NetApp put its foot on the gas pedal in its fiscal third quarter with healthy revenue and income growth that helped it catch up a little bit with storage rival EMC.
A big part of that growth was fueled by a substantial jump in NetApp's indirect sales, which grew noticeably faster than the company's overall revenue.
For its third quarter of fiscal year 2011, which ended January 28, NetApp on Wednesday reported revenue of $1.3 billion, up about 25 percent compared to the $1.0 billion the company reported for the third fiscal quarter of 2010.
NetApp also reported income of $172 million, or 42 cents per share. That was up nearly 60 percent from the $108 million, or 30 cents per share, it reported for the same period a year ago.
That growth was enough to help NetApp close in slightly on its much larger storage rival, EMC, which last month reported fourth quarter 2010 revenue growth of 19 percent over the previous year.
Product revenue for NetApp hit $818 million in its third fiscal quarter, up 32 percent over last year, while software and maintenance revenue rose 8 percent to $184 million and service revenue grew 20 percent to reach $266 million.
The Americas were still the biggest market for NetApp, accounting for 54 percent of total revenue, or $690 million, up 19 percent compared to last year.
Indirect channels accounted for about 74 percent of NetApp's total revenue, compared to 70 percent a year ago, the company reported. About 18 percent of NetApp revenue came from distributor Arrow, while 12 percent came from Avnet.
The total number of NetApp storage systems shipped in the third fiscal quarter grew 23 percent compared to last year. That included a 15 percent increase in shipments of large systems, a 49 percent increase in medium-sized systems, and a 12 percent increase in small-sized shipments. NetApp estimates it shipped a total capacity of 565 petabytes, up 73 percent compared to last year.
Looking forward, NetApp expects to see growth in its business. The company said it expects fourth fiscal quarter revenue of about $1.4 billion, or between 15 percent and 20 percent higher than the fourth fiscal quarter of 2010.
The company also expects earnings per share for its fourth fiscal quarter to be between 38 cents and 42 cents per share, about the same as the 40 cents per share the company reported for the same period last year.
“NetApp demonstrated momentum in the market again this quarter, with product revenue growth of 32% year over year, strong gross margins, and continued market share gains. As customers move toward the next generation IT infrastructure, NetApp’s innovation leadership is enabling compelling business outcomes for our customers and propelling our rapid growth,” said Tom Georgens, NetApp president and CEO, in a statement.
