What Will NetApp’s Revenue And EBITDA Look Like In 5 Years?

March 18th, 2016 by Trefis Team
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NetApp

We expect NetApp’s (NASDAQ:NTAP) top line to grow at a slow pace (annual rate of less than 1%) over the next few years, as low demand for storage products is expected to continue for a few years before revenues start picking up. On the other hand, a higher proportion of software maintenance and services revenues is likely to help expand margins. Additionally, NetApp’s management announced cost-cutting initiatives starting this year which include reducing the workforce by 1,500 employees by 2017, which should lead to lower SG&A expenses. As a result, we expect NetApp’s EBITDA to grow at a significantly faster rate (around 5% annually). Most of the top line growth is likely to come from NetApp’s software entitlements and maintenance revenue stream, as evidenced from the table below.

Bridg_NTAP

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for NetApp
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