NetApp, Inc. (NASDAQ:NTAP) Q1 2020 Earnings Conference Call - Final Transcript

Aug 14, 2019 • 05:30 pm ET

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NetApp, Inc. (NASDAQ:NTAP) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the NetApp First Quarter Fiscal Year 2020 Conference Call. My name is Lateef [Phonetic], and I will be your conference call coordinator for today. [Operator Instructions]

I will now turn the call over to Kris Newton, Vice President, Corporate Communications and Investor Relations. Please proceed, Ms. Newton.

Executive
Kris Newton

Thank you for joining us on our Q1 fiscal year 2020 earnings call. With me today are CEO, George Kurian; and CFO, Ron Pasek. This call is being webcast live and will be available for replay on our website at netapp.com.

During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects such as our guidance for the second quarter and full fiscal year 2020, our expectations regarding future revenue, profitability, shareholder returns and our ability to improve execution gain share and expand our sales capacity without increasing total operating expenses, all of which involve risk and uncertainty. We disclaim any obligation to update our forward-looking statements and projections. Actual results may differ materially for a variety of reasons, including macroeconomic and market conditions, the IT capital spending environment and our ability to expand our total available market, acquire new accounts and new buyers, expand in existing accounts, capitalize on our Data Fabric strategy, improve the consistency of our sales execution and continue our capital allocation strategy.

Please also refer to the documents we file from time-to-time with the SEC and available on our website, specifically, our most recent Form 10-K for fiscal year 2019, including the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections and our current reports on Form 8-K.

During the call, all financial measures presented will be non-GAAP unless otherwise indicated, reconciliations of the GAAP to non-GAAP estimates are posted on our website.

I'll now turn the call over to George.

Executive
George Kurian

Thanks, Kris. Good afternoon, everyone, thank you for joining us. As we discussed on our call on August 1st, while I am clearly disappointed in our weaker-than-expected top line results, the fundamentals of our business are robust and I am confident that we have the right strategy and technologies to address the market transitions to all-flash arrays, private cloud and cloud data services. We have a strong business model as a result of the hard work we conducted to improve gross margin and cost structure over the last several years. This enables us to navigate the ongoing macroeconomic headwinds and make the strategic moves that position us well to return to growth.

We have further analyzed the dynamics of what happened in the first quarter and they confirm that we are seeing a combination of slowdown related to overall macro conditions and company-specific go-to market execution issues. We continue to see pressure on deal sizes, longer sales cycles and deferral of transactions. But as I noted on our earlier call, our underperformance is not across the board. Our APAC, Europe and US public sector geographies were