NetApp on Wednesday reported a fourth-quarter 2014 drop in revenue combined with growth in earnings as the company's business continued to shift away from OEM to NetApp-branded systems, which the company's top executive said is good news for its channel partners.
The storage vendor also said it is now the top vendor of flash storage technology after it shipped about 18 PBs of flash in the fourth quarter.
For its fourth fiscal quarter of 2014, which ended April 25, NetApp reported revenue of $1.6 billion, down nearly 6 percent from the $1.7 billion the company reported for the fourth quarter of 2013.
On a GAAP basis, NetApp earned $197 million, or 59 cents per share, up a healthy 13 percent from the $174 million, or 47 cents a share, it reported last year. Non-GAAP earnings for the quarter reached $284.0 million, or 84 cents a share, up about 12 percent from last year's $283 million, or 69 cents per share.
For all of 2014, NetApp reported revenue of $6.325 billion, down slightly from the $6.332 billion the company reported last year.
NetApp reported full-year 2014 GAAP earnings of $638 million, or $183 per share, up 26 percent from last year's $505 million, or $1.37 a share. On a non-GAAP basis, NetApp reported earnings of $968 million, or $2.78 per share, up 15 percent from the $841 million, or $2.28 per share, it reported a year ago.
Nick Noviello, NetApp's executive vice president of finance and operations, and CFO, said during the company's quarterly financial conference call on Wednesday that NetApp-branded revenue was flat in the fourth quarter and up 4 percent compared to last year, while OEM revenue fell 34 percent in the fourth quarter and 26 percent for all of 2014.
On the distribution front, Arrow accounted for about 24 percent of NetApp's revenue, while Avnet accounted for about 17 percent, Noviello said.
That's good news for the channel, said NetApp Chairman and CEO Tom Georgens.
Georgens told CRN that about 84 percent of NetApp's revenue came from indirect channels, which in NetApp's definition includes its OEM business. NetApp's federal government business is 100 percent channel, he said. "Because the OEM business is down, that means sales through the channel have risen," he said.
NEXT: Partnering With Cisco, Cleaning Up On Flash Storage