NetApp shares surge as fiscal Q2 tops expectations led by software, cloud; Q3 forecast also stronger

NetApp emphasized a tripling of its public cloud services revenue annualized run rate in the quarter.

Shares of storage technology pioneer NetApp jumped nearly 5% in late trading after the company this afternoon reported fiscal Q2 revenue and profit that topped Wall Street's expectations, and forecast the current quarter higher as well. 

CEO George Kurian called the results "strong," and a sign the company has been "successfully executing against our plan to scale our cloud business while growing in the storage market."

Kurian said the company is a "primary beneficiary" of digital transformation activities of its customers. 

Growth in revenue was lead by the company's software offering, which surged 14%, year over year, and 34%, quarter over quarter, to $417 million, almost a third of revenue. 

Hardware revenue declined 18%, year over year. 

NetApp said its revenue from public cloud services, on an annualized basis, reached $216 million in the quarter, triple the rate a year earlier. 

More details on the quarter are available in a separate seet of financial data.

"I am confident in our ability to drive long-term growth, extend our hybrid cloud leadership, and deliver value for customers, partners, and shareholders," said CEO Kurian.

For the three months ended in October, NetApp reported revenue of $1.42 billion, up 3.3%, year over year, and earnings per share of $1.05, excluding some costs.

Analysts had been modeling $1.32 billion in revenue and 73 cents per share in profit. 

For the current quarter, the company forecast revenue in a range of $1.34 billion to $1.49 billion, and EPS in a range of 94 cents to $1.02, excluding some costs. That is better than the Street consensus for $1.37 billion and 91 cents per share. 

Shares of NetApp initially jumped as high as $58.59 in late trading, an 8% gain, and are currently up about 5%, at $56.97.