to commercialization and supply of INBRIJA and AMPYRA; competition for INBRIJA and AMPYRA, including increasing competition and accompanying loss of revenues in the U.S. from generic versions of AMPYRA (dalfampridine) following our loss of patent exclusivity; the ability to realize the benefits anticipated from acquisitions because, among other reasons, acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; the risk of unfavorable results from future studies of INBRIJA (levodopa inhalation powder) or from other research and development programs, or any other acquired or in-licensed programs; the occurrence of adverse safety events with our products; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class-action litigation; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third-party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies.

These and other risks are described in greater detail in our filings with the Securities and Exchange Commission. We may not actually achieve the goals or plans described in our forward-looking statements, and investors should not place undue reliance on these statements. Forward-looking statements made in this press release are made only as of the date hereof, and we disclaim any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, except as may be required by law.

Tierney Saccavino

(917) 783-0251

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Biotechnology Pharmaceutical Health

MEDIA:

Logo
Logo
Posted on

NetApp Reports Fourth Quarter and Fiscal Year 2023 Results

NetApp Reports Fourth Quarter and Fiscal Year 2023 Results

Net revenues of $1.58 billion for the fourth quarter;

Net revenues of $6.36 billion for fiscal year 2023

  • Introduced significant innovation, including C-series, a new family of capacity all-flash storage systems, and NetApp™ Advance, a new portfolio of storage programs and guarantees to help customers cost-effectively future proof their on-premises environments

  • Recognized with three Outperformer placements in GigaOm’s annual Radar reports for storage for the second consecutive year

  • Fiscal year 2023 GAAP net income per share of $5.79 increased 42% year over year; fiscal year 2023 non-GAAP net income per share of $5.59 increased 6% year over year

  • $1.28 billion returned to shareholders in fiscal year 2023; representing 116% of cash from operations and 148% of free cash flow2
  • NetApp announced a new share repurchase authorization of an additional $1 billion

SAN JOSE, Calif.–(BUSINESS WIRE)–
NetApp (NASDAQ: NTAP) today reported financial results for the fourth quarter and fiscal year 2023, which ended on April 28, 2023.

“Our sharpened focus and disciplined execution yielded solid Q4 results in a dynamic environment. Digital transformation projects involving business analytics, AI, data security, and application modernization, both on premises and in the cloud, remain top IT priorities,” said George Kurian, chief executive officer. “We deliver significant value to customers on their transformation journeys with a modern approach to hybrid, multicloud infrastructure and data management. We are entering FY24 with substantial new innovations and a more focused operating model to better address the areas of priority spending. I am confident in our ability to drive long-term growth, extend our leadership position, and deliver increasing value for customers, partners, and shareholders.”

Fourth quarter of fiscal year 2023 financial results

  • Net revenues: $1.58 billion, compared to $1.68 billion in the fourth quarter of fiscal year 2022; a year-over-year decrease of 6%, or 4% in constant currency1.
    • Hybrid Cloud segment revenue: $1.43 billion, compared to $1.56 billion in the fourth quarter of fiscal year 2022
    • Public Cloud segment revenue: $151 million, compared to $120 million in the fourth quarter of fiscal year 2022
  • Billings2: $1.67 billion, compared to $2.02 billion in the fourth quarter of fiscal year 2022; a year-over-year decrease of 17%, or 15% in constant currency.
  • NetApp Public Cloud annualized revenue run rate (ARR)3$620 million, compared to $505 million in the fourth quarter of fiscal year 2022; a year-over-year increase of 23%.
  • All-flash array ARR4$3.1 billion, compared to $3.2 billion in the fourth quarter of fiscal year 2022; a year-over-year decrease of 4%.
  • Net income: GAAP net income of $245 million, compared to $259 million in the fourth quarter of fiscal year 2022; non-GAAP net income5 of $334 million, compared to $324 million in the fourth quarter of fiscal year 2022. The year-over-year fluctuations in GAAP and Non-GAAP net income each include an unfavorable impact of approximately $18 million from foreign currency exchange rate changes.
  • Earnings per share: GAAP net income per share6 of $1.13 compared to $1.14 in the fourth quarter of fiscal year 2022; non-GAAP net income per share of $1.54 compared to $1.42 in the fourth quarter of fiscal year 2022. The year-over-year fluctuations in GAAP and Non-GAAP net income per share each include an unfavorable impact of approximately $0.08 from foreign currency exchange rate changes.
  • Cash, cash equivalents and investments: $3.07 billion at the end of the fourth quarter of fiscal year 2023.
  • Cash provided by operations: $235 million, compared to $411 million in the fourth quarter of fiscal year 2022.
  • Share repurchase and dividends: Returned $256 million to shareholders through share repurchases and cash dividends.

Fiscal year 2023 financial results

  • Net revenues: $6.36 billion, compared to $6.32 billion in fiscal year 2022; a year-over-year increase of 1%, or 4% in constant currency.
    • Hybrid Cloud segment revenue: $5.79 billion, compared to $5.92 billion in fiscal year 2022
    • Public Cloud segment revenue: $575 million, compared to $396 million in fiscal year 2022
  • Billings: $6.41 billion, compared to $6.70 billion in fiscal year 2022, a year-over-year decrease of 4%, or 1% in constant currency.
  • Net income: GAAP net income of $1.27 billion, compared to $937 million in fiscal year 2022; non-GAAP net income of $1.23 billion, compared to $1.21 billion in fiscal year 2022. The year-over-year fluctuations in GAAP and Non-GAAP net income each include an unfavorable impact of approximately $126 million from foreign currency exchange rate changes.
  • Earnings per share: GAAP net income per share of $5.79 compared to $4.09 in fiscal year 2022; non-GAAP net income per share of $5.59 compared to $5.28 in fiscal year 2022. The year-over-year fluctuations in GAAP and Non-GAAP net income per share each include an unfavorable impact of approximately $0.57 from foreign currency exchange rate changes.
  • Cash provided by operations: $1.11 billion compared to $1.21 billion in fiscal year 2022.
  • Share repurchase and dividends: Returned $1.28 billion to shareholders through share repurchases and cash dividends.

First quarter of fiscal year 2024 financial outlook

The Company provided the following financial guidance for the first quarter of fiscal year 2024:

Net revenues are expected to be in the range of:

$1.325 billion to $1.475 billion

 

GAAP

Non-GAAP

Earnings per share is expected to be in the range of:

$0.62 – $0.72

$1.00 – $1.10

Full fiscal year 2024 financial outlook

The Company provided the following financial guidance for the full fiscal year 2024:

Net revenues are expected to be down year-over-year in the low-to-mid single digits on a percentage basis

 

 

GAAP

Non-GAAP

Consolidated gross margins are expected to be:

~69%

~70%

Operating margins are expected to be:

~18%

~25%

Earnings per share is expected to be:

$3.98 – $4.18

$5.65 – $5.85

Dividend

The next cash dividend of $0.50 per share is to be paid on July 26, 2023, to shareholders of record as of the close of business on July 7, 2023.

Fourth quarter of fiscal year 2023 business highlights

Leading product innovation

  • NetApp strengthens its industry-leading flash portfolio with the announcement of the availability of the NetApp AFF C-Series, a new family of capacity flash storage options that delivers lower-cost all-flash storage, and the NetApp AFF A150, a new entry-level storage system in the AFF A-Series family of all-flash systems.

  • NetApp launched ONTAP™ One, the industry’s most comprehensive data management suite, giving customers access to comprehensive NetApp ONTAP software for NetApp AFF C-series, including anti-ransomware, data protection, and security/compliance functionality.

  • NetApp launched NetApp Advance, a new portfolio of storage programs and guarantees to help customers cost-effectively future proof on-premises environments, including the NetApp Storage Lifecycle Program, which offers customers enterprise storage that includes non-disruptive controller refresh, at no additional cost, with the option to flexibly scale to Keystone Storage-as-a-Service and/or public cloud.

  • NetApp announced the preview of a new sustainability SLA for NetApp Keystone™, which will provide a standard watts/TB for each SLA-based performance level, with service credits available if those targets aren’t met.

  • NetApp announced that it is now previewing the BlueXP™ Sustainability Dashboard, which will help customers understand their data center’s carbon footprint across environments.

  • Spot by NetApp announced that Ocean for Apache Spark is now available to all customers within the Spot console.

  • To address new cloud product silos, ad hoc scripting for optimization and scale, and manual maintenance of cloud operations, Fylamynt (acquired by NetApp in 2022) has been revamped to become Spot Connect, available for private preview.

  • Spot by NetApp announced its latest innovation for Spot Security, a machine learning model that detects anomalous events.

Customer and partner momentum

  • NetApp announced the general availability of NetApp Cloud Volumes Service as datastores for Google Cloud VMware Engine, giving customers the ability to easily scale and protect virtual machine (VM) data by using NetApp ONTAP data management software with a fully managed service in Google Cloud.

  • Spot by NetApp announced the general availability of Azure Stateful Node. With Azure Stateful Node, Spot by NetApp customers can now run their stateful compute workloads on Azure with up to 90% immediate cost reduction and maximum availability.

  • SAS, a global analytics leader, chose NetApp Astra™ to provide a disaster recovery solution for its SAS Viya offerings deployed as a hosted managed service in the SAS Cloud on Microsoft Azure.
  • NetApp CloudCheckr has achieved the AWS Cloud Operations Competency in the categories of Cloud Financial Management and Compliance and Auditing.

Corporate news and events

  • NetApp released the 2023 Cloud Complexity Report, a global survey exploring how technology decision makers are navigating cloud requirements coming from digital transformation and AI initiatives and the complexity of multicloud environments.

  • Spot by NetApp published the report DevOps Revealed: Insights and trends driving DevOps productivity and job satisfaction.

NetApp awards and recognition

  • NetApp was recognized by GigaOm for three Outperformer placements in their annual GigaOm Radar reports for storage.
  • NetApp was listed as one of CRN’s 50 Coolest Data Center Companies of 2023.

  • NetApp was listed as one of CRN’s Coolest Software-Defined Storage Vendors of the 2023 Storage 100.
  • NetApp was listed as one of CRN’s Coolest Big Data System and Cloud Platform Companies of the 2023 Big Data 100.
  • NetApp’s Jenni Flinders, SVP of NetApp Partner Programs, was listed as one of 50 of CRN’s 2023 Most Influential Channel Chiefs.
  • NetApp’s Maya Zakhour, Director of Channel Sales Eastern Europe, META, Iberia, & Latin America, won the Woman Executive of the Year Award at CPI and Tahawultech’s Women in Technology Forum and Awards.

Executive leadership announcements

  • NetApp hired Haiyan Song as Executive Vice President and General Manager of CloudOps Business.
  • NetApp hired Jim Lambe as Vice President and General Manager of NetApp Canada.

Webcast and conference call information

NetApp will host a conference call to discuss these results today at 2:30 p.m. Pacific Time. To access the live webcast of this event, go to the NetApp Investor Relations website at investors.netapp.com. In addition, this press release, historical supplemental data tables, and other information related to the call will be posted on the Investor Relations website. An audio replay will be available on the website after 4:30 p.m. Pacific Time today.

“Safe Harbor” statement under U.S. Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, all of the statements made in the First Quarter of Fiscal Year 2024 Financial Outlook section and Full Fiscal Year 2024 Financial Outlook section, and statements about our ability to deliver value to our customers, partners and shareholders, better address areas of priority spending through new innovations and a more focused operating model, drive long-term growth and extend our leadership position. Actual results may differ materially from these statements for a variety of reasons, including, without limitation, our ability to keep pace with the rapid industry, technological and market trends and changes in the markets in which we operate, our ability to execute our evolved cloud strategy and introduce and gain market acceptance for our products and services, our ability to maintain our customer, partner, supplier and contract manufacturer relationships on favorable terms and conditions, general global political, macroeconomic and market conditions, including inflation, rising interest rates and foreign exchange volatility and the resulting impact on demand for our products, the impact of the COVID-19 pandemic, including supply chain disruptions, on our business operations, financial performance and results of operations, material cybersecurity and other security breaches, changes in U.S. government spending, revenue seasonality, changes in laws or regulations, including those relating to privacy, data protection and information security, and our ability to manage our gross profit margins. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission, including the factors described under the section titled “Risk Factors” in our most recently submitted annual report on Form 10-K and quarterly report on Form 10-Q. We disclaim any obligation to update information contained in this press release whether as a result of new information, future events, or otherwise.

NetApp, the NetApp logo, and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. All other marks are the property of their respective owners.

Footnotes

1Refer to the Constant Currency section below for an explanation of constant currency growth rates and the impact of foreign currency exchange rate changes on year-over-year fluctuations in earnings.

2Refer to the NetApp Usage of Non-GAAP Financial Information section below for explanations of free cash flow and billings.

3Public Cloud annualized revenue run rate (ARR) is calculated as the annualized value of all Public Cloud customer commitments with the assumption that any commitment expiring during the next 12 months will be renewed with its existing terms.

4All-flash array annualized net revenue run rate is determined by products and services revenue for the current quarter, multiplied by 4.

5Non-GAAP net income excludes, when applicable, (a) amortization of intangible assets, (b) stock-based compensation expenses, (c) litigation settlements, (d) acquisition-related expenses, (e) restructuring charges, (f) asset impairments, (g) gains/losses on the sale or derecognition of assets, (h) gains/losses on the sale of investments in equity securities, (i) debt extinguishment costs, and (j) our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. NetApp makes additional adjustments to the non-GAAP tax provision for certain tax matters as described below. A detailed reconciliation of our non-GAAP to GAAP results can be found at http://investors.netapp.com. NetApp’s management uses these non-GAAP measures in making operating decisions because it believes that the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance.

6GAAP net income per share and non-GAAP net income per share are calculated using the diluted number of shares.

NetApp usage of non-GAAP financial information

To supplement NetApp’s condensed consolidated financial statement information presented in accordance with generally accepted accounting principles in the United States (GAAP), NetApp provides investors with certain non-GAAP measures, including, but not limited to, historical non-GAAP operating results, non-GAAP net income, non-GAAP effective tax rate, free cash flow, billings, and historical and projected non-GAAP earnings per diluted share. NetApp also presents the hardware and software components of our GAAP product revenues. Because our revenue recognition policy under GAAP defines a configured storage system, inclusive of the operating system software essential to its functionality, as a single performance obligation, hardware and software components of our product revenues are considered non-GAAP measures. The hardware and software components of our product revenues are derived from an estimated fair value allocation of the transaction price of our contracts with customers, down to the level of the product hardware and software components. This allocation is primarily based on the contractual prices at which NetApp has historically billed customers for such respective components.

NetApp believes that the presentation of non-GAAP net income, non-GAAP effective tax rates, and non-GAAP earnings per share data, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

NetApp believes that the presentation of free cash flow, which it defines as the net cash provided by operating activities less cash used to acquire property and equipment, to be a liquidity measure that provides useful information to management and investors because it reflects cash that can be used to, among other things, invest in its business, make strategic acquisitions, repurchase common stock, and pay dividends on its common stock. As free cash flow is not a measure of liquidity calculated in accordance with GAAP, free cash flow should be considered in addition to, but not as a substitute for, the analysis provided in the statement of cash flows.

NetApp believes that the presentation of the software and hardware components of our product revenues is meaningful to investors and management as it illustrates the significance of the Company’s software and provides improved visibility into the value created by our software innovation and R&D investment.

NetApp approximates billings by adding net revenues as reported on our Condensed Consolidated Statements of Operations for the period to the change in total deferred revenue and financed unearned services revenue as reported on our Condensed Consolidated Statements of Cash Flows for the same period. Billings is a performance measure that NetApp believes provides useful information to management and investors because it approximates the amounts under purchase orders received by us during a given period that have been billed.

NetApp’s management uses these non-GAAP measures in making operating decisions because it believes the measurements provide meaningful supplemental information regarding NetApp’s ongoing operational performance. These non-GAAP financial measures are used to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results and (3) allow greater transparency with respect to information used by management in financial and operational decision making.

NetApp excludes the following items from its non-GAAP measures when applicable:

A. Amortization of intangible assets. NetApp records amortization of intangible assets that were acquired in connection with its business combinations. The amortization of intangible assets varies depending on the level of acquisition activity. Management finds it useful to exclude these charges to assess the appropriate level of various operating expenses to assist in budgeting, planning and forecasting future periods and in measuring operational performance.

B. Stock-based compensation expenses. NetApp excludes stock-based compensation expenses from its non-GAAP measures primarily because the amount can fluctuate based on variables unrelated to the performance of the underlying business. While management views stock-based compensation as a key element of our employee retention and long-term incentives, we do not view it as an expense to be used in evaluating operational performance in any given period.

C. Litigation settlements. NetApp may periodically incur charges or benefits related to litigation settlements. NetApp excludes these charges and benefits, when significant, because it does not believe they are reflective of ongoing business and operating results.

D. Acquisition-related expenses. NetApp excludes acquisition-related expenses, including (a) due diligence, legal and other one-time integration charges and (b) write down of assets acquired that NetApp does not intend to use in its ongoing business, from its non-GAAP measures, primarily because they are not related to our ongoing business or cost base and, therefore, are less useful for future planning and forecasting.

E. Restructuring charges. These charges consist of restructuring charges that are incurred based on the particular facts and circumstances of restructuring decisions, including employment and contractual settlement terms, and other related charges, and can vary in size and frequency. We therefore exclude them in our assessment of operational performance.

F. Asset impairments. These are non-cash charges to write down assets when there is an indication that the asset has become impaired. Management finds it useful to exclude these non-cash charges due to the unpredictability of these events in its assessment of operational performance.

G. Gains/losses on the sale or derecognition of assets. These are gains/losses from the sale of our properties and other transactions in which we transfer control of assets to a third party. Management believes that these transactions do not reflect the results of our underlying, on-going business and, therefore, are less useful for future planning and forecasting.

H. Gains/losses on the sale of investments in equity securities. These are gains/losses from the sale of our investment in certain equity securities. Typically, such investments are sold as a result of a change in control of the underlying businesses. Management believes that these transactions do not reflect the results of our underlying, on-going business and, therefore, are less useful for future planning and forecasting.

I. Debt extinguishment costs. NetApp excludes certain non-recurring expenses incurred as a result of the early extinguishment of debt. Management believes such nonrecurring costs do not reflect the results of its underlying, on-going business and, therefore, are less useful for future planning and forecasting.

J. Income tax adjustments. NetApp’s non-GAAP tax provision is based upon a projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. The non-GAAP tax provision also excludes, when applicable, (a) tax charges or benefits in the current period that relate to one or more prior fiscal periods that are a result of events such as changes in tax legislation, authoritative guidance, income tax audit settlements, statute lapses and/or court decisions, (b) tax charges or benefits that are attributable to unusual or non-recurring book and/or tax accounting method changes, (c) tax charges that are a result of a non-routine foreign cash repatriation, (d) tax charges or benefits that are a result of infrequent restructuring of the Company’s tax structure, (e) tax charges or benefits that are a result of a change in valuation allowance, and (f) tax charges or benefits resulting from the integration of intellectual property from acquisitions. Management believes that the use of non-GAAP tax provisions provides a more meaningful measure of the Company’s operational performance.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. NetApp believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. NetApp management compensates for these limitations by analyzing current and projected results on a GAAP basis as well as a non-GAAP basis. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures.

Constant Currency

NetApp presents certain constant currency growth rates or quantifies the impact of foreign currency exchange rate changes on year-over-year fluctuations, including for net revenues, billings, and earnings. This constant currency information assumes the same foreign currency exchange rates that were in effect for the comparable prior-year period were used in translation of the current period results.

About NetApp

NetApp is a global, cloud-led, data-centric software company that empowers organizations to lead with data in the age of accelerated digital transformation. The company provides systems, software, and cloud services that enable them to run their applications optimally from data center to cloud, whether they are developing in the cloud, moving to the cloud, or creating their own cloudlike experiences on premises. With solutions that perform across diverse environments, NetApp helps organizations build their own data fabric and securely deliver the right data, services, and applications to the right people—anytime, anywhere. Learn more at www.netapp.com or follow us on Twitter, LinkedIn, Facebook, and Instagram.

NETAPP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

 

 

 

 

 

 

 

 

April 28,

2023

 

 

April 29,

2022

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and investments

 

$

3,070

 

 

$

4,134

 

Accounts receivable

 

 

987

 

 

 

1,230

 

Inventories

 

 

167

 

 

 

204

 

Other current assets

 

 

456

 

 

 

377

 

Total current assets

 

 

4,680

 

 

 

5,945

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

650

 

 

 

602

 

Goodwill and purchased intangible assets, net

 

 

2,940

 

 

 

2,488

 

Other non-current assets

 

 

1,548

 

 

 

991

 

Total assets

 

$

9,818

 

 

$

10,026

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

392

 

 

$

607

 

Accrued expenses

 

 

857

 

 

 

925

 

Current portion of long-term debt

 

 

—

 

 

 

250

 

Short-term deferred revenue and financed unearned services revenue

 

 

2,218

 

 

 

2,171

 

Total current liabilities

 

 

3,467

 

 

 

3,953

 

Long-term debt

 

 

2,389

 

 

 

2,386

 

Other long-term liabilities

 

 

708

 

 

 

788

 

Long-term deferred revenue and financed unearned services revenue

 

 

2,095

 

 

 

2,061

 

Total liabilities

 

 

8,659

 

 

 

9,188

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

1,159

 

 

 

838

 

Total liabilities and stockholders’ equity

$

9,818

$

10,026

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)
 

 

 

Three Months Ended

 

Year Ended

 

 

April 28, 2023

 

April 29, 2022

 

April 28, 2023

 

April 29, 2022

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

Product

 

$

744

 

$

894

 

 

$

3,049

 

 

$

3,284

 

Services

 

 

837

 

 

 

786

 

 

 

3,313

 

 

 

3,034

 

Net revenues

 

 

1,581

 

 

 

1,680

 

 

 

6,362

 

 

 

6,318

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Cost of product

 

 

335

 

 

 

446

 

 

 

1,517

 

 

 

1,554

 

Cost of services

 

 

171

 

 

 

145

 

 

 

636

 

 

 

544

 

Total cost of revenues

 

 

506

 

 

 

591

 

 

 

2,153

 

 

 

2,098

 

Gross profit

 

 

1,075

 

 

 

1,089

 

 

 

4,209

 

 

 

4,220

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

 

442

 

 

 

480

 

 

 

1,829

 

 

 

1,857

 

Research and development

 

 

243

 

 

 

235

 

 

 

956

 

 

 

881

 

General and administrative

 

 

67

 

 

 

72

 

 

 

265

 

 

 

279

 

Restructuring charges

 

 

11

 

 

 

4

 

 

 

120

 

 

 

33

 

Acquisition-related expense

 

 

3

 

 

 

5

 

 

 

21

 

 

 

13

 

Total operating expenses

 

 

766

 

 

 

796

 

 

 

3,191

 

 

 

3,063

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

309

 

 

 

293

 

 

 

1,018

 

 

 

1,157

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

5

 

 

 

(21

)

 

 

48

 

 

 

(62

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

314

 

 

 

272

 

 

 

1,066

 

 

 

1,095

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

 

69

 

 

 

13

 

 

 

(208

)

 

 

158

 

 

 

 

 

 

 

 

 

 

Net income

 

$

245

 

 

$

259

 

 

$

1,274

 

 

$

937

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

1.15

 

 

$

1.17

 

 

$

5.87

 

 

$

4.20

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

1.13

 

 

$

1.14

 

 

$

5.79

 

 

$

4.09

 

 

 

 

 

 

 

 

 

 

Shares used in net income per share calculations:

 

 

 

 

 

 

 

 

Basic

 

 

213

 

 

 

222

 

 

 

217

 

 

 

223

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

217

 

 

 

228

 

 

 

220

 

 

 

229

 

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

April 28, 2023

 

April 29, 2022

 

April 28, 2023

 

April 29, 2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

245

 

 

$

259

 

 

$

1,274

 

 

$

937

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

66

 

 

 

51

 

 

 

248

 

 

 

194

 

Non-cash operating lease cost

 

 

12

 

 

 

15

 

 

 

52

 

 

 

55

 

Stock-based compensation

 

 

74

 

 

 

66

 

 

 

312

 

 

 

245

 

Deferred income taxes

 

 

(29

)

 

 

(78

)

 

 

(606

)

 

 

(144

)

Other items, net

 

 

2

 

 

 

(19

)

 

 

(67

)

 

 

(54

)

Changes in assets and liabilities, net of acquisitions of businesses:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(165

)

 

 

(450

)

 

 

260

 

 

 

(313

)

Inventories

 

 

8

 

 

 

(37

)

 

 

37

 

 

 

(90

)

Accounts payable

 

 

(34

)

 

 

171

 

 

 

(207

)

 

 

181

 

Accrued expenses

 

 

14

 

 

 

96

 

 

 

(103

)

 

 

(111

)

Deferred revenue and financed unearned services revenue

 

 

93

 

 

 

338

 

 

 

46

 

 

 

384

 

Long-term taxes payable

 

 

6

 

 

 

21

 

 

 

(76

)

 

 

(45

)

Changes in other operating assets and liabilities, net

 

 

(57

)

 

 

(22

)

 

 

(63

)

 

 

(28

)

Net cash provided by operating activities

 

 

235

 

 

 

411

 

 

 

1,107

 

 

 

1,211

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

(Purchases) redemptions of investments, net

 

 

(245

)

 

 

9

 

 

 

(719

)

 

 

45

 

Purchases of property and equipment

 

 

(39

)

 

 

(68

)

 

 

(239

)

 

 

(226

)

Acquisitions of businesses, net of cash acquired

 

 

—

 

 

 

(21

)

 

 

(491

)

 

 

(380

)

Other investing activities, net

 

 

(1

)

 

 

—

 

 

 

59

 

 

 

—

 

Net cash used in investing activities

 

 

(285

)

 

 

(80

)

 

 

(1,390

)

 

 

(561

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock under employee stock award plans

 

 

—

 

 

 

—

 

 

 

108

 

 

 

105

 

Payments for taxes related to net share settlement of stock awards

 

 

(10

)

 

 

(5

)

 

 

(84

)

 

 

(74

)

Repurchase of common stock

 

 

(150

)

 

 

(250

)

 

 

(850

)

 

 

(600

)

Repayments and extinguishment of debt

 

 

—

 

 

 

—

 

 

 

(250

)

 

 

—

 

Dividends paid

 

 

(106

)

 

 

(111

)

 

 

(432

)

 

 

(446

)

Other financing activities, net

 

 

(3

)

 

 

—

 

 

 

(5

)

 

 

(2

)

Net cash used in financing activities

 

 

(269

)

 

 

(366

)

 

 

(1,513

)

 

 

(1,017

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(5

)

 

 

(23

)

 

 

(1

)

 

 

(49

)

 

 

 

 

 

 

 

 

 

Net change in cash, cash equivalents and restricted cash

 

 

(324

)

 

 

(58

)

 

 

(1,797

)

 

 

(416

)

Cash, cash equivalents and restricted cash:

 

 

 

 

 

 

 

 

Beginning of period

 

 

2,646

 

 

 

4,177

 

 

 

4,119

 

 

 

4,535

 

End of period

 

$

2,322

 

 

$

4,119

 

 

$

2,322

 

 

$

4,119

 

NETAPP, INC.

SUPPLEMENTAL DATA

(In millions except net income per share, percentages, DSO, DPO and Inventory Turns)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues by Segment

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Product

 

$

744

 

 

$

682

 

 

$

894

 

 

$

3,049

 

 

$

3,284

 

Support

 

 

598

 

 

 

616

 

 

 

590

 

 

 

2,419

 

 

 

2,344

 

Professional and Other Services

 

 

88

 

 

 

78

 

 

 

76

 

 

 

319

 

 

 

294

 

Hybrid Cloud Segment Net Revenues

 

 

1,430

 

 

 

1,376

 

 

 

1,560

 

 

 

5,787

 

 

 

5,922

 

Public Cloud Segment Net Revenues

 

 

151

 

 

 

150

 

 

 

120

 

 

 

575

 

 

 

396

 

Net Revenues

 

$

1,581

 

 

$

1,526

 

 

$

1,680

 

 

$

6,362

 

 

$

6,318

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit by Segment

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Product

 

$

410

 

 

$

317

 

 

$

452

 

 

$

1,538

 

 

$

1,743

 

Support

 

 

549

 

 

 

572

 

 

 

547

 

 

 

2,238

 

 

 

2,160

 

Professional and Other Services

 

 

33

 

 

 

28

 

 

 

22

 

 

 

108

 

 

 

89

 

Hybrid Cloud Segment Gross Profit

 

 

992

 

 

 

917

 

 

 

1,021

 

 

 

3,884

 

 

 

3,992

 

Public Cloud Segment Gross Profit

 

 

99

 

 

 

103

 

 

 

82

 

 

 

391

 

 

 

278

 

Total Segments Gross Profit

 

 

1,091

 

 

 

1,020

 

 

 

1,103

 

 

 

4,275

 

 

 

4,270

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of Intangible Assets

 

 

(10

)

 

 

(11

)

 

 

(10

)

 

 

(42

)

 

 

(33

)

Stock-based Compensation

 

 

(6

)

 

 

(8

)

 

 

(4

)

 

 

(24

)

 

 

(17

)

Unallocated Cost of Revenues

 

 

(16

)

 

 

(19

)

 

 

(14

)

 

 

(66

)

 

 

(50

)

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

$

1,075

 

 

$

1,001

 

 

$

1,089

 

 

$

4,209

 

 

$

4,220

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin by Segment

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Product

 

 

55.1

%

 

 

46.5

%

 

 

50.6

%

 

 

50.4

%

 

 

53.1

%

Support

 

 

91.8

%

 

 

92.9

%

 

 

92.7

%

 

 

92.5

%

 

 

92.2

%

Professional and Other Services

 

 

37.5

%

 

 

35.9

%

 

 

28.9

%

 

 

33.9

%

 

 

30.3

%

Hybrid Cloud Segment Gross Margin

 

 

69.4

%

 

 

66.6

%

 

 

65.4

%

 

 

67.1

%

 

 

67.4

%

Public Cloud Segment Gross Margin

 

 

65.6

%

 

 

68.7

%

 

 

68.3

%

 

 

68.0

%

 

 

70.2

%

 

 

 

 

 

 

 

 

 

 

 

Product Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Total

 

$

744

 

 

$

682

 

 

$

894

 

 

$

3,049

 

 

$

3,284

 

Software*

 

$

437

 

 

$

390

 

 

$

530

 

 

$

1,798

 

 

$

1,926

 

Hardware*

 

$

307

 

 

$

292

 

 

$

364

 

 

$

1,251

 

 

$

1,358

 

 

 

 

 

 

 

 

 

 

 

 

Software and recurring support and public cloud revenue

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Product – Software

 

$

437

 

 

$

390

 

 

$

530

 

 

$

1,798

 

 

$

1,926

 

Support

 

 

598

 

 

 

616

 

 

 

590

 

 

 

2,419

 

 

 

2,344

 

Public Cloud

 

 

151

 

 

 

150

 

 

 

120

 

 

 

575

 

 

 

396

 

Software and recurring support and public cloud revenue*

 

$

1,186

 

 

$

1,156

 

 

$

1,240

 

 

$

4,792

 

 

$

4,666

 

 

 

 

 

 

 

 

 

 

 

 

Software and recurring support and public cloud revenue as a percentage of net revenues

 

 

75

%

 

 

76

%

 

 

74

%

 

 

75

%

 

 

74

%

 

 

 

 

 

 

 

 

 

 

 

* Our revenue recognition policy under GAAP defines a configured storage system, inclusive of the operating system software essential to its functionality, as a single performance obligation. We have provided a breakdown of our GAAP product revenues into the software and hardware components, which are considered non-GAAP measures, to display the significance of software included in total product revenues. Software and recurring support and public cloud revenue is a non-GAAP measure because it includes the software component of our product revenues, but not the hardware component.

 

 

 

 

 

 

 

 

 

 

 

Geographic Mix

 

 

 

 

 

 

 

 

 

 

 

 

% of Q4 FY’23

 

% of Q3 FY’23

 

% of Q4 FY’22

 

% of FY 2023

 

% of FY 2022

 

 

Revenue

 

Revenue

 

Revenue

 

Revenue

 

Revenue

Americas

 

 

52

%

 

 

54

%

 

 

54

%

 

 

53

%

 

 

55

%

Americas Commercial

 

 

42

%

 

 

44

%

 

 

45

%

 

 

42

%

 

 

45

%

U.S. Public Sector

 

 

10

%

 

 

10

%

 

 

9

%

 

 

11

%

 

 

10

%

EMEA

 

 

34

%

 

 

32

%

 

 

32

%

 

 

33

%

 

 

31

%

Asia Pacific

 

 

14

%

 

 

14

%

 

 

14

%

 

 

14

%

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

Pathways Mix

 

 

 

 

 

 

 

 

 

 

 

 

% of Q4 FY’23

 

% of Q3 FY’23

 

% of Q4 FY’22

 

% of FY 2023

 

% of FY 2022

 

 

Revenue

 

Revenue

 

Revenue

 

Revenue

 

Revenue

Direct

 

 

22

%

 

 

22

%

 

 

24

%

 

 

22

%

 

 

23

%

Indirect

 

 

78

%

 

 

78

%

 

 

76

%

 

 

78

%

 

 

77

%

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Income from Operations, Income before Income Taxes & Effective Tax Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Non-GAAP Income from Operations

 

$

414

 

 

$

372

 

 

$

382

 

 

$

1,539

 

 

$

1,496

 

% of Net Revenues

 

 

26.2

%

 

 

24.4

%

 

 

22.7

%

 

 

24.2

%

 

 

23.7

%

Non-GAAP Income before Income Taxes

 

$

419

 

 

$

377

 

 

$

361

 

 

$

1,555

 

 

$

1,434

 

Non-GAAP Effective Tax Rate

 

 

20.3

%

 

 

20.2

%

 

 

10.2

%

 

 

20.9

%

 

 

15.7

%

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Non-GAAP Net Income

 

$

334

 

 

$

301

 

 

$

324

 

 

$

1,230

 

 

$

1,209

 

Non-GAAP Weighted Average Common Shares Outstanding, Diluted

 

 

217

 

 

 

219

 

 

 

228

 

 

 

220

 

 

 

229

 

Non-GAAP Net Income per Share, Diluted

 

$

1.54

 

 

$

1.37

 

 

$

1.42

 

 

$

5.59

 

 

$

5.28

 

 

 

 

 

 

 

 

 

 

 

 

Select Balance Sheet Items

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

 

 

 

Deferred Revenue and Financed Unearned Services Revenue

 

$

4,313

 

 

$

4,216

 

 

$

4,232

 

 

 

 

 

DSO (days)

 

 

57

 

 

 

49

 

 

 

67

 

 

 

 

 

DPO (days)

 

 

70

 

 

 

75

 

 

 

93

 

 

 

 

 

Inventory Turns

 

 

12

 

 

 

12

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Days sales outstanding (DSO) is defined as accounts receivable divided by net revenues, multiplied by the number of days in the quarter.

Days payables outstanding (DPO) is defined as accounts payable divided by cost of revenues, multiplied by the number of days in the quarter.

Inventory turns is defined as annualized cost of revenues divided by net inventories.

 

 

 

 

 

 

 

 

 

 

 

Select Cash Flow Statement Items

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Net Cash Provided by Operating Activities

 

$

235

 

 

$

377

 

 

$

411

 

 

$

1,107

 

 

$

1,211

 

Purchases of Property and Equipment

 

$

39

 

 

$

58

 

 

$

68

 

 

$

239

 

 

$

226

 

Free Cash Flow

 

$

196

 

 

$

319

 

 

$

343

 

 

$

868

 

 

$

985

 

Free Cash Flow as % of Net Revenues

 

 

12.4

%

 

 

20.9

%

 

 

20.4

%

 

 

13.6

%

 

 

15.6

%

 

 

 

 

 

 

 

 

 

 

 

Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities less purchases of property and equipment.

Some items may not add or recalculate due to rounding.

NETAPP, INC.

RECONCILIATION OF NON-GAAP TO GAAP

INCOME STATEMENT INFORMATION

(In millions, except net income per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

NET INCOME

 

$

245

 

 

$

65

 

 

$

259

 

 

$

1,274

 

 

$

937

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

17

 

 

 

17

 

 

 

14

 

 

 

68

 

 

 

46

 

Stock-based compensation

 

 

74

 

 

 

93

 

 

 

66

 

 

 

312

 

 

 

245

 

Litigation settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

Restructuring charges

 

 

11

 

 

 

87

 

 

 

4

 

 

 

120

 

 

 

33

 

Acquisition-related expense

 

 

3

 

 

 

3

 

 

 

5

 

 

 

21

 

 

 

13

 

Gain on sale of equity investment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(32

)

 

 

—

 

Income tax effects

 

 

11

 

 

 

(33

)

 

 

(24

)

 

 

(51

)

 

 

(68

)

Income tax (benefits) expenses from integration of acquired companies

 

 

(27

)

 

 

—

 

 

 

—

 

 

 

(27

)

 

 

1

 

Resolution of income tax matters

 

 

—

 

 

 

69

 

 

 

—

 

 

 

69

 

 

 

—

 

Income tax benefit from intra-entity intellectual property transfer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(524

)

 

 

—

 

NON-GAAP NET INCOME

 

$

334

 

 

$

301

 

 

$

324

 

 

$

1,230

 

 

$

1,209

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUES

 

$

506

 

 

$

525

 

 

$

591

 

 

$

2,153

 

 

$

2,098

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

(10

)

 

 

(11

)

 

 

(10

)

 

 

(42

)

 

 

(33

)

Stock-based compensation

 

 

(6

)

 

 

(8

)

 

 

(4

)

 

 

(24

)

 

 

(17

)

NON-GAAP COST OF REVENUES

 

$

490

 

 

$

506

 

 

$

577

 

 

$

2,087

 

 

$

2,048

 

 

 

 

 

 

 

 

 

 

 

 

COST OF PRODUCT REVENUES

 

$

335

 

 

$

367

 

 

$

446

 

 

$

1,517

 

 

$

1,554

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

(1

)

 

 

(9

)

Stock-based compensation

 

 

(1

)

 

 

(2

)

 

 

(1

)

 

 

(5

)

 

 

(4

)

NON-GAAP COST OF PRODUCT REVENUES

 

$

334

 

 

$

365

 

 

$

442

 

 

$

1,511

 

 

$

1,541

 

 

 

 

 

 

 

 

 

 

 

 

COST OF SERVICES REVENUES

 

$

171

 

 

$

158

 

 

$

145

 

 

$

636

 

 

$

544

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

(10

)

 

 

(11

)

 

 

(7

)

 

 

(41

)

 

 

(24

)

Stock-based compensation

 

 

(5

)

 

 

(6

)

 

 

(3

)

 

 

(19

)

 

 

(13

)

NON-GAAP COST OF SERVICES REVENUES

 

$

156

 

 

$

141

 

 

$

135

 

 

$

576

 

 

$

507

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

$

1,075

 

 

$

1,001

 

 

$

1,089

 

 

$

4,209

 

 

$

4,220

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

10

 

 

 

11

 

 

 

10

 

 

 

42

 

 

 

33

 

Stock-based compensation

 

 

6

 

 

 

8

 

 

 

4

 

 

 

24

 

 

 

17

 

NON-GAAP GROSS PROFIT

 

$

1,091

 

 

$

1,020

 

 

$

1,103

 

 

$

4,275

 

 

$

4,270

 

NETAPP, INC.

RECONCILIATION OF NON-GAAP TO GAAP

INCOME STATEMENT INFORMATION

(In millions, except net income per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

SALES AND MARKETING EXPENSES

 

$

442

 

 

$

450

 

 

$

480

 

 

$

1,829

 

 

$

1,857

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

(7

)

 

 

(6

)

 

 

(4

)

 

 

(26

)

 

 

(13

)

Stock-based compensation

 

 

(32

)

 

 

(40

)

 

 

(30

)

 

 

(135

)

 

 

(115

)

NON-GAAP SALES AND MARKETING EXPENSES

 

$

403

 

 

$

404

 

 

$

446

 

 

$

1,668

 

 

$

1,729

 

 

 

 

 

 

 

 

 

 

 

 

RESEARCH AND DEVELOPMENT EXPENSES

 

$

243

 

 

$

230

 

 

$

235

 

 

$

956

 

 

$

881

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

(29

)

 

 

(32

)

 

 

(22

)

 

 

(111

)

 

 

(75

)

NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES

 

$

214

 

 

$

198

 

 

$

213

 

 

$

845

 

 

$

806

 

 

 

 

 

 

 

 

 

 

 

 

GENERAL AND ADMINISTRATIVE EXPENSES

 

$

67

 

 

$

59

 

 

$

72

 

 

$

265

 

 

$

279

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

(7

)

 

 

(13

)

 

 

(10

)

 

 

(42

)

 

 

(38

)

Litigation settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSES

 

$

60

 

 

$

46

 

 

$

62

 

 

$

223

 

 

$

239

 

 

 

 

 

 

 

 

 

 

 

 

RESTRUCTURING CHARGES

 

$

11

 

 

$

87

 

 

$

4

 

 

$

120

 

 

$

33

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Restructuring charges

 

 

(11

)

 

 

(87

)

 

 

(4

)

 

 

(120

)

 

 

(33

)

NON-GAAP RESTRUCTURING CHARGES

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

ACQUISITION-RELATED EXPENSE

 

$

3

 

 

$

3

 

 

$

5

 

 

$

21

 

 

$

13

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Acquisition-related expense

 

 

(3

)

 

 

(3

)

 

 

(5

)

 

 

(21

)

 

 

(13

)

NON-GAAP ACQUISITION-RELATED EXPENSE

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

$

766

 

 

$

829

 

 

$

796

 

 

$

3,191

 

 

$

3,063

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

(7

)

 

 

(6

)

 

 

(4

)

 

 

(26

)

 

 

(13

)

Stock-based compensation

 

 

(68

)

 

 

(85

)

 

 

(62

)

 

 

(288

)

 

 

(228

)

Litigation settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

Restructuring charges

 

 

(11

)

 

 

(87

)

 

 

(4

)

 

 

(120

)

 

 

(33

)

Acquisition-related expense

 

 

(3

)

 

 

(3

)

 

 

(5

)

 

 

(21

)

 

 

(13

)

NON-GAAP OPERATING EXPENSES

 

$

677

 

 

$

648

 

 

$

721

 

 

$

2,736

 

 

$

2,774

 

NETAPP, INC.

RECONCILIATION OF NON-GAAP TO GAAP

INCOME STATEMENT INFORMATION

(In millions, except net income per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

INCOME FROM OPERATIONS

 

$

309

 

 

$

172

 

 

$

293

 

 

$

1,018

 

 

$

1,157

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

17

 

 

 

17

 

 

 

14

 

 

 

68

 

 

 

46

 

Stock-based compensation

 

 

74

 

 

 

93

 

 

 

66

 

 

 

312

 

 

 

245

 

Litigation settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

Restructuring charges

 

 

11

 

 

 

87

 

 

 

4

 

 

 

120

 

 

 

33

 

Acquisition-related expense

 

 

3

 

 

 

3

 

 

 

5

 

 

 

21

 

 

 

13

 

NON-GAAP INCOME FROM OPERATIONS

 

$

414

 

 

$

372

 

 

$

382

 

 

$

1,539

 

 

$

1,496

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE), NET

 

$

5

 

 

$

5

 

 

$

(21

)

 

$

48

 

 

$

(62

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

Gain on sale of equity investment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(32

)

 

 

—

 

NON-GAAP OTHER INCOME (EXPENSE), NET

 

$

5

 

 

$

5

 

 

$

(21

)

 

$

16

 

 

$

(62

)

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

$

314

 

 

$

177

 

 

$

272

 

 

$

1,066

 

 

$

1,095

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

17

 

 

 

17

 

 

 

14

 

 

 

68

 

 

 

46

 

Stock-based compensation

 

 

74

 

 

 

93

 

 

 

66

 

 

 

312

 

 

 

245

 

Litigation settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

Restructuring charges

 

 

11

 

 

 

87

 

 

 

4

 

 

 

120

 

 

 

33

 

Acquisition-related expense

 

 

3

 

 

 

3

 

 

 

5

 

 

 

21

 

 

 

13

 

Gain on sale of equity investment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(32

)

 

 

—

 

NON-GAAP INCOME BEFORE INCOME TAXES

 

$

419

 

 

$

377

 

 

$

361

 

 

$

1,555

 

 

$

1,434

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

$

69

 

 

$

112

 

 

$

13

 

 

$

(208

)

 

$

158

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Income tax effects

 

 

(11

)

 

 

33

 

 

 

24

 

 

 

51

 

 

 

68

 

Income tax benefits (expenses) from integration of acquired companies

 

 

27

 

 

 

—

 

 

 

—

 

 

 

27

 

 

 

(1

)

Resolution of income tax matters

 

 

—

 

 

 

(69

)

 

 

—

 

 

 

(69

)

 

 

—

 

Income tax benefit from intra-entity intellectual property transfer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

524

 

 

 

—

 

NON-GAAP PROVISION FOR INCOME TAXES

 

$

85

 

 

$

76

 

 

$

37

 

 

$

325

 

 

$

225

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE

 

$

1.13

 

 

$

0.30

 

 

$

1.14

 

 

$

5.79

 

 

$

4.09

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

0.08

 

 

 

0.08

 

 

 

0.06

 

 

 

0.31

 

 

 

0.20

 

Stock-based compensation

 

 

0.34

 

 

 

0.42

 

 

 

0.29

 

 

 

1.42

 

 

 

1.07

 

Litigation settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.01

 

Restructuring charges

 

 

0.05

 

 

 

0.40

 

 

 

0.02

 

 

 

0.55

 

 

 

0.14

 

Acquisition-related expense

 

 

0.01

 

 

 

0.01

 

 

 

0.02

 

 

 

0.10

 

 

 

0.06

 

Gain on sale of equity investment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.15

)

 

 

—

 

Income tax effects

 

 

0.05

 

 

 

(0.15

)

 

 

(0.11

)

 

 

(0.23

)

 

 

(0.30

)

Income tax (benefits) expenses from integration of acquired companies

 

 

(0.12

)

 

 

—

 

 

 

—

 

 

 

(0.12

)

 

 

—

 

Resolution of income tax matters

 

 

—

 

 

 

0.32

 

 

 

—

 

 

 

0.31

 

 

 

—

 

Income tax benefit from intra-entity intellectual property transfer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2.38

)

 

 

—

 

NON-GAAP NET INCOME PER SHARE

 

$

1.54

 

 

$

1.37

 

 

$

1.42

 

 

$

5.59

 

 

$

5.28

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF NON-GAAP TO GAAP

GROSS MARGIN

($ in millions)

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Gross margin-GAAP

 

 

68.0

%

 

 

65.6

%

 

 

64.8

%

 

 

66.2

%

 

 

66.8

%

Cost of revenues adjustments

 

 

1.0

%

 

 

1.2

%

 

 

0.8

%

 

 

1.0

%

 

 

0.8

%

Gross margin-Non-GAAP

 

 

69.0

%

 

 

66.8

%

 

 

65.7

%

 

 

67.2

%

 

 

67.6

%

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of revenues

 

$

506

 

 

$

525

 

 

$

591

 

 

$

2,153

 

 

$

2,098

 

Cost of revenues adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

(10

)

 

 

(11

)

 

 

(10

)

 

 

(42

)

 

 

(33

)

Stock-based compensation

 

 

(6

)

 

 

(8

)

 

 

(4

)

 

 

(24

)

 

 

(17

)

Non-GAAP cost of revenues

 

$

490

 

 

$

506

 

 

$

577

 

 

$

2,087

 

 

$

2,048

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

$

1,581

 

 

$

1,526

 

 

$

1,680

 

 

$

6,362

 

 

$

6,318

 

RECONCILIATION OF NON-GAAP TO GAAP

PRODUCT GROSS MARGIN

($ in millions)

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Product gross margin-GAAP

 

 

55.0

%

 

 

46.2

%

 

 

50.1

%

 

 

50.2

%

 

 

52.7

%

Cost of product revenues adjustments

 

 

0.1

%

 

 

0.3

%

 

 

0.4

%

 

 

0.2

%

 

 

0.4

%

Product gross margin-Non-GAAP

 

 

55.1

%

 

 

46.5

%

 

 

50.6

%

 

 

50.4

%

 

 

53.1

%

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of product revenues

 

$

335

 

 

$

367

 

 

$

446

 

 

$

1,517

 

 

$

1,554

 

Cost of product revenues adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

(1

)

 

 

(9

)

Stock-based compensation

 

 

(1

)

 

 

(2

)

 

 

(1

)

 

 

(5

)

 

 

(4

)

Non-GAAP cost of product revenues

 

$

334

 

 

$

365

 

 

$

442

 

 

$

1,511

 

 

$

1,541

 

 

 

 

 

 

 

 

 

 

 

 

Product revenues

 

$

744

 

 

$

682

 

 

$

894

 

 

$

3,049

 

 

$

3,284

 

RECONCILIATION OF NON-GAAP TO GAAP

SERVICES GROSS MARGIN

($ in millions)

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Services gross margin-GAAP

 

 

79.6

%

 

 

81.3

%

 

 

81.6

%

 

 

80.8

%

 

 

82.1

%

Cost of services revenues adjustments

 

 

1.8

%

 

 

2.0

%

 

 

1.3

%

 

 

1.8

%

 

 

1.2

%

Services gross margin-Non-GAAP

 

 

81.4

%

 

 

83.3

%

 

 

82.8

%

 

 

82.6

%

 

 

83.3

%

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of services revenues

 

$

171

 

 

$

158

 

 

$

145

 

 

$

636

 

 

$

544

 

Cost of services revenues adjustments:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

(10

)

 

 

(11

)

 

 

(7

)

 

 

(41

)

 

 

(24

)

Stock-based compensation

 

 

(5

)

 

 

(6

)

 

 

(3

)

 

 

(19

)

 

 

(13

)

Non-GAAP cost of services revenues

 

$

156

 

 

$

141

 

 

$

135

 

 

$

576

 

 

$

507

 

 

 

 

 

 

 

 

 

 

 

 

Services revenues

 

$

837

 

 

$

844

 

 

$

786

 

 

$

3,313

 

 

$

3,034

 

RECONCILIATION OF NON-GAAP TO GAAP

EFFECTIVE TAX RATE

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

GAAP effective tax rate

 

 

22.0

%

 

 

63.3

%

 

 

4.8

%

 

 

(19.5

)%

 

 

14.4

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

Income tax effects

 

 

(10.3

)%

 

 

(4.1

)%

 

 

5.5

%

 

 

(4.8

)%

 

 

1.4

%

Income tax benefits (expenses) from integration of acquired companies

 

 

8.6

%

 

 

—

%

 

 

—

%

 

 

2.5

%

 

 

(0.1

)%

Resolution of income tax matters

 

 

—

%

 

 

(39.0

)%

 

 

—

%

 

 

(6.5

)%

 

 

—

%

Income tax benefit from intra-entity intellectual property transfer

 

 

—

%

 

 

—

%

 

 

—

%

 

 

49.2

%

 

 

—

%

Non-GAAP effective tax rate

 

 

20.3

%

 

 

20.2

%

 

 

10.2

%

 

 

20.9

%

 

 

15.7

%

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES

TO FREE CASH FLOW (NON-GAAP)

(In millions)

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Net cash provided by operating activities

 

$

235

 

 

$

377

 

 

$

411

 

 

$

1,107

 

 

$

1,211

 

Purchases of property and equipment

 

 

(39

)

 

 

(58

)

 

 

(68

)

 

 

(239

)

 

 

(226

)

Free cash flow

 

$

196

 

 

$

319

 

 

$

343

 

 

$

868

 

 

$

985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF NET REVENUES

TO BILLINGS (NON-GAAP)

(In millions)

 

 

 

 

 

 

 

 

 

Q4’FY23

 

Q3’FY23

 

Q4’FY22

 

FY2023

 

FY2022

Net revenues

 

$

1,581

 

 

$

1,526

 

 

$

1,680

 

 

$

6,362

 

 

$

6,318

 

Change in deferred revenue and financed unearned services revenue*

 

 

93

 

 

 

46

 

 

 

338

 

 

 

46

 

 

 

384

 

Billings

 

$

1,674

 

 

$

1,572

 

 

$

2,018

 

 

$

6,408

 

 

$

6,702

 

 

 

 

 

 

 

 

 

 

 

 

* As reported on our Condensed Consolidated Statements of Cash Flows

NETAPP, INC.

RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP

EXPRESSED AS EARNINGS PER SHARE

FIRST QUARTER FISCAL 2024

 

 

 

 

 

First Quarter

 

 

Fiscal 2024

 

 

 

Non-GAAP Guidance – Net Income Per Share

 

$1.00-$1.10

 

 

 

Adjustments of Specific Items to Net Income

 

 

Per Share for the First Quarter Fiscal 2024:

 

 

Amortization of intangible assets

 

($0.07)

Stock-based compensation expense

 

($0.39)

Income tax effects

 

$0.08

Total Adjustments

 

($0.38)

 

 

 

GAAP Guidance – Net Income Per Share

 

$0.62-$0.72
 

Some items may not add or recalculate due to rounding.

NETAPP, INC.

RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP

Fiscal 2024

 

 

 

 

 

Fiscal 2024

Gross Margin – Non-GAAP Guidance

 

~70%

Adjustment:

 

 

Cost of revenues adjustments

 

(1)%

Gross Margin – GAAP Guidance

 

~69%

 

 

 

 

 

Fiscal 2024

 

 

 

Operating Margin – Non-GAAP Guidance

 

~25%

Adjustments:

 

 

Amortization of intangible assets

 

(1)%

Stock-based compensation expense

 

(6)%

Operating Margin – GAAP Guidance

 

~18%

 

 

 

Some items may not add or recalculate due to rounding.

NETAPP, INC.

RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP

EXPRESSED AS EARNINGS PER SHARE

Fiscal 2024

 

 

 

 

 

Fiscal 2024

Non-GAAP Guidance – Net Income Per Share

 

$5.65-$5.85

 

 

 

Adjustments of Specific Items to Net Income

 

 

Per Share for Fiscal 2024:

 

 

Amortization of intangible assets

 

$(0.27)

Stock-based compensation expense

 

$(1.70)

Income tax effects

 

$0.30

Total Adjustments

 

$(1.67)

 

 

 

GAAP Guidance – Net Income Per Share

 

$3.98-$4.18

 

 

 

Some items may not add or recalculate due to rounding.

 

(Press)

Chris Drago

1 831 900 8889

[email protected]

(Investors)

Kris Newton

1 408 822 3312

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Data Management Apps/Applications Technology Software Networks Artificial Intelligence Internet

MEDIA:

Logo
Logo
Posted on

Cue Health to Present at the Goldman Sachs 44th Annual Global Healthcare Conference

Cue Health to Present at the Goldman Sachs 44th Annual Global Healthcare Conference

SAN DIEGO, Calif.–(BUSINESS WIRE)–Cue Health (“Cue”) (Nasdaq: HLTH), a healthcare technology company, announced today that its management team will present at the Goldman Sachs 44th Annual Global Healthcare Conference on Wednesday, June 14, 2023 at 4:00 p.m. Pacific Time at the Waldorf Astoria Monarch Beach Resort & Club.

A live audio webcast and replay of the presentation may be accessed for 180 days on the “Investor Relations” section of the company’s website at: https://cuehealth.com/.

About Cue Health

Cue Health Inc. (Nasdaq: HLTH) is a healthcare technology company that uses diagnostic-enabled care to empower people to live their healthiest lives. The Cue Health platform offers individuals and healthcare providers convenient and personalized access to lab-quality diagnostic tests at home and at the point of care, as well as on-demand telehealth consultations and treatment options for a wide range of health and wellness needs. Cue’s customers include federal and state public sector agencies and the private sector, which includes healthcare providers, enterprises, and individual consumers. Cue’s COVID-19 test was the first FDA-authorized molecular diagnostic test for at-home and over-the-counter use without a prescription. Cue has since received Emergency Use Authorization from the FDA for its molecular mpox test at the point of care and, to expand its test menu, the company has a number of other submissions under review by the FDA. Cue, founded in 2010, owns over 100 patents and is headquartered in San Diego. For more information, please visit www.cuehealth.com.

Lorna Williams

[email protected]

Cue Health

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Data Management Health Technology Hospitals Practice Management Managed Care

MEDIA:

Posted on

CrowdStrike Achieves IL5 Authorization to Secure U.S. Department of Defense

CrowdStrike Achieves IL5 Authorization to Secure U.S. Department of Defense

Cybersecurity leader earns highest unclassified level of authorization to protect extensive range of mission critical DoD systems

AUSTIN, Texas–(BUSINESS WIRE)–CrowdStrike (Nasdaq: CRWD) today announced that it has been granted an Impact Level 5 (IL5) Provisional Authorization (PA) from the United States Department of Defense (DoD). A broad range of DoD unclassified National Security Systems (NSS) can now deploy the CrowdStrike Falcon® platform to protect mission-critical data.

The U.S. DoD uses an Impact Level classification system to authorize cybersecurity technology, with IL5 being the highest level of authorization granted to controlled unclassified information (CUI). This authorization will allow the DoD, Intelligence Community and other federal agencies to deploy CrowdStrike to protect their most critical unclassified assets, and will aid the agencies in achieving operational Zero Trust architectures, which the DoD plans on completing by 2027.

“IL5 is a major milestone for CrowdStrike, giving us the ability to protect even more DoD and Intelligence customers in the community cloud through the world’s most advanced cybersecurity technology,” said Michael Sentonas, president of CrowdStrike. “CrowdStrike is committed to serving the U.S. public sector and to empowering government organizations to more effectively protect the country’s most critical assets with a better-together defense. The top federal agencies and state and local governments continue to embrace the CrowdStrike Falcon platform as the public sector’s security offering of choice. This is yet another proud moment for us.”

CrowdStrike secures some of the United States’ most critical assets within the DoD, Defense Industrial Base (DIB) entities, Department of Homeland Security (DHS) through the Cybersecurity and Infrastructure Security Agency (CISA), the Center for Internet Security (CIS) and multiple other federal civilian agencies. Additionally, CrowdStrike is a founding partner of CISA’s Joint Cyber Defense Collaborative (JCDC), which unifies cyber capabilities spread across federal agencies, state and local governments and the private sector, furthering cybersecurity collaboration and information sharing.

For more on CrowdStrike’s public sector offerings, please visit our website.

About CrowdStrike

CrowdStrike (Nasdaq: CRWD), a global cybersecurity leader, has redefined modern security with the world’s most advanced cloud-native platforms for protecting critical areas of enterprise risk – endpoints and cloud workloads, identity and data.

Powered by the CrowdStrike Security Cloud and world-class AI, the CrowdStrike Falcon® platform leverages real-time indicators of attack, threat intelligence, evolving adversary tradecraft and enriched telemetry from across the enterprise to deliver hyper-accurate detections, automated protection and remediation, elite threat hunting and prioritized observability of vulnerabilities.

Purpose-built in the cloud with a single lightweight-agent architecture, the Falcon platform delivers rapid and scalable deployment, superior protection and performance, reduced complexity and immediate time-to-value.

CrowdStrike: We stop breaches.

Learn more: https://www.crowdstrike.com/

Follow us: Blog | Twitter | LinkedIn | Facebook | Instagram

Start a free trial today: https://www.crowdstrike.com/free-trial-guide/

© 2023 CrowdStrike, Inc. All rights reserved. CrowdStrike, the falcon logo, CrowdStrike Falcon and CrowdStrike Threat Graph are marks owned by CrowdStrike, Inc. and registered with the United States Patent and Trademark Office, and in other countries. CrowdStrike owns other trademarks and service marks, and may use the brands of third parties to identify their products and services.

Kevin Benacci

CrowdStrike Corporate Communications

[email protected]

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Security Defense Technology Military Software Government Technology

MEDIA:

Logo
Logo
Posted on

Okta Announces First Quarter Fiscal Year 2024 Financial Results

Okta Announces First Quarter Fiscal Year 2024 Financial Results

  • Q1 revenue grew 25% year-over-year; subscription revenue grew 26% year-over-year
  • Current remaining performance obligations (cRPO) grew 20% year-over-year to $1.70 billion
  • Record operating cash flow of $129 million and free cash flow of $124 million

SAN FRANCISCO–(BUSINESS WIRE)–
Okta, Inc. (Nasdaq: OKTA), the leading independent identity provider, today announced financial results for its first quarter ended April 30, 2023.

“We started the new fiscal year with strong non-GAAP operating profit and record cash flow, which is a testament to the actions we’ve taken to increase efficiency and profitability,” said Todd McKinnon, Chief Executive Officer and co-founder of Okta. “Identity is a key building block for projects around the long-term trends of zero trust security, digital transformation, and cloud adoption. As the leading independent and neutral identity partner, Okta is the choice for over 18,000 organizations’ most critical initiatives. While macroeconomic pressures are increasing, we are well positioned to advance our leadership position by delivering valuable product innovation to our customers while delivering non-GAAP profitable growth to our shareholders.”

First Quarter Fiscal 2024 Financial Highlights:

  • Revenue: Total revenue was $518 million, an increase of 25% year-over-year. Subscription revenue was $503 million, an increase of 26% year-over-year.
  • RPO:RPO, or subscription backlog, was $2.94 billion, an increase of 9% year-over-year. cRPO, which is subscription backlog expected to be recognized over the next 12 months, was $1.70 billion, up 20% compared to the first quarter of fiscal 2023.
  • GAAP Operating Loss: GAAP operating loss was $160 million, or (31)% of total revenue, compared to a GAAP operating loss of $240 million, or (58)% of total revenue, in the first quarter of fiscal 2023.
  • Non-GAAP Operating Income/Loss: Non-GAAP operating income was $37 million, or 7% of total revenue, compared to non-GAAP operating loss of $41 million, or (10)% of total revenue, in the first quarter of fiscal 2023.
  • GAAP Net Loss: GAAP net loss was $119 million, compared to a GAAP net loss of $243 million in the first quarter of fiscal 2023. GAAP net loss per share was $0.74, compared to a GAAP net loss per share of $1.56 in the first quarter of fiscal 2023.
  • Non-GAAP Net Income/Loss: Non-GAAP net income was $38 million, compared to non-GAAP net loss of $43 million in the first quarter of fiscal 2023. Non-GAAP basic and diluted net income per share was $0.24 and $0.22, respectively, compared to non-GAAP basic and diluted net loss per share of $0.27 in the first quarter of fiscal 2023.
  • Cash Flow: Net cash provided by operations was $129 million, or 25% of total revenue, compared to net cash provided by operations of $19 million, or 5% of total revenue, in the first quarter of fiscal 2023. Free cash flow was $124 million, or 24% of total revenue, compared to $11 million, or 3% of total revenue, in the first quarter of fiscal 2023.
  • Cash, cash equivalents, and short-term investments were $2.37 billion at April 30, 2023. During the quarter, the company repurchased $366 million principal amount of the convertible senior notes due in 2025, resulting in a gain on early extinguishment of debt of $31 million.

The section titled “Non-GAAP Financial Measures” below contains a description of the non-GAAP financial measures, and reconciliations between GAAP and non-GAAP information are contained in the tables below.

Financial Outlook:

For the second quarter of fiscal 2024, the Company expects:

  • Total revenue of $533 million to $535 million, representing a growth rate of 18% year-over-year;

  • Current RPO of $1.71 billion to $1.72 billion, representing a growth rate of 14% to 15% year-over-year;

  • Non-GAAP operating income of $36 million to $38 million; and

  • Non-GAAP diluted net income per share of $0.21 to $0.22, assuming diluted weighted-average shares outstanding of approximately 180 million and a non-GAAP tax rate of 26%.

For the full year fiscal 2024, the Company now expects:

  • Total revenue of $2.175 billion to $2.185 billion, representing a growth rate of 17% to 18% year-over-year;

  • Non-GAAP operating income of $161 million to $170 million;

  • Non-GAAP diluted net income per share of $0.88 to $0.93, assuming diluted weighted-average shares outstanding of approximately 180 million and a non-GAAP tax rate of 26%; and

  • Non-GAAP free cash flow margin of approximately 12%.

These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Okta has not reconciled its forward-looking non-GAAP financial measures to their most directly comparable GAAP measures because certain items are out of Okta’s control or cannot be reasonably predicted. Accordingly, reconciliations for forward-looking non-GAAP financial measures are not available without unreasonable effort.

Webcast Information:

Okta will host a live video webcast at 2:00 p.m. Pacific Time on May 31, 2023 to discuss the results and outlook. The news release with the financial results will be accessible from the Company’s website at investor.okta.com prior to the webcast. The live video webcast will be accessible from the Okta investor relations website at investor.okta.com.

Supplemental Financial and Other Information:

Supplemental financial and other information can be accessed through the Company’s investor relations website at investor.okta.com.

Non-GAAP Financial Measures:

This press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) per share, basic and diluted, non-GAAP tax rate, free cash flow and free cash flow margin. Certain of these non-GAAP financial measures exclude stock-based compensation, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities, amortization of debt issuance costs and (gain) loss on early extinguishment of debt. Acquisition and integration-related expenses include transaction costs and other non-recurring incremental costs incurred through the one-year anniversary of the transaction close.

Stock-based compensation is non-cash in nature and is generally fixed at the time the stock-based instrument is granted and amortized over a period of several years. Although stock-based compensation is an important aspect of the compensation of our employees and executives, the expense for the fair value of the stock-based instruments we utilize may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. We believe excluding stock-based compensation provides meaningful supplemental information regarding the long-term performance of our core business and facilitates comparison of our results to those of peer companies.

We also exclude non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities, amortization of debt issuance costs and (gain) loss on early extinguishment of debt from the applicable non-GAAP financial measures because these adjustments are considered by management to be outside of our core operating results.

In addition to these exclusions, starting in fiscal 2024, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate of 26% in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. The non-GAAP tax rate could be subject to change for a variety of reasons, including changes in tax laws and regulations, significant changes in our geographic earnings mix, or other changes to our strategy or business operations. We will periodically reevaluate the projected long-term tax rate, as necessary, for significant events, based on our ongoing analysis of relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.

We define Free cash flow, a non-GAAP financial measure, as net cash provided by operating activities, less cash used for purchases of property and equipment, net of sales proceeds, and capitalized software. Free cash flow margin is calculated as Free cash flow divided by total revenue. We use free cash flow as a measure of financial progress in our business, as it balances operating results, cash management, and capital efficiency. We believe information regarding free cash flow provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to fund ongoing operations, and to fund other capital expenditures. Free cash flow can be volatile and is sensitive to many factors, including changes in working capital and timing of capital expenditures. Working capital at any specific point in time is subject to many variables, including seasonality, the discretionary timing of expense payments, discounts offered by vendors, vendor payment terms, and fluctuations in foreign exchange rates.

We periodically reassess the components of our non-GAAP adjustments for changes in how we evaluate our performance, changes in how we make financial and operational decisions, and consider the use of these measures by our competitors and peers to ensure the adjustments remain relevant and meaningful.

Okta believes that non-GAAP financial information, when taken collectively with GAAP financial measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by the Company’s management about which expenses are excluded or included in determining these non-GAAP financial measures. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP.

Okta encourages investors to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.

Forward-Looking Statements: This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, business strategy and plans, market trends and market size, opportunities and positioning. These forward-looking statements are based on current expectations, estimates, forecasts and projections. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall” and variations of these terms and similar expressions are intended to identify these forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. For example, the market for our products may develop more slowly than expected or than it has in the past; there may be significant fluctuations in our results of operations and cash flows related to our revenue recognition or otherwise; we may not achieve expected synergies and efficiencies of operations between Okta and Auth0, and we may not be able to successfully integrate the companies; global economic conditions could worsen; a network or data security incident that allows unauthorized access to our network or data or our customers’ data could damage our reputation and cause us to incur significant costs; we could experience interruptions or performance problems associated with our technology, including a service outage; and we may not be able to pay off our convertible senior notes when due. Further information on potential factors that could affect our financial results is included in our most recent Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. The forward-looking statements included in this press release represent our views only as of the date of this press release and we assume no obligation and do not intend to update these forward-looking statements.

About Okta

Okta is the World’s Identity Company. As the leading independent Identity partner, we free everyone to safely use any technology—anywhere, on any device or app. The most trusted brands trust Okta to enable secure access, authentication, and automation. With flexibility and neutrality at the core of our Okta Workforce Identity and Customer Identity Clouds, business leaders and developers can focus on innovation and accelerate digital transformation, thanks to customizable solutions and more than 7,000 pre-built integrations. We’re building a world where Identity belongs to you. Learn more at okta.com.

Okta uses its investor.okta.com and okta.com/blog websites as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations and okta.com/blog websites in addition to following our press releases, SEC filings and public conference calls and webcasts.

OKTA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in millions, shares in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

April 30,

 

2023

 

2022

Revenue:

 

 

 

Subscription

$

503

 

 

$

398

 

Professional services and other

 

15

 

 

 

17

 

Total revenue

 

518

 

 

 

415

 

Cost of revenue:

 

 

 

Subscription(1)

 

122

 

 

 

111

 

Professional services and other(1)

 

20

 

 

 

20

 

Total cost of revenue

 

142

 

 

 

131

 

Gross profit

 

376

 

 

 

284

 

Operating expenses:

 

 

 

Research and development(1)

 

163

 

 

 

162

 

Sales and marketing(1)

 

256

 

 

 

252

 

General and administrative(1)

 

110

 

 

 

110

 

Restructuring and other charges

 

7

 

 

 

—

 

Total operating expenses

 

536

 

 

 

524

 

Operating loss

 

(160

)

 

 

(240

)

Interest expense

 

(3

)

 

 

(3

)

Interest income and other, net

 

17

 

 

 

2

 

Gain on early extinguishment of debt

 

31

 

 

 

—

 

Interest and other, net

 

45

 

 

 

(1

)

Loss before provision for income taxes

 

(115

)

 

 

(241

)

Provision for income taxes

 

4

 

 

 

2

 

Net loss

$

(119

)

 

$

(243

)

 

 

 

 

Net loss per share, basic and diluted

$

(0.74

)

 

$

(1.56

)

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

 

161,323

 

 

 

155,875

 

(1) Amounts include stock-based compensation expense as follows:

 

Three Months Ended

April 30,

 

2023

 

2022

Cost of subscription revenue

$

16

 

$

17

Cost of professional services and other

 

4

 

 

4

Research and development

 

68

 

 

70

Sales and marketing

 

38

 

 

39

General and administrative

 

40

 

 

41

Total stock-based compensation expense

$

166

 

$

171

OKTA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions)

(unaudited)

 

 

 

 

 

April 30,

 

January 31,

 

2023

 

2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

125

 

 

$

264

 

Short-term investments

 

2,245

 

 

 

2,316

 

Accounts receivable, net of allowances

 

290

 

 

 

481

 

Deferred commissions

 

95

 

 

 

92

 

Prepaid expenses and other current assets

 

88

 

 

 

76

 

Total current assets

 

2,843

 

 

 

3,229

 

Property and equipment, net

 

54

 

 

 

59

 

Operating lease right-of-use assets

 

114

 

 

 

122

 

Deferred commissions, noncurrent

 

208

 

 

 

210

 

Intangible assets, net

 

227

 

 

 

241

 

Goodwill

 

5,406

 

 

 

5,400

 

Other assets

 

48

 

 

 

46

 

Total assets

$

8,900

 

 

$

9,307

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

10

 

 

$

12

 

Accrued expenses and other current liabilities

 

91

 

 

 

112

 

Accrued compensation

 

88

 

 

 

99

 

Deferred revenue

 

1,173

 

 

 

1,242

 

Total current liabilities

 

1,362

 

 

 

1,465

 

Convertible senior notes, net, noncurrent

 

1,831

 

 

 

2,193

 

Operating lease liabilities, noncurrent

 

134

 

 

 

142

 

Deferred revenue, noncurrent

 

14

 

 

 

18

 

Other liabilities, noncurrent

 

25

 

 

 

23

 

Total liabilities

 

3,366

 

 

 

3,841

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock

 

—

 

 

 

—

 

Class A common stock

 

—

 

 

 

—

 

Class B common stock

 

—

 

 

 

—

 

Additional paid-in capital

 

8,148

 

 

 

7,974

 

Accumulated other comprehensive loss

 

(20

)

 

 

(33

)

Accumulated deficit

 

(2,594

)

 

 

(2,475

)

Total stockholders’ equity

 

5,534

 

 

 

5,466

 

Total liabilities and stockholders’ equity

$

8,900

 

 

$

9,307

 

OKTA, INC.

SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)

(unaudited)

 

 

 

Three Months Ended

April 30,

 

2023

 

2022

Cash flows from operating activities:

 

 

 

Net loss

$

(119

)

 

$

(243

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Stock-based compensation

 

166

 

 

 

171

 

Depreciation, amortization and accretion

 

25

 

 

 

30

 

Amortization of debt issuance costs

 

1

 

 

 

1

 

Amortization of deferred commissions

 

23

 

 

 

19

 

Deferred income taxes

 

1

 

 

 

—

 

Lease impairment charges

 

8

 

 

 

—

 

Gain on early extinguishment of debt

 

(31

)

 

 

—

 

Net gain on strategic investments

 

—

 

 

 

(1

)

Other, net

 

2

 

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

191

 

 

 

139

 

Deferred commissions

 

(25

)

 

 

(22

)

Prepaid expenses and other assets

 

(13

)

 

 

(13

)

Operating lease right-of-use assets

 

6

 

 

 

7

 

Accounts payable

 

(2

)

 

 

15

 

Accrued compensation

 

(11

)

 

 

(60

)

Accrued expenses and other liabilities

 

(9

)

 

 

9

 

Operating lease liabilities

 

(10

)

 

 

(8

)

Deferred revenue

 

(74

)

 

 

(25

)

Net cash provided by operating activities

 

129

 

 

 

19

 

Cash flows from investing activities:

 

 

 

Capitalized software

 

(5

)

 

 

(3

)

Purchases of property and equipment

 

—

 

 

 

(5

)

Purchases of securities available-for-sale and other

 

(431

)

 

 

(306

)

Proceeds from maturities and redemption of securities available-for-sale

 

456

 

 

 

231

 

Proceeds from sales of securities available-for-sale and other

 

61

 

 

 

—

 

Purchases of intangible assets

 

—

 

 

 

(1

)

Payments for business acquisitions, net of cash acquired

 

(22

)

 

 

(4

)

Net cash provided by (used in) investing activities

 

59

 

 

 

(88

)

Cash flows from financing activities:

 

 

 

Payments for repurchases of convertible senior notes

 

(332

)

 

 

—

 

Proceeds from stock option exercises, net of repurchases

 

6

 

 

 

5

 

Net cash provided by (used in) financing activities

 

(326

)

 

 

5

 

Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash

 

1

 

 

 

(5

)

Net decrease in cash, cash equivalents and restricted cash

 

(137

)

 

 

(69

)

Cash, cash equivalents and restricted cash at beginning of period

 

271

 

 

 

273

 

Cash, cash equivalents and restricted cash at end of period

$

134

 

 

$

204

 

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Data

(dollars in millions, shares in thousands, except per share data)

(unaudited)

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define Non-GAAP gross profit and Non-GAAP gross margin as GAAP gross profit and GAAP gross margin, adjusted for stock-based compensation expense included in cost of revenue, amortization of acquired intangibles and acquisition and integration-related expenses.

 

Three Months Ended

April 30,

 

2023

 

2022

Gross profit

$

376

 

 

$

284

 

Add:

 

 

 

Stock-based compensation expense included in cost of revenue

 

20

 

 

 

21

 

Amortization of acquired intangibles

 

12

 

 

 

10

 

Acquisition and integration-related expenses

 

—

 

 

 

1

 

Non-GAAP gross profit

$

408

 

 

$

316

 

Gross margin

 

73

%

 

 

68

%

Non-GAAP gross margin

 

79

%

 

 

76

%

Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin

We define Non-GAAP operating income (loss) and Non-GAAP operating margin as GAAP operating loss and GAAP operating margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses and restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities.

 

Three Months Ended

April 30,

 

2023

 

2022

Operating loss

$

(160

)

 

$

(240

)

Add:

 

 

 

Stock-based compensation expense

 

166

 

 

 

171

 

Non-cash charitable contributions

 

1

 

 

 

1

 

Amortization of acquired intangibles

 

23

 

 

 

20

 

Acquisition and integration-related expenses

 

—

 

 

 

7

 

Restructuring costs

 

7

 

 

 

—

 

Non-GAAP operating income (loss)

$

37

 

 

$

(41

)

Operating margin

 

(31

)%

 

 

(58

)%

Non-GAAP operating margin

 

7

%

 

 

(10

)%

Non-GAAP Net Income (Loss), Non-GAAP Net Margin and Non-GAAP Net Income (Loss) Per Share, Basic and Diluted

We define Non-GAAP net income (loss) and Non-GAAP net margin as GAAP net loss and GAAP net margin, adjusted for stock-based compensation expense, non-cash charitable contributions, amortization of acquired intangibles, acquisition and integration-related expenses, amortization of debt issuance costs, gain on early extinguishment of debt and restructuring costs related to severance and termination benefits and lease impairments in connection with the closing of certain leased facilities. In addition, starting in fiscal 2024, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate of 26% in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods.

We define Non-GAAP net income (loss) per share, basic, as Non-GAAP net income (loss) divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted.

We define Non-GAAP net income (loss) per share, diluted, as Non-GAAP net income (loss) divided by GAAP weighted-average shares used to compute net loss per share, basic and diluted adjusted for the potentially dilutive effect of (i) employee equity incentive plans, excluding the impact of unrecognized stock-based compensation expense, and (ii) convertible senior notes outstanding and related warrants. In addition, Non-GAAP net income (loss) per share, diluted, includes the impact of our note hedge and capped call agreements on convertible senior notes outstanding, as applicable. The note hedge and capped call agreements are intended to offset potential dilution to our Class A common stock upon any conversion or settlement of the convertible senior notes under certain circumstances. Accordingly, we did not record any adjustments for the potential impact of the convertible senior notes outstanding under the if-converted method.

 

Three Months Ended

April 30,

 

2023

 

2022

Net loss

$

(119

)

 

$

(243

)

Add:

 

 

 

Stock-based compensation expense

 

166

 

 

 

171

 

Non-cash charitable contributions

 

1

 

 

 

1

 

Amortization of acquired intangibles

 

23

 

 

 

20

 

Acquisition and integration-related expenses

 

—

 

 

 

7

 

Amortization of debt issuance costs

 

1

 

 

 

1

 

Gain on early extinguishment of debt

 

(31

)

 

 

—

 

Restructuring costs

 

7

 

 

 

—

 

Tax adjustment

 

(10

)

 

 

—

 

Non-GAAP net income (loss)

$

38

 

 

$

(43

)

 

 

 

 

Net margin

 

(23

)%

 

 

(58

)%

Non-GAAP net margin

 

7

%

 

 

(10

)%

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

 

161,323

 

 

 

155,875

 

Non-GAAP weighted-average effect of potentially dilutive securities

 

14,872

 

 

 

—

 

Non-GAAP weighted-average shares used to compute non-GAAP net income (loss) per share, diluted

 

176,195

 

 

 

155,875

 

 

 

 

 

Net loss per share, basic and diluted

$

(0.74

)

 

$

(1.56

)

Non-GAAP net income (loss) per share, basic

$

0.24

 

 

$

(0.27

)

Non-GAAP net income (loss) per share, diluted

$

0.22

 

 

$

(0.27

)

OKTA, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(dollars in millions)

(unaudited)

Free Cash Flow and Free Cash Flow Margin

We define Free cash flow, a non-GAAP financial measure, as net cash provided by operating activities, less cash used for purchases of property and equipment, net of sales proceeds, and capitalized software. Free cash flow margin is calculated as Free cash flow divided by total revenue.

In fiscal 2024, we updated our definition of Free cash flow to include on-premise software purchases in addition to capitalized internal-use software costs within capitalized software.

 

Three Months Ended

April 30,

 

2023

 

2022

Net cash provided by operating activities

$

129

 

 

$

19

 

Less:

 

 

 

Purchases of property and equipment

 

—

 

 

 

(5

)

Capitalized software

 

(5

)

 

 

(3

)

Free cash flow

$

124

 

 

$

11

 

Net cash provided by (used in) investing activities

$

59

 

 

$

(88

)

Net cash provided by (used in) financing activities

$

(326

)

 

$

5

 

Operating cash flow margin

 

25

%

 

 

5

%

Free cash flow margin

 

24

%

 

 

3

%

 

Investor Contact:

Dave Gennarelli

[email protected]

Media Contact:

Kyrk Storer

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Networks Security Data Management Technology Software

MEDIA:

Logo
Logo