ITASCA, Ill. and SAN JOSE, Calif. - In a strategic move to bolster its cloud financial management offerings, Flexera has announced the acquisition of the Spot by NetApp (NASDAQ:NTAP) FinOps business from NetApp (NASDAQ: NTAP), a prominent player in intelligent data infrastructure with a market capitalization of $23.72 billion. This acquisition aims to enhance Flexera's capabilities in managing multi-cloud cost and FinOps needs, expanding its services to include hybrid cloud, SaaS applications, and containers. According to InvestingPro analysis, NetApp maintains a strong financial position with a 71.1% gross profit margin and has demonstrated impressive market performance with a 37% return over the past year.
The integration of Spot's AI and ML-driven technology with Flexera's expertise is expected to provide a comprehensive FinOps solution that promotes financial accountability and operational efficiency in cloud environments. The deal includes advanced features like Kubernetes cost management and commitment management, adding to Flexera's FinOps portfolio. NetApp's strong market position is reflected in its consistent dividend payments, maintained for 13 consecutive years, demonstrating long-term stability. For detailed insights into NetApp's financial health and growth prospects, investors can access comprehensive analysis through InvestingPro, which offers exclusive ProTips and detailed financial metrics.
Jim Ryan, President and CEO of Flexera, emphasized the growing demand for technology spend and risk management across different IT ecosystems, citing the acquisition as a significant step in Flexera's strategic plan. He pointed out the challenges organizations face in understanding their cloud expenditures and technology service usage.
Flexera's history of developing its FinOps and cloud cost management portfolio through acquisitions and innovation dates back to its acquisition of RightScale in 2018. The company has recently been recognized as a leader in both the 2024 Gartner (NYSE:IT) Magic Quadrant for Cloud Financial Management Tools and The Forrester Wave for Cloud Cost Management and Optimization in Q3 2024.
Haiyan Song, Executive Vice President of Intelligent Operations Services at NetApp, described the transaction as beneficial for both the Spot business and NetApp's focus on intelligent data infrastructure and growth objectives. She expressed confidence in Flexera providing an environment for the Spot business to thrive and scale.
The acquisition is also set to expand Flexera's ecosystem of FinOps Managed Service Providers (MSPs), serving the evolving needs of customers and welcoming new DevOps users into its customer community.
The transaction is pending customary closing conditions and regulatory approvals, with the financial details remaining undisclosed. The acquisition is based on a press release statement, and more information on Flexera and its services can be found on its website. NetApp's stock currently trades near its InvestingPro Fair Value, with 18 analysts recently revising their earnings expectations upward for the upcoming period, suggesting positive momentum in the company's core business.
In other recent news, NetApp has reported a 6% year-over-year increase in revenue, reaching $1.66 billion in Q2 of fiscal year 2025. The company also raised its full-year revenue outlook to between $6.54 and $6.74 billion, with earnings per share expected to increase by 13% to fall between $7.20 and $7.40. JPMorgan has upgraded NetApp's stock from Neutral to Overweight, increasing the price target to $160 due to an anticipated acceleration in revenue growth. Both TD Cowen and Citi have expressed confidence in NetApp's future performance, with TD Cowen maintaining a Buy rating and Citi maintaining a Neutral rating but increasing the share price target. Other recent developments include a record operating margin for the quarter, a 19% increase in annualized revenue from all-flash storage arrays, and a 9% growth in public cloud revenue. NetApp's partnerships with firms like Google (NASDAQ:GOOGL) Cloud have expanded, and their Keystone storage-as-a-service offering saw approximately 55% growth year-over-year. These are among the recent developments that highlight the company's positive momentum.
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