NetApp CEO: We protect most of the world’s important data

Apple shares have been up most of the session here right now, up 2 1/3% after it announced it is discontinuing Apple Pay later in the US. Users across the globe will be able to access installment loans offered through credit and debit cards as well as lenders when checking out with Apple Pay. The tech giant had announced it last week's Worldwide Developers Conference 2024 that users would also be able to access loans through third party app Affirm through Apple Pay. We've got Apple as you see about $217.00 in change a firm is up a quarter of a percent to $30.97. Speaking of Apple, from 1995 to 2012, Apple, which was sitting on an Oasis of cash, was a dividend desert. Even as the company innovative like crazy, creating the iMac, the iPod Air, iPhone, iPad, shareholders got no dividend. Love Microsoft, which IPO in 1986, another tech giant that held off on paying a dividend for nearly three decades. But since the AI revolution set tech stocks on fire, tech companies are falling over each other to pay a dividend. In fact, this year Meta and Alphabet issued their first ever dividends, making Amazon and Tesla the only ones in the Magnificent 7 not to offer a payout. But other widely held companies from Salesforce and Booking Holdings not waiting around for Tesla and Amazon to do it, they too launched dividends for the first time this year. And while Net App has had a dividend of some kind since 2013, the American data infrastructure and cloud based solutions company just announced it's boosting its quarterly dividends starting July 24th to $0.52, taking the forward yield to 1.7%. So let's bring in CEO George Curian, who joins me now live in a Fox Business exclusive. Mr. Curian, let's get right to it. You guys have been giving a a dividend way earlier than some of the larger market cap companies. Why? Dividends are one way of returning cash to shareholders. Share buybacks are another. We've had a policy of returning a part of our free cash flow for many years to our shareholders through a balanced combination of dividends and buybacks. And the reason we raised our quarterly dividend by two cents a share was the confidence we have in our cash generation capabilities moving forward. I look at your company and you've got about a $26 billion market cap, which is dwarfed by Meta. Meta just started giving its dividend. Do you see this as a trend and what do you think is really behind it? I think it's a way for shareholders to participate in the cash generation possibilities of a business. And I think that different leaders have different positions on it. In our case, we've had many years of record margins. This is the third year of record operating margins and we just finished a year where we generated $1.7 billion of cash flow from operations and we thought it would be a good thing for us to return some of that through to shareholders through dividends. Well, I'm sure shareholders really like that. I find it so interesting you guys are at 1.7%. NVIDIA is giving a dividend of point O3 percent. Let's talk about the business and how it's doing. Net app has a more supportive infrastructure for AI than a lot of other cloud companies. What are you doing to build upon that? We see that AI is powered by data and data runs on net app. We hold and protect most of the world's most important unstructured data, meaning documents and videos and text of various types that's used to power AI applications. And what we're doing is enabling our customers to easily use generative AI tools like large language models with their data securely in a high performance way and in a responsible way. You've been partnering with NVIDIA on AI data for what, more than five years? What's the next step in that partnership? We started with NVIDIA many years ago, well before the advent of generative AI, where customers saw bringing NVIDIA as, you know, kind of processor technology with the data management capabilities that we bring enabled predictive analytics, right, predictive AI so that you could make better decisions using your data. That partnership has now brought into Encompass not only NVIDIA and net app for large language models and generative AI, but also some of our mutual partners like Cisco and Lenovo. Well, the business is doing well quarter to date. You're up 20% year over year. I believe you're up something like 70%. So it's not just oh, hey, buy us for the dividend. I mean, that's dangerous, is it not, when people just look at it because dividends can come, but they also can go away in times of trouble Where that can be suspended, like Disney suspended its dividend during the pandemic, right? Listen, we have real confidence in our business. I think we would not take the step to increase our dividend if we did not see that there would be substantial cash generation growth going forward. And so our belief is that the dividends are the first call on capital to returns to shareholders. And then we've typically reduced our share count by about 1:00 to 2%. We recently concluded our investor conference successfully in New York and we shared with our shareholders this kind of disciplined approach to returning cash to shareholders. Well, George, I'm sure shareholders like it. Thank you very much. It's good to see you. Thank you, Liz. Thanks for having me. Good to see you.

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