NetApp hit$ a home run

February 18, 2010 – Maybe it’s a sign that the IT spending turnaround is ramping up, and maybe it’s just an indication of NetApp executing well, but the company wowed Wall Street yesterday with the results of its fiscal third quarter, which ended January 29.

Highlights: GAAP revenues for the quarter were $1.01 billion, topping both internal and external expectations. That compares to $746 million in the same period last year.

GAAP net income for the fiscal third quarter 2010 was $108 million, compared to a net loss of $82 million in Q3 of the prior year. Non-GAAP net income in the most recent quarter was $144 million.

Gross margins were estimated at 63.2%.

And the surge may carry into the fiscal fourth quarter: NetApp execs estimated revenues for Q4 at $1.07 billion to $1.10 billion.

In his prepared statements, NetApp president and CEO Tom Georgens gushed: “The NetApp team demonstrated remarkable execution this quarter. With record revenues, record profits and record EPS, the company produced double-digit year over year revenue growth and our operations team shipped a record number of systems, despite persistent supply constraints.”

And here’s CFO Steve Gomo: “NetApp significantly outpaced both the market and the competition and we are forecasting Q4 sequential growth at about 6% to 9%. These sequential growth numbers translate into about 22% to 25% year over year organic growth in revenue, a figure that our competitors are nowhere near achieving in their storage businesses.”

The company played up its partnership announcements in the fiscal third quarter, including those with Cisco and VMware (see “NetApp, Cisco, VMware collaborate on the cloud” ), Microsoft, and Fujitsu.

Revenues were strong across most of the company’s product lines, but execs emphasized the company’s performance in the virtualization space – both in the virtual server market and the performance of the company’s V-Series virtualization platforms. In addition, NetApp has high hopes for the cloud computing arena, where it is targeting big providers such as AT&T.

NetApp is expected to hire around 200 people in the next quarter. And that won’t be difficult: Last month, NetApp was ranked #7 in Fortune magazine’s “100 Best Companies to Work For” list for 2010.