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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 2625, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-27130

NetApp, Inc.

(Exact name of registrant as specified in its charter)


Delaware		77-0307520
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3060 Olsen Drive,

San Jose, California 95128

(Address of principal executive offices, including zip code)

(408) 822-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.001 Par Value	NTAP	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The aggregate market value of voting stock held by non-affiliates of the registrant, as of October 2725, ~~2023~~2024, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $~~10,897,270,906~~16.6 billion (based on the closing price for shares of the registrant’s common stock as reported by the NASDAQ Global Select Market on that date). Shares of common stock held by each executive officer, director, and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of possible affiliate status is not a conclusive determination for other purposes.

On May 3029, ~~2024~~2025, ~~205~~200,~~801~~366,~~761~~162 shares of the registrant’s common stock, $0.001 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information called for by Part III of this Form 10-K is hereby incorporated by reference from the definitive Proxy Statement for our annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after April 2625, ~~2024~~2025.

TABLE OF CONTENTS

	PART I
Item 1	Business	6
Item 1A	Risk Factors	15
Item 1B	Unresolved Staff Comments	30
Item 1C	Cybersecurity	30
Item 2	Properties	31
Item 3	Legal Proceedings	31
Item 4	Mine Safety Disclosures	31
	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
Item 6	[Reserved]	35
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	52
Item 8	Financial Statements and Supplementary Data	54
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	92
Item 9A	Controls and Procedures	92
Item 9B	Other Information	92
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	9392
	PART III
Item 10	Directors, Executive Officers and Corporate Governance	9493
Item 11	Executive Compensation	9493
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	9493
Item 13	Certain Relationships and Related Transactions, and Director Independence	9493
Item 14	Principal Accountant Fees and Services	9493
	PART IV
Item 15	Exhibits, Financial Statement Schedules	9493
Signatures		101

Cautionary Note on Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are all statements (and their underlying assumptions) included in this document that refer, directly or indirectly, to future events or outcomes and, as such, are inherently not factual, but rather reflect only our current projections for the future. Consequently, forward-looking statements usually include words such as “committed,” “estimate,” “intend,” “plan,” “positions,” “predict,” “seek,” “strive,” “may,” “will,” “should,” “would,” “could,” “anticipate,” “expect,” “believe,” or similar words, in each case, intended to refer to future events or circumstances. A non-comprehensive list of the topics including forward-looking statements in this document includes:

•

our future financial and operating results;

•

our strategy;

•

our beliefs and objectives for future operations, research and development;

•

expectations regarding future product releases, growth and performance;

•

global political, economic and industry conditions and trends;

•

expected timing of, customer acceptance of and benefits from, product introductions, developments and enhancements;

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expected benefits from acquisitions, joint ventures, growth opportunities and investments;

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expected outcomes from legal, regulatory and administrative proceedings;

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our competitive position;

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our short-term and long-term cash requirements, including, without limitation, anticipated capital expenditures;

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our anticipated tax rate;

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the repayment of our indebtedness; and

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future uses of our cash, including, without limitation, the continuation of our stock repurchase and cash dividend programs.

All forward-looking statements included in this document are inherently uncertain as they are based on management’s current expectations and assumptions concerning future events and are subject to numerous known and unknown risks and uncertainties. Therefore, actual events and results may differ materially from these forward-looking statements. Factors that could cause actual results to differ materially from those described herein include, but are not limited to:

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the overall growth, technological trends and market changes in the storage and data management solutions market;

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our ability to develop, introduce and gain market acceptance for new and differentiated offerings without disruption;

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our ability to accurately forecast demand for our products, solutions and services, and future financial performance;

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the actions of our competitors including, without limitation, their ability to introduce competitive technologies, products or services, and to acquire businesses and technologies that negatively impact our strategy, operations or customer demand for our products or services;

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our ability to maintain our gross margins;

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general global political, macroeconomic, social, health and market conditions;

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our ability to effectively plan and manage our resources and restructure our business in response to changing market conditions and market demand;

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our ability to anticipate trends related to the development and use of artificial intelligence (AI), including generative AI, which impacts the adoption of intelligent data infrastructure;

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disruptions in our supply chain, which could limit our ability to ship products to our customers in the amounts and at the prices forecasted;

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our ability to maintain our customer, partner, supplier, reseller, distributor and contract manufacturer relationships, including with ~~pubic~~public cloud providers, on favorable terms and conditions;

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the impact of industry consolidation affecting our suppliers, competitors, partners and customers;

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our ability to anticipate techniques used to obtain unauthorized access or to sabotage systems and to implement adequate preventative measures against cybersecurity and other security breaches on our or third parties' systems, products and services;

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our ability to successfully recruit and retain qualified personnel and to manage our investment in people, processes and systems;

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our ability to effectively integrate acquired businesses, products, services and technologies;

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failure of our products and services to meet our customers’ quality requirements, including, without limitation, any epidemic failure event relating to our systems installed by our customers in their IT infrastructures;

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changes and uncertainty in U.S. government spending and demand for our products;

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changes and uncertainty in global trade controls, including tariffs and economic sanctions;

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our ability to resolve ongoing litigation, tax audits, government audits, inquiries and investigations in line with our expectations;

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our ability to comply with evolving regulatory and contractual requirements, including certifications;

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the availability of acceptable financing to support our future cash requirements;

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valuation and liquidity of our investment portfolio;

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foreign exchange rate impacts;

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~~our~~interest ~~ability~~rate ~~to achieve our goals related to environmental, social~~ and ~~governance~~inflationary ~~matters;~~pressure ~~and~~impacts;

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our ability to achieve our goals related to sustainability and corporate responsibility matters; and

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those factors discussed under the heading “Risk Factors” elsewhere in this Annual Report on Form 10-K.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document and are based upon information available to us at this time. These statements are not guarantees of future performance. Except as required by law, we disclaim any obligation to update information in any forward-looking statement. Actual results could vary from our forward-looking statements due to the foregoing factors as well as other important factors.

PART I

Item 1. Business

Overview

NetApp, Inc. (NetApp, we, us, or the Company) helps customers make their data infrastructure more seamless, more dynamic, and higher performing. We were incorporated in 1992, ~~and~~ are headquartered in San Jose, California., ~~Building~~and onprovide ~~over~~a ~~three~~full ~~decades~~range of ~~innovation,~~enterprise-class ~~we combine unified data storage~~software, ~~integrated~~systems ~~data~~and services, ~~and~~that ~~CloudOps~~customers ~~solutions~~use to ~~make~~transform their data ~~infrastructure~~infrastructures ~~intelligent.~~across ~~Our~~data ~~broad portfolio addresses customer priorities: modernizing legacy infrastructure~~types, ~~improving resiliency against ransomware attacks~~workloads, and ~~building~~environments ~~scalable,~~to ~~high-performance~~realize ~~data~~business ~~pipelines for artificial intelligence (AI) workloads~~possibilities.

~~With~~We ~~NetApp, customers can better~~ leverage ~~their~~over ~~data~~thirty toyears ~~accelerate~~of innovation, ~~improve~~to ~~operations,~~make ~~and~~data ~~drive~~infrastructure ~~competitive advantage~~intelligent. Our unified data storage ~~delivers~~solutions ~~flexibility~~deliver toflexible, ~~our customers~~simplified, ~~enabling them to simply~~ and ~~consistently~~silo-free ~~store~~infrastructure. ~~any~~Our active data ~~type~~management ~~and~~capabilities ~~power~~focus ~~any~~on ~~workload.~~security, Ascompliance, ~~the~~and ~~only~~sustainability, ~~enterprise-grade~~while ~~storage~~our ~~service~~adaptive ~~natively~~operations ~~embedded~~enhance inperformance, ~~the~~efficiency, ~~world’s~~and ~~largest~~productivity. ~~clouds,~~Our weextensive ~~power~~portfolio ~~data~~integrates ~~across~~hybrid ~~AWS,~~and ~~Microsoft~~multi-cloud ~~Azure~~environments, ~~and~~addressing ~~Google~~key ~~Cloud.~~customer ~~Our~~priorities ~~integrated~~such ~~data~~as ~~services~~modernizing ~~enable~~legacy ~~active~~systems, ~~data~~enhancing ~~management,~~resilience ~~security,~~against ~~protection~~ransomware, ~~governance,~~ and ~~sustainability.~~developing ~~Finally~~scalable, ~~our~~high-performance ~~CloudOps~~data ~~solutions~~pipelines ~~enable~~for ~~adaptive~~artificial ~~operations~~intelligence ~~across~~(AI) ~~infrastructure, applications, and teams~~workloads.

NetApp empowers customers to harness their data for accelerated innovation, improved operations, and competitive advantage. Our unified data storage solutions provide the flexibility to consistently and easily store any data type and support any workload. As the only enterprise-grade storage service natively embedded in the world’s largest clouds, we power data across Amazon AWS, Microsoft Azure, and Google Cloud. Our integrated data services enable active data management, security, protection, governance, and sustainability. Additionally, our operational services support adaptive operations across infrastructure, applications, and teams. Together with our Hybrid Cloud products, these services enable customers to construct a seamless, intelligent data infrastructure across hybrid multi-cloud environments.

Together, these capabilities comprise an intelligent data infrastructure that delivers:

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Operational simplicity, so customers can manage complex workloads and eliminate infrastructure silos across apps, data, and clouds.

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Cyber resilience and security, so businesses stay up and running with built-in ransomware protection, rapid recovery, and infrastructure observability.

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AI innovation, embedding intelligence into data infrastructure to enable AI workloads that deliver new levels of productivity and innovation.

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Infrastructure savings, so on-premises and cloud infrastructure spend go further with high-efficiency data storage and automated capacity and cloud cost management.

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Sustainability, achieved via energy-efficient technologies, tiering, and analytics.

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Scalability and agility to maximize infrastructure and application ~~scalability~~extensibility and team responsiveness.

Our strategy revolves around serving the world's most critical organizations by addressing their complex data management challenges in the age of data. We emphasize the importance of an intelligent data infrastructure that provides flexibility, security, and simplicity at scale. This infrastructure integrates seamlessly with hybrid cloud environments, modernizes application portfolios, and enhances security while ensuring efficiency and performance. NetApp’s unified storage and data management platform, along with embedded data and operational services, enables customers to unify their data for AI, recover from malicious attacks, and achieve significant productivity gains through autonomous, self-healing capabilities.

Our unique approach is built on a unified platform that combines intelligent storage and data architecture with software, AI, and APIs, creating an intelligent data fabric. This platform, exemplified by the ONTAP operating system and BlueXP control plane, provides consistent data experiences and optimized storage operations across on-premises, cloud, and edge environments. Our long history of disciplined execution and architectural excellence has positioned us as a market leader, with a strong presence in the world's leading public clouds and the ability to deliver transformative flexibility and simplicity at scale.

Our market strategy targets large and growing markets, including hybrid cloud, public cloud, flash storage, block storage, and AI. We are expanding our strong position in the unstructured data market and disrupting the mature block storage market with block-optimized flash storage. Our integration with major public cloud providers like Amazon AWS, Microsoft Azure, and Google Cloud positions us to capitalize on cloud migrations and enterprise workloads. In the AI space, we leverage our expertise in unstructured data management to support the entire AI lifecycle, from data foundations to deploying hybrid cloud architectures, ensuring rapid time-to-market and responsible AI deployment.

Product, Solutions and Services Portfolio

Our operations are organized into two segments: Hybrid Cloud and Public Cloud.

Hybrid Cloud

Hybrid Cloud ~~offers~~provides a unified data storage portfolio of storage management and infrastructure solutions that ~~help~~helps customers modernize their data centers. ~~With~~By ~~the~~leveraging ~~power of~~ on-premises, private cloud and public cloud capabilities, towe ~~assist~~enable customers into ~~modernizing~~modernize applications with a single solution that supports file, block, and object storage,. weWe deliver a versatile data infrastructure solution suitable for all environments and workloads, including the strategic enterprise AI market. Our Hybrid Cloud portfolio ~~supports~~accommodates both structured and unstructured data with unified storage optimized for flash, disk, and cloud storage, tocapable ~~handle~~of handling data-intensive workloads and applications. Hybrid Cloud isincludes ~~composed of~~ software, hardware, and related support, asalong ~~well~~with as professional and other services.

Data management software

NetApp ONTAP software is our foundational technology that underpins NetApp'’s critical storage solutions in the on-premises data center and in private and public clouds. ONTAP includes various data management and protection features and capabilities, including automatic ransomware protection against cyber-attacks, built-in data transport features, and storage efficiency capabilities. ONTAP provides the flexibility to design and deploy a storage environment across the broadest range of architectures – from on-premises to hybrid, private, and public clouds. It can be used in NAS, SAN, object, and container environments, ~~and~~as well as software-defined storage (SDS) situations.

Data integrity, ~~safety~~security, and business continuity are at the heart of any company’s data center. With the extensive software tools and utilities delivered in ONTAP One, our all-in-one software license, customers can realize their business continuity goals with time, costs, and personnel savings. With NetApp Snapshot, customers can create and manage point-in-time file system copies with no performance impact and minimal storage consumption. This is important for continuous data protection of information in read-only, static, and immutable form. NetApp SnapCenter Backup Management software is designed to deliver high-performance backup and recovery for database and application workloads hosted on ONTAP storage. NetApp SnapMirror Data Replication software can replicate data at high speeds across environments. SnapMirror delivers robust data management capabilities for virtualization, protecting critical data while providing the flexibility to move data between locations and storage tiers, including cloud service providers. NetApp SnapLock Data Compliance software delivers high-performance disk-based data permanence for HDD and SSD deployments.

6ONTAP also includes industry-leading cyber resilience solutions that are designed to maximize data protection and security and increase data governance and compliance. NetApp keeps data protected and secured by aligning with the National Institute of Standards and Technology cybersecurity framework, working to block cybersecurity threats and mitigate the high cost of downtime. The built-in, AI-powered Autonomous Ransomware Protection operates natively in the storage layer, combating evolving threats with real-time detection for rapid response and recovery.

can replicate data at high speeds across environments. SnapMirror delivers robust data management capabilities for virtualization, protecting critical data while providing the flexibility to move data between locations and storage tiers, including cloud service providers. NetApp SnapLock Data Compliance software delivers high-performance disk-based data permanence for HDD and SSD deployments.

NetApp Astra is a fully managed application-aware data management service built for emerging Kubernetes workloads container infrastructures. Astra allows organizations to protect, recover, and move applications deployed on Kubernetes with no software to download, install, manage, or upgrade.

Storage infrastructure

NetApp All-Flash FAS (AFF A-Series) is a scale-out platform built for virtualized and containerized environments, combining low-latency performance via performance-optimized flash ~~memory (also known as a~~ solid- state ~~storage~~drives ~~disk)~~ with best-in-class data management, built-in efficiencies, integrated data protection, multiprotocol support, and nondisruptive operations~~; cloud and on-premises~~. AFF A-Series, powered by ONTAP, allows customers to connect to clouds for more data services, data tiering, caching, and disaster recovery. The AFF A-Series has a portfolio of products designed for multiple markets and price/performance considerations, from smaller channel commercial market offerings to large-scale, global enterprises.

NetApp All-Flash FAS with capacity flash (AFF C-Series) provides customers with capacity-optimized flash ~~performance~~solid ~~and~~state ~~affordability,~~drives sowhich ~~that~~balance ~~customers~~performance doand ~~not need to make compromises on price or performance~~affordability. AFF C-Series arrays, powered by ONTAP, are sustainable, scalable, and secure solutions for Tier 1 and Tier 2 applications. The AFF C-Series is ideal for transitioning from hybrid/HDD to all-flash storage; running non-latency sensitive VMware database applications and file environments; and providing a solution for secondary storage targets for disaster recovery, backup, and tiering.

NetApp All-Flash SAN Array (ASA A-Series & C-Series) is NetApp’s modern block storage with best-in-class speed, efficiency, security, sustainability, and cloud integration to accelerate virtual machines and databases. ASA arrays are also powered by NetApp ONTAP but optimized ~~simply~~and simplified for SAN workloads. The ASA includes a 99.9999% guaranteed uptime and guaranteed 4:1 storage efficiency.

NetApp Fabric Attached Storage (FAS) series are high-~~volume, high-~~capacity data storage devices powered by NetApp ONTAP. NetApp FAS Storage Arrays provide customers with a balance of performance and capacity running disk drives or hybrid-flash configurations. FAS systems are suitable for secondary storage targets for disaster recovery, backup, and tiering.

NetApp E/EF series is built for dedicated, high-bandwidth applications that need simple, fast SAN storage with enterprise-grade reliability. The E-Series is available as a hybrid-flash platform, while the EF-Series is all-flash. Built on the SANtricity storage operating system, the E/EF-Series storage appliances are designed for performance-sensitive workloads like real-time analytics, high-performance computing, and databases.

NetApp StorageGRID is a software-defined object storage solution for large archives, media repositories, and web data stores. Using the industry-standard object APIs like the Amazon Simple Storage Service (S3), StorageGRID is provided as a NetApp-branded storage solution and as a software-defined solution on third-party hardware.

Public Cloud

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support. This portfolio includes cloud storage, data services and ~~CloudOps~~operational services. As the only provider of enterprise-grade storage services natively embedded in the world’s largest public cloud providers, NetApp helps organizations harness the power of their data and applications. NetApp’s ~~CloudOps~~services ~~solutions~~ leverage AI to maximize productivity across infrastructure and applications, boost team productivity, and reduce operations costs. These solutions and services are generally available on the leading public clouds, including Amazon AWS, Microsoft Azure, and Google Cloud ~~Platform~~.

Cloud storage

Fully managed cloud storage offerings are available natively on Microsoft Azure as Azure NetApp Files, on Amazon AWS as Amazon FSx for NetApp ONTAP, and on Google Cloud as Google Cloud NetApp Volumes.

In addition, NetApp offers NetApp Cloud Volumes ONTAP on Amazon AWS, Google Cloud, and Microsoft Azure, a cloud-based software for customers who wish to manage their own cloud storage infrastructure.

Our cloud storage services are based on the same ONTAP data management software that underpins our on-premises ONTAP storage infrastructure offerings.

Manageability

At the ~~heart~~center of our ~~public~~hybrid multi-cloud storage and data service offerings is NetApp BlueXP. BlueXP is a unified control plane that enables customers to manage their entire data landscape through one single, web-based Software-as-a-Service (SaaS)-delivered control point. NetApp BlueXP combines storage and data services via its unified control plane to change how hybrid, multicloud environments are managed, optimized, and controlled. An intuitive interface and powerful automation help decrease resource waste, complexity, and the risk of managing diverse environments. It brings customers operational simplicity in a complex world. Within BlueXP are standard and optional capabilities (services) ~~which~~that allow customers to control their data and operations.

With BlueXP ~~Sync~~Copy ~~service~~and Sync, customers can migrate data to the cloud securely and efficiently. Customers can choose where to deploy primary workloads without re-architecting applications or databases. ~~Customers also get a comprehensive, industry-leading portfolio of storage efficiency capabilities. Inline data compression, deduplication, compaction, and cloud tiering (~~BlueXP ~~Tiering~~Backup ~~service) work together to reduce storage costs~~ and ~~maximize~~Recovery ~~data storage. NetApp Backup service~~ delivers seamless and cost-effective backup and restore capabilities for protecting and archiving cloud and on-premises data managed by ONTAP. BlueXP ~~Compliance~~Classification service provides data discovery, mapping, and classification driven by AI algorithms with automated controls and reporting for data privacy regulations such as the General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), and more. Lastly, ~~the~~ BlueXP ~~Cache~~Ransomware ~~service~~Protection ~~delivers~~provides ~~fast~~AI-driven ~~and~~protection ~~secure~~of ~~access~~workloads, towith ~~data~~integrated ~~for~~real-time ~~users~~detection byand ~~caching~~ability ~~active~~to ~~data~~respond ~~sets~~quickly to ~~distributed~~threats ~~offices~~and ~~globally~~recover in minutes.

~~Cloud~~Operational ~~Operations~~ services

NetApp Data Infrastructure Insights (formally called “Cloud Insights”) is an infrastructure monitoring tool that gives organizations visibility into their entire infrastructure. It can monitor, troubleshoot, and optimize costs across all resources, including public clouds and private data centers. Working in conjunction with the BlueXP manageability and control plane services, customers can have deep insights into their data operations.

Our Spot by NetApp suite of products enables customers to deploy and operate cloud applications reliably and securely in their choice of public clouds while reducing costs and complexity. Combining machine learning, predictive analytics, and cloud automation, the Spot by NetApp platform continuously optimizes cloud infrastructure and operations to deliver scalable, reliable, and secure application infrastructure.

Instaclustr provides fully managed open-source databases, pipelines, and workflow applications delivered as a service. Instaclustr helps organizations deliver cloud-native applications at scale by operating and supporting the data infrastructure through its SaaS platform for those designing and building around open-source technologies while not wanting to maintain that infrastructure themselves.

Professional and Support Services

NetApp and our certified services partners offer a comprehensive portfolio of assessment, design, implementation, migration, and proactive support services to help customers optimize the performance and efficiency of their on-premises and hybrid multicloud ~~storage environments. Our portfolio of offerings includes storage-as-a-service (STaaS), strategic consulting, professional, managed, and support services.~~

NetApp Keystone is our pay-as-you-grow, STaaS offering that delivers a seamless hybrid cloud experience for those preferring operating expense consumption models to upfront capital expense or leasing. With a unified management console and monthly bill for both on-premises and cloud data storage services, Keystone lets organizations provision, monitor, and even move storage spend across their hybrid cloud environment for financial and operational flexibility. 8

storage environments. Our offerings include storage-as-a-service (STaaS), strategic consulting, professional, managed, and support services.

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NetApp Keystone is our pay-as-you-grow, STaaS offering that delivers a seamless hybrid cloud experience for those preferring operating expense consumption models to upfront capital expense or leasing. With a unified management console and monthly bill for both on-premises and cloud data storage services, Keystone lets organizations provision, monitor, and even move storage spending across their hybrid cloud environment for financial and operational flexibility.

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NetApp strategic consulting services provide executive-level, high-touch consulting engagements to help organizations facilitate the alignment of their business and technology goals. Our proven expertise can help organizations define long-term data fabric strategies and operations models to drive IT initiatives for digital transformation.

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NetApp'’s Professional Services offer specialized expertise to minimize risks and simplify ~~the process of~~ designing, implementing, migrating, and integrating NetApp hybrid cloud solutions. This enables businesses to reap the benefits of new technology investments more quickly. Our highly skilled service experts help ensure secure and optimized environments, delivering consistent, high-quality outcomes that meet customers' expectations ~~from the start~~.

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NetApp Managed Services can optimize the performance and efficiency of your IT infrastructure, whether you have a hybrid cloud or on-premises environment. Our experienced NetApp experts follow a proven methodology and industry best practices to monitor, administer, operate, and optimize your IT environment. This allows your organization's IT staff to focus on driving business initiatives forward, without worrying about the day-to-day management of your IT infrastructure.

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NetApp Global Support offers a wide range of solutions, including systems, processes, and personnel, to support uninterrupted operation in complex and critical environments. Our focus is on providing proactive and preemptive technology support to help ensure operational continuity across the NetApp hybrid cloud. We offer personalized support options that provide actionable intelligence to resolve problems faster, minimize downtime, and optimize the performance of the entire NetApp ecosystem.

Sales, Principal Markets, and Distribution Channels

We market and sell our products and services in numerous countries throughout the world. Our sales efforts are organized around the evolving needs of our current and targeted customers, and our marketing initiatives reflect this focus. NetApp uses a multichannel distribution strategy. We sell our products, solutions and services to end-user business customers and service providers through a direct sales force and an ecosystem of partners, including the leading cloud providers. Our marketing is focused on building our brand reputation, creating market awareness, communicating customer advantages and generating demand for our sales force and channel partners.

Our diversified customer base spans industry segments and vertical markets such as energy, financial services, government, technology, internet, life sciences, healthcare services, manufacturing, media, entertainment, animation, video postproduction and telecommunications. NetApp focuses primarily on the enterprise storage and data management, cloud storage and cloud operations markets. We design our products to meet the evolving requirements of a hybrid, multicloud world, driven by digital transformation and cloud initiatives.

Our partnerships with the industry’s leading cloud, infrastructure, consulting, application, and reseller partners are created with one goal in mind: the success of our customers. Global enterprises, local businesses, and government agencies look to NetApp and our ecosystem of partners to help maximize the business value of their IT and cloud investments.

We work with a wide range of partners for our customers, including technology partners, value-added resellers, system integrators, OEMs, service providers and distributors. During fiscal ~~2024~~2025, sales through our indirect channels represented 7678% of our net revenues. Our global partner ecosystem is critical to NetApp’s growth and success. We are continually strengthening existing partnerships and investing in new ones to ensure we are meeting the evolving needs of our customers.

As of April 2625, ~~2024~~2025, our worldwide sales and marketing functions consisted of approximately 5,~~300~~100 managers, sales representatives and technical support personnel. We have offices in approximately 2426 countries. Sales to customers Arrow Electronics, Inc. and TD Synnex Corporation ~~each~~ accounted for 2221% and 24% of our net revenues, respectively, in fiscal ~~2024~~2025. Information about sales to and accounts receivables from our major customers, segment disclosures, foreign operations and net sales attributable to our geographic regions is included in Note 15 – Segment, Geographic, and Significant Customer Information of the Notes to Consolidated Financial Statements included in Part II, Item 8.

Seasonality

We have historically experienced a sequential decline in revenues in the first quarter of our fiscal year, as the sales organization spends time developing new business after higher close rates in the fourth quarter, and because sales to European customers are typically weaker during the summer months. We derive a substantial amount of our revenue in any given quarter from customer orders booked in the same quarter. Customer orders and revenues typically follow intra-quarter seasonality patterns weighted toward the end of the quarter. If recurring services and cloud revenue continue to increase as a percentage of our total revenues, historical seasonal patterns may become less pronounced.

Backlog

We manufacture products based on a combination of specific order requirements and forecasts of our customers’ demand. Orders are generally placed by customers on an as-needed basis. A substantial portion of our products is sold on the basis of standard purchase orders that are cancelable prior to shipment without penalty. In certain circumstances, purchase orders are subject to change with respect to quantity of product or timing of delivery resulting from changes in customer requirements. Our business is characterized by seasonal and intra-quarter variability in demand, as well as short lead times and product delivery schedules. Accordingly, backlog at any given time may not be a meaningful indicator of future revenue.

Manufacturing and Supply Chain

We have outsourced manufacturing operations to third parties located in Fremont, California; San Jose, California; ~~San Antonio, Texas;~~ Guadalajara, Mexico; Schiphol Airport, The Netherlands; ~~Tiszaujvaros~~Helmond, ~~Hungary~~The Netherlands; ~~Wuxi~~Tiszaujvaros, ~~China~~Hungary; Taoyuan City, Taiwan; and Singapore. These operations include materials procurement, commodity management, component engineering, test engineering, manufacturing engineering, product assembly, product assurance, quality control, final test, and global logistics. We rely on a limited number of suppliers for materials, as well as several key subcontractors for the production of certain subassemblies and finished systems. We strive to have multiple suppliers qualified to provide critical components where possible and have our products manufactured in a number of locations to mitigate our supply chain risk. Our strategy has been to develop close relationships with our suppliers, maximizing the exchange of critical information and facilitating the implementation of joint quality programs. We use contract manufacturers for the production of major subassemblies and final system configuration. This manufacturing strategy minimizes capital investments and overhead expenditures while creating flexibility for rapid expansion.

systems. We strive to have multiple suppliers qualified to provide critical components where possible and have our products manufactured in a number of locations to mitigate our supply chain risk. Our strategy has been to develop close relationships with our suppliers, maximizing the exchange of critical information and facilitating the implementation of joint quality programs. We use contract manufacturers for the production of major subassemblies and final system configuration. This manufacturing strategy minimizes capital investments and overhead expenditures while creating flexibility for rapid expansion.

We are certified to the International Organization for Standardization (ISO) 9001:2015 and ISO 14001:2015 certification standards. We have been Tier 2 certified under the U.S. Customs and Border Protection’s (CBP) Customs Trade Partnership Against Terrorism (CTPAT) program since January 2015.

Research and Development

Our research and development team delivers innovation to help customers create an evolved cloud experience. Our R&D structure allows us to align and accelerate the execution of our strategies and roadmaps across product groups. We leverage our talent and shared IP for cloud- and hybrid-cloud solutions to remain agile to changing market conditions. Our R&D priorities are defined by how we can help customers realize operational simplicity, cyber resilience and security, AI innovation, infrastructure savings and agility, and sustainability. We design our products and services from the ground up with cloud connectivity in mind, including our capabilities for cyber resiliency, tiering, disaster recovery, replication, bursting, and migration.

We conduct research and development activities in various locations throughout the world. Total research and development expenses were $1,~~029~~012 million in fiscal ~~2024~~2025, $~~956~~1,029 million in fiscal ~~2023~~2024 and $~~881~~956 million in fiscal ~~2022~~2023. These costs consist primarily of personnel and related ~~costs~~expenses incurred to conduct product development activities. Although we develop many of our products internally, we also acquire technology through business combinations or through ~~licensing from~~ third ~~parties~~party licensing when appropriate. We believe that technical leadership is essential to our success, and we expect to continue to commit substantial resources to research and development.

Competition

We operate in an industry inwith ~~which there are~~ rapid technological advances in hardware, software, and related ~~services~~service offerings. Cloud, digital transformation, and AI initiatives are driving ~~changes in~~ customer and solution requirements changes.

We compete with many companies in the storage and data management markets. Our hybrid cloud solutions primarily compete with legacy IT and storage vendors. Some offer a broad spectrum of products, solutions and services and others offer a more limited set of storage and data-management products, solutions or services. ~~Additionally,~~In ~~public~~the ~~cloud~~emerging ~~providers~~AI ~~offer~~market, ~~customers~~we ~~storage~~encounter asboth anour ~~operating expense which competes with more~~ traditional ~~storage~~competitive ~~offerings~~set, ~~that~~as ~~customers~~well ~~acquire~~as ~~through~~newer ~~capital~~entrants, ~~expenditures.~~focused Weprimarily ~~both~~on ~~partner~~the ~~with~~AI ~~and~~model ~~compete~~training ~~against~~space. ~~cloud~~Additionally, ~~providers with our~~ public cloud ~~software~~providers ~~and~~offer ~~services.~~customers ~~Legacy~~storage ~~vendors~~as ~~are~~an ~~not~~operating ~~often~~expense ~~encountered~~which incompetes ~~the~~with ~~cloud~~more traditional storage ~~services~~offerings ~~market~~that ascustomers ~~competitors.~~acquire

We compete with many companies in the cloud operations marketplace, including new companies (startups) and larger software companies who target developers, operations engineering (DevOps) and financial engineering (FinOps). Some companies have single point solutions that compete with one of our services and others are building platforms. Additionally, public cloud providers offer similar services on their own cloud.10

through capital expenditures. We both partner with and compete against cloud providers with our public cloud software and services. Legacy vendors are not often encountered as competitors in the cloud storage services market.

We compete with many companies in the cloud operations marketplace, including new companies (startups) and larger software companies who target developers, and operations engineering (DevOps). Some companies have single point solutions that compete with one of our services and others are building platforms. Additionally, public cloud providers offer similar services on their own cloud.

We face ongoing product and price competition in all areas of our business, including from both branded- and generic-product competitors.

Our current and potential competitors may establish cooperative relationships among themselves or with third-parties, including some of our partners. ItNew ~~is possible that new~~ competitors or alliances among competitors might emerge and further increase competitive pressures.

We consider our hardware, software innovation, cloud integration, and technology partnerships key to our competitive differentiation. We believe our competitive advantage also includes the nature of the relationships we form with our customers and partners worldwide. We strive to deliver an outstanding experience in every interaction we have with our customers and partners through our product, service, and support offerings, which enables us to provide our customers with a full range of expertise before, during and after their purchases.

Proprietary Rights

We generally rely on patent, copyright, trademark, trade secret and contract laws to establish and maintain our proprietary rights in our technology, products and services. While our intellectual property rights are important to our success, we believe that our business is not materially dependent on any particular patent, trademark, copyright, license or other individual intellectual property right. We have been granted, or own by assignment, well over two thousand U.S. patents, hundreds of pending U.S. patent applications, and many corresponding patents and patent applications in other countries. From time to time, we may make certain intellectual property available under an open source license. Our primary trademarks are NetApp and the NetApp design logo, which are registered trademarks in the U.S. and in many other countries. In addition, we have trademarks and trademark registrations in the U.S. and other countries covering our various product or service names.

many corresponding patents and patent applications in other countries. From time to time, we may make certain intellectual property available under an open source license. Our primary trademarks are NetApp and the NetApp design logo, which are registered trademarks in the U.S. and in many other countries. In addition, we have trademarks and trademark registrations in the U.S. and other countries covering our various product or service names.

We generally enter into confidentiality agreements with our employees, resellers, distributors, customers, and suppliers. In addition, through various licensing arrangements, we receive certain rights to the intellectual property of others. We expect to maintain current licensing arrangements and to secure additional licensing arrangements in the future, as needed and to the extent available on reasonable terms and conditions, to support continued development and sales of our products and services. Some of these licensing arrangements require or may require royalty payments and other licensing fees. The amount of these payments and fees may depend on various factors, including but not limited to the structure of royalty payments; offsetting considerations, if any; and the degree of use of the licensed technology.

The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding intellectual property rights, and we may be exposed to various risks related to such claims or legal proceedings. If we are unable to protect our intellectual property, we may be subject to increased competition that could materially and adversely affect our business operations, financial condition, results of operations and/or cash flows.

Environmental Disclosure

We ~~are~~believe ~~committed~~that toour ~~the~~commitment ~~success~~to ofhelping our customers and partners, tosucceed ~~delivering value to our stockholders,~~ and to positively affecting the communities where our employees work and live. Wesupports ~~firmly~~our ~~believe~~efforts ~~that~~to wedeliver ~~can~~value ~~accomplish~~to ~~these objectives concurrently with~~ our ~~commitment to sound environmental management~~stockholders. We are committed to the reduction of greenhouse gas emissions; the efficient use of ~~natural~~ resources; and ~~minimizing~~reducing, relative to the growth of the Company, the environmental impacts from our operations, products, and services, as well as complying with laws and regulations related to these areas.

We voluntarily measure, monitor, and publicly report our scope 1, scope 2, and scope 3 (partial) greenhouse gas emissions and water impacts ~~to CDP, a global standardized mechanism by which companies report their greenhouse gas emissions and water impacts to customers and institutional investors~~. We ~~continuously~~ seek to optimize the energy efficiency of our buildings, labs, and data centers; and we have increased our use of renewable energy, especially at our facilities in Bangalore, India (95% of the total energy consumed is renewable); Cork, Ireland (100% of electricity consumed is from renewable energy) and Wichita, Kansas, ~~both~~(100% of ~~which~~the ~~are~~electricity ~~powered~~consumed ~~almost~~is ~~exclusively~~produced by renewable wind energy).

At the global, regional and state levels, various laws and regulations have been implemented or are under consideration to mitigate or report on the effects of climate change. Environmental laws are complex and have tended to become more stringent over time. However, it is difficult to anticipate future regulations pertaining to environmental matters and to estimate their impacts on our operations. ~~Based on current information, we believe that our primary risk related to climate change is the risk of increased energy costs.~~ Additionally, we have implemented disaster recovery and business resiliency measures to mitigate the physical risks our facilities, business, and supply chain might face as a consequence of natural disasters or severe weather/climate-related phenomena such as earthquakes, floods, droughts, and other such natural occurrences.

We are subject to international, federal, state, and local regulations regarding workplace safety and protection of the environment. Various international, federal, state, and local provisions regulate the use and discharge of certain hazardous materials used in the manufacture of our products. Failure to comply with environmental regulations in the future could cause us to incur substantial costs, subject us to business interruptions or cause customers to cease purchasing from us. We strive to comply with all applicable environmental laws. All of our products meet the applicable requirements of the following European Union (EU) directives: Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH); Energy Related Products (ErP); and Restriction of Hazardous Substances (RoHS). We also comply with the China RoHS directive. We have a global product take-back program and an e-waste scheme to comply with the EU directive on Waste Electrical and Electronic Equipment (WEEE), and Extended Producer Responsibility (EPR) regulations in India.11

facilities, business, and supply chain might face as a consequence of natural disasters, earthquakes, floods, droughts, and other such occurrences or severe weather/climate-related phenomena.

We have maintained an environmental management system since December 2004 that provides the framework for setting, monitoring, and continuously improving our environmental goals and objectives. As part of ISO 14001 requirements, we set local environmental performance goals, such as reducing energy use per square foot and minimizing waste generated on site, that are aligned with our overall corporate strategy. We also conduct periodic reviews and are subject to third-party audits of our operations, and we monitor environmental legislation and requirements to help make sure we are taking necessary measures to remain in compliance with applicable laws, not only in our operations but also for our products.

Human Capital

We take pride in, and believe our success depends on, attracting and retaining leading talent in the industry based on a culture-fit approach. From our inception, NetApp has worked to build a model company and has embraced a culture of openness and trust. Our employees are supported and encouraged to be innovative, and we communicate openly and transparently so that employees can focus on critical and impactful work that ties directly to our business strategy. We continue to invest in our global workforce to support inclusion and belonging and our employees’ well-being and development.

11Belonging

~~employees~~We ~~are~~believe ~~supported~~inclusion and ~~encouraged~~belonging lead to bemore ~~innovative~~innovation, ~~and~~better weaccess ~~communicate~~to ~~openly~~talent and ~~transparently~~improved ~~so that employees can focus on critical and impactful work that ties directly to our~~ business ~~strategy~~outcomes. WeOur ~~continue~~strategies toare ~~invest~~intended into ~~our~~promote ~~global~~a ~~workforce~~team-based toculture, ~~support~~inclusiveness, ~~diversity~~ and ~~inclusion and~~ to ~~support~~achieve ~~our~~sustained ~~employees’~~business ~~well-being and development~~results.

Diversity, Equity, Inclusion and Belonging

We believe diversity, equity, inclusion and belonging leads to more innovation, better access to talent and improved business outcomes. Our strategies are intended to increase the demographic and cognitive diversity of our employee population and promote a culture of equity and inclusion to achieve sustained business results. For more information about our commitment to diversity, equity, inclusion and belonging, go to the “Diversity Inclusion Equity and Belonging” section of our website.

Benefits, Wellbeing and Engagement

Our healthcare options offer competitive, comprehensive coverage for our employees and their families, including:

•

National medical plans;

•

Regional medical plans;

•

Expert advice from world-renowned doctors through our medical second opinion program;

•

National dental plans;

•

National vision plans; and

•

A robust wellness program.

Insurance and income protection. We provide life, accidental death and dismemberment and disability insurance programs. For additional peace of mind, we also offer supplemental insurance for our employees and their dependents.

Financial and savings programs. We offer flexible spending accounts, an employee stock purchase plan and competitive retirement plans, including options to maximize retirement savings.

Flexible Work. We offer a flexible hybrid work program that allows employees, in consultation with their managers and teams, flexibility around where, when and how work is performed to deliver business outcomes, understanding that certain roles may be tied to specific locations or require an in-office presence due to business needs and job responsibilities, and to collaborate and connect most effectively. We are leaning into digital-first workflows, tools, and resources and programs to continuously promote flexibility, while enabling us to be productive, wherever we are. We also believe in the value of people being together, building relationships, fostering trust, collaboration and innovation. We have evolved into a hybrid model, in which employees who are assigned to an office can divide their work between the office and other locations about half the time. We continue to pilot, test and iterate our approach to support new ways of working and evolving the employee experience.

Employee Wellbeing. We provide a wide range of wellbeing programs and tools to ensure employees and their families have the resources they need when they need them. We offer emotional wellbeing resources and programs such as back-up child and elder care, student debt repayment, educational assistance, and legal services for employees and their dependents. NetApp also offers a variety of time-off programs to help support our employees who need time-off. Employees also have access to discounts and fitness centers.

Engagement. We help employees grow, develop and succeed at NetApp by encouraging an open and interactive culture, where individual needs are recognized and met, and Company goals are supported. For employees, growth goals are tied to corporate objectives and key results to ensure that employees are progressing and are supported by management teams. Managers are encouraged to set aside time at least each quarter to conduct a two-way conversation with each team member to offer feedback, guidance and support on goals, priorities and career development. The Company also conducts surveys that gauge employee sentiment in areas like cross-functional collaboration, manager performance and inclusivity and create action plans to address concerns and amplify opportunities.

Giving Back. The NetApp Cares programs support our employees' efforts to make a positive difference in our communities. In fiscal ~~2024~~2025, ~~more than 2,386~~ NetApp employees donated over 1920,~~940~~900 hours to serve their communities and make an impact around the world. The NetApp Cares programs encourage employees to volunteer through individual, team or company efforts.

Board Oversight of Human Capital Management

12Our Board of Directors plays an active role in overseeing the Company's human capital management strategy and programs. Our Talent and Compensation Committee provides oversight of our talent strategy and key programs related to corporate culture, workforce inclusion, talent acquisition, engagement, development and retention.

Our Board of Directors plays an active role in overseeing the Company's human capital management strategy and programs. Our Talent and Compensation Committee provides oversight of our talent strategy and key programs related to corporate culture, workforce diversity and inclusion, talent acquisition, engagement, development and retention.

Employees

As of April 2625, ~~2024~~2025, we had approximately 11,~~800~~700 employees worldwide. None of our employees are represented by a labor union and we consider relations with our employees to be good.

Please visit our website for more detailed information regarding our human capital programs and initiatives. Nothing on our website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

Information About Our Executive Officers

Our executive officers and their ages as of June 109, ~~2024~~2025, were as follows:

Name	Age	Position
George Kurian	5758	Chief Executive Officer
César Cernuda	5253	President
Michael J. Berry	61	Executive Vice President and Chief Financial Officer
Wissam Jabre	55	Executive Vice President and Chief Financial Officer
Harvinder S. Bhela	5253	Executive Vice President and Chief Product Officer
Elizabeth M. O'Callahan	5556	Executive Vice President, Chief ~~Legal~~Administrative Officer, and ~~Corporate~~ Secretary

George Kurian is the chief executive officer of NetApp, a position he has held since June 1, 2015. He joined our Board of Directors in June 2015. From September 2013 to May 2015, he was executive vice president of product operations, overseeing all aspects of technology strategy, product and solutions development across our portfolio. Mr. Kurian joined NetApp in April 2011 as the senior vice president of the storage solutions group and was appointed to senior vice president of the Data ONTAP group in December 2011. Prior to joining NetApp, Mr. Kurian held several positions with Cisco Systems from 2002 to 2011, including vice president and general manager of the application networking and switching technology group. Additional roles include vice president of product management and strategy at Akamai Technologies from 1999 to 2002, as well as a management consultant at McKinsey and Company and a leader on the software engineering and product management teams at Oracle Corporation. Mr. Kurian is a board member at Cigna Corporation, a global health services company, where he serves on the compliance committee and people resources committee, and holds a BS degree in electrical engineering from Princeton University and an MBA degree from Stanford University.

César Cernuda came to NetApp in July 2020 as president and is responsible for leading the Company’s global go-to-market organization spanning sales, marketing, services, support, and customer success. Mr. Cernuda joined NetApp after a long career at Microsoft that included various leadership roles. Mr. Cernuda is non-executive director and chairman of the ESG committee at Gestamp, an international group dedicated to automotive components. He is also on the advisory boards of Georgetown University’s McDonough School of Business and the IESE Business School – University of Navarra. Mr. Cernuda is a graduate of the Harvard Business School Executive Leadership Program and the Program for Management Development at IESE Business School – University of Navarra, and he also completed the Leading Sustainable Corporations Programme at Oxford University’s Saïd Business School. He earned his bachelor’s degree in Business Administration from ESIC Business & Marketing School.

Michael J. Berry joined NetApp in March 2020 as executive vice president and chief financial officer, overseeing the worldwide finance, investor relations, security and IT organizations. Mr. Berry has served as a chief financial officer for over 16 years in both public and private companies including McAfee, FireEye, Informatica, and SolarWinds. Most recently he was executive vice president and chief financial officer at McAfee where he was responsible for all aspects of finance, including financial planning, accounting, tax and treasury, as well as operations and shared services. Mr. Berry is a board member of Rapid7, Inc., where he serves as chair of the audit committee. Mr. Berry holds a BS degree in finance from Augsburg University and an MBA degree in finance from the University of St. Thomas.

Harvinder S. Bhela joined NetApp in January 2022 as executive vice president and chief product officer. He is responsible for leading NetApp’s product and engineering teams and building our multi-cloud, storage and data services products and solutions. Before joining NetApp, Mr. Bhela spent 25 years at Microsoft where he held multiple executive leadership positions. Most recently he served as corporate vice president of the Microsoft 365 Security, Compliance and Management business. Mr. Bhela holds a Bachelor of Engineering from the University of Mumbai and a Master of Science in Computer Science from the University of Minnesota.

Elizabeth M. O’Callahan joined NetApp in 2013 and has served as NetApp’s executive vice president, chief legal officer, and corporate secretary since January 2022. Prior to her appointment as chief legal officer, Ms. O’Callahan served as senior vice president

and general counsel from May 2021 to December 2021, as vice president and deputy general counsel from May 2020 to April 2021, and as vice president, corporate legal from October 2013 to April 2020. Ms. O’Callahan has over 20 years of ~~experience advising technology companies on a variety of matters~~Navarra, ~~including corporate governance, securities law, mergers~~ and ~~acquisitions,~~he ~~capital~~also ~~markets~~completed ~~transactions,~~the ~~corporate~~Leading ~~compliance~~Sustainable ~~and~~Corporations ~~ethics,~~Programme ~~data~~at ~~privacy,~~Oxford ~~intellectual property, litigation and government relations. Before joining NetApp, Ms. O~~University’~~Callahan~~s ~~served~~Saïd inBusiness ~~a senior legal role at Xilinx (since acquired by AMD)~~School. ~~She~~He ~~began~~earned ~~her~~his ~~legal career in private practice in Silicon Valley specializing in corporate law and business litigation. Ms. O’Callahan holds a~~ bachelor’s degree ~~from~~in ~~the~~Business ~~University~~Administration offrom ~~California~~ESIC atBusiness ~~Los~~& ~~Angeles~~Marketing ~~and a J~~School.~~D. from Santa Clara University.~~

Wissam Jabre joined NetApp in March 2025 as executive vice president and chief financial officer, overseeing the worldwide finance and investor relations organizations. Mr. Jabre is an accomplished finance executive with over 20 years of experience leading finance organizations and driving value creation through disciplined operational management. Prior to joining NetApp, Mr. Jabre served as the executive vice president and CFO at Western Digital Corporation from February 2022 to February 2025, where he led the global finance organization and oversaw various critical functions. Prior to joining Western Digital, he served as the CFO of Dialog Semiconductor from March 2016 to August 2021. He has also held senior finance positions at prominent technology companies, including Advanced Micro Devices, Freescale Semiconductor (since acquired by NXP Semiconductors), and Motorola. Mr. Jabre's career began at Schlumberger, where he gained valuable experience in both engineering and finance roles. Mr. Jabre holds a B.E. in Electrical Engineering from the American University of Beirut and an MBA from Columbia Business School. He also serves on the board of directors of MKS, Inc. where he serves as a member of the audit committee.

Elizabeth M. O’Callahan joined NetApp in 2013 and has served as NetApp’s executive vice president, chief administrative officer, and secretary since March 2025. Prior to her appointment as chief administrative officer, Ms. O’Callahan served as executive vice president, chief legal officer, and secretary from January 2022 to February 2025, senior vice president and general counsel from May 2021 to December 2021, as vice president and deputy general counsel from May 2020 to April 2021, and as vice president, corporate legal from October 2013 to April 2020. Ms. O’Callahan has over 20 years of experience advising technology companies on a variety of matters, including corporate governance, executive compensation, securities law, employment law, mergers and acquisitions, capital markets transactions, corporate compliance and ethics, data privacy, intellectual property, crisis management, real estate, litigation and government relations. Before joining NetApp, Ms. O’Callahan served in a senior legal role at Xilinx (since acquired by AMD). She began her legal career in private practice in Silicon Valley specializing in corporate law and business litigation. Ms. O’Callahan holds a bachelor’s degree from the University of California at Los Angeles and a J.D. from Santa Clara University.

Additional Information

Our internet address is www.netapp.com. We make available through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including exhibits, amendments to those reports and other documents filed or furnished pursuant to the Exchange Act of 1934, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC.

The SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Item 1A. Risk Factors

The ~~information~~following ~~included~~discussion ~~elsewhere~~and inthe ~~this~~sections ~~Annual~~entitled ~~Report~~“Management’s onDiscussion ~~Form~~and ~~10-K~~Analysis ~~should~~of beFinancial ~~considered~~Condition and ~~understood~~Results ~~in the context~~ of ~~the following risk factors~~Operations,” ~~which~~“Quantitative ~~describe~~and ~~circumstances~~Qualitative ~~that~~Disclosures ~~may~~About ~~materially~~Market ~~harm~~Risk” ~~our~~and ~~future~~“Management's ~~business,~~Report ~~operating~~on ~~results~~Internal orControl ~~financial~~Over ~~condition.~~Financial ~~The~~Reporting” ~~following~~reflect ~~discussion reflects~~ our current judgment regarding the most significant risks we face. These risks can and will change in the future.

Risks Related to Our Business and Industry

Global economic and geopolitical conditions have adversely affected and may ~~harm~~in the future continue to adversely affect our industry, business operations, and ~~operating~~financial ~~results~~performance, including our revenue growth, ~~and~~ profitability, financial condition and cash flows.

WeAs ~~operate globally and as~~ a ~~result~~global company, our business, ~~revenues~~is ~~and~~influenced ~~profitability are impacted~~ by ~~global~~worldwide economic and market conditions, including, among others, inflation, slower growth, economic downturn or recession, changes toin fiscal and monetary ~~policy~~policies, higher interest ~~rates,~~and tax rates, economic uncertainty, political instability, ~~warfare~~regional conflicts, ~~changes~~military ~~in laws~~warfare, ~~reduced~~extreme ~~consumer~~weather ~~confidence~~events and ~~spending,~~effects ~~and~~from ~~economic~~climate ~~and~~change, ~~trade~~natural ~~barriers.~~disasters ~~Such~~and ~~factors~~pandemics, ~~may~~supply ~~contribute~~chain tointerruptions ~~increased~~and ~~periodic~~shortages, ~~volatility~~changes in ~~the~~laws, ITreduced ~~industry~~consumer atconfidence ~~large~~ and ~~limit our ability to forecast future demand for our products and services~~spending, ~~impact~~international ~~availability~~trade ofprotection ~~supplies~~measures and ~~could~~disputes ~~constrain~~(including ~~future~~economic ~~access to capital for our suppliers, customers~~ and ~~partners.~~trade ~~Additionally~~barriers, ~~adverse macroeconomic conditions~~tariffs, ~~including~~sanctions ~~those~~and ~~identified~~export ~~above~~controls), ~~could~~and ~~materially adversely impact~~ the ~~demand~~threat ~~for our products~~ and ~~our~~potential ~~operating~~of ~~results~~retaliatory ~~amid~~trade ~~customer~~control ~~concerns~~policies ~~over~~(including ~~slowing~~retaliatory ~~demand~~tariffs). ~~for~~These ~~their products~~factors, ~~reduced~~as ~~asset~~well ~~values,~~as ~~volatile energy costs, geopolitical issues,~~ the ~~availability~~fear ~~and~~or ~~cost~~anticipation of ~~credit~~such ~~and~~conditions, ~~the~~may ~~stability~~influence decisions and ~~solvency~~actions ofby ~~financial~~our ~~institutions,~~key ~~financial~~stakeholders ~~markets, businesses, local~~ and ~~state~~the ~~governments~~market generally, and ~~sovereign~~can ~~nations.~~lead ~~The~~to ~~impacts~~increased ofvolatility ~~these~~in ~~circumstances~~the ~~are~~IT ~~global~~industry, ~~and~~making ~~pervasive,~~it ~~and~~difficult ~~the~~to ~~timing~~predict ~~and~~future ~~nature~~demand offor ~~any~~our ~~ultimate~~products ~~resolution~~and ofservices. ~~these~~They ~~matters~~can ~~remain~~also ~~highly~~negatively ~~uncertain.~~impact ~~All~~the availability of ~~these~~supplies ~~risks~~ and ~~conditions~~limit ~~could~~access ~~materially~~to ~~adversely~~capital ~~affect~~for our ~~future~~suppliers, ~~sales~~customers and ~~operating results~~partners.

~~Our~~Any ~~business~~of these factors above, as well as other adverse macroeconomic conditions can significantly reduce demand for our products and negatively affect our operating results due to customer concerns about declining demand for their products, reduced asset values, fluctuating energy costs, geopolitical issues, the cost and availability of credit, and the stability of financial institutions, markets, businesses, and governments. These conditions may be ~~harmed~~widespread, byand ~~technological~~their ~~trends~~resolution could be uncertain. If we are not able to efficiently and effectively resolve such issues in ~~our~~a ~~market~~timely manner, or if weour chosen strategies are ~~unable~~not tosuccessful, ~~keep~~then ~~pace~~our ~~with~~business, ~~rapid~~operations ~~industry~~and financial condition could be materially adversely impacted. Consequently, ~~technological~~these risks and ~~market~~conditions ~~changes~~could materially adversely affect our future sales and operating results.

~~The~~Our ~~growth~~business inmay our industry and the markets in which we compete is driven by the increasing demand for data, which increases demand for, and purchases of, storage and data management solutions. Despite these growth drivers, our markets could be ~~adversely~~negatively impacted by ~~technology~~technological ~~transitions,~~trends ~~increased~~in ~~storage~~our ~~efficiency,~~market ~~competitive pricing dynamics, changing consumption models, and/~~or ~~uncertain~~our ~~macroeconomic~~inability ~~conditions. Additionally, the impact of generative artificial intelligence (GenAI) in the markets for storage and data management solutions has yet~~ to bekeep ~~fully~~pace ~~realized~~with ~~and~~rapid ~~could evolve in unexpected ways. While customers are navigating through their information technology (IT) transformations~~industry, ~~which leverage modern architectures and hybrid cloud environments~~technological, ~~they are also looking for simpler solutions~~ and ~~changing~~market ~~how they consume IT~~changes. This evolution is diverting spending towards transformational projects and architectures like flash, hybrid cloud, cloud storage, and IT as a service. The future impact of these trends on both short- and long-term growth patterns is uncertain, and we may be unable to meet customer demand, with an expected level of quality and support for new products or services.

~~Our~~The ~~business~~growth ~~may~~in beour ~~adversely impacted if we are unable to keep pace with rapid~~ industry, ~~technological or market changes or if our products~~ and ~~services~~the ~~are~~markets ~~not~~we ~~accepted~~compete in ~~the~~is ~~marketplace.~~driven Asby athe ~~result~~increasing ofdemand ~~these~~for ~~and~~data, ~~other~~which ~~factors discussed~~ in ~~this~~turn ~~report,~~drives ~~customer~~the ~~demand~~need for ~~our~~storage ~~products~~ and ~~services~~data ~~may~~management ~~fall~~solutions. ~~and~~However, our ~~revenue~~markets ~~may~~could ~~decline~~face onchallenges adue ~~year-over-year~~to ~~basis~~technology transitions, asincreased itstorage ~~did~~efficiency, incompetitive ~~fiscal~~pricing ~~2017~~dynamics, ~~2020~~changing consumption models, and ~~2024.~~uncertain Ifmacroeconomic ~~the~~conditions. ~~general historical rate of industry growth declines~~Additionally, if the ~~growth~~impact ~~rates~~ of ~~some~~generative orartificial ~~all~~intelligence of(GenAI) ~~the~~on ~~specific markets in which we compete decline, if~~ the ~~consumption model of~~ storage ~~changes, if our new~~ and ~~existing~~data ~~products,~~management ~~services~~markets and ~~solutions~~regulation dothereof ~~not~~is ~~receive~~still ~~customer~~unfolding ~~acceptance~~ and~~/or~~ ~~if we do not adapt our sales programs to address market changes, our business, operating results, financial condition and cash flows~~ could ~~suffer~~evolve unpredictably.

IfAs wecustomers ~~are~~undergo ~~unable~~their toinformation ~~develop~~technology (IT) transformations, ~~introduce~~leveraging modern architectures and ~~gain~~hybrid ~~market~~cloud ~~acceptance~~environments, ~~for~~they seek simpler solutions and new ~~products~~consumption models. This shift is directing spending towards transformational projects and ~~services~~architectures ~~while~~like ~~managing~~flash ~~the~~storage, ~~transition~~hybrid ~~from~~cloud, ~~older~~cloud ~~ones~~storage, orand ifIT weas ~~cannot~~a ~~provide~~service. ~~the~~The ~~expected~~future ~~level~~impact of ~~quality~~these trends on both short- and ~~support~~long-term demand for our ~~new~~ products ~~and~~is ~~services~~uncertain, ~~our~~and ~~business,~~we ~~operating~~may ~~results,~~struggle ~~financial~~to ~~condition~~meet customer demand with the expected level of quality and ~~cash~~support ~~flows~~for ~~could~~new beproducts ~~harmed~~or services.

Our ~~future~~business ~~growth~~may ~~depends~~suffer ~~upon~~if ~~the~~we ~~successful~~fail ~~development~~to ~~and~~keep ~~introduction~~pace ofwith ~~new~~rapid ~~hardware~~industry, ~~and~~technological, ~~software~~or market changes, or if our products and services are not well-received in the marketplace. ~~Due~~These factors, along with other considerations discussed in this Annual Report on Form 10-K, could lead to ~~the~~a ~~complexity~~decline ofin ~~storage~~customer ~~software~~demand for our products and services, ~~cloud~~resulting ~~operations~~in ~~software~~decreased revenue on a year-over-year basis, ~~subsystems~~as ~~and~~seen ~~appliances~~in fiscal 2017, 2020, and 2024. If the ~~difficulty~~overall growth rate of industry declines, if specific markets we compete in ~~gauging~~experience ~~the~~reduced ~~engineering~~growth, ~~effort~~if ~~required~~storage toconsumption ~~produce~~models change, if our new and existing products and services do not gain customer acceptance, ~~such~~or ~~products~~if ~~and~~we ~~services~~do ~~are~~not ~~subject~~adapt our sales programs to ~~significant~~market ~~technical~~changes, our business, operating results, financial condition, and ~~quality~~cash ~~control~~flows ~~risks~~could be adversely affected.

IfThe weglobal ~~are~~nature ~~unable, for technological, customer reluctance or other reasons, to develop, introduce and gain market acceptance for new products and services, or if we are unable to provide the expected level~~ of ~~product and support quality for~~ our ~~new~~business ~~products~~exposes ~~and~~us ~~services,~~to ~~each~~risks asthat ~~and~~could ~~when~~materially ~~required~~harm ~~by the market and~~ our ~~customers~~operations, ~~our business~~revenues, ~~operating~~and ~~results,~~ financial ~~condition and cash flows could be materially and adversely affected~~results.

~~New~~A orsignificant ~~additional~~portion ~~product~~of our operations and ~~feature~~revenues ~~introductions,~~are ~~such~~derived asfrom ~~new~~outside ~~all-flash~~of ~~arrays~~the U.S., ~~including~~and most of our products are sourced and manufactured outside of the ~~block-optimized~~U.S. ~~ASA~~We ~~families~~also have research and development, sales, and ~~capacity~~service ~~flash~~centers ~~C-series~~internationally. Consequently, ~~subject~~our usinternational tooperations ~~additional~~and future financial results could be adversely affected by various economic, business, regulatory, social and ~~operational~~political ~~risks~~factors in foreign countries. These factors include government controls, local political or economic conditions such as recessions, economic downturns, inflation and political uncertainty, economic sanctions, trade protections and regulations, export and import requirements (including ~~our~~but ~~ability~~not limited to ~~forecast~~government ~~customer~~and ~~preferences~~regulatory authorizations), tariffs, investment restrictions, tax

~~and/or demand~~policies, ~~our~~treaties ~~ability to successfully manage the transition from older products and solutions, our ability to forecast and manage the impact of customers’ demand for new products, services and solutions~~ or ~~the products being replaced~~laws, ~~and~~local ~~our~~labor ~~ability to manage production capacity to meet the demand for new products and services. In addition~~conditions, astransportation ~~existing customers transition from older products and solutions to newer ones~~costs, ~~the~~government ~~transition~~spending ~~could take longer than expected~~patterns, orgeopolitical ~~the~~tensions ~~customer could decide to delay the transition, either of which could result in non-renewal of the new offerings or affect our ability to manage~~ and ~~forecast customer churn and expansion rates for new offerings. As new or enhanced products and services are introduced~~uncertainties, weacts ~~must avoid excessive levels~~ of ~~older product inventories and related components and ensure that new products and services can be delivered to meet customers’ demands. Further risks inherent in the introduction of new products~~terrorism, ~~services~~international ~~and solutions include the uncertainty of price-performance relative to products of competitors~~conflicts, natural ~~competitors’ responses to the introductions~~disasters, ~~delays in sales caused by the desire of customers to evaluate new products for extended periods of time~~ and ~~our~~adverse ~~partners’~~public ~~investment~~health ~~in selling our new products and solutions~~developments. ~~If these risks are not managed effectively, we could experience material risks to our business, operating results, financial condition and cash flows.~~

AsChanges wein ~~enter~~laws ~~new~~ or ~~emerging~~policies ~~markets~~governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we ~~will~~source ~~likely~~and/or ~~increase~~manufacture ~~demands~~products, including the impact on our ~~service~~suppliers and ~~support~~contract ~~operations~~manufacturers ~~and~~who may belook ~~exposed~~to pass through additional costs imposed on them, could have a material adverse effect on our business and financial results. The U.S. government has recently enacted changes to U.S. trade policy and has signaled plans for possible additional ~~competition~~changes. WeFor ~~may~~example, ~~not~~the U.S. government has imposed sweeping tariffs on certain products and countries and has signaled that further tariffs may be ~~able~~imposed in the future. The U.S. government's tariffs policy remains fluid, with tariffs on certain countries delayed or reduced in scope, and additional tariffs likely to ~~provide~~be forthcoming on other countries or specified products,. ~~services~~Additional tariffs and ~~support~~restrictive policies, particularly with respect to ~~effectively~~the ~~compete~~tariffs ~~for~~on ~~these~~Mexico, ~~market~~could ~~opportunities~~have a significant impact on our business and results of operations. The exact magnitude of any potential impact remains uncertain given possible further changes in tariffs and increased tensions with U.S. trading partners targeted by tariffs or other restrictive trade policies. Our risk exposure may increase further if any countries levy retaliatory tariffs, taxes, or other trade restrictions or penalties against the United States or U.S. companies.

~~The~~Additionally, ~~dynamic~~ongoing ~~markets~~trade tensions between the U.S. and China and recent investment restrictions, such as the U.S. Outbound Investment Security Program, could impact our business and operating results. Any increase in tensions between China and Taiwan, including threats of military actions or escalation of military activities, could adversely affect our or our contract manufacturers’ ability to source key supply chain components included in our products. As a result of Russia’s actions in Ukraine, numerous countries and organizations have imposed sanctions and export controls, while businesses, including the Company, have limited or suspended Russian operations. Russia has likewise imposed currency restrictions and regulations and may further take retaliatory trade or other actions, including the nationalization of foreign businesses. These actions could impact our supply chain, pricing, business and operating results and expose us to cyberattacks. In addition, due to the global nature of our business, we are subject to complex legal and regulatory requirements in the U.S. and the foreign jurisdictions in which we ~~participate~~operate and sell our ~~sales~~products, including antitrust and ~~distribution~~anti-competition ~~structure~~laws, ~~makes~~and ~~forecasting~~regulations ~~revenues~~related ~~difficult~~to ~~and~~data privacy, ifdata ~~disrupted~~protection, and cybersecurity. We are also subject to the potential loss of proprietary information due to piracy, misappropriation, or laws that may be less protective of our intellectual property rights than U.S. laws. Such factors have had or could ~~harm~~have an adverse impact on our business, operating results, financial condition and cash flows.

~~The~~We ~~dynamic~~face ~~markets~~exposure ~~in which we participate, and our business and sales models make revenues difficult~~ to ~~forecast.~~adverse Wemovements ~~sell~~in toforeign acurrency ~~variety~~exchange ofrates ~~customers,~~as ~~across multiple industries and geographies, both directly and through various channels, with~~ a ~~corresponding~~result ~~variety~~ of ~~sales cycles. The majority of~~ our ~~sales~~international ~~are~~operations. ~~made~~These ~~and/or~~exposures ~~fulfilled~~may ~~indirectly~~change ~~through~~over ~~channel~~time ~~partners,~~as ~~including~~business ~~value-added~~practices ~~resellers~~evolve, ~~systems integrators, distributors, original equipment manufacturers (OEMs)~~ and ~~strategic~~they ~~business~~could ~~partners,~~have ~~which~~a ~~include~~material ~~public~~adverse ~~cloud~~impact ~~providers.~~on ~~This structure significantly complicates~~ our ~~ability~~operating ~~to forecast future revenue~~results, ~~especially~~financial ~~within~~condition ~~any~~and ~~particular~~cash ~~fiscal quarter or year~~flows. ~~Moreover,~~We ~~our~~utilize ~~relationships~~forward ~~with our indirect channel partners~~ and ~~strategic~~option ~~business~~contracts ~~partners~~in ~~are~~an ~~critical~~attempt to ~~our~~reduce ~~success.~~the ~~The~~adverse ~~loss~~impact of ~~one~~exchange orrate ~~more~~fluctuations ofon ~~our~~certain ~~key~~assets ~~indirect~~and ~~channel~~liabilities. ~~partners~~Our inhedging astrategies ~~given~~may ~~geographic~~not ~~area~~be orsuccessful, ~~the~~and ~~failure~~currency ofexchange ~~our~~rate ~~channel~~fluctuations orcould ~~strategic~~have ~~partners,~~a ~~including~~material ~~public~~adverse ~~cloud~~effect ~~providers,~~on ~~to promote~~ our ~~products could harm our~~ operating results. ~~Qualifying~~ and ~~developing~~cash ~~new indirect channel partners typically requires a significant investment of time and resources before acceptable levels of productivity are met~~flows. IfIn weaddition, ~~fail to maintain~~ our ~~relationships~~foreign ~~with~~currency ~~our~~exposure ~~indirect~~on ~~channel partners and strategic partners~~assets, ~~including public cloud providers~~liabilities, ifand ~~their~~cash ~~financial~~flows ~~condition,~~that ~~business~~we ordo ~~customer~~not ~~relationships~~hedge ~~were~~could tohave ~~weaken,~~a ifmaterial ~~they~~impact ~~fail~~on toour ~~comply~~financial ~~with~~results ~~legal~~in orperiods ~~regulatory~~when ~~requirements,~~the orU.S. ifdollar wesignificantly ~~were~~fluctuates toin ~~cease~~relation to doforeign ~~business with them for these or other reasons, our business, operating results, financial condition and cash flows could be harmed~~currencies.

~~Our~~Moreover, ~~gross~~in ~~margins~~many ~~may~~foreign ~~vary~~countries, particularly in those with developing economies, it is a common business practice to engage in activities that are prohibited by NetApp's internal policies and procedures, or laws and regulations applicable to us. There can be no assurance that all our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, will comply with these policies, procedures, laws and/or regulations. Any such violation could subject us to fines and other penalties, which could have a material adverse effect on our business, operating results, financial condition and cash flows.

~~Our~~The ~~gross~~dynamic ~~margins~~markets reflect a variety of factors, including competitive pricing, component and product design, inflation, foreign exchange currency fluctuations, and the volume and relative mix of revenues from product, software support, hardware support and other services offerings. Increased component and labor costs, increased pricing and discounting pressures, the relative and varying rates of increases or decreases in ~~component~~which ~~costs~~we ~~and~~operate ~~product prices, or changes in the mix of revenue or decreased volume from product, software support, hardware support~~ and ~~other services offerings could harm~~ our ~~revenues, gross margins or earnings. Our gross margins are also impacted by the cost of any materials that are of poor quality and our~~ sales and distribution ~~activities,~~structure ~~including,~~make ~~without~~it ~~limitation,~~challenging ~~pricing~~to ~~actions,~~forecast ~~rebates~~revenues, ~~sales initiatives~~ and ~~discount~~any ~~levels,~~disruption and the timing of service contract renewals. The costs of third-party components comprise a significant portion of our product costs. While we generally have been able to manage our component and product design costs, we may have difficulty managing these costs if supplies of certain components, including NAND, become limited or component prices increase. Any such limitation could ~~result~~harm ~~in an increase in~~ our ~~product costs. We have seen~~business, ~~and~~operating ~~may continue to see~~results, ~~our~~financial ~~gross margins negatively impacted by increases in component costs~~condition, ~~logistics costs,~~ and ~~inflationary~~cash ~~pressures~~flows. An increase in component or design costs relative to our product prices could harm our gross margins and earnings. Failure to sustain or improve our gross margins may have a material adverse effect on our business and stock price.

~~Issues~~We ~~related~~participate toin ~~the~~dynamic ~~development~~markets and ~~use~~employ diverse business and sales models, which complicate revenue forecasting. We sell to a wide range of ~~artificial~~customers ~~intelligence~~across ~~(AI)~~various industries and geographies, ~~including~~both ~~GenAI~~directly and through multiple channels, ~~could~~each ~~give~~with ~~rise~~different tosales ~~legal~~cycles. Most of our sales are made and/or ~~regulatory~~fulfilled ~~action~~indirectly through channel partners, ~~damage~~including ~~our~~value-added ~~reputation~~resellers, orsystems ~~otherwise~~integrators, ~~materially~~distributors, ~~harm~~original ~~our~~equipment manufacturers (OEMs), and strategic business partners, including public cloud providers. This structure makes it particularly difficult to predict future revenue, especially within any specific fiscal quarter or year.

WeOur ~~are~~relationships ~~increasingly~~with ~~building~~our ~~and/or~~indirect ~~leveraging~~channel AIpartners ~~technology,~~and ~~including~~strategic ~~GenAI,~~business inpartners ~~certain~~are ofcrucial ~~our~~to ~~products and services and in~~ our ~~business operations~~success. ~~Our~~The ~~research~~loss ~~and~~of ~~development~~one ofor ~~such~~more ~~technology~~of ~~remains~~our ~~ongoing.~~key Asindirect ~~with~~channel ~~many~~partners ~~innovations,~~in AIa ~~presents~~particular ~~risks~~region, ~~challenges,~~or ~~and~~the ~~potential~~failure ~~unintended~~of ~~consequences~~our ~~that~~channel ~~could~~or ~~affect~~strategic ~~our~~partners, ~~and~~including ~~our~~public ~~customers’~~cloud ~~adoption~~providers, ~~and~~to ~~use~~promote ofour ~~this~~products ~~technology.~~could AInegatively ~~algorithms~~impact ~~and~~our ~~training~~operating ~~methodologies~~results. ~~may~~Qualifying ~~be flawed,~~ and AIdeveloping ~~technologies~~new ~~are~~indirect ~~complex~~channel ~~and~~partners ~~rapidly~~typically ~~evolving.~~requires ~~We face~~ significant ~~competition~~time ~~in the market~~ and ~~from~~resource ~~other~~investment ~~companies~~before ~~regarding~~achieving ~~such~~acceptable ~~technologies.~~productivity levels.

~~While~~If we ~~aim~~fail to ~~develop~~maintain ~~and~~strong ~~use~~relationships AIwith ~~responsibly~~our ~~and~~indirect ~~attempt~~channel topartners ~~identify~~ and ~~mitigate~~strategic ~~ethical~~partners, ~~and~~including ~~legal~~public ~~issues~~cloud ~~presented~~providers, byif ~~its~~our ~~use,~~partners weseek ~~may~~to berenegotiate ~~unsuccessful~~or interminate ~~identifying~~existing contracts or ~~resolving~~agreements, ~~issues~~or ~~before~~if ~~they~~their ~~arise.~~financial ~~AI-related~~condition, ~~issues~~business, ~~deficiencies and/~~or ~~failures could (i)~~

~~give~~customer ~~rise~~relationships ~~to legal and/or regulatory action~~weaken, ~~including~~if ~~with~~they ~~respect~~fail to ~~proposed~~comply ~~legislation~~with ~~regulating~~legal AIor inregulatory ~~various~~requirements, ~~jurisdictions~~or inif ~~which~~ we ~~operate,~~cease ~~and~~to asdo abusiness ~~result~~with ofthem ~~new~~for ~~applications~~these ofor ~~existing~~other ~~data protection~~reasons, ~~privacy, intellectual property, and other laws; (ii) damage~~ our ~~reputation; or (iii) otherwise materially harm our~~ business., Tooperating ~~the extent regulation materially delays or impedes the adoption of AI~~results, ~~demand~~financial ~~for~~condition ~~our~~and ~~products~~cash ~~may~~flows ~~not~~could ~~meet~~be ~~our~~adversely ~~forecasts~~affected.

~~Increasing~~Our ~~competition~~business, operating results, financial condition, and ~~industry~~cash ~~consolidation~~flows could ~~harm~~be ~~our~~adversely ~~business~~affected if we are unable to develop, ~~operating~~introduce ~~results~~and gain market acceptance for new products and services while managing the transition from older ones, ~~financial~~or ~~condition~~if we cannot provide the expected level of quality and ~~cash~~support ~~flows~~for our new products and services.

Our ~~markets~~future ~~are~~growth ~~intensely~~relies ~~competitive~~on the successful development and ~~are~~introduction ~~characterized~~of bynew ~~fragmentation~~hardware and ~~rapidly~~software ~~changing~~products ~~technology~~and services. WeThe ~~compete~~complexity ~~with~~of ~~many~~storage ~~companies~~and indata ~~the~~management ~~markets~~software, wesubsystems ~~serve~~and appliances, ~~including~~as ~~established~~well ~~public~~as ~~companies,~~the ~~newer~~challenges ~~public~~in ~~companies~~estimating ~~with~~the aengineering ~~strong~~effort ~~flash~~required ~~focus,~~to ~~and~~produce new ~~market~~products ~~entrants~~and ~~addressing~~services, ~~the~~pose ~~opportunity~~significant ~~for~~technical ~~GenAI~~ and ~~application~~quality ~~data~~control ~~management~~risks for ~~Kubernetes~~these new products and services. ~~Some~~If ~~offer~~we aencounter ~~broad~~technological ~~spectrum~~challenges, ofcustomer ITreluctance, ~~products~~or ~~and~~other ~~services~~obstacles ~~(full-stack~~that ~~vendors)~~prevent ~~and~~us ~~others~~from ~~offer~~developing, aintroducing ~~more~~and ~~limited~~gaining ~~set~~market ofacceptance for new products orand services., ~~Technology~~or ~~trends,~~if ~~such~~we asfail ~~hosted~~to orprovide ~~public~~the ~~cloud~~expected ~~storage,~~level ~~software~~of asproduct aand ~~service~~support ~~(SaaS)~~quality, ~~and~~our ~~flash~~business, ~~storage~~operating ~~are~~results, ~~driving~~financial ~~significant~~condition ~~changes~~and incash ~~storage~~flows ~~architectures~~could be materially and ~~solution~~adversely ~~requirements~~affected. ~~Cloud~~Introducing ~~service~~new ~~provider~~products ~~competitors~~and ~~provide~~features ~~customers~~exposes ~~storage~~us onto ~~demand,~~additional ~~without~~financial ~~requiring~~and aoperational ~~capital~~risks. ~~expenditure,~~These ~~which~~include ~~meets~~the ~~rapidly~~ability ~~evolving~~to ~~business~~forecast ~~needs~~customer preferences and ~~has~~demand, ~~changed~~managing production capacity to meet the ~~competitive~~demand ~~landscape.~~for Wenew ~~also~~products ~~compete~~and inservices ~~the~~and ~~emerging~~avoid ~~cloud~~excessive ~~operations~~inventories ~~market,~~of ~~where~~older ~~growth~~products isand ~~being~~components, ~~driven~~manage bythe ~~increased~~transition ~~customer~~from ~~cloud~~older ~~usage~~products and ~~commensurate spend~~solutions, ~~but~~and ~~customer~~handle ~~requirements~~the ~~are~~impact ~~still~~of ~~evolving.~~customer ~~There~~demand isfor nonew ~~clear~~offerings ~~leader~~versus inthose ~~this~~being ~~market~~replaced.

~~Competitors~~As ~~may~~customers ~~develop~~transition ~~new~~from ~~technologies,~~older products to newer ones, delays or ~~services~~decisions into ~~advance~~postpone ofthe ustransition orcould ~~establish~~lead to non-renewal of new ~~business~~offerings, ~~models~~impacting our ability to manage and forecast customer churn and expansion rates. Additionally, ~~more~~uncertainties ~~flexible~~related ~~purchase~~to ~~models~~the orprice-performance of new ~~technologies~~products ~~disruptive~~compared to ~~us.~~competitors, Bycompetitors’ ~~extending~~responses to our ~~flash~~new products, ~~cloud~~extended ~~storage,~~evaluation ~~converged~~periods ~~infrastructure~~by customers, and ~~cloud~~our ~~operations~~partners’ ~~offerings,~~investment in selling our new products add to the inherent risks. If we ~~are~~do ~~competing~~not inmanage ~~new~~these ~~segments~~risks ~~with~~effectively, ~~both~~our ~~traditional~~business, ~~competitors~~operating results, financial condition, and ~~new~~cash ~~competitors~~flows could face significant adverse impacts. Furthermore, ~~particularly~~entering ~~smaller~~new or emerging ~~storage~~markets ~~and~~will ~~cloud~~likely ~~operations~~increase ~~vendors.~~demands ~~The~~on ~~longer-term~~our ~~potential~~service and ~~competitiveness~~support ofoperations ~~these~~and ~~emerging~~expose ~~vendors~~us ~~remains~~ to beadditional ~~determined~~competition. InWe ~~cloud~~may ~~and~~struggle ~~converged~~to ~~infrastructure~~provide competitive products, weservices ~~also~~and ~~compete~~support ~~with~~for ~~large~~these ~~well-established~~market ~~competitors~~opportunities.

ItOur isgross ~~possible~~margins ~~that~~may ~~new competitors or alliances among competitors might emerge and rapidly acquire significant market share or buying power~~fluctuate. Changes in customer requirements or an increase in industry consolidation might result in stronger competitors that are better able to compete. In addition, current and potential competitors have established or might establish cooperative relationships among themselves or with third parties, including some of our partners or suppliers. For additional information regarding our competitors, see the section entitled “Competition” contained in Part I, Item 1 – Business of this Form 10-K.

~~Transition~~Our togross ~~consumption-based~~margins ~~business~~are ~~models~~influenced ~~may~~by ~~adversely~~a ~~affect~~variety ~~our~~of ~~revenues~~factors, including macroeconomic volatility, competitive pricing, component and ~~profitability~~product indesign ~~other~~costs, ~~areas~~inflation, foreign exchange currency fluctuations, and the volume and relative mix of ~~our~~revenues ~~business~~from product sales, software support, hardware support, and other services offerings. Factors such as aincreased ~~result~~component ~~may~~and ~~harm~~labor ~~our~~costs, ~~business~~pricing and discounting pressures, ~~operating~~changes ~~results~~in component costs and product prices, ~~financial~~or ~~condition~~shifts in revenue mix and ~~cash~~volume ~~flows~~from different offerings could negatively impact our revenues, gross margins or earnings.

WeAdditionally, ~~offer~~our ~~customers~~gross amargins ~~full~~are ~~range~~affected ofby ~~consumption~~the ~~models,~~cost ~~including~~of ~~cloud-based~~any ~~storage~~substandard ~~services~~materials and ~~storage~~our assales aand ~~service~~distribution ~~(STaaS)~~activities, ~~delivered~~including onpricing ~~premises.~~actions, ~~These~~rebates, ~~business~~sales ~~models~~initiatives, ~~continue~~discount ~~to evolve~~levels, and wethe ~~may~~timing ~~not~~of beservice ~~able~~contract torenewals. ~~compete~~Third-party ~~effectively,~~component ~~generate~~costs ~~significant~~make ~~revenues~~up ora ~~maintain~~significant ~~the~~portion ~~profitability~~ of our ~~consumption-based~~product ~~offerings~~costs. ~~Additionally,~~We ~~the increasing prevalence of cloud and SaaS delivery models offered by us and our competitors~~ may have adifficulty ~~dampening~~managing ~~impact~~these oncosts ~~overall~~if ~~demand~~supplies ~~for~~of ~~our~~certain ~~on-premises offerings sold in a traditional capex model~~components, ~~which~~including ~~could reduce our revenues and cash flow~~NAND, atbecome ~~least~~limited inor ~~the~~component ~~near~~prices ~~term~~rise. IfSuch welimitations docould ~~not~~increase ~~successfully execute~~ our ~~consumption~~product ~~model strategy or anticipate the needs of our customers, our revenues and profitability could decline~~costs.

AsWe ~~customer~~have ~~demand~~experienced, ~~for~~and ~~our~~may ~~consumption~~continue ~~model~~to ~~offerings increases~~experience, wenegative ~~will~~impacts ~~experience~~on ~~differences~~our ingross ~~the~~margins ~~timing~~due ofto ~~revenue~~rising ~~recognition~~component ~~between~~costs, ~~our~~logistics ~~traditional~~costs, ~~purchase~~tariffs ~~arrangements~~and ~~(for~~other ~~which~~trade ~~revenue~~barriers, isand ~~generally~~inflationary ~~recognized~~pressures. inAn ~~full~~increase atin ~~the~~component ~~time~~or ofdesign ~~delivery),~~costs relative to our ~~consumption~~product ~~model~~prices ~~offerings~~could ~~(for~~harm ~~which~~our ~~revenue~~gross ismargins ~~generally~~and ~~recognized ratably over the term of the arrangement)~~earnings. WeFailure ~~incur~~to ~~certain~~sustain ~~expenses~~or ~~associated~~improve ~~with~~our ~~the~~gross ~~infrastructure~~margins ~~and~~may ~~marketing~~have ofa ~~our~~material ~~consumption~~adverse ~~model~~effect ~~offerings~~on ~~in advance of~~ our ~~ability~~business toand ~~recognize~~stock ~~the revenues associated with these offerings~~price.

~~Due~~Issues related to the ~~global~~development ~~nature~~and use of ~~our~~artificial ~~business~~intelligence (AI), ~~risks~~including ~~inherent~~GenAI, incould lead to legal or regulatory action, damage our ~~international~~reputation, ~~operations~~or ~~could~~otherwise materially harm our business.

AAs ~~significant portion of our operations are located, and~~ a ~~significant~~technology ~~portion~~company ofat ~~our~~the ~~revenues~~forefront ~~are derived, outside~~ of ~~the~~AI ~~U.S. In addition~~innovation, ~~most of~~ our ~~products~~business ~~are~~faces ~~manufactured~~potential ~~outside~~risks ofassociated with the ~~U.S.,~~rapidly ~~and~~evolving weregulatory ~~have~~landscape ~~research~~for ~~and~~AI. ~~development,~~Governments ~~sales~~ and ~~service~~regulatory ~~centers~~bodies ~~overseas.~~worldwide ~~Accordingly,~~are ~~our~~increasingly ~~international~~enacting ~~operations,~~new ~~business~~laws and ~~future~~guidelines ~~operating~~to ~~results~~address ~~could~~the ~~be adversely impacted by economic~~ethical, ~~business~~privacy, ~~regulatory, social~~ and ~~political~~security ~~factors~~implications inof ~~foreign~~AI ~~countries~~technologies. ~~including~~Non-compliance, ~~among~~even ~~other~~if ~~things,~~inadvertent ~~the imposition of government controls, local political~~ or ~~economic~~without ~~conditions~~our ~~including recessionary cycles~~knowledge, ~~inflationary~~with ~~conditions~~these ~~and~~emerging ~~political~~regulations ~~uncertainty,~~could ~~economic~~result ~~sanctions,~~in ~~trade~~legal ~~protections~~ and ~~regulations~~financial ~~and export and import requirements~~penalties, ~~tariffs,~~reputational ~~tax policies~~damage, ~~treaties or laws, local labor conditions, transportation costs, government spending patterns, geopolitical tensions~~ and ~~uncertainties,~~operational ~~acts of terrorism, international conflicts and natural disasters in areas with limited infrastructure and adverse public health developments~~disruptions. ~~In particular~~Additionally, ~~ongoing trade tensions between~~ the ~~U.S.~~diverse and ~~China~~sometimes ~~could~~conflicting ~~impact~~nature ~~our~~of ~~business~~international ~~and~~AI ~~operating~~regulations ~~results.~~may ~~Any~~pose ~~increase~~challenges in ~~tensions~~maintaining ~~between~~consistent ~~China~~compliance ~~and~~across ~~Taiwan,~~different ~~including~~jurisdictions. ~~threats~~The ofcomplexity ~~military~~and ~~actions~~novelty ~~or escalation~~ of ~~military~~these ~~activities,~~laws ~~could~~may ~~adversely~~also ~~affect~~require ~~our~~investments ~~or our contract manufacturers’ ability to source key supply chain components included~~ in ~~our~~compliance ~~products. As a result of Russia’s actions in Ukraine~~infrastructure, ~~numerous~~including ~~countries~~enhanced ~~and~~data ~~organizations~~governance ~~have imposed sanctions and export controls~~frameworks, ~~while~~algorithmic ~~businesses~~transparency, ~~including the Company, have limited or suspended Russian operations. Russia has likewise imposed currency restrictions~~ and ~~regulations~~bias ~~and~~mitigation ~~may further take~~ strategies.

We are increasingly building and/or leveraging AI technology in certain products, services, and business operations, and our research and development in this area is ongoing. As with many innovations, AI presents risks, challenges, and potential unintended consequences that could affect our and our customers’ adoption and use of this technology. AI algorithms and training methodologies may be flawed, and AI technologies are complex and rapidly evolving. We face significant competition in the market and from other companies regarding such technologies.

~~retaliatory~~We ~~trade~~may be unsuccessful in identifying or ~~other~~resolving ~~actions,~~ethical ~~including~~and ~~the~~legal ~~nationalization~~issues ofpresented ~~foreign~~by ~~businesses.~~the ~~These~~use ~~actions~~of ~~could~~AI ~~impact~~before ~~our~~they ~~supply~~arise. ~~chain,~~AI-related ~~pricing~~issues, ~~business~~deficiencies and/or ~~operating~~failures ~~results~~could ~~and~~result ~~expose~~in us(i) tolegal ~~cyberattacks.~~or Inregulatory ~~addition~~action, ~~due~~including to ~~the~~enforce ~~global~~new ~~nature~~legislation ofregulating ~~our~~AI ~~business,~~in wevarious ~~are~~jurisdictions ~~subject~~where towe ~~complex~~operate, ~~legal~~ and ~~regulatory~~the ~~requirements~~application inof ~~the~~existing ~~U.S.~~data ~~and~~protection, ~~the~~privacy, ~~foreign~~intellectual ~~jurisdictions~~property, inand ~~which~~other welaws; ~~operate~~(ii) ~~and~~damage ~~sell~~to our ~~products,~~reputation; ~~including~~(iii) ~~antitrust~~time-consuming and ~~anti-competition~~costly ~~laws~~litigation, ~~and~~including ~~regulations~~ related to ~~data~~intellectual ~~privacy,~~property; ~~data~~(iv) ~~protection,~~inability ~~and~~to ~~cybersecurity.~~protect Weour ~~are~~intellectual ~~also~~property; ~~subject~~(v) todisclosure ~~the potential loss~~ of ~~proprietary~~our confidential information ~~due to piracy, misappropriation,~~ or ~~laws~~(vi) ~~that~~other ~~may~~material beharm ~~less~~to ~~protective~~our ofbusiness. ~~our~~If ~~intellectual~~regulation ~~property~~significantly ~~rights~~delays ~~than~~or ~~U.S.~~impedes ~~laws.~~the ~~Such~~adoption ~~factors~~of ~~have~~AI, orwe ~~could~~may ~~have~~not anbe ~~adverse~~able ~~impact~~to onmeet our ~~business,~~development ~~operating~~goals ~~results,~~or ~~financial~~our ~~condition~~sales ~~and cash flows~~forecasts.

WeIncreasing ~~face~~competition ~~exposure~~and toindustry ~~adverse~~consolidation ~~movements~~could inharm ~~foreign currency exchange rates as a result of~~ our ~~international operations. These exposures may change over time as~~ business ~~practices evolve~~, ~~and they could have a material adverse impact on our~~ operating results, financial condition and cash flows. We utilize forward and option contracts in an attempt to reduce the adverse earnings impact from the effect of exchange rate fluctuations on certain assets and liabilities. Our hedging strategies may not be successful, and currency exchange rate fluctuations could have a material adverse effect on our operating results and cash flows. In addition, our foreign currency exposure on assets, liabilities, and cash flows that we do not hedge could have a material impact on our financial results in periods when the U.S. dollar significantly fluctuates in relation to foreign currencies.

~~Moreover,~~Our inmarkets ~~many~~are ~~foreign~~highly ~~countries~~competitive, ~~particularly in those with developing economies~~fragmented, itand ischaracterized ~~a common business practice to engage in activities that are prohibited~~ by ~~NetApp's~~rapidly ~~internal~~changing ~~policies and procedures, or U~~technology.S. ~~laws~~We ~~and~~face ~~regulations~~competition ~~applicable~~from tomany uscompanies, ~~such~~including asestablished ~~the~~public ~~Foreign~~companies, ~~Corrupt~~newer ~~Practices~~public ~~Act.~~companies ~~There~~with ~~can~~a bestrong nofocus ~~assurance~~on ~~that~~flash ~~all our employees~~storage, ~~contractors~~ and ~~agents,~~new asmarket ~~well~~entrants astargeting ~~those~~opportunities ~~companies~~in toGenAI ~~which~~and weapplication ~~outsource~~data ~~certain~~management offor ~~our~~Kubernetes. ~~business~~Some ~~operations,~~competitors ~~will~~offer ~~comply~~a ~~with~~broad ~~these~~range ~~policies,~~of ~~procedures,~~IT ~~laws~~products and~~/or~~ ~~regulations.~~services ~~Any~~(full-stack ~~such violation could subject us to fines and other penalties~~vendors), ~~which~~while ~~could~~others ~~have~~offer a ~~material~~more ~~adverse~~limited ~~effect on our business, operating results, financial condition and cash flows~~set.

Technology trends, such as GenAI, hosted or public cloud storage, software as a service (SaaS), IT as a service, and flash storage are driving significant changes in storage architectures and solution requirements. Cloud service providers offer storage on demand without requiring capital expenditure, which meets rapidly evolving business needs and has altered the competitive landscape. Competitors may develop new technologies, products, or services ahead of us or establish new business models, more flexible purchase models, or disruptive technologies. By extending our offerings in flash, cloud storage, converged infrastructure, and block storage, and GenAI, we are entering new segments and facing competition from both traditional competitors and emerging competitors. The long-term potential and competitiveness of emerging vendors remains uncertain.

New competitors or alliances among existing competitors could emerge and quickly gain significant market share or buying power. Changes in customer requirements or increased industry consolidation could result in stronger competitors better able to compete. Additionally, current and potential competitors may establish cooperative relationships among themselves or with third parties, including some of our partners or suppliers. For additional information regarding our competitors, see the section entitled “Competition” contained in Part I, Item 1 - Business of this Annual Report on Form 10-K.

Transition to consumption-based business models may adversely affect our revenues and profitability in other areas of our business, potentially harming our business, operating results, financial condition and cash flows.

We offer customers a variety of consumption models, including cloud-based storage services and storage as a service (STaaS) delivered on-premises. As these business models continue to evolve, we may face challenges in competing effectively, generating significant revenues, or maintaining the profitability of our consumption-based offerings. Additionally, the growing prevalence of cloud and SaaS delivery models offered by us and our competitors may reduce overall demand for our traditional on-premises offerings sold through a capital expenditure (capex) model, which could negatively impact our revenues and cash flow, at least in the short term. Failure to successfully execute our consumption model strategy or anticipate customer needs could lead to a decline in our revenues and our profitability could decline.

As customer demand for our consumption model offerings increases, we will encounter differences in the timing of revenue recognition compared to our traditional purchase arrangements. Revenue from traditional purchases is generally recognized in full at the time of delivery, whereas revenue from consumption model offerings is generally recognized ratably over the term of the arrangement. We incur certain expenses related to the infrastructure and marketing of our consumption model offerings before we can recognize the associated revenues.

If we are unable to attract and retain qualified personnel, our business, operating results, financial condition and cash flows could be harmed.

Our ~~continued~~ success depends, ~~in part,~~ on our ability to hire and retain qualified personnel ~~and~~ to advance our corporate strategy and ~~preserve~~maintain ~~the~~ key aspects of our corporate culture. ~~Because~~As our future success isrelies ~~dependent~~ on ~~our~~enhancing ~~ability to continue to enhance~~ and ~~introduce~~introducing new products and features, we ~~are~~ particularly ~~dependent~~need ~~on our ability~~ to ~~hire~~attract and retain qualified engineers and technical talent, ~~including~~especially in emerging ~~areas of~~ technology ~~such~~areas aslike AI and machine learning. InTo ~~addition, to~~ increase revenues, we ~~will~~must bealso ~~required to~~ increase the productivity of our sales force ~~and support infrastructure to achieve adequate customer coverage. Competition for qualified employees~~, ~~particularly~~which inmay ~~the~~require ~~technology~~an ~~industry,~~increase ~~remains tight. We have periodically reduced our workforce, including reductions of approximately 9% and 2% announced~~ in ~~fiscal~~support ~~2023~~infrastructure and ~~fiscal 2024, respectively, and these actions may make it more difficult to attract and retain qualified employees. Our inability to hire and retain qualified management and skilled~~ personnel, ~~particularly engineers, salespeople and key executive management, could disrupt our development efforts, sales results, business relationships and/or our ability~~ to ~~execute~~achieve ~~our~~adequate ~~business~~customer ~~plan and strategy on a timely basis and could materially and adversely affect our operating results, financial conditions and cash flows~~coverage.

~~Many~~Competition offor ~~our~~qualified employees, ~~participate~~particularly in ~~our~~the ~~hybrid~~technology ~~work program~~industry, ~~and~~is ~~work~~intense. ~~remotely~~We onhave aperiodically ~~full-~~reduced orour ~~part-time~~workforce, ~~basis.~~including ~~While~~restructuring ~~this~~plans ~~has~~announced ~~been~~in ~~generally~~fiscal ~~well~~2023, ~~received~~fiscal ~~by employees~~2024, itand ~~may~~fiscal ~~also~~2025, ~~create~~respectively. ~~other~~These ~~challenges~~actions ~~that~~may ~~impact~~make ~~our~~it ~~ability~~more challenging to attract and retain qualified ~~personnel,~~employees. ~~including,~~Failure ~~but not limited~~ to, ~~some~~hire ~~employees~~and ~~may~~retain ~~prefer~~skilled anmanagement inand ~~person~~personnel, ~~work~~particularly ~~environment~~engineers, ~~difficulty~~salespeople, ~~collaborating~~ and ~~communicating~~key ~~among~~executive ~~employees~~management, ~~and~~could ~~ability~~disrupt toour ~~maintain~~development ~~consistent~~efforts, ~~experience~~sales ofresults, ~~our~~business ~~corporate~~relationships, ~~culture~~ and ~~workforce~~our ~~morale.~~ability ~~If we are unable~~ to ~~effectively~~execute ~~manage~~our ~~the~~business ~~risks~~plan and ~~challenges~~strategy, ~~associated~~adversely ~~with~~affecting ~~hybrid work,~~ our ~~business~~operating ~~operations~~results, ~~and~~ financial ~~performance~~conditions ~~may~~and becash ~~adversely affected~~flows.

A number of our employees are foreign nationals who rely on visas and entry permits in order to legally work in the U.S. and other countries. In recent years, the U.S. has increased the level of scrutiny in granting H-1B, L-1 and other business visas. Compliance with new and unexpected U.S. immigration and labor laws could also require us to incur additional unexpected labor costs and expenses or could restrain our ability to retain and attract skilled professionals. Any of these restrictions could have a negative material adverse effect on our business, results of operations or financial conditions.

Equity grants are a critical component of our current compensation programs as they support attraction and engagement of key talent and align employee interests with shareholders. A competitive broad-based equity compensation program is essential to compete for talent in both the hardware and software industries, in which competitors for talent provide a more significant portion of compensation via equity. If we reduce, modify or eliminate our equity programs or fail to grant equity competitively, we may have difficulty attracting and retaining critical employees.

In addition, because of the structure of our sales, cash and equity incentive compensation plans, we may be at increased risk of losing employees at certain times. For example, the retention value of our compensation plans decreases after the payment of periodic bonuses or the vesting of equity awards.

~~Our~~Many ~~acquisitions~~of our employees participate in our hybrid work program and work remotely on a full- or ~~divestitures~~part-time ~~may~~basis. Changes ~~not~~to ~~achieve~~our ~~expected~~office ~~benefits~~environments, including the adoption of new work models and our requirements and/or expectations about when or how often certain employees work on-site or remotely may ~~increase~~not meet the expectations of our ~~liabilities~~employees, ~~disrupt~~and ~~our~~may ~~existing~~create ~~business~~challenges ~~and~~in ~~harm~~attracting ~~our~~and ~~operating~~retaining ~~results~~qualified personnel, ~~financial~~adversely ~~condition~~affecting our business operations and ~~cash~~financial ~~flows~~performance.

AsAdditionally, ~~part~~many of our ~~strategy,~~employees weare ~~seek~~foreign tonationals ~~acquire~~relying ~~other~~on ~~businesses~~visas and ~~technologies~~entry topermits ~~complement our current products and services, expand the breadth of our markets, or enhance our technical capabilities, and may seek~~ to ~~divest~~work alegally ~~business, product line, or division which no longer complements our current products or services. For example, we acquired a number of privately held companies~~ in the ~~past several years~~U.S. ~~The benefits we have received,~~ and ~~expect~~other ~~to receive~~countries, ~~from these~~ and ~~other~~may ~~acquisitions~~be ~~depend~~dependent on ~~our~~licenses ~~ability~~ to ~~successfully~~work ~~conduct~~with ~~due~~controlled ~~diligence, negotiate the terms of the acquisition and integrate the acquired business into our systems, procedures and organizational structure~~technology. ~~Similarly,~~Restrictions ~~the~~or ~~benefits~~difficulties wein ~~would~~obtaining ~~expect to receive from a divestiture would depend on our ability to manage separation of operations~~H-1B, ~~services,~~L-1 ~~product,~~ and ~~personnel, in addition to~~ other ~~risks.~~business ~~Any~~visas, ~~inaccuracy~~as inwell ~~our~~as ~~assumptions~~licenses ~~or any failure~~ to ~~uncover~~work ~~or mitigate liabilities or risks associated~~ with ancontrolled ~~acquisition or divestiture~~technologies, ~~such~~along aswith ~~differing~~compliance orwith ~~inadequate~~new ~~cybersecurity~~immigration and ~~data~~labor ~~privacy~~laws ~~protection controls or contractual limitations of liability,~~ and ~~any~~unintended ~~failure~~impacts tofrom ~~make~~changes anin ~~acquisition~~immigration orpolicy ~~divestiture on favorable terms, integrate~~ or ~~divest~~in the ~~subject~~enforcement ~~business~~of orexisting ~~assets~~immigration aslaws and ~~when expected~~policies, orcould ~~retain~~lead ~~or separate key employees of the subject company or business may reduce or eliminate the expected benefits~~ to ~~us,~~unexpected ~~increase~~labor ~~our~~ costs, ~~disrupt~~and hinder our ~~operations,~~ability ~~result~~to inretain ~~additional~~and ~~liabilities,~~attract ~~investigations~~skilled ~~and litigation~~professionals, ~~and~~negatively ~~may~~impacting ~~also harm~~ our ~~strategy~~business, ~~our business and our operating~~ results. ~~The~~of ~~failure~~operations ~~to achieve expected acquisition~~ or ~~divestiture~~financial ~~benefits may also result in impairment charges for goodwill and intangible assets~~conditions.

WeEquity ~~often~~grants ~~incur~~are ~~expenses~~a ~~before~~crucial wepart ~~receive~~of ~~related~~our ~~benefits~~compensation programs, supporting talent attraction and ~~expenses~~engagement and aligning employee interests with stockholders. A competitive broad-based equity compensation program is essential to compete for talent in both the hardware and software industries, where competitors offer significant equity compensation. Reducing, modifying, or eliminating our equity programs, or failing to grant equity competitively, may behinder ~~difficult~~our ability to ~~reduce~~attract ~~quickly~~and ifretain ~~demand~~critical ~~declines~~employees.

~~We base our expense levels in part on future revenue expectations and a significant percentage of our expenses are fixed. It is difficult to reduce our fixed costs quickly~~Furthermore, ~~and~~the ifstructure ~~revenue levels are below our expectations, operating results could be adversely impacted. During periods~~ of ~~uneven growth or decline, we may incur costs before we realize the anticipated related benefits, which could also harm~~ our ~~operating results. We have made, and will continue to make, significant investments in engineering,~~ sales, ~~service and support~~cash, ~~marketing~~ and ~~other~~equity ~~functions~~incentive tocompensation ~~support~~plans ~~and~~may ~~grow~~increase ~~our business. We are likely to recognize~~ the ~~costs~~risk ~~associated with these investments earlier than some~~ of ~~the~~losing ~~related~~employees ~~anticipated~~at ~~benefits~~certain times, such as ~~revenue~~after ~~growth, and~~ the ~~return~~payment onof ~~these~~periodic ~~investments~~bonuses ~~may be lower,~~ or ~~may~~the ~~develop~~vesting ~~more~~of ~~slowly,~~equity ~~than we expect, which could harm our business, operating results, financial condition and cash flows~~awards.

~~Initiatives~~Our ~~intended~~acquisitions toor ~~make~~divestitures ~~our cost structure, business processes and systems more efficient~~ may not achieve the expected benefits and could ~~inadvertently~~increase ~~have~~our anliabilities, ~~adverse~~disrupt ~~effect on~~ our existing business, and harm our operating results, financial condition and cash flows.

WeAs ~~continuously~~part ~~seek~~of toour ~~make~~strategy, ~~our~~we ~~cost~~may ~~structure~~seek ~~and~~to ~~business~~acquire ~~processes~~other ~~more~~businesses ~~efficient,~~and ~~including~~technologies byto ~~moving~~complement our ~~business~~current ~~activities~~products ~~from~~and ~~higher-cost to lower-cost locations~~services, ~~outsourcing~~expand ~~certain~~our ~~business~~market ~~processes and functions~~reach, ~~and~~or ~~implementing~~enhance ~~changes to~~ our ~~business~~technical ~~information systems~~capabilities. ~~These~~The ~~efforts~~benefits ~~may~~we ~~involve~~have areceived, ~~significant~~and ~~investment~~expect ofto ~~financial~~receive, ~~and~~from ~~human~~these ~~resources~~ and ~~significant~~other ~~changes~~acquisitions todepend on our ~~current~~ability ~~operating~~to ~~processes.~~successfully ~~For~~conduct ~~example,~~due ~~in fiscal 2024~~diligence, wenegotiate ~~implemented,~~the ~~and~~terms inof ~~fiscal~~the ~~2025~~acquisition weand ~~will~~integrate ~~continue~~the toacquired ~~implement, certain new~~ business ~~information~~into our systems, ~~including~~procedures ~~implementing~~and ~~our~~organizational ~~new enterprise resource planning system~~structure. We may ~~encounter~~also ~~difficulties~~divest inbusinesses, ~~implementing~~product ~~these~~lines, ~~new~~or ~~business~~divisions ~~information~~that ~~systems~~no orlonger ~~maintaining~~align ~~and~~with ~~upgrading~~our ~~existing~~current ~~systems and software~~offerings. ~~Such~~For ~~difficulties~~example, ~~may~~we ~~lead~~sold toour ~~significant~~FinOps ~~expenses~~business ~~or losses due~~ to ~~unexpected~~Flexera ~~additional~~in ~~costs~~fiscal ~~required~~2025. toRealizing ~~implement~~the orbenefits ~~maintain~~we ~~systems,~~would ~~disruption~~expect into ~~business~~receive ~~operations,~~from ~~loss~~a ofdivestiture ~~sales~~would ordepend ~~profits,~~on ~~or disruption to~~ our ability to ~~timely~~manage ~~and~~the ~~accurately~~separation ~~process and report key aspects~~ of ~~our financial statements and~~operations, ~~as a result~~services, ~~may have a material adverse effect on our business~~products, ~~results~~and ~~of operations~~personnel, ~~financial~~in ~~condition~~addition ~~and~~to ~~prospects~~other risks.

InAny ~~addition,~~inaccuracy asin weour ~~move~~assumptions ~~operations~~or ~~into~~failures ~~lower-cost~~to ~~jurisdictions~~identify and ~~outsource~~mitigate ~~certain~~liabilities ~~business~~or ~~processes,~~risks weassociated ~~become~~with ~~subject~~an toacquisition ~~new~~or ~~regulatory~~divestiture ~~regimes~~– ~~and~~such ~~lose~~as ~~control~~differing ofor ~~certain~~inadequate ~~aspects~~cybersecurity ofand ~~our~~data ~~operations~~privacy ~~and,~~protection ascontrols aor ~~consequence,~~contractual ~~become~~limitations ~~more~~of ~~dependent~~liability ~~upon~~– ~~the~~could ~~systems~~reduce ~~and~~or ~~business~~eliminate ~~processes~~the ofexpected ~~third-parties~~acquisition or divestiture benefits. If we ~~are~~fail ~~unable~~ to ~~move~~make ~~our~~acquisitions ~~operations, outsource business processes~~ or ~~implement~~divestitures ~~new~~on ~~business~~favorable ~~information~~terms, ~~systems~~integrate inor adivest ~~manner~~the ~~that~~subject ~~complies~~business ~~with~~or ~~local~~assets ~~law~~as ~~and~~planned, ~~maintains~~or ~~adequate~~retain ~~standards,~~or ~~controls~~separate ~~and~~key ~~procedures~~employees, ~~the~~our ~~quality~~costs ofcould increase, our ~~products~~operations ~~and~~could ~~services~~be ~~may~~disrupted, ~~suffer~~ and we ~~may~~could beface ~~subject~~additional ~~to increased litigation risk~~liabilities, ~~either~~investigations ofand ~~which~~litigation. This could ~~have~~harm ~~an adverse effect on~~ our strategy, business, ~~operating results~~ and ~~financial~~operating ~~condition~~results. Additionally, wethe ~~may~~failure ~~not~~to achieve ~~the~~ expected benefits offrom ~~these~~acquisitions ~~and~~or ~~other~~divestitures ~~transformational~~may ~~initiatives,~~result ~~which~~in ~~could~~impairment ~~harm~~charges ~~our~~for ~~business,~~goodwill ~~operating results, financial condition~~ and ~~cash~~intangible ~~flows~~assets.

WeRisks ~~are~~Related ~~exposed~~ to ~~credit~~Our risks, our investment portfolio may experience fluctuations in market value or returns, and our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail. Operations

We ~~maintain~~often anincur ~~investment~~expenses ~~portfolio~~before ofreceiving ~~various~~related ~~holdings~~benefits, ~~types,~~ and ~~maturities.~~it ~~Credit~~may ~~ratings and pricing of our investments can~~ be ~~negatively~~difficult affected by liquidity, credit deterioration, financial results, economic risk, political risk, sovereign risk or other factors. As a result, the value and liquidity of our investments and the returns thereon may fluctuate substantially. Unfavorable macroeconomic conditions, rising interest rates, or other circumstances could result in an economic slowdown and possibly cause a global recession. An economic slowdown or increased regional or global economic uncertainty may lead to ~~failures~~reduce ofexpenses ~~counterparties,~~quickly ~~including~~if ~~financial~~demand ~~institutions, governments and insurers, which could result in a material decline in the value of our investment portfolio and~~ declines.

We base our expense levels partly on future revenue expectations, and a significant portion of our expenses are fixed. Reducing these fixed costs quickly can be challenging, and if our revenue falls below expectations, our operating results could be adversely impacted. During periods of uneven growth or decline, we may incur costs before realizing the anticipated benefits, which could also harm our operating results.

We have made, and will continue to make, significant investments in engineering, sales, service and support, marketing, and other functions to support and grow our business. The costs associated with these investments are likely to be recognized earlier than some of the related anticipated benefits, such as revenue growth. Additionally, the return on these investments may be lower or may develop more slowly than we expect, which could harm our business, operating results, financial condition and cash flows.

Initiatives to improve our cost structure, business processes, and systems may not achieve the expected benefits and could negatively impact our reputation, business, operating results, financial condition and cash flows.

We continuously strive to make our cost structure and business processes more efficient, including by relocating our business activities from higher-cost to lower-cost locations, outsourcing certain business processes and functions, and implementing changes to our business information systems. These efforts require significant investment of financial and human resources and substantial changes to our current operations. For example, in fiscal 2025, we continued our implementation of certain new business information systems, including a new enterprise resource planning (ERP) system to enhance and standardize our processes, improve oversight, and better serve our customers. However, any disruption during this transition could impact our ability to send and track invoices, process

~~substantially~~vendor ~~reduce our investment returns. We regularly maintain cash balances at large third-party financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250~~payments,~~000~~ ~~and~~pay ~~similar regulatory insurance limits outside the United States. If a depository institution where we maintain deposits fails or is subject to adverse conditions in the financial or credit markets~~employees, wefulfill ~~may~~contractual ~~not be able to recover all of our deposits~~obligations, ~~which~~report ~~could adversely impact our operating liquidity and~~ financial ~~performance. Similarly~~results, ifmaintain ~~our~~effective ~~customers~~internal orcontrols, ~~partners experience liquidity issues as a result of financial institution defaults~~ or ~~non-performance~~operate ~~where they hold cash assets, their ability to pay us may become impaired and could have a material adverse effect on~~ our ~~results~~business ~~of operations, including the collection of accounts receivable and cash flows~~effectively.

~~Our~~We ~~goals~~may also encounter difficulties in implementing new business information systems or maintaining and ~~disclosures~~upgrading ~~related~~existing systems and software. These difficulties could lead to ~~environmental~~significant expenses or losses due to unexpected additional costs, ~~social~~disruption ~~and~~in ~~governance~~business ~~(ESG)~~operations, ~~matters~~loss ~~expose~~of ussales toor ~~risks~~profits, ~~that~~or ~~could~~delays ~~adversely~~in ~~affect~~processing and reporting key financial information. As a result, our ~~reputation~~business, results of operations, financial condition and ~~performance.~~prospects could be materially adversely affected.

~~We have established and publicly announced~~Additionally, ~~and~~as ~~may~~we ~~continue~~move operations to ~~establish~~lower-cost ~~and~~jurisdictions ~~publicly announce, initiatives~~ and ~~goals~~outsource ~~regarding~~certain ~~environmental~~business ~~matters~~processes, ~~diversity,~~we ~~and~~become ~~other~~subject ~~related matters, including our commitment~~ to ~~reducing~~new ~~our~~regulatory ~~greenhouse~~regimes ~~gas emissions~~ and ~~increasing~~lose ~~our~~control ~~representation~~ of ~~women~~certain inaspects ~~our~~of ~~global workforce and underrepresented minorities in~~ our ~~US workforce~~operations, inincreasing our ~~ESG~~dependence ~~Report,~~upon onthird-party ~~our~~systems ~~website, in our SEC filings~~ and ~~elsewhere~~processes. ~~These~~If ~~statements reflect our current plans and aspirations and are not quotas or guarantees that~~ we ~~will~~fail ~~be able~~ to ~~achieve~~move ~~them.~~operations, ~~These~~outsource ~~initiatives and goals could be difficult and expensive to implement~~processes, ~~the~~or ~~technologies we need to~~ implement ~~them~~new ~~may~~information ~~not~~in becompliance ~~cost~~with ~~effective~~local laws and ~~may~~maintain ~~not~~adequate ~~advance at a sufficient pace~~standards, controls and ~~ensuring the accuracy~~procedures, ~~adequacy or completeness of~~ the ~~disclosure~~quality of our ~~ESG~~products ~~initiatives~~and ~~can~~services bemay ~~costly~~suffer, ~~difficult~~ and ~~time-consuming.~~we ~~Our~~may ~~failure~~face toincreased ~~accomplish~~litigation orrisk. ~~accurately~~These ~~track~~issues ~~and report on these goals on a timely basis, or at all,~~ could adversely affect our ~~reputation~~business, ~~financial~~operating ~~performance and growth~~results, and ~~expose~~financial ~~us to increased scrutiny from our stakeholders, the investment community as well as enforcement authorities~~condition.

~~There~~If iswe ando ~~increasing~~not ~~focus~~achieve from U.S. and foreign government agencies, investors, customers, consumers, employees and other stakeholders concerning ESG matters, including sustainable products. These changing rules, regulations and stakeholder expectations have resulted in, and are likely to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. For example, developing and acting on ESG initiatives, and collecting, measuring and reporting ESG information and metrics can be costly, difficult and time consuming and is subject to evolving reporting standards, including the ~~SEC’s~~expected ~~climate-related~~benefits reporting requirements, the California climate reporting rules and, to the extent applicable, the European Union's (EU) Corporate Sustainability Reporting Directive. Statements about our ESG initiatives and goals, and progress against those goals, may be based on standards for tracking, measuring and reporting ESG matters that are continuing to evolve and assumptions that are subject to change. This may result in a lack of ~~consistent~~these ~~or meaningful comparative data from period to period or between the Company~~ and other ~~companies~~transformational ~~in the same industry. In addition~~initiatives, our ~~processes and controls may not always comply with evolving standards for identifying~~business, ~~measuring~~operating ~~and reporting ESG metrics~~results, ~~including~~financial ~~ESG-related disclosures that may be required of public companies by the Securities and Exchange Commission~~condition, and ~~such~~cash ~~standards~~flows ~~may change over time, which~~ could ~~result~~be ~~in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future~~harmed.

We ~~could~~are ~~also~~exposed ~~face~~to ~~scrutiny~~credit ~~from~~risks, ~~certain~~fluctuations ~~stakeholders~~in ~~for~~ the ~~scope~~market orvalue ~~nature~~ of our ~~ESG~~investment ~~initiatives or goals~~portfolio, ~~or for any revisions to these goals. If our ESG related data, processes~~ and ~~reporting~~potential ~~are~~adverse ~~incomplete~~effects ~~or inaccurate, if we fail to achieve progress with respect to our ESG goals~~ on ~~a timely basis, or at all, or if we were to be subject to government enforcement actions or private litigation from stakeholders because of~~ our ~~ESG~~cash ~~initiatives, our ability to attract or retain employees,~~ and ~~our~~cash ~~attractiveness~~equivalents asif anthe ~~investment, business partner, acquiror or supplier could be negatively impacted and our business,~~ financial ~~performance~~institutions ~~and~~holding ~~growth~~them ~~could be adversely affected~~fail.

We maintain an investment portfolio of various holdings, types, and maturities. The credit ratings and pricing of our investments can be negatively affected by factors such as volatile macroeconomic conditions, liquidity issues, credit deterioration, financial results, economic risk, political risk, sovereign risk, or other factors. Consequently, the value and liquidity of our investments and their returns may fluctuate significantly. Unfavorable macroeconomic conditions, rising interest rates, international trade protection measures and disputes (including economic and trade barriers, tariffs, sanctions and export controls), or other circumstances could lead to an economic slowdown or global recession, potentially causing failures of counterparties, including financial institutions, governments, and insurers. This could materially decrease the value of our investment portfolio and substantially reduce our investment returns.

We regularly maintain cash balances at large third-party financial institutions that exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit of $250,000 and similar regulatory insurance limits outside the United States. If a depository institution where we maintain deposits fails or faces adverse financial or credit markets conditions, we may not be able to recover all of our deposits, which adversely impacts our operating liquidity and financial performance.

Additionally, if our customers or partners experience liquidity issues due to financial institution defaults or non-performance where they hold cash assets, their ability to pay us may be impaired. This could materially affect our results of operations, including the collection of accounts receivable and cash flows.

Our initiatives and disclosures related to sustainability and corporate responsibility matters expose us to risks that could adversely affect our reputation and performance.

We have publicly announced, and may continue to establish and announce, initiatives regarding sustainability and corporate responsibility matters, as well as other related matters in our Impact Report, on our website and elsewhere. These statements, which are included in our Impact Report, on our website, in our SEC filings, and elsewhere, reflect our current plans and aspirations but are not guarantees of achievement. Implementing these initiatives and goals can be challenging and costly, and our current plans and aspirations may not all succeed or be achieved in the way and on the timelines we expect or at all. While these initiatives and goals are not a critical part of our business operations and may not significantly impact our financial performance directly, they are an important part of our business ethos and corporate culture that we believe is valued and appreciated by our investors and key stakeholders.

There is growing attention from governments, investors, customers, employees, and other stakeholders on sustainability and corporate responsibility matters, and laws and regulations regarding disclosure, reporting and diligence requirements continue to evolve. We may face scrutiny from stakeholders regarding the scope or nature of our sustainability and corporate responsibility initiatives or any changes to these initiatives. In addition, state attorneys general and other governmental authorities may take action against certain sustainability and corporate responsibility policies or practices, and we may become subject to restrictions on sustainability and corporate responsibility initiatives. Incomplete or inaccurate sustainability and corporate responsibility-related data, failure to achieve sustainability and corporate responsibility goals, or government enforcement actions or litigation relating to sustainability and corporate responsibility initiatives could negatively impact our ability to attract or retain employees, our attractiveness as an investment or business partner, and ultimately our business, financial performance, and growth.

Risks Related to Our Customers and Sales

A portion of our revenues is generated by large, recurring purchases from various customers, resellers and distributors. ~~A loss, cancellation or delay in purchases has negatively affected our revenues in the past, and could negatively affect our revenues in the future.~~

A significant portion of our net revenues depends on sales to a limited number of customers and distributors. We generally do not enter into binding purchase commitments with our customers, resellers and distributors for extended periods of time, and thus there is no guarantee we will continue to receive large, recurring orders from these customers, resellers or distributors. For example, our reseller agreements generally do not require minimum purchases, and our customers, resellers and distributors can stop purchasing and marketing our products at any time. Any deterioration in the solvency of our customers, resellers and distributors or the ability of such customers, resellers and distributors to obtain credit to finance purchases of our products could have a significant adverse effect on our results of operations and cash flow. If any of our key customers, resellers or distributors changes its pricing practices, reduces the size or frequency of its orders for our products, or stops purchasing our products altogether, our operating results, financial condition and cash flows could be materially adversely impacted. In addition, major customers may also seek pricing, payment, intellectual property-related, or other commercial terms that are less favorable to us, which may have a negative impact on our business, cash flow and operating results.

A significant portion of our net revenues rely on sales to a limited number of customers and distributors. We typically do not enter into binding long-term purchase commitments with our customers, resellers, and distributors, meaning there is no guarantee that we will continue to receive large, recurring orders from them. For instance, our reseller agreements generally do not require minimum purchases, and our customers, resellers, and distributors can stop purchasing and marketing our products at any time. The loss, cancellation, or delay of purchases has previously impacted our revenues and could again in the future.

Any deterioration in the financial stability of our customers, resellers, and distributors, or their ability to obtain credit to finance purchases of our products, could significantly adversely affect our results of operations and cash flow. If any of our key customers, resellers, or distributors changes its pricing practices, reduces the size or frequency of its orders, or stops purchasing our products altogether, our operating results, financial condition, and cash flows could be materially adversely impacted. Additionally, major customers may seek pricing, payment, intellectual property-related, or other commercial terms that are less favorable to us, which could negatively impact our business, cash flow, and operating results.

If we are unable to maintain and develop relationships with strategic partners, our revenues may be harmed.

Our growth strategy ~~includes~~relies on developing and maintaining strategic partnerships with major third-party software and hardware vendors to integrate our products into their products and ~~also~~ co-market ~~our products with~~ them. AMany ~~number~~ of our strategic partners are industry leaders that ~~offer~~provide us with expanded access to market segments inwhere ~~which~~ we do not directly participate. InStrategic ~~particular, strategic~~ partnerships with public cloud providers and other cloud service vendors are particularly critical to the success of our cloud-based business. However, there is intense competition for attractive strategic partners, and these relationships may not be exclusive, may not generate significant revenues and may be terminated on short notice. For instance, some of our partners are also partnering with our competitors, which may increase the availability of competing solutions and harm our ability to grow our relationships with those partners. Moreover, some of our partners, particularly large, more diversified technology companies, including major cloud providers, are also competitors, thereby complicating our relationships. If we are unable to establish new partnerships or maintain existing partnerships, if our strategic partners favor their relationships with other vendors in the storage industry or if our strategic partners increasingly compete with us, we could experience lower than expected revenues, suffer delays in product development, or experience other harm to our business, operating results, financial condition and cash flows.

~~Our~~However, ~~success~~there ~~depends~~is ~~upon~~intense ~~our~~competition ~~ability~~for toattractive ~~effectively~~strategic ~~plan~~partners, and ~~manage~~these ~~our~~relationships ~~resources~~may not be exclusive, may not generate significant revenues, and tomay ~~periodically~~be ~~restructure~~terminated on short notice. Some of our ~~business~~partners also collaborate with our competitors, ~~and~~which ~~such~~can ~~actions~~increase ~~may~~the ~~have~~availability anof ~~adverse~~competing ~~effect~~solutions onand hinder our ~~business~~ability to grow these relationships. Additionally, ~~operating~~some ~~results~~partners, ~~financial~~especially ~~condition~~large and ~~cash~~diversified ~~flows~~technology companies, including major cloud providers, are also our competitors, complicating our relationships.

~~Our~~If ~~ability~~we are unable to ~~successfully~~establish ~~offer~~new or maintain current partnerships, if our ~~products~~strategic ~~and~~partners ~~services~~prioritize intheir arelationships ~~rapidly~~with ~~evolving~~other ~~market~~vendors ~~requires~~in anthe ~~effective~~storage ~~planning~~industry, ~~forecasting,~~if ~~and~~our ~~management~~strategic ~~process~~partners seek to ~~enable~~renegotiate usor toterminate ~~effectively~~our ~~scale~~agreements, ~~and~~or ~~adjust~~if our ~~business~~strategic partners increasingly compete with us, we could experience lower-than-expected revenues, delays in ~~response~~product todevelopment, ~~fluctuating~~and ~~market~~other ~~opportunities~~adverse effects on our business, operating results, financial condition and ~~conditions~~cash flows.

InOur ~~fiscal~~success ~~2024,~~depends weupon ~~reorganized~~ our ~~sales~~ability ~~resources, which included changes and additions~~ to ~~our~~effectively ~~sales~~plan ~~leadership team, to gain operational efficiencies~~ and ~~improve~~manage ~~the alignment of~~ our resources ~~with customer~~ and ~~market~~periodically ~~opportunities.~~restructure ~~Reorganization of~~ our ~~sales resources~~business, ~~and~~which ~~ongoing~~may ~~evolution~~adversely ofaffect our ~~go-to-market model~~business, ~~could result in short or long-term disruption of our sales cycles, may not produce the efficiencies and benefits desired, and could harm our~~ operating results, financial condition, and cash flows.

WeTo ~~have~~successfully ~~and~~offer ~~may in the future undertake initiatives that could include reorganizing~~ our ~~workforce,~~products ~~restructuring, disposing of,~~ and~~/or~~ ~~otherwise~~services ~~discontinuing~~in ~~certain products, facility reductions or~~ a ~~combination~~rapidly ofevolving ~~these actions which have resulted in~~market, orwe ~~may~~need ~~result~~effective inplanning, ~~restructuring charges. Rapid changes in the size~~forecasting, ~~alignment or organization of our workforce, including our business unit structure, structure of our sales team,~~ and ~~sales~~management ~~account~~processes ~~coverage,~~that ~~could~~allow ~~adversely~~us ~~affect our ability~~ to ~~develop,~~scale ~~sell~~ and ~~deliver~~adjust ~~products and services as planned or impair~~ our ~~ability to realize our current or future~~ business ~~and~~in ~~financial~~response ~~objectives. Charges associated with these activities could harm our operating results. Our ability~~ to ~~achieve~~changing ~~the~~market ~~anticipated~~opportunities ~~cost savings~~ and ~~other benefits from these initiatives is subject to many estimates and assumptions, which are subject to uncertainties~~conditions. If our estimates and assumptions are incorrect, if we are unsuccessful at implementing changes, or if other unforeseen events occur, our business, financial condition, and results of operations could be adversely affected.

~~Reduced~~In ~~U.S.~~fiscal ~~government~~2024 ~~demand~~and ~~could~~fiscal ~~materially~~2025, ~~harm~~we reorganized our ~~business~~sales resources, ~~operating~~including ~~results~~changes and additions to our sales leadership team, ~~financial~~to ~~condition~~gain operational efficiencies and ~~cash~~better ~~flows.~~align Inour ~~addition~~resources with customer and market opportunities. However, wesuch reorganization and ongoing adjustments to our go-to-market model could bedisrupt ~~harmed~~our bysales ~~claims~~cycles ~~that~~in wethe ~~have~~short- or along-term, ~~channel~~may ~~partner~~not ~~has~~yield ~~failed~~the todesired ~~comply~~efficiencies ~~with~~and ~~regulatory~~benefits, and ~~contractual~~could ~~requirements~~harm ~~applicable~~our tooperating ~~sales~~results, tofinancial ~~the~~condition, ~~U.S.~~and ~~government~~cash flows.

~~The~~We ~~U.S.~~have ~~government~~undertaken, isand anmay ~~important~~in ~~customer~~the ~~for~~future ~~us. However~~undertake, ~~government~~initiatives ~~demand~~that isinclude ~~uncertain,~~reorganizing asour itworkforce, isrestructuring, ~~subject~~discontinuing tocertain ~~political~~products, ~~and~~acquisitions ~~budgetary fluctuations~~ and ~~constraints.~~dispositions ~~Events~~of ~~such~~businesses, asreducing ~~the~~facilities, ~~U.S.~~or ~~federal~~a ~~government~~combination ~~shutdown~~of ~~from~~these ~~December~~actions, ~~2018~~which tocould ~~January~~result ~~2019~~in ~~and~~restructuring ~~continued uncertainty regarding the U~~charges.S. ~~budget~~Rapid ~~and~~changes ~~debt~~in ~~levels~~the ~~have~~size, ~~increased~~alignment, ~~demand~~or ~~uncertainty~~organization ~~for~~of our ~~products.~~workforce, Inincluding ~~addition,~~our ~~like~~business ~~other~~unit ~~customers~~structure, ~~the~~structure ~~U.S.~~of ~~government~~our ~~may~~sales ~~evaluate~~team, ~~competing products~~ and ~~delay~~sales ~~purchasing~~account incoverage, ~~the~~could ~~face~~impair ofour ~~the~~ability ~~technology~~to ~~transitions~~develop, ~~taking~~sell ~~place~~and indeliver ~~the~~products ~~storage~~and ~~industry.~~services Ifas ~~the~~planned, ~~U.S. government~~ or anhinder ~~individual~~our ~~agency~~ability orto ~~multiple~~achieve ~~agencies~~our ~~within~~business ~~the~~and Ufinancial objectives.S. ~~government~~Charges ~~continue~~associated towith ~~reduce~~these oractivities ~~shift~~could ~~their~~harm ~~IT spending patterns,~~ our operating results~~, including revenues may be harmed~~.

~~Selling~~Our ~~our~~ability ~~products~~ to achieve the ~~U.S.~~anticipated ~~government,~~cost ~~whether~~savings ~~directly or through channel partners, also subjects us to certain regulatory~~ and ~~contractual~~other ~~requirements.~~benefits ~~Failure~~from ~~to comply with~~ these ~~requirements~~initiatives bydepends ~~either~~on usmany orestimates ~~our channel partners could subject us to investigations, fines,~~ and ~~other penalties~~assumptions, which ~~could~~are ~~materially~~subject ~~harm~~to ~~our operating results and financial condition~~uncertainties. AsIf anour ~~example,~~estimates ~~the United States Department of Justice (DOJ)~~ and ~~the~~assumptions ~~General~~are ~~Services Administration (GSA) have in the past pursued claims against and financial settlements with IT vendors~~incorrect, ~~including~~if uswe ~~and~~are ~~several~~unsuccessful ofat ~~our~~implementing ~~competitors and channel partners~~changes, ~~under~~or ~~the~~if ~~False Claims Act and~~ other ~~statutes~~unforeseen ~~related~~events ~~to pricing and discount practices and compliance with certain provisions of GSA contracts for sales to the federal government. Although the DOJ and GSA currently have no claims pending against us~~occur, weour ~~could face claims in the future. Violations of certain regulatory and contractual requirements~~business, ~~including~~financial ~~with respect to cybersecurity~~condition, ~~procurement~~and ~~process~~results ~~or affirmative action program requirements could also result in us being suspended or debarred from future government contracting. Any~~ of ~~these~~operations ~~outcomes~~ could ~~have~~be aadversely ~~material adverse effect on our business, operating results, financial condition and cash flows~~affected.

InReduced ~~response to increasing cybersecurity threats, the~~ U.S. government ~~has~~demand ~~subjected~~could ITmaterially ~~vendors,~~harm ~~including~~our usbusiness, tooperating ~~certain additional requirements. As an example~~results, ~~the~~financial ~~Executive~~condition ~~Order~~and oncash ~~Improving the Nation’s Cybersecurity (EO 14028), released in May 2021,~~ flows.

The U.S. government is an important customer for us, but its demand is uncertain due to political and budgetary fluctuations and constraints. Uncertainty related to the U.S. government budget and debt levels, changes to governmental agency structure, compliance with new initiatives and executive orders, and reductions in force have increased demand uncertainty for our products. Changes in administration may also lead to programs and initiatives moving in or out of favor, which may lead to varied perception of our company in the U.S. government market and may negatively impact our sales to the U.S. government. Additionally, the U.S. government, like other customers, may evaluate competing products and delay purchases during technology transitions in the storage

~~outlines~~industry. If the U.S. government’s ~~plan~~or toits ~~address~~agencies ~~software~~reduce ~~supply~~or ~~chain~~shift ~~security~~their ~~for~~IT ~~“critical~~spending ~~software” and other software. NetApp’s products are categorized as critical software~~patterns, ~~requiring~~our usrevenues to achieve compliance with the Secure Software Development Framework (SSDF) under NIST special publication 800-218. The current deadline for compliance is subject to the U.S. government’s finalization of their common attestation form, and ~~any~~operating ~~products~~results ~~that cannot attest to compliance with the SSDF~~ may ~~result~~be inadversely ~~delays or inability to execute contracts with customers, particularly with government entities~~affected.

Selling our products to the U.S. government, whether directly or through channel partners, subjects us to specific regulatory and contractual requirements, which may change or increase at short notice. Some of these requirements may extend past the specific nature and products of the arrangement and impact our broader corporate policies, initiatives and employee resources. Failure to comply with these requirements by either us or our channel partners could lead to investigations, fines, and other penalties (including the loss of such government contracts), harming our operating results and financial condition. For example, the U.S. Department of Justice (DOJ) has previously pursued claims and settlements with IT vendors, including us and our competitors and channel partners, under the False Claims Act and other statutes related to violations of regulatory and contractual requirements, which may include such areas as pricing and discount practices, cybersecurity, or procurement integrity. These actions, in addition to potential fines and other penalties as well as potential government audits and investigations, could also result in suspension or disbarment from future government contracts. Additionally, government certification requirements may change and, in doing so, restrict our ability to sell into the government sector until we have attained revised certifications (or are able to make the required certifications to the government). We could also be harmed by claims of non-compliance with these requirements by us or our channel partners. Any of these outcomes could materially adversely affect our business, operating results, financial condition and cash flows. In response to evolving and increasing security threats, the U.S. government has imposed additional requirements on IT vendors, including us. These requirements range from software development security (e.g., the Executive Order on Improving the Nation’s Cybersecurity (EO 14028), issued in May 2021, to require attestation to minimum requirements for our software development framework), to supply chain security (e.g., Section 5949 of the FY23 National Defense Authorization Act (NDAA) prohibits us from including in our products or using in our corporate environment certain semiconductor products and services), to cybersecurity (e.g., the U.S. Department of Defense’s Cybersecurity Maturity Model Certification (CMMC) program). Failure to meet these requirements as they apply to us and our products may result in delays or inability to execute contracts with customers, particularly with government entities.

If we do not achieve forecasted sales orders in any quarter, our operating results, financial condition and cash flows could be harmed.

We derive a ~~majority~~significant amount of our revenues in any given quarter from orders booked in the same quarter. ~~Orders~~These orders typically follow intra-quarter seasonality patterns, ~~weighted~~with a significant portion occurring toward the ~~back~~ end of the quarter. If we dofail ~~not~~to achieve the forecasted level, timing, and mix of orders ~~consistent~~in line with our quarterly targets and historical patterns, or if we experience cancellations of significant orders, our operating results, financial condition and cash flows could be ~~harmed~~adversely affected.

We are exposed to the credit and non-payment risk of our customers, resellers and distributors, especially during times of economic uncertainty and tight credit markets, which could result in material losses.

Most of our sales to customers are on an open credit basis, with typical payment terms of 30 days. WeDuring periods of economic uncertainty, when access to liquidity may be limited, we may experience increased losses as ~~potentially~~ more customers ~~are~~become unable to pay ~~all or a portion of~~ their obligations to us, ~~particularly~~either in ~~the~~full ~~current~~or ~~macroeconomic~~in ~~environment when access to sources of liquidity may be limited~~part. ~~Beyond our open credit arrangements~~Additionally, some ~~of our~~ customers have entered into recourse and non-recourse financing leasing arrangements using third-party leasing companies. Under ~~the terms of~~ recourse leases, which ~~are~~typically ~~generally~~last three years or less, we remain liable for the ~~aggregate~~ unpaid remaining lease payments to the third-party leasing companies inif the ~~event of~~ end-user customer ~~default~~defaults. During periods of economic uncertainty, our exposure to credit risks from our customers increases. In addition, our exposure to credit risks of our customers may increase further if our customers and their customers or their lease financing sources are adversely affected by global economic conditions.

Our exposure to credit risks from our customers increases during economic uncertainty or volatility. This risk may further increase if our customers, their customers, or their lease financing sources are adversely affected by global economic conditions.

Risks Related to Our Products and Services

Any disruption to our supply chain could materially harm our business, operating results, financial condition and cash flows.

We do not manufacture certain components used in our products. We rely on third parties to manufacture critical components, asand ~~well~~handle ~~as for~~ associated logistics. Our lack of direct ~~responsibility for, and~~ control over, these elements ~~of our business~~, ascombined ~~well~~with as the diverse international geographic locations of our manufacturing partners and suppliers, creates significant risks for us, including~~, among other things~~:

•

Limited number of suppliers for certain components;

•

No guarantees of supply and limited ability to control the quality, quantity and cost of our products or of their components;

•

~~The~~Potential ~~potential~~ for binding price or purchase commitments with our suppliers at higher than market rates;

•

Limited ability to adjust production volumes in response to our customers’ demand fluctuations;

•

Labor and political unrest at facilities we do not operate or own;

Geopolitical disputes disrupting our supply chain;

Impacts on our supply chain from adverse public health developments;

Business, legal compliance, litigation and financial concerns affecting our suppliers or their ability to manufacture and ship components in the quantities, quality and manner we require; and

Disruptions due to floods, earthquakes, storms and other natural disasters, especially those caused by climate change, and particularly in countries with limited infrastructure and disaster recovery resources.

Such risks have subjected us, and could in the future subject us, to supply constraints, price increases and minimum purchase requirements and our business, operating results, financial condition and cash flows could be harmed. The risks associated with our outsourced manufacturing model are particularly acute when we transition products to new facilities or manufacturers, introduce and increase volumes of new products or qualify new contract manufacturers or suppliers, at which times our ability to manage the relationships among us, our manufacturing partners and our component suppliers, becomes critical. New manufacturers, products, components or facilities create increased costs and risk that we will fail to deliver high quality products in the required volumes to our

•

~~customers.~~Geopolitical ~~Any~~disputes, ~~failure~~acts of ~~a manufacturer or component supplier to meet our quality~~terrorism, ~~quantity~~cyber orattacks ~~delivery requirements in a cost-effective manner will harm our business, including customer relationships~~ and ashacktivism adisrupting ~~result could harm~~ our ~~operating results, financial condition and cash flows. Additionally, disruption to our manufacturing operations, or those of our contract manufacturers, could significantly impact our ability to~~ supply ~~our~~chain; ~~customers and could produce a near-term severe impact on the Company.~~

•

Impacts on our supply chain from adverse public health developments;

•

Business, regulatory compliance, legal compliance, litigation, trade controls and financial concerns affecting our suppliers or their ability to manufacture and ship components in the quantities, quality and manner as required; and

•

Disruptions due to floods, earthquakes, storms, fires and other natural disasters, especially those caused by climate change, and particularly in countries with limited infrastructure and disaster recovery resources.

These risks have subjected us, and could in the future subject us, to supply constraints, price increases, and minimum purchase requirements, which could harm our business, operating results, financial condition, and cash flows. The risks associated with our outsourced manufacturing model are particularly acute when we transition products to new facilities or manufacturers, introduce and increase volumes of new products, or qualify new contract manufacturers or suppliers. During these times, our ability to manage relationships among ourselves, our manufacturing partners, and our component suppliers, becomes critical. New manufacturers, products, components, or facilities create increased costs and risk that we will fail to deliver high quality products in the required volumes to our customers. Any failure of a manufacturer or component supplier to meet our quality, quantity or delivery requirements in a cost-effective manner will harm our business, including customer relationships and as a result could harm our operating results, financial condition and cash flows. Additionally, disruption to our manufacturing operations, or those of our contract manufacturers, could significantly impact our ability to supply our customers and could produce a near-term severe impact on the Company.

We rely on a limited number of suppliers for critical product components.

We ~~rely~~depend on a limited number of suppliers for drives and other components ~~utilized~~used in ~~the~~assembling ~~assembly of~~ our products, including ~~certain~~some single -source suppliers,. ~~which~~This reliance has subjected us, and could in the future subject us, to price rigidity, periodic supply constraints, and ~~the~~challenges ~~inability~~in toproducing ~~produce~~ our products with the required quality and ~~in the~~ quantities ~~demanded~~. Consolidation among suppliers, particularly within the semiconductor and storage media industries, has ~~contributed~~led to price volatility and supply constraints. When industry supply is constrained, or the supply chain is disrupted, our suppliers may allocate volumes away from us and to our competitors, ~~all~~who ofdepend ~~which rely~~ on many of the same suppliers as we do. ~~Accordingly~~As a result, our business, operating results, financial condition and cash flows may be ~~harmed~~adversely affected.

If a material cybersecurity or other security breach impacts our services, ~~or occurs on our~~ systems, ~~within our~~ supply chain, or ~~on our~~ end-user customer systems, or if stored data is improperly accessed, ~~customers may reduce or cease using~~ our ~~solutions,~~business ~~our~~could ~~reputation~~suffer ~~may be harmed and we may incur~~ significant ~~liabilities~~harm.

We store and transmit, and sell products and services that store and transmit, personal, sensitive and proprietary data related to our products, our employees, customers, clients, ~~and~~ partners (including third-party vendors such as data centers and providers of SaaS, cloud computing, and internet infrastructure and bandwidth), and their respective customers,. ~~including~~This data includes intellectual property, ~~books~~records, ~~of record~~ and personal information. It is critical to our business strategy that our infrastructure, products, and services remain secure and are perceived as secure by customers, clients, and partners ~~to be secure~~. There are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, state-sponsored intrusions, industrial espionage, human error and technological vulnerabilities. Material cybersecurity incidents or other security breaches could result in (1) unauthorized access to, or loss or unauthorized use, alteration, or disclosure of, such information; (2) litigation, indemnity obligations, government investigations and proceedings, regulatory fines and penalties, and other possible liabilities; (3) negative publicity; and (4) disruptions to our internal and external operations. Any of these could damage our reputation and public perception of the security and reliability of our products, as well as harm our business and cause us to incur significant liabilities. In addition, a material cybersecurity incident or loss of personal information, or other material security breach could result in other negative consequences, including remediation costs, disruption of internal operations, increased cybersecurity protection costs and lost revenues.

~~Our~~ ~~clients~~There are numerous and ~~customers~~evolving ~~use~~cybersecurity ~~our~~and ~~platforms~~privacy ~~for~~risks, ~~the~~including ~~transmission~~criminal ~~and~~hacking ~~storage~~(eCrime), ofstate-sponsored ~~sensitive~~intrusions, ~~data.~~industrial Weespionage, dohacktivism, ~~not~~insider ~~generally~~threats, ~~review~~inadvertent ~~the~~disclosure, ~~information~~ransomware orattacks, ~~content~~social-engineering, ~~that~~exploitation ~~our~~of ~~clients~~unpatched ~~and~~or ~~their~~unmanaged ~~customers~~vulnerabilities, ~~upload~~cyber-attacks ~~and~~to ~~store~~the Company’s service providers, ~~and~~suppliers weor ~~have~~vendors, notechnological ~~direct~~vulnerabilities, ~~control~~or ~~over~~destruction ~~the~~or ~~substance~~other misuse of ~~the~~data ~~information~~that orcould ~~content~~harm ~~stored~~the ~~within~~Company, operations or our ~~platforms~~competitive position. IfIn ~~our~~some ~~employees~~cases, orthese ~~our~~types ~~clients,~~of ~~partners~~attacks orhave ~~their~~been ~~respective~~successful. ~~customers~~Increasing use ~~our~~of ~~platforms~~AI ~~for~~in ~~the~~techniques ~~transmission~~employed orby ~~storage~~threat actors will continue to increase the risk of ~~personal~~successful orattacks, ~~other~~while ~~sensitive~~also providing opportunities for improved attack detection and prevention capabilities. Our information, orsystems ~~our~~and ~~supply~~data ~~chain~~have ~~cybersecurity~~been isspecifically ~~compromised~~targeted by various threat actors, including nation-state affiliated threat actors, and we expect that our information systems and data will continue to be targeted in the future. Cybersecurity incidents or other security ~~measures~~breaches ~~are~~have ~~breached~~in asthe apast and could in the future result ofin: ~~third-party~~(1) ~~action~~unauthorized access to, ~~employee~~or ~~error~~loss or unauthorized use, ~~malfeasance~~alteration, ~~stolen~~ or ~~fraudulently~~disclosure ~~obtained~~of, ~~log-in~~personal, ~~credentials~~sensitive and/or ~~otherwise,~~proprietary ~~our~~data; ~~reputation~~(2) ~~could~~litigation, beindemnity ~~damaged~~obligations, ~~our~~government ~~business~~investigations ~~may~~and beproceedings, ~~harmed~~regulatory fines and wepenalties, ~~could~~and ~~incur~~other ~~significant~~possible liabilities; (3) revenue loss; (4) negative publicity and damage to our reputation; and (5) disruptions to our internal and external operations.

~~Security~~These ~~industry~~outcomes ~~experts~~could ~~and~~damage USour ~~Government~~reputation, ~~officials~~harm ~~continue~~our tobusiness, ~~emphasize~~and ~~risks~~lead to ~~our~~significant ~~industry~~liabilities. ~~Cyber attacks and security breaches continue to increase~~Additionally, ~~and~~a ofcybersecurity ~~particular~~incident ~~concern~~or ~~are~~loss ~~supply-chain attacks against software development and breaches~~ of ~~technology~~personal ~~service~~information ~~providers.~~has ~~We anticipate that cyberattacks will continue to increase~~ in the ~~future~~past ~~given cyber warfare has become a consistent lever within geopolitical conflicts~~ and ~~increasingly~~could ~~leverages hacktivism. We cannot give assurance that we will always be successful~~ in ~~preventing~~the orfuture ~~repelling~~result ~~unauthorized access to our systems. We also may face delays~~ in ~~our~~remediation ~~ability to identify or otherwise respond to any cybersecurity incident or any other breach. Additionally~~costs, wedisruption ~~use third-party service providers to provide some services to us that involve the storage or transmission~~ of ~~data~~internal operations, ~~such~~increased ascybersecurity ~~SaaS,~~protection ~~cloud computing~~costs, ~~and~~significant ~~internet infrastructure and bandwidth~~fines, and ~~they face various cybersecurity threats and also may suffer cybersecurity incidents~~ /or ~~other~~lost ~~security breaches~~revenues.

~~Many~~Our ~~jurisdictions~~clients ~~have~~and ~~enacted~~their orcustomers ~~are~~use ~~enacting~~our ~~laws~~platforms ~~requiring companies~~ to ~~notify~~transmit ~~regulators~~and orstore ~~individuals~~sensitive of data ~~security incidents involving certain types of personal data~~. ~~These~~We ~~mandatory~~do ~~disclosures~~not ~~regarding~~generally ~~security~~have ~~incidents~~the ~~often~~ability ~~lead~~ to ~~widespread~~review ~~negative publicity. Moreover,~~ the ~~risk~~information ofor ~~reputational~~content ~~harm~~they ~~may~~upload beand ~~magnified~~store, ~~and/or~~nor ~~distorted~~do ~~through~~we control the ~~rapid~~substance ~~dissemination~~ of this information ~~over~~or ~~the~~content. ~~internet,~~If ~~including~~our ~~through news articles~~employees, ~~blogs~~clients, ~~social media~~partners, ~~and~~or ~~other~~their ~~online~~respective ~~communication~~customers ~~forums~~use ~~and~~our ~~services.~~platforms ~~Any~~for ~~security~~the ~~incident,~~transmission ~~loss of data,~~ or ~~other~~storage ~~security~~of ~~breach,~~sensitive ~~whether actual or perceived~~information, or ~~whether impacting us or~~ our ~~third~~supply-~~party~~chain ~~service~~cybersecurity ~~providers,~~is ~~could~~compromised ~~harm~~and our ~~reputation, erode customer confidence in the effectiveness of our data~~ security measures, ~~negatively~~are ~~impact~~breached ~~our~~as ~~ability~~a toresult ~~attract~~of ~~new customers, cause existing customers to elect not to renew their support contracts or their SaaS subscriptions, or subject us to~~ third-party ~~lawsuits, regulatory fines or other~~ action ~~or liability~~, ~~which~~employee ~~could materially and adversely affect our business and operating results.~~

error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, our reputation could be damaged, our business may be harmed and we could incur significant liabilities.

Security industry experts and U.S. government officials continue to emphasize risks to our industry. Cyber-attacks and security breaches continue to increase, and of particular concern are supply-chain attacks against software development and breaches of technology service providers. We anticipate that cyberattacks will continue to increase in the future given cyber warfare has become a consistent lever within geopolitical conflicts and increasingly leverages hacktivism. We cannot give assurance that we will always be successful in preventing or repelling unauthorized access to our systems. We also may face delays in our ability to identify or otherwise respond to any cybersecurity incident or any other breach. Future cyber-attacks or incidents could persist undetected in our environments for a period of time. Additionally, we use third-party service providers to provide some services to us that involve the storage or transmission of data, such as SaaS, cloud computing, and internet infrastructure and bandwidth, and they face various cybersecurity threats and also may suffer cybersecurity incidents or other security breaches. While we conduct diligence on these third parties, our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been or will not be compromised. Many jurisdictions require companies to notify regulators or individuals of data security incidents involving certain types of personal data. These mandatory disclosures regarding security incidents often lead to widespread negative publicity. The risk of reputational harm may be magnified by the rapid dissemination of information online. Any security incident, loss of data, or other security breach, whether actual or perceived, or whether impacting us or our third-party service providers, could harm our reputation, erode customer confidence in the effectiveness of our data security measures, negatively impact our ability to attract new customers, cause existing customers to elect not to renew their support contracts or their SaaS subscriptions, or subject us to third-party lawsuits, regulatory fines or other action or liability, which could materially and adversely affect our business and operating results.

There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. Our existing general liability insurance coverage, cybersecurity insurance coverage and coverage for errors and omissions may not continue to be available on acceptable terms or may not be available in sufficient amounts to cover one or more large claims, or our insurers may deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, operating results, financial condition and cash flows.

If a data center or other third-party who relies on our products experiences a disruption in service or a loss of data, such disruption could be attributed to the quality of our products~~, thereby causing financial or reputational harm to our business~~.

Our clients, including data centers, SaaS providers, cloud computing services and internet infrastructure and bandwidth providers, rely on our products for their data storage needs. ~~Our~~These clients may authorize third-party technology providers to access their data on our systems. Because we do not control the transmissions between our clients, their customers, and third-party technology providers, or the processing of such data by third-party technology providers, we cannot ensure the complete integrity or security of such transmissions or processing. Errors or wrongdoing by clients, their customers, or third-party technology providers resulting in actual or perceived security breaches may result in such actual or perceived breaches being attributed to us.

A failure ~~or inability~~ to meet our ~~clients~~customers’ ~~expectations~~and ~~with~~partners’ ~~respect~~expectations toregarding security and confidentiality, ~~through~~due ato ~~disruption~~disruptions in ~~the~~ services provided by ~~these~~ third-party vendors, or the loss or alteration of data stored by such vendors, could ~~result~~cause in financial or reputational harm to our business. toThis ~~the~~harm ~~extent~~could ~~that~~occur ~~such~~if the disruption or data loss is caused by, or perceived ~~by our customers~~ to ~~have~~be ~~been~~ caused by, defects in our products. ~~Moreover,~~The ~~the~~ risk of reputational harm may be magnified ~~and/or~~by ~~distorted through~~ the rapid dissemination of information over the internet, including through news articles, blogs, social media, and other online communication forums and services. This ~~may~~could affect our ability to retain clients and attract new business.

Additionally, ~~Failure~~our tooperations ~~comply~~and ~~with~~select ~~new~~cloud ~~and~~services ~~existing~~rely ~~laws~~on ~~and~~third-party ~~regulations~~cloud ~~relating~~providers. Interruptions due to ~~privacy~~technical failures such as hardware or software issues or connectivity problems, ~~data~~security ~~protection~~incidents, AIcompliance changes, operational challenges and ~~information~~natural ~~security~~disasters could ~~cause~~reduce ~~harm~~revenue due to ~~our~~the ~~reputation,~~cloud ~~result~~services’ inmetered ~~liability~~billing and ~~adversely~~could ~~impact~~pose ~~our~~reputational ~~business~~risks. Moreover, dependence on key cloud infrastructure providers carries systemic risks, as we could face amplified reputational damage if observability features fail during client outages.

Failure ~~Our business is subject~~ to ~~increasing~~comply ~~regulation~~with bynew ~~various federal, state~~ and ~~international~~existing ~~governmental agencies responsible for enacting and enforcing~~ laws and regulations ~~relating~~related to privacy, data protection, AI and information security. ~~For~~could ~~example,~~cause ~~since~~harm ~~the~~to ~~effective~~our ~~date~~reputation, ofresult ~~the EU’s General Data Protection Regulation~~ in ~~2018,~~liability ~~the Court of Justice of the EU has issued rulings that have impacted how multinational companies must implement that law and the European Commission~~ (~~EC)~~including ~~has published new~~ regulatory ~~requirements~~penalties relating to cross-border data transfers applicable to multinational companies like NetApp. NetApp relies on a variety of compliance methods to transfer personal data of European Economic Area (EEA) individuals to other countries, including Binding Corporate Rules and ~~Standard Contractual Clauses (SCCs~~litigation)~~. In June 2021~~, ~~the EC imposed new SCC requirements which impose certain contract~~ and ~~operational~~adversely ~~requirements~~impact onour NetApp and its contracting parties, including requirements related to government access transparency, enhanced data subject rights, and broader third-party assessments to ensure safeguards necessary to protect personal data transferred from NetApp or its partners to countries outside the EEA, requiring NetApp to revise customer and vendor agreementsbusiness. ~~In addition to the EU’s General Data Protection Regulation, other global governments have adopted new privacy and data protection laws implementing similarly comprehensive regulatory frameworks.~~

Our ~~The~~business ~~rapidly evolving regulatory landscape in this area~~ is ~~likely~~increasingly subject to ~~remain~~regulation ~~uncertain for the foreseeable future given heightened cyber-security threats, and amid the innovation and adoption of GenAI technology. For example, the Artificial Intelligence Act, recently adopted~~ by ~~the~~various EUfederal, ~~sets~~state ~~forth new AI risk categorization, obligations,~~ and ~~prohibitions.~~international Ingovernmental ~~addition,~~agencies ~~changes~~responsible infor ~~the~~enacting ~~interpretation~~ and ~~enforcement~~enforcing ~~of existing~~ laws and regulations ~~could~~relating ~~impact~~to ~~our business operations and those of our partners~~privacy, ~~vendors~~data ~~and customers. Customers~~protection, ~~privacy advocates~~ and ~~industry~~information ~~groups~~security. ~~also~~For ~~may propose new and different self-regulatory standards or standards of care that may legally or contractually apply to us~~example, ~~and~~since ~~these standards may be subject to change. These factors create uncertainty and we cannot yet determine~~ the ~~impact~~EU’s ~~such~~General ~~future~~Data ~~laws,~~Protection ~~regulations~~Regulation ~~and~~became ~~standards,~~effective orin ~~changes to such laws~~2018, ~~regulations,~~the orCourt ~~standards,~~of orJustice toof ~~their~~the ~~interpretation~~EU orhas ~~enforcement,~~issued ~~may~~rulings that have onimpacted ~~our~~how ~~business~~multinational orcompanies ~~the~~must ~~businesses~~implement ofthat ~~our~~law ~~partners, vendors~~ and ~~customers. In addition, changes in~~ the ~~interpretation~~European ofCommission ~~existing~~(EC) ~~laws~~has ~~and~~published ~~regulations~~new ~~could~~regulatory ~~impact our business operations and those of our partners, vendors and customers.~~

Because the interpretation and application of many laws and regulations relating to privacy, data protection and information security, along with industry standards, are uncertain, it is possible that relevant laws, regulations, or standards may be interpreted and applied in manners that are, or are alleged to be, inconsistent with our data management practices or the features of our products. Any failure, or perceived failure, by us or our business partners to comply with federal, state or international laws and regulations relating to privacy, data protection, and information security, commitments relating to privacy, data protection, and information security contained in our contracts, self-regulatory standards that apply to us or that third parties assert are applicable to us, or our policies or notices we post or make available could subject us to claims, investigations, sanctions, enforcement actions and other proceedings, disgorgement of profits, fines, damages, civil and criminal liability, penalties or injunctions.

~~Additionally,~~requirements ~~as a technology provider, our customers expect that we can demonstrate compliance with laws and regulations~~ relating to ~~privacy,~~cross-border data ~~protection,~~transfers. ~~and~~NetApp ~~information~~relies ~~security,~~on ~~and~~compliance ~~our~~methods ~~inability~~such oras ~~perceived~~Standard ~~inability~~Contractual toClauses do(SCCs) soto ~~may~~transfer ~~adversely~~personal ~~impact~~data ~~sales~~ of ~~our~~individuals ~~products~~located ~~and services, particularly to customers~~ in ~~highly-regulated~~the ~~industries.~~European WeEconomic ~~have~~Area ~~invested~~(EEA) ~~company~~to ~~resources in complying with new laws, regulations, and~~ other ~~obligations~~countries. ~~relating~~In toJune ~~privacy~~2021, ~~data~~the ~~protection,~~EC ~~and~~imposed ~~information~~new ~~security,~~SCC ~~and~~requirements ~~we may be required to make additional, significant changes in our business operations, all of~~ which ~~may~~impose ~~adversely~~certain ~~affect~~contractual ~~our revenue~~ and ~~our~~operational ~~business~~requirements ~~overall.~~on AsNetApp ~~a result of any inability to comply with such laws~~ and ~~regulations,~~its ~~our~~contracting ~~reputation and brand may be harmed~~parties, weincluding ~~could~~requirements ~~incur~~related ~~significant costs, and financial and operating results could be materially adversely affected, and we could be required~~ to ~~modify~~government oraccess ~~change our products or our business practices~~transparency, ~~any~~enhanced ofdata ~~which could have an adverse effect on our business. Our business could be~~ subject ~~to stricter obligations~~rights, ~~greater fines~~ and ~~private~~broader ~~causes~~third-party ofassessments ~~action,~~to ~~including~~ensure ~~class~~safeguards ~~actions,~~necessary ~~under the enactment of new laws and regulations relating~~ to ~~privacy,~~protect personal data ~~protection,~~transferred ~~and~~from ~~information~~NetApp ~~security,~~or ~~including~~its ~~but~~partners ~~not~~to ~~limited~~countries ~~to,~~outside the ~~European Union General Data Protection Regulation~~EEA, ~~which~~requiring ~~provides~~NetApp ~~for penalties of up~~ to 20revise ~~million~~customer ~~Euros~~and orvendor ~~four~~agreements. ~~percent~~Other ~~of our annual~~ global ~~revenues,~~governments ~~the~~have ~~California~~adopted ~~Consumer~~new ~~Privacy~~privacy ~~Act~~ and ~~the~~data ~~California~~protection ~~Privacy~~laws ~~Rights~~implementing ~~Act,~~similarly ~~and~~comprehensive ~~other~~regulatory Uframeworks.~~S. state-based regulation.~~

IfThe ~~our~~interpretation ~~products~~and orapplication ~~services~~of many privacy, data protection, and information security laws and regulations, along with industry standards, are ~~defective~~uncertain. These laws, regulations, or standards may be interpreted and applied in ways that are ~~perceived~~inconsistent with our data management practices or product features. Additionally, government certification requirements for products like ours may change and, in doing so, restrict our ability to besell ~~defective~~into asthe agovernment ~~result~~sector ofuntil ~~improper~~we ~~use~~have attained revised certifications. Any failure, or ~~maintenance~~perceived failure, by us or our ~~operating~~business ~~results~~partners to comply with relevant laws, ~~including~~regulations, ~~gross~~contractual ~~margins~~commitments, required certifications, self-regulatory standards, or our policies could subject us to claims, investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and ~~customer~~criminal ~~relationships~~liability, ~~may~~penalties, beor ~~harmed~~injunctions.

~~Our~~As ~~products~~a ~~and~~technology ~~services are complex. We have experienced in the past~~provider, ~~and~~our customers expect us to ~~experience~~demonstrate incompliance ~~the~~with ~~future~~privacy, ~~quality~~data ~~issues impacting certain products~~protection, and ininformation ~~the~~security ~~future,~~laws weand ~~could experience reliability issues with services we provide~~regulations. ~~Such~~Our ~~quality~~inability, ~~and~~or ~~reliability~~perceived ~~issues~~inability, ~~may be due~~ to, ~~for~~do ~~example,~~so ~~our~~may ~~own~~adversely ~~designs~~impact orsales ~~processes, the designs or processes~~ of our ~~suppliers,~~products and~~/or~~ ~~flaws~~services, inespecially ~~third-party~~to ~~software~~customers ~~used~~ in ~~our~~highly ~~products~~regulated industries. ~~These~~We ~~types~~have ofinvested ~~risks~~resources ~~are~~in ~~most~~complying ~~acute~~with ~~when we are introducing~~ new ~~products.~~laws ~~Quality~~and orregulations ~~reliability issues have~~ and ~~could~~may ~~again~~need ~~in the future cause customers~~ to ~~experience~~make ~~outages~~additional orsignificant ~~disruptions~~changes ~~in service, data loss or data corruption. If we fail~~ to ~~remedy~~our abusiness ~~product defect or flaw~~operations, wewhich ~~may~~could ~~experience~~adversely aaffect ~~failure~~our ofrevenue aand ~~product~~overall ~~line,~~business. ~~temporary~~Non-compliance orcould ~~permanent~~harm ~~withdrawal from a product or market, damage to~~ our reputation, ~~loss~~and ~~of revenue~~brand, ~~inventory~~incur ~~costs~~significant ~~or product reengineering expenses and higher ongoing warranty and service~~ costs, ~~and~~materially ~~these~~affect ~~occurrences could have a material impact on~~ our ~~gross~~financial ~~margins, business~~ and operating results~~. In addition~~, ~~we exercise little control over how our customers use or maintain our products~~ and ~~services,~~require ~~and~~modifications into ~~some cases improper usage or maintenance could impair the performance of~~ our products ~~and services, which could lead to a perception of a quality~~ or ~~reliability~~business ~~issue~~practices. Customers may experience losses that may result from or are alleged to result from defects or flaws in our products and services, which could subject us to claims for damages, including consequential damages.

Our business could face stricter obligations, greater fines, and private causes of action under new privacy, data protection, and information security laws and regulations, including the GDPR, which provides for penalties of up to 20 million Euros or four percent of our total worldwide annual turnover of the preceding financial year (whichever is higher), the California Consumer Privacy Act, the California Privacy Rights Act, and other similar U.S. state-based regulations, as well as new and emerging privacy laws globally.

As NetApp provides technology services to EU financial institutions, the Digital Operational Resilience Act (DORA) imposes financial and legal risks. These include compliance costs for enhancing cybersecurity, performing resilience testing, requiring comprehensive documentation, increased audits, and detailed reporting. Stricter contractual obligations will be imposed by financial institution clients, necessitating more robust incident reporting and data protection measures. Non-compliance could result in legal liabilities, suspension of services and reputational damage. Additionally, NetApp must ensure that its subcontractors and suppliers also comply with DORA requirements, further increasing the complexity and potential liability.

If our products or services are defective, or are perceived to be defective, including as a result of improper use or maintenance, our operating results and customer relationships may be harmed.

Our products and services are complex. We have experienced in the past, and expect to experience in the future, quality issues impacting certain products, and we could experience reliability issues with services we provide, including security vulnerabilities, software bugs, hardware failure in networked storage appliances, incompatibility issues with customer systems or other applications, performance deficiencies causing slow data retrieval or processing, firmware or software updates causing system instability, compliance with various product certifications, and data breaches due to flaws in the product design. Such quality and reliability issues may be due to, for example, our own designs or processes, the designs or processes of our suppliers, and/or flaws in third-party software used in our products. These types of risks are most acute when we are introducing new products. Quality or reliability issues have and could again in the future cause customers to experience outages or disruptions in service, data loss or data corruption. If we fail to remedy a product defect or flaw, we may experience a failure of a product line, temporary or permanent withdrawal from a product or market, damage to our reputation, loss of revenue, inventory costs or product reengineering expenses and higher ongoing warranty and service costs, and these occurrences could have a material impact on our gross margins, business and operating results. In addition, we exercise little control over how our customers use or maintain our products and services, and in some cases improper usage or maintenance could impair the performance of our products and services, which could lead to a perception of a quality or reliability issue. Customers may experience losses that may result from or are alleged to result from defects or flaws in our products and services, which could subject us to claims for damages, including consequential damages.

Changes in regulations relating to our products or their components, or the manufacture, sourcing, distribution or use thereof, may harm our business, operating results, financial condition and cash flows.

The laws and regulations governing the manufacturing, sourcing, distribution and use of our products have become ~~more~~increasingly complex and stringent ~~over time~~. For example, in addition to various environmental laws relating to carbon emissions, the use and discharge of hazardous materials, and the use of certain minerals originating from identified conflict zones, many governments, including the U.S., the United Kingdom and Australia, have adopted regulations concerning the risk of human trafficking in supply chains which govern how workers are recruited and managed. We incur costs to comply with the requirements of such laws. Further, since our supply chain is complex, we may face reputational harm if our customers or other stakeholders conclude that we are unable to verify sufficiently the origins of the minerals used in the products we sell or the actions of our suppliers with respect to workers. As the laws and regulations governing our products continue to expand and change, our costs are likely to rise, and the failure to comply with any such laws and regulations could subject us to business interruptions, litigation risks and reputational harm.

Some of our products are subject to U.S. export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered, and any violation of these laws could have a material and adverse effect on our business, operating results, financial condition and cash flows.

Due to the global nature of our business, we are subject to import and export restrictions and regulations, including the Export Administration Regulations administered by the Commerce Department’s Bureau of Industry and Security (BIS) and the trade and economic sanctions regulations administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). The U.S., through the BIS and OFAC, places restrictions on the sale or export of certain products and services to certain countries and persons, including most recently to Russia, Belarus and portions of Ukraine. These regulations have caused the Company to stop selling or servicing our products temporarily in restricted areas, such as Russia, Belarus and portions of Ukraine. The BIS and OFAC have also placed restrictions on dealing with certain "blocked” entities, such as Russia’s federal security service (FSB), including the Company’s filing of notifications to the FSB for exporting certain products to Russia. Violators of these export control and sanctions laws may be subject to significant penalties, which may include significant monetary fines, criminal proceedings against them and their officers and employees, a denial of export privileges, and suspension or debarment from selling products to the federal government. Our products could be shipped to those targets by third parties, including potentially our channel partners, despite our precautions.

If we were ever found to have violated U.S. export control laws, we may be subject to various penalties available under the laws, any of which could have a material and adverse impact on our business, operating results and financial condition. Even if we were not

~~found~~the toUnited ~~have~~Kingdom, ~~violated~~and ~~such laws~~Australia, ~~the~~have ~~political~~adopted ~~and~~regulations ~~media~~to ~~scrutiny~~address ~~surrounding~~the ~~any~~risk ~~governmental investigation~~ of ushuman ~~could~~trafficking ~~cause~~in ussupply ~~significant~~chains, ~~expense~~which ~~and~~govern ~~reputational~~how ~~harm.~~workers ~~Such~~are ~~collateral~~recruited ~~consequences could have a material adverse impact on our business, operating results, financial condition~~ and ~~cash flows~~managed.

We incur costs to comply with these requirements. Given the complexity of our supply chain, we may face reputational harm if our customers or other stakeholders conclude that we are unable to verify sufficiently the origins of the minerals used in the products we sell or the actions of our suppliers with respect to workers. As the laws and regulations governing our products continue to expand and change, our costs are likely to rise, and the failure to comply with any such laws and regulations could subject us to business interruptions, litigation risks and reputational harm.

Any violation of U.S. export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered could have a material and adverse effect on our business, operating results, financial condition and cash flows.

Violators of export control and sanctions laws may be subject to significant penalties, which may include significant monetary fines, criminal proceedings against them and their officers and employees, a denial of export privileges, and suspension or debarment from selling products to the federal government. Our products could be diverted by third parties (including potentially our channel partners) to countries or end users under sanctions / embargo orders, despite our precautions.

If we were ever found to have violated U.S. export control laws or any trade-related laws or regulations, even if inadvertent or without our knowledge, we may be subject to various penalties available under the laws, any of which could have a material and adverse impact on our business, operating results and financial condition. Even if we were not found to have violated such laws, the political and media scrutiny surrounding any governmental investigation of us could cause us significant expense and reputational harm. Such collateral consequences could have a material adverse impact on our business, operating results, financial condition and cash flows.

Our failure to protect our intellectual property could harm our business, operating results, financial condition and cash flows.

Our success depends significantly upon developing, maintaining and protecting our proprietary technology. We rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality procedures and contractual provisions with employees, resellers, strategic partners and customers, to protect our proprietary rights. We currently have multiple U.S. and international patent applications pending and multiple U.S. and international patents issued. The pending applications may not be approved, and our existing and future patents may be challenged. If such challenges are brought, the patents may be invalidated. We may not be able to develop proprietary products or technologies that are patentable, and patents issued to us may not provide us with any competitive advantages and may be challenged by third parties. Further, the patents of others may materially and adversely affect our ability to do business. In addition, a failure to obtain and defend our trademark registrations may impede our marketing and branding efforts and competitive condition. Litigation may be necessary to protect our proprietary technology. Any such litigation may be time-consuming and costly. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary. In addition, the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the U.S. Our means of protecting our proprietary rights may not be adequate or our competitors may independently develop similar technology, duplicate our products, or design around patents issued to us or other intellectual property rights of ours. InThere ~~addition, while we train employees in confidentiality practices and include terms in our employee and consultant agreements to protect our intellectual property, there~~ is persistent risk that some individuals will improperly take our intellectual property after terminating their employment or other engagements with us, which could lead to intellectual property leakage to competitors and a loss of our competitive advantages.

We may be found to infringe on intellectual property rights of others.

We compete in markets in which intellectual property infringement claims arise in the normal course of business. Third parties have, from time to time, asserted intellectual property-related claims against us, including claims for alleged patent infringement brought by non-practicing entities. Such claims may be made against our products and services, our customers’ use of our products and services, or a combination of our products and third-party products. We also may be subject to claims and indemnification obligations from customers and resellers with respect to third-party intellectual property rights pursuant to our agreements with them. If we refuse to indemnify or defend such claims, even in situations in which the third-party’s allegations are meritless, then customers and resellers may refuse to do business with us.

Patent litigation is particularly common in our industry. We have been, and continue to be, in active patent litigations with non-practicing entities. While we vigorously defend our ability to compete in the marketplace, there is no guarantee that, in patent or other types of intellectual property litigation, we will prevail at trial or be able to settle at a reasonable cost. If a judge or jury were to find that our products infringe, we could be required to pay significant monetary damages and be subject to an injunction that could cause product shipment delays, require us to redesign our products, affect our ability to supply or service our customers, and/or require us to enter into compulsory royalty or licensing agreements.

We expect that companies in the enterprise storage and data management, cloud storage and cloud operations markets will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps. Any such claims, and any such infringement claims discussed above, could be time consuming, result in costly litigation, cause suspension of product shipments or product shipment delays, require us to redesign our products, or require us to enter into royalty or licensing agreements, any of which could materially and adversely affect our operating results, financial condition and cash flows. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all.

We rely on software from third parties, and a failure to properly manage our use of third-party software could result in increased costs or loss of revenue.

Many of our products are designed to include software licensed from third parties. Such third-party software includes software licensed from commercial suppliers and software licensed under public or open source licenses. We have internal processes to manage our use of such third-party software. However, if we fail to adequately manage our use of third-party software, then we may be subject to copyright infringement or other third-party claims. If we are non-compliant with a license for commercial software, then we may be required to pay penalties or undergo costly audits pursuant to the license agreement. In the case of open-source software licensed under certain “copyleft” licenses, the license itself may require, or a court-imposed remedy for non-compliant use of the open source software may require, that proprietary portions of our own software be publicly disclosed or licensed. Additionally, contract proposals, negotiations and software proposals are complex and frequently involve lengthy bidding and selection processes. We may not be able to negotiate extensions to our current third-party licenses when due for renewal or continue to secure such licenses under

~~commercially~~Patent ~~reasonable~~litigation ~~terms~~is particularly common in our industry. ~~Each~~We ofhave ~~the~~been, ~~foregoing~~and ~~could~~continue ~~result~~to be, in aactive ~~loss~~patent litigations with non-practicing entities. There is no guarantee that, in patent or other types of intellectual property ~~rights~~litigation, ~~increased~~we ~~costs~~will prevail at trial or be able to settle at a reasonable cost. If a judge or jury were to find that our products infringe, ~~damage~~we could be required to pay significant monetary damages and be subject to an injunction that could cause product shipment delays, require us to redesign our ~~reputation~~products, affect our ability to supply or service our customers, and/or arequire ~~loss~~us ofto ~~revenue~~enter into compulsory royalty or licensing agreements.

InWe ~~addition~~expect that companies in the enterprise storage and data management, ~~many~~and ofcloud ~~our~~storage, ~~products~~operational ~~use~~and ~~open-source~~workload ~~software.~~services ~~Such~~markets ~~open-source~~will ~~software~~increasingly ~~generally~~be ~~does~~subject ~~not~~to ~~provide~~infringement ~~any~~claims ~~warranty~~as orthe ~~contractual~~number ~~protection,~~of products and ~~may~~competitors bein ~~susceptible~~our toindustry ~~attack~~segment ~~from~~grows ~~bad~~and ~~actors~~the functionality of products in different industry segments overlaps. ~~Further~~Any such claims, ~~open-source~~and ~~software~~any ~~may~~such ~~contain~~infringement ~~vulnerabilities~~claims discussed above, ~~which~~could ~~may~~be ortime ~~may~~consuming, ~~not~~result bein ~~known~~costly atlitigation, ~~the~~cause ~~time~~suspension of ~~our~~product ~~inclusion~~shipments ofor ~~the~~product ~~software~~shipment indelays, arequire ~~product.~~us Ifto aredesign ~~vulnerability~~our inproducts, ~~such~~or ~~software~~require isus ~~successfully~~to ~~exploited~~enter into royalty or licensing agreements, weany of which could bematerially ~~subject~~and toadversely ~~damages~~affect ~~including~~our ~~remediation~~operating ~~costs~~results, ~~reputational~~financial ~~damage~~condition and ~~lost~~cash ~~revenues~~flows. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all.

We rely on software from third parties, and a failure to properly manage our use of third-party software could result in increased costs or loss of revenue.

Many of our products are designed to include software licensed from third parties. Such third-party software includes software licensed from commercial suppliers and software licensed under public or open-source licenses. We have internal processes to manage our use of such third-party software. However, if we fail to adequately manage our use of third-party software, then we may be subject to copyright infringement or other third-party claims. If we are non-compliant with a license for commercial software, then we may be required to pay penalties or undergo costly audits pursuant to the license agreement. In the case of open-source software licensed under certain “copyleft” licenses, the license itself may require, or a court-imposed remedy for non-compliant use of the open-source software may require, that proprietary portions of our own software be publicly disclosed or licensed. Additionally, contract proposals, negotiations and software proposals are complex and frequently involve lengthy bidding and selection processes. We may not be able to negotiate extensions to our current third-party licenses when due for renewal or continue to secure such licenses under commercially reasonable terms. Each of the foregoing could result in a loss of intellectual property rights, increased costs, damage to our reputation and/or a loss of revenue.

In addition, many of our products use open-source software. Such open-source software generally does not provide any warranty or contractual protection and may be susceptible to compromise and supply-chain attacks by threat actors. Further, open-source software or third-party software may contain vulnerabilities, which may or may not be known at the time of our inclusion of the software in a product. If a vulnerability in such software is successfully exploited, we could be subject to damages including remediation costs, reputational damage, and lost revenues.

Our failure to adjust to emerging standards may harm our business.

Emerging standards may adversely affect the UNIX®, Windows® and World Wide Web server markets upon which we depend. For example, we provide our open access data retention solutions to customers within the financial services, healthcare, pharmaceutical and government market segments, industries that are subject to various evolving governmental regulations, certifications and controls with respect to data access, reliability and permanence in the U.S. and in the other countries in which we operate. If our products do not meet and continue to comply with these evolving governmental regulations in this regard, customers in these market and geographical segments will not purchase our products, and we may not be able to expand our product offerings in these market and geographical segments at the rates which we have forecasted.

Risks Related to Our Securities

Our stock price is subject to volatility.

Our stock price is subject to changes in recommendations or earnings estimates by financial analysts, changes in investors' or analysts' valuation measures for our stock, changes in our capital structure, including issuance of additional debt, changes in our credit ratings, our ability to pay dividends and to continue to execute our stock repurchase program as planned and market trends and economic volatility unrelated to our performance.

~~Our~~If ability to pay quarterly dividends and to continue to execute our stock repurchase program as planned will be subject to, among other things, our financial condition and operating results, available cash and cash flows in the U.S., capital requirements, and other factors. Future dividends are subject to declaration by our Board of Directors, and our stock repurchase program does not obligate us to acquire any specific number of shares. However, if we fail to meet any investor expectations related to dividends and/or stock repurchases, the market price of our stock could decline significantly, and could have a material adverse impact on investor confidence. Additionally, price volatility of our stock over a given period may cause the average price at which we repurchase our own stock to exceed the stock’s market price at a given point in time.

Furthermore, speculation in the press or investment community about our strategic position, financial condition, results of operations or business can cause changes in our stock price. These factors, as well as general economic and political conditions and the timing of announcements in the public market regarding new products or services, product enhancements or technological ~~advances by our competitors or us, and any announcements by us of acquisitions, major transactions, or management changes may adversely affect our stock price.~~

advances by our competitors or us, and any announcements by us of acquisitions, major transactions, or management changes may adversely affect our stock price.

Our quarterly operating results may fluctuate materially, which could harm our common stock price.

Our operating results have fluctuated in the past and will continue to do so, sometimes materially. All of the matters discussed in this Risk Factors section could impact our operating results in any fiscal quarter or year. In addition to those matters, we face the following issues, which could impact our quarterly results:

•

Seasonality, such as our historical seasonal decline in revenues in the first quarter of our fiscal year and seasonal increase in revenues in the fourth quarter of our fiscal year;

•

Linearity, such as our historical intra-quarter customer orders and revenue pattern in which a disproportionate percentage of each quarter’s total orders and related revenue occur in the last month of the quarter; and

•

Unpredictability associated with larger scale enterprise software license agreements which generally take longer to negotiate and occur less consistently than other types of contracts, and for which revenue attributable to the software license component is typically recognized in full upon delivery.

If our operating results fall below our forecasts and the expectations of public market analysts and investors, the trading price of our common stock may decline.

There are risks associated with our outstanding and future indebtedness.

27As of April 25, 2025, we had $3.3 billion aggregate principal amount of outstanding indebtedness for our senior notes that mature at specific dates in calendar years 2025, 2027, 2030, 2032 and 2035. We may incur additional indebtedness in the future under existing credit facilities and/or enter into new financing arrangements. We may fail to pay these or additional future obligations, as and when required. Specifically, if we are unable to generate sufficient cash flows from operations or to borrow sufficient funds in the future to service or refinance our debt, our business, operating results, financial condition and cash flows will be harmed. Any downgrades from credit rating agencies such as Moody’s Investors Service or Standard & Poor’s Rating Services may adversely impact our ability to obtain additional financing or the terms of such financing and reduce the market capacity for our commercial paper. Furthermore, if prevailing interest rates or other factors result in higher interest rates upon any potential future financing, then interest expense related to the refinance indebtedness would increase.

As of April 26, 2024, we had $2.4 billion aggregate principal amount of outstanding indebtedness for our senior notes that mature at specific dates in calendar years 2024, 2025, 2027 and 2030. We may incur additional indebtedness in the future under existing credit facilities and/or enter into new financing arrangements. We may fail to pay these or additional future obligations, as and when required. Specifically, if we are unable to generate sufficient cash flows from operations or to borrow sufficient funds in the future to service or refinance our debt, our business, operating results, financial condition and cash flows will be harmed. Any downgrades from credit rating agencies such as Moody’s Investors Service or Standard & Poor’s Rating Services may adversely impact our ability to obtain additional financing or the terms of such financing and reduce the market capacity for our commercial paper. Furthermore, if prevailing interest rates or other factors result in higher interest rates upon any potential future financing, then interest expense related to the refinance indebtedness would increase.

In addition, all our debt and credit facility arrangements subject us to continued compliance with restrictive and financial covenants. If we do not comply with these covenants or otherwise default under the arrangements, we may be required to repay any outstanding amounts borrowed under these agreements. Moreover, compliance with these covenants may restrict our strategic or operational flexibility in the future, which could harm our business, operating results, financial condition and cash flows.

General Risks

Our business could be materially and adversely affected as a result of natural disasters, terrorist acts or other catastrophic events.

We depend on the ability of our personnel, inventories, equipment and products to move reasonably unimpeded around the world. Any political, military, terrorism, global trade, world health or other issue that hinders this movement or restricts the import or export of materials could lead to significant business disruptions. For example, the COVID-19 pandemic impeded the mobility of our personnel, inventories, equipment and products and disrupted our business operations. Furthermore, any economic failure or other material disruption caused by natural disasters, including fires, floods, droughts, hurricanes, tornadoes, earthquakes, and volcanoes; power or water loss or shortages; environmental disasters; telecommunications or business information systems failures or break-ins and similar events could also adversely affect our ability to conduct business. As a result of climate change, we expect the frequency and impact of such natural disasters or other material disruptions to increase. If such disruptions result in cancellations of customer orders or contribute to a general decrease in economic activity or corporate spending on IT, or directly impact our marketing, manufacturing, financial and logistics functions, or impair our ability to meet our customer demands, our operating results and financial condition could be materially adversely affected. Our headquarters is located in Northern California, an area susceptible to earthquakes and wildfires. If any significant disaster were to occur there, our ability to operate our business and our operating results, financial condition and cash flows could be adversely impacted.

We could be subject to additional income tax liabilities.

Our effective tax rate is influenced by a variety of factors, many of which are outside of our control. These factors include among other things, fluctuations in our earnings and financial results in the various countries and states in which we do business, changes to ~~the tax laws in such jurisdictions and the outcome of income tax audits. Changes to any of these factors could materially impact our operating results, financial condition and cash flows.~~

We receive significant tax benefits from sales to our non-U.S. customers. These benefits are contingent upon existing tax laws and regulations in the U.S. and in the countries in which our international operations are located. Future changes in domestic or international tax laws and regulations or a change in how we manage our international operations could adversely affect our ability to continue realizing these tax benefits.

Many countries around the world are beginning to implement legislation and other guidance to align their international tax rules with the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting Project (“BEPS”) recommendation and related action plans that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules and nexus-based tax incentive practices. As a result, many of these changes, if enacted in whole or in part, could increase our worldwide effective tax rate and harm our operating result, financial condition, and cash flows. Implementation of the BEPS inclusive framework (“Inclusive Framework”), including potential incremental taxes under a new global minimum tax framework known as Pillar Two, is effective in most jurisdictions for fiscal years beginning on or after January 1, 2024. The first fiscal year for which NetApp will be potentially subject to additional taxes under the Inclusive Framework is fiscal year 2025.

Our effective tax rate could also be adversely affected by changes in tax laws and regulations and interpretations of such laws and regulations, which in turn would negatively impact our earnings and cash and cash equivalent balances we currently maintain. Additionally, our effective tax rate could also be adversely affected if there is a change in international operations, our tax structure and how our operations are managed and structured, and as a result, we could experience harm to our operating results and financial condition. For example, on August 16, 2022, the U.S. enacted the Inflation Reduction Act, which includes a corporate minimum tax

~~and~~the atax 1%laws ~~excise~~in ~~tax~~such onjurisdictions ~~net~~and ~~stock~~the ~~repurchases.~~outcome Weof ~~continue~~income totax ~~evaluate~~audits. ~~the~~Changes ~~impacts~~to any of ~~changes~~these infactors ~~tax~~could ~~laws~~materially ~~and~~impact ~~regulations~~our onoperating ~~our~~results, ~~business~~financial condition and cash flows.

Many countries around the world are beginning to implement legislation and other guidance to align their international tax rules with the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting Project (BEPS) recommendation and related action plans that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules and nexus-based tax incentive practices. As a result, many of these changes, if enacted in whole or in part, could increase our worldwide effective tax rate and harm our operating results, financial condition, and cash flows. Implementation of the BEPS inclusive framework (Inclusive Framework), including potential incremental taxes under a new global minimum tax framework known as Pillar Two, is effective in most jurisdictions for fiscal years beginning on or after January 1, 2024. We are currently subject to Pillar Two rules starting in our fiscal year 2025 and could potentially be subject to additional taxes under the Inclusive Framework. Amount B under Pillar One of the Inclusive Framework is related to standardized returns for baseline marketing and distribution activities. Amount B is applicable to NetApp beginning in fiscal 2026 and we could be subject to higher controlled profit requirements for some of our global distribution entities which could increase our global tax burden.

Our effective tax rate could also be adversely affected by changes in tax laws and regulations and interpretations of such laws and regulations, which in turn would negatively impact our earnings and cash and cash equivalent balances we currently maintain. Additionally, our effective tax rate could also be adversely affected if there is a change in international operations, our tax structure and how our operations are managed and structured, and as a result, we could experience harm to our operating results and financial condition. We continue to evaluate the impacts of changes in tax laws and regulations on our business.

We are routinely subject to income tax audits in the U.S. and several foreign tax jurisdictions. If the ultimate determination of income taxes or at-source withholding taxes assessed under these audits results in amounts in excess of the tax provision we have recorded or reserved for, our operating results, financial condition and cash flows could be adversely affected.

We may not be able to maintain appropriate internal financial reporting controls and procedures.

We cannot be assured that significant deficiencies or material weaknesses in our internal control over financial reporting will not exist in the future. Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, including in connection with our new ERP system, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial reporting required under the Sarbanes-Oxley Act and the rules promulgated thereunder. The existence of a material weakness could result in errors in our financial statements that could result in a restatement of financial statements, cause us to fail to timely meet our reporting obligations, or cause investors to lose confidence in our reported financial information, which could cause a decline in the market price of our stock and we could be subject to sanctions or investigations by the SEC or other regulatory authorities including equivalent foreign authorities. Further, irrespective of the controls that we adopt, we cannot be assured that we will not experience fraudulent financial reporting in the future, including earnings mismanagement, recording fictitious revenues, improper asset valuation, understating liabilities or expenses, inadequate disclosure, reserve manipulation, misuse of judgments in financial reporting, concealing fraud or illegal activities, information tampering, and insider trading based on non-public information about the Company's financials.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

Risk Management and Strategy

The Company regularly assesses risks from cybersecurity threats, monitors its information systems for potential vulnerabilities, and tests those systems pursuant to the Company’s cybersecurity policies, standards, processes and practices, which are integrated into the Company’s overall risk management system. To protect the Company’s information systems from cybersecurity threats, the Company uses various security technologies and tools that help the Company identify, escalate, investigate, manage, resolve and recover from security incidents in a timely manner. These efforts include:

•

ongoing collection of threat intelligence and environment awareness through monitoring,

•

data protection management and vulnerability monitoring through data loss prevention and exfiltration tools,

•

cybersecurity risk management processes and practices,

•

control assurance,

•

secure development of new products,

•

identity and access management,

•

incident response, auditing and monitoring, and

•

maintaining a 24x7 security operations center to allow for always available incident response.

The Company takes a risk-based approach to cybersecurity and has implemented cybersecurity policies throughout its operations that are designed to address cybersecurity threats and incidents. In particular, the Company follows an incident escalation process that is incorporated into ~~our~~its incident and risk management processes. In the event wethe ~~identify~~Company identifies a cybersecurity incident, ~~our~~its senior management, consisting of the Chief Financial Officer, Chief Information Security Officer (~~CSO~~CISO), ~~and~~ Chief ~~Legal~~Administrative Officer, and Executive Vice President of Business Technology and Operations review the facts and circumstances involved in such cybersecurity incident, or series of related cybersecurity incidents.

The Company partners with third parties to assess the effectiveness of ~~our~~its cybersecurity prevention and response systems and processes, including third-party review of the Company’s Information Security Management System for ISO 27001 controls, assessment of the Company’s cloud products and managed services according to the American Institute of CPAs (AICPA) Service Organization Control (SOC) Audit Type II, and new product validation as part of the Company’s secure development lifecycle. The Company additionally engages third-party providers in support of endpoint detection and responses, data loss prevention efforts, and incident management efforts.

To date, the Company is not aware of cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition. For additional discussion of cybersecurity risks and potential related impacts on the Company, refer to the risk factors in Part I, Item 1A. “Risk Factors,” including “If a material cybersecurity or other security breach impacts our services, ~~or occurs on our~~ systems, ~~within our~~ supply chain, or ~~on our~~ end-user customer systems, or if stored data is improperly accessed, ~~customers may reduce or cease using~~ our ~~solutions,~~business ~~our~~could ~~reputation~~suffer ~~may be harmed and we may incur~~ significant ~~liabilities~~harm.”

Governance

~~Our~~NetApp's Board of Directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees. The Audit Committee of the Board of Directors oversees the Company’s risk management program, which focuses on the most significant risks the Company faces in the short-, intermediate-, and long-term timeframes. The Company’s ~~CSO~~CISO regularly updates each of the Board of Directors and the Audit Committee at least twice a year. Such updates include a review of cybersecurity risks affecting the ~~company~~Company, related metrics, and any incidents or issues that require attention from the Board of Directors.

The ~~CSO~~CISO provides leadership, strategic direction, and oversight for NetApp'’s Global Security Risk and Compliance functions and security program. Global Security executives oversee management of risks and track projects progress, remediations, and any issues related to cybersecurity risks.

NetApp’s ~~CSO, in coordination with the Chief Information Security Officer (~~CISO) is responsible for leading the assessment and management of cybersecurity risks. The current ~~CSO and~~ CISO ~~each~~has ~~have~~ over 30 years of experience in IT and information security., including over 16 years with NetApp in roles of increasing seniority, and is a

~~The~~Certified ~~CSO~~Information Security Auditor, Certified Information Security Manager with ISACA and a Certified Information Systems Security Professional with ISC2. The CISO ~~stay~~stays informed on information security risks through regular meetings on key cybersecurity projects and KPIs. Updates are communicated to the Global Security Steering Committee, which provides quarterly reports to the Board of Directors and to the Audit Committee.

Item 2. Properties

We owned or leased, domestically and internationally, the following properties as of April 2625, ~~2024~~2025.

We own approximately 0.8 million square feet of facilities in Research Triangle Park (RTP), North Carolina. In addition, we own 65 acres of undeveloped land. The RTP site supports research and development, global services and sales and marketing.

We own approximately 0.7 million square feet of facilities in Bangalore, India on 14 acres of land. The Bangalore site supports research and development, ~~marketing~~finance and global services.

We lease approximately 0.3 million square feet of office space for our corporate headquarters located in San Jose, California. The San Jose site supports research and development, corporate general administration, sales and marketing, global services and operations.

We lease approximately 10.27 million square feet in other sales offices and research and development facilities throughout the U.S. and internationally. We expect that our existing facilities and those being developed worldwide are suitable and adequate for our requirements over at least the next two years.

Item 3. Legal Proceedings

For a discussion of legal proceedings, see Note 17 – Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock is traded on the NASDAQ Stock Market LLC (NASDAQ) under the symbol NTAP.

Price Range of Common Stock

The price range per share of common stock presented below represents the highest and lowest intraday sales prices for the Company’s common stock on the NASDAQ during each quarter of our two most recent fiscal years.

	Fiscal 2024				Fiscal 2023
	Fiscal 2025				Fiscal 2024
	High		Low		High		Low
First Quarter	$	80135.5301	$	61100.5424	$	7680.7353	$	61.2654
Second Quarter	$	80134.0237	$	71112.2587	$	7980.0902	$	6071.5625
Third Quarter	$	91135.7645	$	70112.8286	$	7591.1976	$	5870.0882
Fourth Quarter	$	~~112~~127.4878	$	8371.8084	$	69112.7548	$	5983.7480

Holders

As of May 3029, ~~2024~~2025 there were ~~approximately~~403 ~~418~~ holders of record of our common stock.

Dividends

The Company paid cash dividends of $0.52 per outstanding common share in each quarter of fiscal 2025 for an aggregate of $424 million and $0.50 per outstanding common share in each quarter of fiscal 2024, ~~2023~~ and ~~2022~~fiscal 2023 for an aggregate of $416 million, ~~$432 million~~ and $~~446~~432 million, respectively. In the first quarter of fiscal ~~2025~~2026, the Company declared a cash dividend of $0.52 per share of common stock, payable on July 2423, ~~2024~~2025 to shareholders of record as of the close of business on July 53, ~~2024~~2025.

Performance Graph

The following graph shows a comparison of cumulative total shareholder return, calculated on a dividend reinvested basis, of an investment of $100 for the Company, the S&P 500 Index, the S&P 500 Information Technology Index and the S&P 1500 Technology Hardware & Equipment Index for the five years ended April 2625, ~~2024~~2025. The comparisons in the graphs below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. The graph and related information shall not be deemed “soliciting material” or be deemed to be “filed” with the SEC, nor shall such information be incorporated by reference into any past or future filing with the SEC, except to the extent that such filing specifically states that such graph and related information are incorporated by reference into such filing.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

Among NetApp, Inc., the S&P 500 Index, the S&P 500 Information Technology Index and the S&P 1500 Technology Hardware & Equipment Index*

*$100 invested on April 2624, ~~2019~~2020 in stock or index, including reinvestment of dividends. Data points are the last day of each fiscal year for the Company’s common stock and each of the indexes.

	April 2019		April 2020		April 2021		April 2022		April 2023		April 2024
	April 2020		April 2021		April 2022		April 2023		April 2024		April 2025
NetApp, Inc.	$	100.00	$	62179.1271	$	~~111~~180.6439	$	~~112~~159.0778	$	99263.2663	$	~~163~~234.7764
S&P 500 Index	$	100.00	$	98149.4489	$	~~147~~150.5521	$	~~147~~154.8721	$	~~151~~191.8056	$	~~188~~210.5735
S&P 500 Information Technology Index	$	100.00	$	~~114~~159.6307	$	~~182~~162.3408	$	~~185~~175.8017	$	~~200~~245.8024	$	~~281~~272.1240
S&P 1500 Technology Hardware & Equipment Index	$	100.00	$	~~114~~177.3682	$	~~203~~202.3533	$	~~231~~214.3981	$	~~245~~227.6556	$	~~260~~271.2336

We believe that a number of factors may cause the market price of our common stock to fluctuate significantly. See Item 1A. – Risk Factors.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended April 2625, ~~2024~~2025:

					Total Number of Shares		Approximate Dollar Value
	Total Number		Average		Purchased as Part of		of Shares That May Yet
	of Shares		Price Paid		Publicly Announced		Be Purchased Under The
Period	Purchased		per Share		Program		Repurchase Program
	(Shares in thousands)				(Shares in thousands)		(Dollars in millions)
January 27, 2024 - February 23, 2024		322	$	87.64		370,887	$	574
January 25, 2025 - February 21, 2025		248	$	121.03		379,256	$	572
February 24, 2024 - March 22, 2024		323	$	97.82		371,210	$	542
February 22, 2025 - March 21, 2025		246	$	101.53		379,502	$	547
March 23, 2024 - April 26, 2024		389	$	103.09		371,599	$	502
March 22, 2025 - April 25, 2025		2,314	$	84.28		381,816	$	352
Total		12,~~034~~808	$	9689.6303

In May 2003, our Board of Directors approved a stock repurchase program. As of April 2625, ~~2024~~2025, our Board of Directors had authorized the repurchase of up to $1617.1 billion of our common stock, and on May 2322, ~~2024~~2025, authorized an additional $1.01 billion. Since inception of the program through April 2625, ~~2024~~2025, we repurchased a total of ~~372~~382 million shares of our common stock for an aggregate purchase price of $1516.68 billion. Under this program, we may purchase shares of our outstanding common stock through solicited or unsolicited transactions in the open market, in privately negotiated transactions, through accelerated share repurchase programs, pursuant to a Rule 10b5-1 plan or in such other manner as deemed appropriate by our management. The stock repurchase program may be suspended or discontinued at any time.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read together with the financial statements and the accompanying notes set forth under Part II, Item 8. – Financial Statements and Supplementary Data. The following discussion also contains trend information and other forward-looking statements that involve a number of risks and uncertainties. The Risk Factors set forth in Part I, Item 1A. – Risk Factors are hereby incorporated into the discussion by reference.

Executive Overview

Our Company

NetApp ~~makes~~helps ~~data~~customers ~~infrastructure~~make ~~intelligent~~their bydata ~~combining~~infrastructure ~~unified~~more ~~data storage~~seamless, ~~integrated~~more ~~data services~~dynamic, and ~~CloudOps~~higher ~~solutions~~performing. We ~~create~~were ~~silo-free~~incorporated ~~infrastructure~~in 1992, ~~and~~are ~~harness~~headquartered ~~observability~~in ~~and~~San ~~artificial~~Jose, ~~intelligence~~California, toand ~~enable~~provide ~~seamless~~a ~~data~~full ~~management~~range ~~across~~of ~~environments~~enterprise-class ~~to help our customers achieve their business priorities. No matter the data type~~software, ~~workload,~~systems orand ~~environment,~~services ~~with~~that ~~NetApp~~ customers ~~can~~use ~~modernize~~to transform their data ~~infrastructure~~infrastructures ~~and~~across ~~better leverage their~~ data ~~to accelerate innovation~~types, ~~improve operations~~workloads, and ~~drive~~environments ~~competitive~~to ~~advantage.~~realize business possibilities.

~~Our~~We ~~unified~~leverage ~~data~~over ~~storage~~thirty ~~delivers~~years ~~flexibility~~of byinnovation ~~enabling customers~~ to ~~store~~make ~~any~~ data ~~type~~infrastructure ~~and~~intelligent. ~~power~~Our ~~any~~unified ~~workload,~~data ~~simply~~storage ~~and~~solutions ~~consistently~~deliver onflexible, ~~a single storage operating system~~simplified, ~~optimized for cloud~~ and ~~flash. As the only enterprise~~silo-~~grade~~free ~~storage~~infrastructure. ~~service~~Our ~~natively~~active ~~embedded~~data inmanagement ~~the~~capabilities ~~world’s~~focus ~~largest~~on ~~clouds~~security, ~~our~~compliance, ~~data~~and ~~storage~~sustainability, ~~powers~~while ~~any~~our ~~data~~adaptive ~~across~~operations ~~AWS~~enhance performance, ~~Microsoft Azure~~efficiency, and ~~Google Cloud~~productivity. Our ~~integrated~~extensive ~~data~~portfolio ~~services~~integrates ~~enable~~hybrid ~~active~~and ~~data~~multi-cloud ~~management~~environments, ~~through~~addressing ~~superior~~key ~~data~~customer ~~security,~~priorities ~~protection,~~such ~~governance,~~as ~~and~~modernizing ~~sustainability.~~legacy ~~Our~~systems, ~~CloudOps~~enhancing ~~solutions~~resilience ~~enable~~against ~~adaptive~~ransomware, ~~operations~~and ~~across~~developing ~~infrastructure~~scalable, ~~applications,~~high-performance ~~and~~data ~~teams.~~pipelines for artificial intelligence (AI) workloads.

Our operations are organized into two segments: Hybrid Cloud and Public Cloud.

Hybrid Cloud offers a unified data storage portfolio of storage management and infrastructure solutions that ~~help~~helps customers modernize their data centers. With the power of on-premises, private cloud and public cloud capabilities to assist customers in modernizing applications with a single solution that supports file, block, and object storage, we deliver a data infrastructure solution for all environments and workloads. Our Hybrid Cloud portfolio ~~supports~~accommodates both structured and unstructured data with unified storage optimized for flash, disk, and cloud storage, tocapable ~~handle~~of handling data-intensive workloads and applications. Hybrid Cloud isincludes ~~composed of~~ software, hardware, and related support, asalong ~~well~~with as professional and other services.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support. This portfolio includes cloud storage ~~and CloudOps services. As the only provider of enterprise-grade storage services natively embedded in the world’s largest public cloud providers~~, ~~NetApp helps organizations harness the power of their~~ data ~~and applications. NetApp’s CloudOps solutions leverage AI to maximize productivity across infrastructure and applications~~services, ~~boost team productivity,~~ and ~~reduce~~operational ~~operations costs~~services. These ~~solutions and~~ services are generally available on the leading public clouds, including Amazon AWS, Microsoft Azure, and Google Cloud ~~Platform~~.

Global Business Environment

Macroeconomic Conditions

Continuing economic uncertainty, political conditions and fiscal challenges in the U.S. and abroad have resulted and may continue to result in adverse macroeconomic conditions, including inflation, rising interest rates, foreign exchange volatility, slower growth and possibly a recession. In particular, in fiscal 2024, we continued to experience a weakened demand environment, characterized by cloud optimizations and increased budget scrutiny, which resulted in smaller deal sizes, longer selling cycles, and the delay of some deals.

If these macroeconomic uncertainties persist or worsen in fiscal 2025, we may observe a further reduction in customer demand for our offerings, which could impact our operating results.

Supply Chain

Supply chain constraints, which substantially began to impact us in the first half of fiscal 2023, led to elevated product component and freight costs during fiscal 2023. Comparatively, the supply chain substantially improved during fiscal 2024, resulting in lower costs.

Financial Results and Key Performance Metrics Overview

The following table provides an overview of key financial metrics for each of the last three fiscal years (in millions, except per share amounts and percentages):

	Year Ended
	April 26, 2024			April 28, 2023			April 29, 2022
	April 25, 2025			April 26, 2024			April 28, 2023
Net revenues	$	6,~~268~~572		$	6,~~362~~268		$	6,~~318~~362
Gross profit	$	4,~~433~~613		$	4,~~209~~433		$	4,~~220~~209
Gross margin		7170	%		6671	%		6766	%
Income from operations	$	1,~~214~~337		$	1,~~018~~214		$	1,~~157~~018
Income from operations as a percentage of net revenues		1920	%		1619	%		1816	%
Provision (benefit) for income taxes	$	~~277~~197		$	~~(208~~277	)	$	~~158~~(208	)
Net income	$	~~986~~1,186		$	~~1,274~~986		$	~~937~~1,274
Diluted net income per share	$	45.6367		$	54.7963		$	45.0979
Net cash provided by operating activities	$	1,~~685~~506		$	1,~~107~~685		$	1,~~211~~107

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Deferred revenue and financed unearned services revenue	$	4,~~234~~536	$	4,~~313~~234

~~Net revenues: Our net revenues decreased approximately 1% in fiscal 2024 compared to fiscal 2023, due to a decrease in product revenues, partially offset by an increase in services revenues.~~36

•

~~Gross~~Net ~~margin~~revenues: Our ~~gross~~net ~~margin~~revenues increased ~~five~~approximately ~~percentage~~5% ~~points~~ in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024, due to ~~the~~increases ~~increase~~ in ~~gross~~both ~~margins~~product onrevenues ~~product~~and services revenues.

•

~~Income~~Gross ~~from operations as a percentage of net revenues~~margin: Our ~~income~~gross ~~from~~margin ~~operations~~decreased asless athan ~~percentage~~one ~~of net revenues increased by three~~ percentage ~~points~~point in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024, ~~primarily~~ due to athe ~~higher~~decrease in gross ~~margin~~margins on product revenues.

•

~~Provision~~Income ~~(benefit)~~from ~~for~~operations ~~income~~as ~~taxes:~~a Wepercentage ~~had~~of anet ~~provision~~revenues: ~~from~~Our income ~~taxes~~from inoperations ~~fiscal~~as ~~2024, compared to~~ a ~~benefit~~percentage ~~from~~of ~~income~~net ~~taxes~~revenues inincreased ~~fiscal~~by ~~2023,~~one ~~due~~percentage topoint ~~a discrete tax benefit of $524 million~~ in fiscal ~~2023~~2025 ~~that~~compared ~~resulted~~to ~~from~~fiscal an2024, ~~intra-entity~~primarily ~~asset~~due ~~transfer~~to ofhigher ~~certain~~net ~~intellectual property~~revenues.

•

~~Net~~Provision ~~income~~(benefit) ~~and~~for ~~Diluted net~~ income ~~per share~~taxes: ~~The~~Our ~~decrease~~provision infor ~~both net~~ income ~~and~~taxes ~~diluted~~decreased ~~net income per share~~ in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 ~~reflect~~primarily ~~the~~as ~~factors~~a ~~discussed~~result ~~above.~~of ~~Lower~~differences ~~net income~~ in ~~fiscal~~discrete ~~2024~~tax ~~compared~~impacts toin ~~fiscal~~each ~~2023 unfavorably impacted diluted net income per share~~year.

•

Net income and Diluted net income per share: The increase in both net income and diluted net income per share in fiscal 2025 compared to fiscal 2024 reflect the factors discussed above.

Stock Repurchase Program and Dividend Activity

During fiscal ~~2024~~2025, we repurchased ~~approximately~~10.2 12 million shares of our common stock at an average price of $77112.8755 per share, for an aggregate purchase price of $~~900~~1.2 ~~million~~billion. We also declared aggregate cash dividends of $2.0008 per share in fiscal ~~2024~~2025, for which we paid a total of $~~416~~424 million.

Restructuring Events

During fiscal ~~2024~~2025, we executed ~~two~~several restructuring plans and recognized expenses totaling $4483 million consisting primarily of employee severance-related costs ~~and lease termination costs~~.

Senior Notes Issuance

In March 2025, we issued $625 million aggregate principal amount of 5.50% Senior Notes due 2032 and $625 million aggregate principal amount of 5.70% Senior Notes due 2035, for which we received total proceeds of $1.24 billion, net of discount and issuance costs.

Results of Operations

Our fiscal year is reported on a 52- or 53-week year that ends on the last Friday in April. An additional week is included in the first fiscal quarter approximately every six years to realign fiscal months with calendar months. Fiscal years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, which ended on April 2625, ~~2024~~2025, April 2826, ~~2023~~2024 and April 2928, ~~2022~~2023, respectively, are all 52-week years, with 13 weeks in each of their quarters. Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years ended in April and the associated quarters, months and periods of those fiscal years.

The following table sets forth certain Consolidated Statements of Income data as a percentage of net revenues for the periods indicated:

	Fiscal Year
	2024			2023			2022
	2025			2024			2023
Revenues:
Product		4546	%		4845	%		5248	%
Services		5554			5255			4852
Net revenues		100			100			100
Cost of revenues:
Cost of product		1820			2418			2524
Cost of services		1110			1011			910
Gross profit		7170			6671			6766
Operating expenses:
Sales and marketing		2928			29			29
Research and development		1615			1516			1415
General and administrative		5			45			4
Restructuring charges		1			21			12
Acquisition-related expense		—			—			—
Total operating expenses		5150			5051			4850
Income from operations		1920			1619			1816
Other income (expense), net		1			1			(1	)
Other income, net		1			1			1
Income before income taxes		2021			1720			17
Provision (benefit) for income taxes		43			(34	)		(3	)
Net income		1618	%		2016	%		1520	%

Percentages may not add due to rounding

Discussion and Analysis of Results of Operations

Net Revenues (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Net revenues	$	$6,572	~~6,268~~	$	$6,268	~~6,362~~		5	(1%	)%	$	$6,362	~~6,318~~		(1	1)%	%

The increase in net revenues for fiscal 2025 compared to fiscal 2024 was due to an increase in both product revenues and services revenues. Product revenues as a percentage of net revenues increased by approximately one percentage point in fiscal 2025 compared to fiscal 2024, while services revenues as a percentage of net revenues decreased by approximately one percentage point.

The decrease in net revenues for fiscal 2024 compared to fiscal 2023 was due to a decrease in product revenues partially offset by an increase in services revenues. Product revenues as a percentage of net revenues decreased by approximately three percentage points in fiscal 2024 compared to fiscal 2023, while services revenues as a percentage of net revenues increased by approximately three percentage points.

~~The~~Sales ~~increase~~through inour ~~net~~indirect ~~revenues~~channels ~~for~~represented ~~fiscal~~78%, ~~2023~~76% ~~compared~~and to78% ~~fiscal 2022 was due to an increase in services revenue partially offset by a decrease in product revenues. Product revenues as a percentage~~ of net revenues ~~decreased by approximately four percentage points~~ in fiscal ~~2023 compared to fiscal 2022~~2025, ~~while~~2024 ~~services~~and revenues as a percentage of net revenues increased by approximately four percentage points. Fluctuations in foreign currency exchange rates adversely impacted net revenues percent growth by approximately four percentage points in fiscal 2023, ~~compared to fiscal 2022~~respectively.

Sales through our indirect channels represented 76%, 78% and 77% of net revenues in fiscal 2024, 2023 and 2022, respectively.

The following customers, each of which is a distributor, accounted for 10% or more of net revenues:

	Fiscal Year
	2024			2023			2022
	2025			2024			2023
Arrow Electronics, Inc.		2221	%		2422	%		24	%
TD Synnex Corporation (previously presented as Tech Data Corporation)		2224	%		2122	%		21	%

Product Revenues (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Product revenues	$	$3,040	~~2,849~~	$	$2,849	~~3,049~~		7	(7%	)%	$	$3,049	~~3,284~~		(7	(7)%	)%
Hardware (Non-GAAP)			1,251			1,251			—	%			1,358			(8	)%
Software (Non-GAAP)			1,598			1,798			(11	)%			1,926			(7	)%

Hybrid Cloud

In prior years, we presented the hardware and software components of our GAAP product revenues to illustrate the significance and value of the Company’s software. Because our revenue recognition policy under GAAP defines a configured storage system, inclusive of the operating system software essential to its functionality, as a single performance obligation, hardware and software components of our product revenues are considered non-GAAP measures. Effective in fiscal 2025, we are no longer presenting the non-GAAP hardware and software components of our product revenues, as management no longer considers them to be key financial measures. Our current strategy is expected to deliver investor value through growth in total revenues, including product revenues, while maintaining operational discipline to drive earnings leverage. While software continues to be the primary value driver of our products, NetApp is primarily focused on driving growth in total product revenues, through the sale of configured storage systems comprised of both hardware and software, with less focus on the pricing of each component. Additionally, we are considering potential opportunities to simplify pricing for certain products in the future, which may eliminate the existence of separate prices for hardware and software components and/or impact our ability to allocate between them.

Product revenues are derived through the sale of our Hybrid Cloud solutions and consist of sales of configured all-flash array systems (including All-Flash FAS A-Series and All-Flash FAS C-Series with capacity flash) and hybrid systems, which are bundled hardware and software products, as well as add-on flash, disk and/or hybrid storage and related OS, StorageGrid, OEM products, NetApp HCI and add-on optional software.

InTotal ~~order to provide visibility into the value created by our software innovation and R&D investment, we disclose the software and hardware components of our~~ product revenues. ~~Software~~increased ~~product~~in ~~revenues~~fiscal ~~includes~~2025 ~~the~~compared ~~OS software and optional add-on software solutions attached~~ to ~~our~~fiscal ~~systems across our entire product set~~2024, ~~while~~primarily ~~hardware~~due ~~product~~to ~~revenues~~higher ~~include~~sales ~~the~~of ~~non~~C-~~software~~Series ~~component~~all-flash ofarray ~~our~~ systems ~~across the entire set. Because our revenue recognition policy under GAAP defines a configured storage system~~, ~~inclusive~~partially ofoffset ~~the~~by ~~operating system software essential to its functionality, as~~ a ~~single~~decrease ~~performance~~in ~~obligation,~~sales ~~the hardware and software components~~ of ~~our~~hybrid ~~product revenues are considered non-GAAP measures~~systems. The hardware and software components of our product revenues are derived from an estimated fair value allocation of the transaction price of our contracts with customers, down to the level of the product hardware and software components. This allocation is primarily based on the contractual prices at which NetApp has historically billed customers for such respective components.

Total product revenues decreased in fiscal 2024 compared to fiscal 2023, primarily due to lower sales of hybrid systems due to softening customer demand, partially offset by an increase in sales of C-Series all-flash array systems.

Total product revenues decreased in fiscal 2023 compared to fiscal 2022, primarily due to lower sales of A-Series all-flash array systems, as a result of softening customer demand. Product revenues were also unfavorably impacted by foreign exchange rate fluctuations. These decreases were partially offset by an increase in sales of hybrid systems.

Revenues from the hardware component of product revenues represented 44%, 41% and 41% of product revenues in fiscal 2024, 2023 and 2022, respectively. The software component of product revenues represented 56%, 59% and 59% of product revenues in fiscal 2024, 2023 and 2022, respectively. The decrease in the software component percentage of product revenues in fiscal 2024 as compared to fiscal 2023 was primarily due to the mix of systems sold. The software component percentage of product revenues remained relatively flat in fiscal 2023 as compared to fiscal 2022 despite the decrease in sales of A-Series all-flash array systems, which contain a higher proportion of software components than other Hybrid Cloud products, primarily due to the mix of other Hybrid Cloud products sold.

Services Revenues (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Services revenues	$	$3,532	~~3,419~~	$	$3,419	~~3,313~~		3	3%	%	$	$3,313	~~3,034~~		3	9%	%
Support		2,512	~~2,488~~		2,488	~~2,419~~		1	3%	%		2,419	~~2,344~~		3	3%	%
Professional and other services		355	~~320~~		320	~~319~~		11	—%	%		319	~~294~~		—	9%	%
Public cloud		665	~~611~~		611	~~575~~		9	6%	%		575	~~396~~		6	45%	%

Hybrid Cloud

Hybrid Cloud services revenues are derived from the sale of: (1) support, which includes both hardware and software support contracts (the latter of which entitle customers to receive unspecified product upgrades and enhancements, bug fixes and patch releases), and (2) professional and other services, which include customer education and training.

39Support revenues increased marginally in fiscal 2025 compared to fiscal 2024 and increased in fiscal 2024 compared to fiscal 2023 as a result of a higher aggregate support contract value for our installed base.

~~Support~~Professional and other services revenues increased in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 asprimarily adue ~~result~~to ofan increase in revenues from our Keystone storage-as-a-service ~~higher~~offering ~~aggregate~~and ~~support~~remained ~~contract~~relatively ~~value~~flat ~~for~~in ~~our~~fiscal ~~installed~~2024 ~~base~~compared to fiscal 2023.

Support revenues increased in fiscal 2023 compared to fiscal 2022, despite the unfavorable impact from foreign exchange rate fluctuations, primarily due to a higher aggregate support contract value for our installed base during fiscal 2023.

Professional and other services revenues remained relatively flat in fiscal 2024 compared to fiscal 2023. The increase in fiscal 2023 compared to fiscal 2022 was primarily due to an increase in other services revenues.

Public Cloud

~~Public Cloud revenues are derived from the sale of public cloud offerings delivered primarily as-a-service, which include cloud storage and data services, and cloud operations services.~~39

Public Cloud revenues ~~increased~~are inderived ~~fiscal~~from ~~2024 and fiscal 2023 compared to~~ the ~~respective~~sale ~~prior~~of ~~years~~public ~~primarily due to growing customer demand for NetApp's diversified~~ cloud offerings, ~~coupled~~delivered ~~with~~primarily ~~overall~~as-a-service, ~~growth~~which ininclude ~~the~~ cloud ~~market.~~storage, ~~The~~data ~~acquisitions~~services ~~of Instaclustr early in the first quarter of fiscal 2023~~ and ~~CloudCheckr,~~operational ~~Inc~~services. ~~(CloudCheckr) in the third quarter of fiscal 2022 also contributed to the increase in Public Cloud revenues in fiscal 2023 compared to fiscal 2022.~~

Public Cloud revenues increased in fiscal 2025 and fiscal 2024 compared to the respective prior years primarily due to customer demand for NetApp’s diversified cloud offerings, coupled with overall growth in the cloud market.

Revenues by Geographic Area:

	Fiscal Year
	2024			2023			2022
	2025			2024			2023
United States, Canada and Latin America (Americas)		51	%		51	%		5351	%
Europe, Middle East and Africa (EMEA)		34	%		34	%		3234	%
Asia Pacific (APAC)		15	%		15	%		15	%

Percentages may not add due to rounding

~~Effective~~Americas ~~in fiscal 2024, management began evaluating~~ revenues byconsist ~~geographic~~of ~~region~~sales ~~based on the location~~ to ~~which~~Americas ~~products~~commercial and ~~services~~United ~~are~~States ~~delivered,~~(U.S.) ~~rather~~public ~~than~~sector ~~based on the location from which the customer relationship is managed~~markets. ~~Prior~~Demand ~~year~~across ~~numbers~~geographies ~~have~~was ~~been~~relatively ~~recast~~consistent tofor ~~conform~~each tofiscal ~~the current~~ year ~~presentation~~presented.

Americas revenues consist of sales to Americas commercial and United States (U.S.) public sector markets. Demand across geographies was relatively consistent in fiscal 2024 compared to fiscal 2023. Americas revenues were negatively impacted by adverse macroeconomic conditions which resulted in a weakened demand environment in fiscal 2023 compared to fiscal 2022, which continued into fiscal 2024.

Cost of Revenues

Our cost of revenues consists of:

(1) cost of product revenues, composed of (a) cost of Hybrid Cloud product revenues, which includes the costs of manufacturing and shipping our products, inventory write-downs, and warranty costs, and (b) unallocated cost of product revenues, which includes stock-based compensation and amortization of intangibles, and;

(2) cost of services revenues, composed of (a) cost of support revenues, which includes the costs of providing support activities for hardware and software support, global support partnership programs, and third party royalty costs, (b) cost of professional and other services revenues, (c) cost of public cloud revenues, constituting the cost of providing our Public Cloud offerings which includes depreciation and amortization expense and third party datacenter fees, and (d) unallocated cost of services revenues, which includes stock-based compensation and amortization of intangibles.

Cost of Product Revenues (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Cost of product revenues	$	$1,284	~~1,137~~	$	$1,137	~~1,517~~		13	~~(25~~%	)%	$	$1,517	~~1,554~~		(25	(2)%	)%
Hybrid Cloud		1,278	~~1,131~~		1,131	~~1,511~~		13	~~(25~~%	)%		1,511	~~1,541~~		(25	(2)%	)%
Unallocated		6	6		6	6		—	—%	%		6	13		—	~~(54~~%	)%

Hybrid Cloud

Cost of Hybrid Cloud product revenues represented 4042%, 5040% and 4750% of Hybrid Cloud product revenues in fiscal ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively. Materials costs represented 8889%, 9488% and 9394% of cost of Hybrid Cloud product revenues in fiscal ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Materials costs ~~decreased~~increased by ~~approximately~~ $~~418~~140 million in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 primarily reflecting ~~lower component and freight costs as a result of supply chain improvements. Materials costs were also impacted by~~ the ~~decrease~~increase in product revenues ~~in fiscal 2024~~.

Hybrid Cloud product gross margins ~~increased~~decreased by approximately ~~ten~~two percentage points in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 primarily due to ~~lower~~higher component ~~and freight~~ costs.

Materials costs ~~were~~decreased ~~approximately~~by ~~flat~~$418 million in fiscal ~~2023~~2024 compared to fiscal ~~2022~~2023 reflecting ~~the~~lower ~~decrease in product revenues, offset by higher~~ component and freight costs as a result of supply chain ~~challenges~~improvements. Materials costs were also impacted by the decrease in product revenues in fiscal 2024.

Hybrid Cloud product gross margins ~~decreased~~increased by approximately ~~three~~ten percentage points in fiscal ~~2023~~2024 compared to fiscal ~~2022~~2023 primarily due to ~~higher~~lower component and freight costs ~~and the adverse impacts of fluctuations in foreign currency exchange rates~~.

Unallocated

Unallocated cost of product revenues remained relatively flat in fiscal 2024 compared to fiscal 2023 while they decreased in fiscal 2023 compared to fiscal 2022 due to certain intangible assets becoming fully amortized.40

Unallocated cost of product revenues were consistent for each fiscal year presented.

Cost of Services Revenues (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Cost of services revenues	$	$675	~~698~~	$	$698	~~636~~		(3	10)%	%	$	$636	~~544~~		10	17%	%
Support		197	~~195~~		195	~~181~~		1	8%	%		181	~~184~~		8	(2%	)%
Professional and other services		261	~~243~~		243	~~211~~		7	15%	%		211	~~205~~		15	3%	%
Public cloud		165	~~203~~		203	~~184~~		(19	10)%	%		184	~~118~~		10	56%	%
Unallocated		52	57		57	60		(9	(5)%	)%		60	37		(5	62)%	%

Hybrid Cloud

Cost of Hybrid Cloud services revenues, which are composed of the costs of support and professional and other services, increased in fiscal ~~2024~~2025 and fiscal ~~2023~~2024 compared to the respective prior years reflecting the increase in Hybrid Cloud services revenues. Cost of Hybrid Cloud services revenues represented 16%, 1416% and 1514% of Hybrid Cloud services revenues in fiscal ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Hybrid Cloud support gross margins were similar in fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023. Hybrid Cloud professional and other services gross margins ~~decreased~~increased by approximately ~~ten~~two percentage points in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 while they ~~increased~~decreased by approximately ~~four~~ten percentage points in fiscal ~~2023~~2024 compared to fiscal ~~2022~~2023 primarily due to the mix of services provided.

Public Cloud

Cost of Public Cloud revenues ~~increased~~decreased in fiscal ~~2024~~2025 ~~and~~compared into fiscal ~~2023~~2024, ~~compared~~while toPublic ~~the~~Cloud ~~respective~~gross ~~prior~~margins ~~years,~~increased ~~reflecting~~by ~~the~~eight ~~increase~~percentage points in ~~Public~~fiscal ~~Cloud~~2025 ~~revenues~~compared into ~~each~~fiscal ~~period~~2024. ~~Public~~The ~~Cloud~~decrease ~~gross~~in ~~margins~~cost ~~decreased~~of byPublic ~~one~~Cloud ~~percentage~~revenues ~~point~~and inimproved ~~fiscal~~gross ~~2024~~margins ~~and~~was ~~two~~due ~~percentage~~to ~~points~~cost inoptimization ~~fiscal~~that ~~2023~~included ~~compared~~a todecrease ~~the~~in ~~respective~~fixed ~~prior~~assets ~~years~~depreciation ~~primarily~~and ~~due to~~ the mix of offerings provided.

Cost of Public Cloud revenues increased in fiscal 2024 compared to fiscal 2023, reflecting the increase in Public Cloud revenues. Public Cloud gross margins decreased by one percentage point in fiscal 2024 compared to fiscal 2023 primarily due to the mix of offerings provided.

Unallocated

Unallocated cost of services revenues decreased in fiscal ~~2024~~2025 compared to fiscal ~~2023~~2024 due to the derecognition of certain intangible assets ~~becoming~~as ~~fully~~a ~~amortized~~result of the sale of our cloud optimization and management software business known as Spot by NetApp during the ~~first~~fourth quarter of fiscal ~~2024~~2025. Unallocated cost of services revenues ~~increased~~decreased in fiscal ~~2023~~2024 compared to fiscal 2023 due to ~~our~~certain ~~acquisitions~~intangible ofassets ~~Instaclustr~~becoming ~~early~~fully inamortized during the first quarter of fiscal ~~2023 and CloudCheckr in the third quarter of fiscal 2022, which resulted in higher amortization expense from acquired intangible assets~~2024.

Operating Expenses

Sales and Marketing, Research and Development and General and Administrative Expenses

Sales and marketing, research and development, and general and administrative expenses for fiscal 2025 totaled $3,188 million, or 49% of net revenues, representing a decrease of one percentage point compared to fiscal 2024.

Sales and marketing, research and development, and general and administrative expenses for fiscal 2024 totaled $3,165 million, or 50% of net revenues, representing an increase of two percentage points compared to fiscal 2023.

Sales and marketing, research and development, and general and administrative expenses for fiscal 2023 totaled $3,050 million, or 48% of net revenues, relatively consistent with fiscal 2022. While fluctuations in foreign currency exchange rates adversely impacted net revenues in fiscal 2023 compared to fiscal 2022, they favorably impacted sales and marketing, research and development and general and administrative expenses by approximately 3% in fiscal 2023.

Compensation costs represent the largest component of operating expenses. Included in compensation costs are salaries, benefits, other compensation-related costs, stock-based compensation expense and employee incentive compensation plan costs.

Total compensation costs included in sales and marketing, research and development and general and administrative expenses ~~increased~~in byfiscal ~~$115~~2025 ~~million,~~were orrelatively ~~6%,~~flat ~~during fiscal 2024~~ compared to fiscal ~~2023, primarily due to higher incentive compensation expense reflecting higher operating performance against goals~~2024. ~~The increase was partially offset by lower salaries expense, reflecting a decrease in average headcount of 7%.~~

Total compensation costs included in sales and marketing, research and development and general and administrative expenses increased by $~~101~~115 million, or 6%, during fiscal ~~2023~~2024 compared to fiscal ~~2022~~2023, primarily due to higher ~~salaries, benefits and stock-based compensation expense, reflecting an increase in average headcount of 8%. The increase was partially offset by lower~~ incentive compensation expense.

reflecting higher operating performance against goals. The increase was partially offset by lower salaries expense, reflecting a decrease in average headcount of 7%.

Sales and Marketing (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Sales and marketing expenses	$	$1,865	~~1,828~~	$	$1,828	~~1,829~~		2	—%	%	$	$1,829	~~1,857~~		—	(2%	)%

Sales and marketing expenses consist primarily of compensation costs, commissions, outside services, facilities and IT support costs, advertising and marketing promotional expense and travel and entertainment expense. ~~The changes in sales and marketing expenses consisted of the following (in percentage points of the total change):~~

	Fiscal 2024 to Fiscal 2023		Fiscal 2023 to Fiscal 2022
Compensation costs		—		2
Commissions		—		(3	)
Advertising and marketing promotional expense		—		(2	)
Travel and entertainment		—		1
Total change		—		(2	)

The increase in sales and marketing expenses in fiscal 2025 compared to fiscal 2024 was primarily due to an increase in sales commission expenses.

All primary components of sales and marketing expenses were relatively consistent in fiscal 2024 compared to fiscal 2023.

The increase in compensation costs for fiscal 2023 compared to fiscal 2022 reflected an increase in average headcount of approximately 6%. The impact of the increase in headcount was partially offset by lower incentive compensation expense and the impact of foreign exchange rate fluctuations.

The decrease in commissions expense for fiscal 2023 compared to fiscal 2022 was primarily due to lower performance against sales goals.

Advertising and marketing promotional expense decreased in fiscal 2023 compared to fiscal 2022, primarily due to lower spending on certain marketing programs.

Travel and entertainment expense increased in fiscal 2023 compared to fiscal 2022, as COVID-19 related travel restrictions eased.

Research and Development (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Research and development expenses	$	$1,012	~~1,029~~	$	$1,029	~~956~~		(2	8)%	%	$	$956	~~881~~		8	9%	%

Research and development expenses consist primarily of compensation costs, facilities and IT support costs, depreciation, equipment and software related costs, prototypes, non-recurring engineering charges and other outside services costs. ~~Changes in research and development expenses consisted of the following (in percentage points of the total change):~~

	Fiscal 2024 to Fiscal 2023		Fiscal 2023 to Fiscal 2022
Compensation costs		8		8
Development projects and outside services		—		1
Total change		8		9

The decrease in research and development expenses in fiscal 2025 compared to fiscal 2024 was primarily due to lower compensation costs.

The increase in ~~compensation~~research ~~costs~~and ~~for~~development expenses in fiscal 2024 compared to fiscal 2023 was primarily due to higher compensation costs, attributable to higher incentive compensation expense and stock-based compensation expense, partially offset by lower salaries expense, reflecting a decrease in average headcount of 5%.

The increase in compensation costs for fiscal 2023 compared to fiscal 2022 was primarily attributable to an increase in average headcount of 11%. The impact of the increase in headcount was partially offset by lower incentive compensation expense and the impact of foreign exchange rate fluctuations. The increase in development projects and outside services for fiscal 2023 compared to fiscal 2022 was primarily due to the higher spending on certain engineering projects.

General and Administrative (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
General and administrative expenses	$	$311	~~308~~	$	$308	~~265~~		1	16%	%	$	$265	~~279~~		16	(5%	)%

General and administrative expenses consist primarily of compensation costs, professional and corporate legal fees, outside services and facilities and IT support costs. ~~Changes in general and administrative expense consisted of the following (in percentage points of the total change):~~

	Fiscal 2024 to Fiscal 2023		Fiscal 2023 to Fiscal 2022
Compensation costs		14		(1	)
Professional and legal fees and outside services		1		1
Facilities and IT support costs		—		(5	)
Other		1		—
Total change		16		(5	)

General and administrative expenses remained relatively flat in fiscal 2025 compared to fiscal 2024.

The increase in ~~compensation~~general ~~costs~~and administrative expenses in fiscal 2024 compared to fiscal 2023 was attributable to increases in all components of compensation costs, but ~~primarily~~predominately incentive compensation expense. ~~The~~Professional ~~increase in professional~~ and legal fees and outside services expense was also slightly higher in fiscal 2024 ~~was primarily~~ due to higher spending on certain business transformation projects.

The decrease in compensation costs in fiscal 2023 compared to fiscal 2022 was primarily attributable to lower incentive compensation expense, partially offset by the increase in salaries and stock-based compensation expenses. The increases in professional and legal fees and outside services expense in fiscal 2023 were primarily due to higher spending on certain business transformation projects. The decrease in facilities and IT support costs in fiscal 2023 was primarily related to lower spending for certain IT projects.

Restructuring Charges (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Restructuring charges	$	$83	44	$	$44	~~120~~		89	~~(63~~%	)%	$	$120	33		(63	~~264~~)%	%

4342

In an effort to reduce our cost structure and redirect resources to our highest return activities, in fiscal ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, we initiated a number of business realignment plans designed to streamline our business and focus on key strategic opportunities. These plans resulted in aggregate ~~reductions of our global workforce of approximately 2% in fiscal 2024, 9% in fiscal 2023, and 1% in fiscal 2022, and aggregate~~ charges of $4483 million, $~~120~~44 million, and $33120 million, respectively, consisting primarily of employee severance-related costs. Additionally, the aggregate charges for fiscal 2025 and fiscal 2024 included optimization of our global office space for our hybrid work model~~, while the aggregate charges in fiscal 2023 and fiscal 2022 included legal and tax-related consulting fees associated with the establishment of an international headquarters in Cork, Ireland~~. See Note 12 – Restructuring Charges of the Notes to Consolidated Financial Statements included in Part II, Item 8 for more details regarding our restructuring plans.

Acquisition-related Expense (in millions, except percentages):

	Fiscal Year	~~Fiscal Year~~
		2024			2023			% Change				2022			% Change
	2025			2024			% Change				2023			% Change
Acquisition-related expense	$	$5	10	$	$10	21		(50	~~(52~~)%	)%	$	$21	13		(52	62)%	%

We incurred $105 million, $2110 million and $1321 million of acquisition-related expenses, primarily consisting of legal and consulting fees, in fiscal ~~2024~~2025, fiscal ~~2023~~2024 and fiscal ~~2022~~2023, respectively, associated with our acquisitions and subsequent integrations.

Other Income ~~(Expense)~~, Net (in millions, except percentages)

The components of other income ~~(expense)~~, net were as follows:

	Fiscal Year	~~Fiscal Year~~
		2024				2023				% Change				2022				% Change
	2025				2024				% Change				2023				% Change
Interest income	$	$112	~~112~~		$	$112	69			—	62%	%	$	$69	7			62	~~886~~%	%
Interest expense		(64	~~(64~~)	)		(64	~~(67~~)	)		—	(4%	)%		(67	~~(73~~)	)		(4	(8)%	)%
Other, net		(2	1)			1	46		NM	NM				46	4		NM	NM
Total	$	$46	49		$	$49	48			NM(6	)%		$	$48	~~(62~~	)		NM2	%

NM - Not Meaningful

Interest income ~~increased~~and interest expense in fiscal ~~2024~~2025 ~~and~~were ~~fiscal~~relatively ~~2023~~flat compared to ~~previous~~fiscal ~~years~~2024. ~~was~~Each ~~primarily~~component ~~due~~of toother ~~higher~~income, ~~yields~~net ~~earned~~was onrelatively ~~our~~flat ~~cash~~in ~~and~~fiscal ~~investments~~2025 compared to fiscal 2024.

Interest ~~expense~~income ~~decreased~~increased in fiscal 2024 ~~and fiscal 2023~~ compared to ~~previous~~fiscal ~~years~~2023 primarily due to ~~the~~higher ~~extinguishment~~yields ofearned ~~certain~~on ~~senior~~our ~~notes~~cash inand ~~the second quarter of fiscal 2023~~investments.

Interest ~~Other,~~expense ~~net~~decreased ~~for fiscal 2023 includes $22 million of other income for non-refundable, up-front payments from customers~~ in ~~Russia for support contracts, which we were not able to fulfill due to imposed sanctions and for which we have no remaining legal obligation to perform. Other, net for~~ fiscal 2023 also includes a $32 million gain recognized on our sale of a minority equity interest in a privately held company for proceeds of approximately $59 million. The remaining differences in Other, net for fiscal 2024 compared to fiscal 2023, ~~and~~due ~~for fiscal 2023 compared~~ to ~~fiscal~~the ~~2022,~~extinguishment ~~are~~of ~~primarily~~certain ~~due~~senior tonotes ~~differences~~ in ~~foreign~~the ~~exchange~~second ~~gains~~quarter ~~and~~of ~~losses in each~~ fiscal ~~year~~2023.

Other, net for fiscal 2023 includes $22 million of other income for non-refundable, up-front payments from customers in Russia for support contracts, which we were not able to fulfill due to imposed sanctions and for which we have no remaining legal obligation to perform. Other, net for fiscal 2023 also includes a $32 million gain recognized on our sale of a minority equity interest in a privately held company for proceeds of $59 million. The remaining difference in Other, net for fiscal 2024 compared to fiscal 2023 is primarily due to differences in foreign exchange gains and losses.

Provision (Benefit) for Income Taxes (in millions, except percentages):

	Fiscal Year
	2024		2023			% Change			2022		% Change
Provision (benefit) for income taxes	$	277	$	(208	)		(233	)%	$	158		(232	)%

Our provision (benefit) for income taxes and effective tax rates were as follows:

Our effective tax rate for fiscal 2024 was 21.9% compared to (19.5)% in fiscal 2023 and 14.4% in fiscal 2022. The differences in the effective tax rates between fiscal years were primarily due to fiscal 2023 benefits resulting from an intra-entity asset transfer of certain IP, partially offset by discrete tax expense recorded as a result of the Danish Supreme Court ruling received January 9, 2023.


	Fiscal Year
	2025			2024			% Change			2023			% Change
Provision (benefit) for income taxes	$	197		$	277			(29	)%	$	(208	)		(233	)%
Effective tax rate		14.2	%		21.9	%	NM				(19.5	)%	NM

~~During~~NM ~~fiscal 2023, we completed an intra~~-~~entity~~ ~~asset~~Not transfer of certain IP to our international headquarters (the “IP Transfer”). The transaction resulted in a step-up of tax-deductible basis in the transferred assets, and accordingly, created a temporary difference where the tax basis exceeded the financial statement basis of such intangible assets, which resulted in the recognition of a discrete tax benefit and related deferred tax asset of $524 million during the second quarter of fiscal 2023. Management applied significant judgment when determining the fair value of the IP, which serves as the tax basis of the deferred tax asset. With the assistance of third-party valuation specialists, the fair value of the IP was determined principally based on the present value of projected cash flows related to the IP which reflects management’s assumptions regarding projected revenues, earnings before interest and taxes, and a Meaningful

44 The differences in the effective tax rates between fiscal years were primarily due to fiscal 2025 benefits related to the Internal Revenue Service (“IRS”) examination of our fiscal 2018 and fiscal 2019 U.S. income tax returns and fiscal 2023 benefits resulting from an intra-entity asset transfer of certain IP, partially offset by discrete tax expense recorded as a result of the Danish Supreme Court ruling received January 9, 2023.

~~discount~~During ~~rate.~~the ~~The~~fourth ~~tax-deductible~~quarter ~~amortization~~of ~~related~~fiscal to2025, the ~~transferred~~IRS IPsubstantially ~~rights~~completed ~~will~~the beexamination ~~recognized~~of inour ~~future~~fiscal ~~periods~~2018 and ~~any~~fiscal ~~amortization~~2019 ~~that is unused in a particular year can be carried forward indefinitely~~U.S. ~~The~~income ~~deferred~~ tax ~~asset~~returns, and ~~the~~we ~~tax~~recognized ~~benefit~~a ~~were measured based on the enacted~~ tax ~~rates~~benefit ~~expected~~of to$36 ~~apply~~million inattributable ~~the years the asset is expected~~ to ~~be realized. We expect to realize~~ the ~~deferred~~release ~~tax asset resulting from the IP Transfer and will assess the realizability~~ of ~~the~~related ~~deferred~~ tax ~~asset quarterly~~reserves. Any Organisation for Economic Co-operation and Development’s (“OECD”) actions adopted internationally could impact our financial results in future periods. The impact of the transaction to net cash provided by or used in operating, investing and financing activities on the consolidated statements of cash flows during fiscal 2023 was not material.

During fiscal 2023, we completed an intra-entity asset transfer of certain IP to our international headquarters (the “IP Transfer”). The transaction resulted in a step-up of tax-deductible basis in the transferred assets, and accordingly, created a temporary difference where the tax basis exceeded the financial statement basis of such intangible assets, which resulted in the recognition of a discrete tax benefit and related deferred tax asset of $524 million during the second quarter of fiscal 2023. Management applied significant judgment when determining the fair value of the IP, which serves as the tax basis of the deferred tax asset. With the assistance of third-party valuation specialists, the fair value of the IP was determined principally based on the present value of projected cash flows related to the IP which reflects management’s assumptions regarding projected revenues, earnings before interest and taxes, and a discount rate. The tax-deductible amortization related to the transferred IP rights will be recognized in future periods and any amortization that is unused in a particular year can be carried forward indefinitely. The deferred tax asset and the tax benefit were measured based on the enacted tax rates expected to apply in the years the asset is expected to be realized. We expect to realize the deferred tax asset resulting from the IP Transfer and will assess the realizability of the deferred tax asset quarterly. Any Organisation for Economic Co-operation and Development’s actions adopted internationally could impact our financial results in future periods. The impact of the transaction to net cash provided by or used in operating, investing and financing activities on the consolidated statements of cash flows during fiscal 2023 was not material.

During fiscal 2023, the Danish Supreme Court issued a non-appealable ruling on the distributions declared in 2005 and 2006. The Danish Supreme Court ruled the 2005 dividend was subject to at-source dividend withholding tax while the smaller 2006 distribution would not be subject to withholding tax. During fiscal 2023, we recorded $69 million of tax expense, which includes $23 million of withholding tax and $46 million of interest.

Liquidity, Capital Resources and Cash Requirements

(In millions, except percentages)	April 26, 2024		April 28, 2023
(In millions)	April 25, 2025		April 26,2024
Cash, cash equivalents and short-term investments	$	3,~~252~~846	$	3,~~070~~252
Principal amount of debt	$	23,~~400~~250	$	2,400

The following is a summary of our cash flow activities:

	Fiscal Year
(In millions)	~~2024~~2025			~~2023~~2024
Net cash provided by operating activities	$	1,~~685~~506		$	1,~~107~~685
Net cash used in investing activities		(735	)		(1,390	)
Net cash provided by (used in) investing activities		147			(735	)
Net cash used in financing activities		(~~1,344~~828	)		(1,~~513~~344	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		~~(19~~15	)		(119	)
Net change in cash, cash equivalents and restricted cash	$	~~(413~~840	)	$	(~~1,797~~413	)

As of April 2625, ~~2024~~2025, our cash, cash equivalents and short-term investments totaled $3.38 billion, reflecting an increase of $~~0.2~~594 ~~billion~~million from April 2826, ~~2023~~2024. The increase was primarily due to $1.724 billion of net proceeds from the issuance of Senior Notes and $1.5 billion of cash generated from operating activities, partially offset by $~~900~~1.2 ~~million~~billion used to repurchase shares of our common stock, a $~~416~~400 million principal repayment of our 3.30% Senior Notes due September 2024, $424 million used for the payment of dividends, and $~~155~~168 million in purchases of property and equipment. Net working capital was $~~791~~1.2 ~~million~~billion as of April 2625, ~~2024~~2025, aan ~~reduction~~increase of $~~422~~398 million when compared to April 2826, ~~2023~~2024, primarily due to the ~~reclassification~~increases ofin ~~$400~~cash, ~~million~~cash ~~principal~~equivalents ~~amount~~and ~~of our senior notes from long~~short-term toinvestments ~~current~~discussed ~~liabilities~~above.

Cash Flows from Operating Activities

During fiscal ~~2024~~2025, ~~we generated~~ cash ~~from~~provided by operating activities ofreflected ~~$1.7 billion, reflecting~~ net income of $1.02 billion which was increased for non-cash depreciation and amortization expense of $~~255~~243 million and non-cash stock-based compensation expense of $~~357~~386 million.

Significant changes in assets and liabilities during fiscal 2025 included the following:

•

Accounts receivable increased by $219 million, primarily reflecting higher billing in the fourth quarter of fiscal 2025 compared to the fourth quarter of fiscal 2024.

•

Deferred revenue and financed unearned services revenue increased by $208 million, primarily due to an increase in deferred revenue for software and hardware support contracts.

•

Long-term taxes payable decreased by $207 million, primarily due to settlements associated with certain IRS tax examinations and changes in prior period tax positions.

During fiscal 2024, cash provided by operating activities reflected net income of $1.0 billion which was increased for non-cash depreciation and amortization expense of $255 million and non-cash stock-based compensation expense of $357 million.

Significant changes in assets and liabilities during fiscal 2024 included the following:

•

Accounts payable increased by $123 million, primarily reflecting the timing of inventory purchases from, and payments to, our contract manufacturers.

•

Accrued expenses increased by $113 million, primarily due to higher employee compensation accruals as of the end of fiscal 2024 compared to fiscal 2023 related to incentive compensation and commissions plans.

During fiscal 2023, we generated cash from operating activities of $1.1 billion, reflecting net income of $1.3 billion which was reduced by $606 million for non-cash deferred tax benefits and increased for non-cash depreciation and amortization expense of $248 million and non-cash stock-based compensation expense of $312 million.

Significant changes in assets and liabilities during fiscal 2023 included the following:

Accounts receivable decreased $260 million, reflecting lower billing in the fourth quarter of fiscal 2023 compared to the fourth quarter of fiscal 2022.

Accounts payable decreased by $207 million, primarily reflecting lower inventory purchases, and the timing of those purchases from, and payments to, our contract manufacturers.

Accrued expenses decreased by $103 million, primarily due to employee compensation payments related to fiscal 2022 incentive compensation and commissions plans.

We expect that cash provided by operating activities may materially fluctuate in future periods due to a number of factors, including fluctuations in our operating results, shipping linearity, accounts receivable collections performance, inventory and supply chain management, vendor payment initiatives, and the timing and amount of compensation, income taxes and other payments.

Cash Flows from Investing Activities

During fiscal 2025, we generated $245 million primarily from maturities and sales of investments, net of purchases, and paid $168 million for capital expenditures. Additionally, we received proceeds of $70 million from the sale of our Spot by NetApp business.

During fiscal 2024, we used $580 million for the purchases of investments, net of maturities and sales, and $155 million for capital expenditures.

During fiscal 2023, we used $719 million for the purchases of investments, net of maturities and sales, paid $491 million, net of cash acquired, for a privately-held company and $239 million for capital expenditures. Additionally, we received proceeds of $59 million from the sale of one of our minority investments in fiscal 2023.

Cash Flows from Financing Activities

During fiscal ~~2024~~2025, ~~cash~~we ~~flows~~ used ~~in financing activities totaled~~ $1.32 billion ~~and include $900 million~~ for the repurchase of ~~approximately~~10.2 12 million shares of common stock, ~~and~~ $~~416~~424 million for the payment of dividends and $400 million principal repayment upon maturity, partially offset by $1.24 billion of net proceeds from the issuance of Senior Notes.

During fiscal ~~2023~~2024, ~~cash~~we ~~flows~~ used ~~in financing activities totaled~~ $~~1.5~~900 ~~billion and include $850~~ million for the repurchase of ~~approximately~~11.5 13 million shares of common stock, and $~~432~~416 million for the payment of dividends ~~and $250 million to redeem our Senior Notes due in December 2022~~.

Key factors that that could affect our cash flows include changes in our revenue mix and profitability, our ability to effectively manage our working capital, in particular, accounts receivable, accounts payable and inventories, the timing and amount of stock repurchases and payment of cash dividends, the impact of foreign exchange rate changes, our ability to effectively integrate acquired products, businesses and technologies and the timing of repayments of our debt. Based on past performance and our current business outlook, we believe that our sources of liquidity, including cash, cash equivalents and short-term investments, cash generated from operations, and our ability to access capital markets and committed credit lines will satisfy our working capital needs, capital expenditures, investment requirements, stock repurchases, cash dividends, contractual obligations, commitments, principal and interest payments on our debt and other liquidity requirements associated with operations and meet our cash requirements for at least the next 12 months and thereafter for the foreseeable future. ~~However~~We may choose to periodically raise additional debt capital based on certain conditions, inincluding the refinancing of upcoming maturities and/or for potential strategic acquisitions and investments. Our ability to obtain this or any additional financing that we may pursue or need, will depend on, among other things, our business plans, operating performance and the condition of the capital markets at the time we seek financing. We may not be able to obtain such financing on terms acceptable to us or at all. In the event our liquidity is insufficient and we are unable to enter into new financing arrangements, we may be required to curtail spending and implement additional cost saving measures and restructuring actions ~~or enter into new financing arrangements~~. We cannot be certain that we will continue to generate cash flows at or above current levels ~~or that we will be able to obtain additional financing, if necessary, on satisfactory terms, if at all~~. For further discussion of factors that could affect our cash flows and liquidity requirements, see ~~Part I,~~ Item 1A. Risk Factors.

Liquidity

Our principal sources of liquidity as of April 2625, ~~2024~~2025 consisted of cash, cash equivalents and short-term investments, cash we expect to generate from operations, and our commercial paper program and related credit facility.

Cash, cash equivalents and short-term investments consisted of the following (in millions):

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Cash and cash equivalents	$	12,~~903~~742	$	21,~~316~~903
Short-term investments		1,~~349~~104		~~754~~1,349
Total	$	3,~~252~~846	$	3,~~070~~252

As of April 26, 2024 and April 28, 2023, $2.1 billion and $2.2 billion, respectively, of cash, cash equivalents and short-term investments were held by various foreign subsidiaries and were generally based in U.S. dollar-denominated holdings, while $1.2 billion and $0.9 billion, respectively, were available in the U.S.45

46As of April 25, 2025 and April 26, 2024, $2.5 billion and $2.1 billion, respectively, of cash, cash equivalents and short-term investments were held by various foreign subsidiaries and were generally based in U.S. dollar-denominated holdings, while $1.3 billion and $1.2 billion, respectively, were available in the U.S.

Our principal liquidity requirements are primarily to meet our working capital needs, support ongoing business activities, fund research and development, meet capital expenditure needs, invest in critical or complementary technologies through asset purchases and/or business acquisitions, service interest and principal payments on our debt, fund our stock repurchase program, and pay dividends, as and if declared. In the ordinary course of business, we engage in periodic reviews of opportunities to invest in or acquire companies or units in companies to expand our total addressable market, leverage technological synergies and establish new streams of revenue, particularly in our Public Cloud segment.

The principal objectives of our investment policy are the preservation of principal and maintenance of liquidity. We attempt to mitigate default risk by investing in high-quality investment grade securities, limiting the time to maturity and monitoring the counter-parties and underlying obligors closely. We believe our cash equivalents and short-term investments are liquid and accessible. We are not aware of any significant deterioration in the fair value of our cash equivalents or investments from the values reported as of April 2625, ~~2024~~2025.

Our investment portfolio has been and will continue to be exposed to market risk due to trends in the credit and capital markets. We continue to closely monitor current economic and market events to minimize the market risk of our investment portfolio. We routinely monitor our financial exposure to both sovereign and non-sovereign borrowers and counterparties. We utilize a variety of planning and financing strategies in an effort to ensure our worldwide cash is available when and where it is needed. We also have an automatic shelf registration statement on file with the U.S. Securities and Exchange Commission (SEC). We may in the future offer an additional unspecified amount of debt, equity and other securities.

Senior Notes

The following table summarizes the principal amount of our Senior Notes as of April 2625, ~~2024~~2025 (in millions):

	Amount
3.30% Senior Notes Due September 2024	$	400
1.875% Senior Notes Due June 2025	$	750
1.875% Senior Notes Due June 2025		750
2.375% Senior Notes Due June 2027		550
2.70% Senior Notes Due June 2030		700
Total	$	2,400
5.50% Senior Notes Due June 2032		625
5.70% Senior Notes Due June 2035		625
Total	$	3,250

Interest on the Senior Notes is payable semi-annually. For further information on the underlying terms, see Note 8 – Financing Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8.

On September 30, 2024, upon maturity, we repaid our 3.30% Senior Notes due September 2024 for an aggregate amount of $407 million, comprised of the principal and unpaid interest.

Commercial Paper Program and Credit Facility

We have a commercial paper program (the “Program”), under which we may issue unsecured commercial paper notes. Amounts available under the Program may be borrowed, repaid and re-borrowed, with the aggregate face or principal amount of the notes outstanding under the Program at any time not to exceed $1.0 billion. The maturities of the notes can vary, but may not exceed 397 days from the date of issue. The notes are sold under customary terms in the commercial paper market and may be issued at a discount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of their issuance. The proceeds from the issuance of the notes are used for general corporate purposes. No commercial paper notes were outstanding as of April 2625, ~~2024~~2025.

In connection with the Program, we have a senior unsecured credit agreement with a syndicated group of lenders. The credit agreement, which was amended in ~~May~~March 2023 primarily to replace the London Interbank Offered Rate (LIBOR) with the Secured Overnight Financing Rate (SOFR) as the basis for establishing the interest rate applicable to certain borrowings under the agreement2025, provides for a $1.0 billion revolving unsecured credit facility, with a sublimit of $50 million available for the issuance of letters of credit on our behalf. The credit facility matures on ~~January~~March 225, ~~2026~~2030, with an option for us to extend the maturity date for two additional 1-year periods, subject to certain conditions. The proceeds of the loans may be used by us for general corporate purposes and as liquidity support for our existing commercial paper program. As of April 26, 2024, we were compliant with all associated covenants in the agreement. No amounts were drawn against this credit facility during any of the periods presented.

to extend the maturity date for two additional 1-year periods, subject to certain conditions. The proceeds of the loans may be used by us for general corporate purposes and as liquidity support for our existing commercial paper program. As of April 25, 2025, we were compliant with all associated covenants in the agreement. No amounts were drawn against this credit facility during any of the periods presented.

Capital Expenditure Requirements

We expect to fund our capital expenditures, including our commitments related to facilities, equipment, operating leases and internal-use software development projects over the next few years through existing cash, cash equivalents, investments and cash generated from operations. The timing and amount of our capital requirements cannot be precisely determined and will depend on a number of factors, including future demand for products, changes in the network storage industry, hiring plans and our decisions related to the financing of our facilities and equipment requirements. We anticipate capital expenditures for fiscal 2026 to be between $175 million and $225 million.

related to the financing of our facilities and equipment requirements. We anticipate capital expenditures for fiscal 2025 to be between $150 million and $200 million.

Transition Tax Payments

The Tax Cuts and Jobs Act of 2017 imposed a mandatory, one-time transition tax on accumulated foreign earnings and profits that had not previously been subject to U.S. income tax. As of April 2625, ~~2024~~2025, ~~outstanding~~a ~~payments~~final ~~related to the~~ transition tax ~~are~~payment ~~estimated~~of ~~to be approximately~~ $~~215~~178 million ofremains ~~which~~outstanding ~~$115 million~~ and ~~$100~~is ~~million are~~ expected to be paid during fiscal ~~2025 and fiscal~~ 2026~~, respectively~~. During fiscal ~~2024~~2025, transition tax payments totaled $88115 million. ~~Our estimates for future transition tax payments, however, could change with further guidance or review from U.S. federal and state tax authorities or other regulatory bodies.~~

Dividends and Stock Repurchase Program

On May 2322, ~~2024~~2025, we declared a cash dividend of $0.52 per share of common stock, payable on July 2423, ~~2024~~2025 to holders of record as of the close of business on July 53, ~~2024~~2025.

As of April 2625, ~~2024~~2025, our Board of Directors had authorized the repurchase of up to $1617.1 billion of our common stock under our stock repurchase program. Under this program, we may purchase shares of our outstanding common stock through solicited or unsolicited transactions in the open market, in privately negotiated transactions, through accelerated share repurchase programs, pursuant to a Rule 10b5-1 plan or in such other manner as deemed appropriate by our management. The stock repurchase program may be suspended or discontinued at any time. Since the May 13, 2003 inception of this program through April 2625, ~~2024~~2025, we repurchased a total of ~~372~~382 million shares of our common stock at an average price of $4243.0493 per share, for an aggregate purchase price of $1516.68 billion. As of April 2625, ~~2024~~2025, the remaining authorized amount for stock repurchases under this program was $0.54 billion. On May 2322, ~~2024~~2025 our Board of Directors authorized the repurchase of an additional $1.01 billion of our common stock.

Purchase Commitments

In the ordinary course of business, we make commitments to third-party contract manufacturers and component suppliers to manage manufacturer lead times and meet product forecasts, and to other parties, to purchase various key components used in the manufacture of our products. In addition, we have open purchase orders and contractual obligations associated with our ordinary course of business for which we have not yet received goods or services. These off-balance sheet purchase commitments totaled $01.80 billion at April 2625, ~~2024~~2025, of which $0.6 billion is due in fiscal ~~2025~~2026, with the remainder due thereafter.

Financing Guarantees

While most of our arrangements for sales include short-term payment terms, from time to time we provide long-term financing to creditworthy customers. We have generally sold receivables financed through these arrangements on a non-recourse basis to third party financing institutions within 10 days of the contracts’ dates of execution, and we classify the proceeds from these sales as cash flows from operating activities in our consolidated statements of cash flows. We account for the sales of these receivables as “true sales” as defined in the accounting standards on transfers of financial assets, as we are considered to have surrendered control of these financing receivables. We sold $6765 million and $3867 million of receivables during fiscal ~~2024~~2025 and ~~2023~~2024, respectively.

In addition, we enter into arrangements with leasing companies for the sale of our hardware systems products. These leasing companies, in turn, lease our products to end-users. The leasing companies generally have no recourse to us in the event of default by the end-user.

Some of the leasing arrangements described above have been financed on a recourse basis through third-party financing institutions. Under the terms of recourse leases, which are generally three years or less, we remain liable for the aggregate unpaid remaining lease payments to the third-party leasing companies in the event of end-user customer default. These arrangements are generally collateralized by a security interest in the underlying assets. As of April 2625, ~~2024~~2025 and April 2826, ~~2023~~2024, the aggregate amount by which such contingencies exceeded the associated liabilities was not significant. To date, we have not experienced significant losses under our lease financing programs or other financing arrangements.

We have entered into service contracts with certain of our end-user customers that are supported by third-party financing arrangements. If a service contract is terminated as a result of our non-performance under the contract or our failure to comply with the terms of the financing arrangement, we could, under certain circumstances, be required to acquire certain assets related to the service contract or to pay the aggregate unpaid payments under such arrangements. As of April 26, 2024, we have not been required to make any payments under these arrangements, and we believe the likelihood of having to acquire a material amount of assets or make 47

48by which such contingencies exceeded the associated liabilities was not significant. To date, we have not experienced significant losses under our lease financing programs or other financing arrangements.

We have entered into service contracts with certain of our end-user customers that are supported by third-party financing arrangements. If a service contract is terminated as a result of our non-performance under the contract or our failure to comply with the terms of the financing arrangement, we could, under certain circumstances, be required to acquire certain assets related to the service contract or to pay the aggregate unpaid payments under such arrangements. As of April 25, 2025, we have not been required to make any payments under these arrangements, and we believe the likelihood of having to acquire a material amount of assets or make payments under these arrangements is remote. The portion of the financial arrangement that represents unearned services revenue is included in deferred revenue and financed unearned services revenue in our consolidated balance sheets.

Legal Contingencies

We are subject to various legal proceedings and claims which arise in the normal course of business. See further details on such matters in Note 17 – Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), which require management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses, and the disclosure of contingent assets and liabilities. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We believe that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates and such differences may be material.

The summary of significant accounting policies is included in Note 1 – Description of Business and Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Part II, Item 8. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. The accounting policies described below reflect the significant judgments, estimates and assumptions used in the preparation of the consolidated financial statements.

Revenue Recognition

Our contracts with customers often include the transfer of multiple products and services to the customer. In determining the amount and timing of revenue recognition, we assess which products and services are distinct performance obligations and allocate the transaction price, which may include fixed and/or variable amounts, among each performance obligation on a relative standalone selling price (SSP) basis. The following are the key estimates and assumptions and corresponding uncertainties included in this approach:

Key Estimates and Assumptions Key Uncertainties  We evaluate whether products and services promised in our contracts with customers are distinct performance obligations that should be accounted for separately versus together.  In certain contracts, the determination of our distinct performance obligations requires significant judgment. As our business and offerings to customers change over time, the products and services we determine to be distinct performance obligations may change. Such changes may adversely impact the amount of revenue and gross margin we report in a particular period.  In determining the transaction price of our contracts, we estimate variable consideration based on the expected value, primarily relying on our history. In certain situations, we may also use the most likely amount as the basis of our estimate.  We may have insufficient relevant historical data or other information to arrive at an accurate estimate of variable consideration using either the “expected value” or “most likely amount” method. Additionally, changes in business practices, such as those related to sales returns or marketing programs, may introduce new forms of variable consideration, as well as more complexity and uncertainty in the estimation process.  In contracts with multiple performance obligations, we establish SSPs based on the price at which products and services are sold separately. If SSPs are not observable through past transactions, we estimate them by maximizing the use of observable inputs including pricing strategy, market data, internally-approved pricing guidelines related to the performance obligations and other observable inputs.  As our business and offerings evolve over time, modifications to our pricing and discounting methodologies, changes in the scope and nature of product and service offerings and/or changes in customer segmentation may result in a lack of consistency, making it difficult to establish and/or maintain SSPs. Changes in SSPs could result in different and unanticipated allocations of revenue in contracts with multiple performance obligations. These factors, among others, may adversely impact the amount of revenue and gross margin we report in a particular period.

4948

     

     In contracts with multiple performance obligations, we establish SSPs based on the price at which products and services are sold separately. If SSPs are not observable through past transactions, we estimate them by maximizing the use of observable inputs including pricing strategy, market data, internally-approved pricing guidelines related to the performance obligations and other observable inputs.

     

     As our business and offerings evolve over time, modifications to our pricing and discounting methodologies, changes in the scope and nature of product and service offerings and/or changes in customer segmentation may result in a lack of consistency, making it difficult to establish and/or maintain SSPs. Changes in SSPs could result in different and unanticipated allocations of revenue in contracts with multiple performance obligations. These factors, among others, may adversely impact the amount of revenue and gross margin we report in a particular period.

Inventory Valuation and Purchase Order Accruals

Inventories consist primarily of purchased components and finished goods and are stated at the lower of cost or net realizable value, which approximates actual cost on a first-in, first-out basis. A provision is recorded when inventory is determined to be in excess of anticipated demand or obsolete in order to adjust inventory to its estimated realizable value. The following are the key estimates and assumptions and corresponding uncertainties for estimating the value of our inventories:

Key Estimates and Assumptions Key Uncertainties  We periodically perform an excess and obsolete analysis of our inventory. Inventories are written down based on excess and obsolete reserves determined primarily on assumptions about future demand forecasts and market conditions. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.  Although we use our best estimates to forecast future product demand, any significant unanticipated changes in demand, including due to macroeconomic uncertainties, or obsolescence related to technological developments, new product introductions, customer requirements, competition or other factors could have a significant impact on the valuation of our inventory. If actual market conditions are less favorable than those projected, additional write-downs and other charges against earnings that adversely impact gross margins may be required. If actual market conditions are more favorable, we may realize higher gross profits in the period when the written-down inventory is sold. We are subject to a variety of environmental laws relating to the manufacture of our products. If there are changes to the current regulations, we may be required to make product design changes which may result in excess or obsolete inventory, which could adversely impact our operating results.  We make commitments to our third-party contract manufacturers and other suppliers to manage lead times and meet product forecasts and to other parties to purchase various key components used in the manufacture of our products. We establish accruals for estimated losses on non-cancelable purchase commitments when we believe it is probable that the components will not be utilized in future operations.  If the actual materials demand is significantly lower than our forecast, we may be required to increase our recorded liabilities for estimated losses on non-cancelable purchase commitments~~, including incremental commitments made in response to recent developments in the broader technology supply chain, which would adversely impact our operating results~~.

Goodwill and Purchased Intangible Assets

We allocate the purchase price of acquisitions to identifiable assets acquired and liabilities assumed at their acquisition date fair values based on established valuation techniques. Goodwill represents the residual value as of the acquisition date, which in most cases is measured as the excess of the purchase consideration transferred over the net of the acquisition date fair values of the assets acquired and liabilities assumed.

The carrying values of purchased intangible assets are reviewed whenever events and circumstances indicate that the net book value of an asset may not be recovered through expected future cash flows from its use and eventual disposition. We periodically review the estimated remaining useful lives of our intangible assets. This review may result in impairment charges or shortened useful lives, resulting in charges to our consolidated statements of income.

We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of one of our reporting units may exceed its fair value. The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. For our annual goodwill impairment test in the fourth quarter of fiscal 2024, we performed a qualitative assessment of goodwill impairment by evaluating relevant factors to determine whether it is more likely than not that the fair value of each of our reporting units is less than their carrying values. As a result of the qualitative assessment, we determined the quantitative test was not necessary and there was no impairment of goodwill. 49

We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying amount of one of our reporting units may exceed its fair value. The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. For our annual goodwill impairment test in the fourth quarter of fiscal 2025, we performed a qualitative assessment of goodwill impairment by evaluating relevant factors to determine whether it is more likely than not that the fair value of each of our reporting units is less than their carrying values. As a result of the qualitative assessment, we determined the quantitative test was not necessary and there was no impairment of goodwill.

The following are the key estimates and assumptions and corresponding uncertainties for estimating the value of our goodwill and purchased intangible assets:

Key Estimates and Assumptions Key Uncertainties  The assessment of fair value for goodwill and purchased intangible assets is based on factors that market participants would use in an orderly transaction in accordance with the accounting guidance for the fair value measurement of nonfinancial assets.The valuation of purchased intangible assets is principally based on estimates of the future performance and cash flows expected to be generated by the acquired assets from the acquired business.  While we employ experts to determine the acquisition date fair value of acquired intangibles, the fair values of assets acquired and liabilities assumed are based on significant management assumptions and estimates, which are inherently uncertain and highly subjective and as a result, actual results may differ from estimates. If different assumptions were to be used, it could materially impact the purchase price allocation. ~~Volatile macroeconomic and market conditions have increased the level of uncertainty and subjectivity of certain management assumptions and estimates.~~  Evaluations of possible goodwill and purchased intangible asset impairment require us to make judgments and assumptions related to the allocation of our balance sheet and income statement amounts and estimate future cash flows and fair market values of our reporting units and assets.  In response to changes in industry and market conditions, we could be required to strategically realign our resources and consider restructuring, disposing of, or otherwise exiting businesses, which could result in an impairment of goodwill or purchased intangible assets. Assumptions and estimates about expected future cash flows and the fair values of our reporting units and purchased intangible assets are complex and subjective. They can be affected by a variety of factors, including external factors such as the adverse impact of unanticipated changes in macroeconomic conditions, and technological changes or new product introductions from competitors. They can also be affected by internal factors such as changes in business strategy or in forecasted product life cycles and roadmaps. Our ongoing consideration of these and other factors could result in future impairment charges or accelerated amortization expense, which could adversely affect our operating results.

Income Taxes

We are subject to income taxes in the United States and numerous foreign jurisdictions. We compute our provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets or liabilities are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The following are the key estimates and assumptions and corresponding uncertainties for our income taxes:


	Key Estimates and Assumptions		Key Uncertainties

	Our income tax provision is based on existing tax law and advanced pricing agreements or letter rulings we have with various tax authorities.		Our provision for income taxes is subject to volatility and could be adversely impacted by future changes in existing tax laws, such as a change in tax rate, possible U.S. changes to the taxation of earnings of our foreign subsidiaries, and uncertainties as to future renewals of favorable tax agreements and rulings.

	The determination of whether we should record or adjust a valuation allowance against our deferred tax assets is based on assumptions regarding our future profitability.		Our future profits could differ from current expectations resulting in a change to our determination as to the amount of deferred tax assets that are more likely than not to be realized. We could adjust our valuation allowance with a corresponding impact to the tax provision in the period in which such determination is made.

	The estimates for our uncertain tax positions are based primarily on company specific circumstances, applicable tax laws, tax opinions from outside firms and past results from examinations of our income tax returns.		Significant judgment is required in evaluating our uncertain tax positions. Although we believe our reserves are reasonable, no assurance can be given that the final tax outcome or tax court rulings of these matters will not be different from that which is reflected in our historical tax provisions and accruals.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk related to fluctuations in interest rates and foreign currency exchange rates. We use certain derivative financial instruments to manage foreign currency exchange risks. We do not use derivative financial instruments for speculative or trading purposes. All financial instruments are used in accordance with management-approved policies.

Interest Rate Risk

Fixed Income Investments — As of April 2625, ~~2024~~2025, we had fixed income debt investments of $12.30 billion and certificates of deposit of $1224 million. Our fixed income debt investment portfolio primarily consists of investments with original maturities greater than three months at the date of purchase, which are classified as available-for-sale investments. These fixed income debt investments, which consist primarily of ~~corporate bonds and~~ U.S. Treasury and government debt securities, and our certificates of deposit are subject to interest rate and interest income risk and will decrease in value if market interest rates increase. Conversely, declines in interest rates, including the impact from lower credit spreads, could have a material adverse impact on interest income for our investment portfolio. A hypothetical 100 basis point increase in market interest rates from levels as of April 2625, ~~2024~~2025 would have resulted in a decrease in the fair value of our fixed-income securities of ~~approximately~~ $43 million. Volatility in market interest rates over time will cause variability in our interest income. We do not use derivative financial instruments in our investment portfolio.

Our investment policy is to limit credit exposure through diversification and investment in highly rated securities. We further mitigate concentrations of credit risk in our investments by limiting our investments in the debt securities of a single issuer and by diversifying risk across geographies and type of issuer. We actively review, along with our investment advisors, current investment ratings, company-specific events and general economic conditions in managing our investments and in determining whether there is a significant decline in fair value. We monitor and evaluate our investment portfolio on a quarterly basis for any impairments.

Debt — As of April 2625, ~~2024~~2025 we have outstanding $23.43 billion aggregate principal amount of Senior Notes. We carry these instruments at face value less unamortized discount and issuance costs on our consolidated balance sheets. Since these instruments bear interest at fixed rates, we have no financial statement risk associated with changes in interest rates. However, the fair value of these instruments fluctuates when interest rates change. See Note 8 – Financing Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8 for more information.

Credit Facility — We are exposed to the impact of changes in interest rates in connection with our $1.0 billion five-year revolving credit facility. Borrowings under the facility accrue interest at rates that vary based on certain market rates and our credit rating on our Senior Notes. Consequently, our interest expense would fluctuate with any changes in these market interest rates or in our credit rating if we were to borrow any amounts under the credit facility. As of April 2625, ~~2024~~2025, no amounts were outstanding under the credit facility.

Foreign Currency Exchange Rate Risk

We hedge risks associated with certain foreign currency transactions to minimize the impact of changes in foreign currency exchange rates on earnings. We utilize foreign currency exchange forward contracts to hedge against the short-term impact of foreign currency fluctuations on certain foreign currency denominated monetary assets and liabilities. We also use foreign currency exchange forward contracts to hedge foreign currency exposures related to forecasted sales transactions denominated in certain foreign currencies. These derivatives are designated and qualify as cash flow hedges under accounting guidance for derivatives and hedging.

We do not enter into foreign currency exchange contracts for speculative or trading purposes. In entering into foreign currency exchange forward contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of the contracts. We attempt to limit our exposure to credit risk by executing foreign currency exchange contracts with creditworthy multinational commercial banks. All contracts have a maturity of 12 months or less. See Note 11 – Derivatives and Hedging Activities of the Notes to Consolidated Financial Statements included in Part II, Item 8 for more information regarding our derivatives and hedging activities.

Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Balance Sheets as of April 26, 2024 and April 28, 2023	55
Consolidated Balance Sheets	55
Consolidated Statements of Income for the years ended April 26, 2024, April 28, 2023 and April 29, 2022	56
Consolidated Statements of Income	56
Consolidated Statements of Comprehensive Income for the years ended April 26, 2024, April 28, 2023 and April 29, 2022	57
Consolidated Statements of Comprehensive Income	57
Consolidated Statements of Cash Flows for the years ended April 26, 2024, April 28, 2023 and April 29, 2022	58
Consolidated Statements of Cash Flows	58
Consolidated Statements of Stockholders’ Equity for the years ended April 26, 2024, April 28, 2023 and April 29, 2022	59
Consolidated Statements of Stockholders’ Equity	59
Notes to Consolidated Financial Statements	60
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	89

NETAPP, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

	April 26, 2024			April 28, 2023
	April 25, 2025			April 26,2024
ASSETS
Current assets:
Cash and cash equivalents	$	12,~~903~~742		$	21,~~316~~903
Short-term investments		1,~~349~~104			~~754~~1,349
Accounts receivable		1,~~007~~246			~~987~~1,007
Inventories		186			~~167~~186
Other current assets		~~452~~573			~~456~~452
Total current assets		45,~~897~~851			4,~~680~~897
Property and equipment, net		~~604~~563			~~650~~604
Goodwill		2,~~759~~723			2,759
Purchased intangible assets, net		~~124~~43			~~181~~124
Other non-current assets		1,~~503~~643			1,~~548~~503
Total assets	$	910,~~887~~823		$	9,~~818~~887
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	~~517~~511		$	~~392~~517
Accrued expenses		1,~~013~~122			~~857~~1,013
Current portion of long-term debt		~~400~~750			—400
Short-term deferred revenue and financed unearned services revenue		2,~~176~~279			2,~~218~~176
Total current liabilities		4,~~106~~662			34,~~467~~106
Long-term debt		12,~~992~~485			21,~~389~~992
Other long-term liabilities		~~585~~379			~~708~~585
Long-term deferred revenue and financed unearned services revenue		2,~~058~~257			2,~~095~~058
Total liabilities		89,~~741~~783			8,~~659~~741
Commitments and contingencies (Note 17)
Stockholders' equity:
Preferred stock, $0.001 par value, 5 shares authorized; no shares issued or outstanding as of April 26, 2024 or April 28, 2023		—			—
Preferred stock, $0.001 par value, 5 shares authorized; no shares issued or outstanding as of April 25, 2025 or April 26, 2024		—			—
Common stock and additional paid-in capital, $0.001 par value, 885 shares authorized; 206 and 212 shares issued and outstanding as of April 26, 2024 and April 28, 2023, respectively		997			945
Common stock and additional paid-in capital, $0.001 par value, 885 shares authorized; 201 and 206 shares issued and outstanding as of April 25, 2025 and April 26, 2024, respectively		1,106			997
Retained earnings		~~208~~—			~~265~~208
Accumulated other comprehensive loss		(5966	)		(5159	)
Total stockholders' equity		1,~~146~~040			1,~~159~~146
Total liabilities and stockholders' equity	$	910,~~887~~823		$	9,~~818~~887

See accompanying notes to consolidated financial statements.

NETAPP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

Year Ended

April 26, 2024

April 28, 2023

April 29, 2022

April 25, 2025

April 26, 2024

April 28, 2023

Revenues:

Product

23,~~849~~040

32,~~049~~849

3,~~284~~049

Services

3,~~419~~532

3,~~313~~419

3,~~034~~313

Net revenues

6,~~268~~572

6,~~362~~268

6,~~318~~362

Cost of revenues:

Cost of product

1,~~137~~284

1,~~517~~137

1,~~554~~517

Cost of services

~~698~~675

~~636~~698

~~544~~636

Total cost of revenues

1,~~835~~959

21,~~153~~835

2,~~098~~153

Gross profit

4,~~433~~613

4,~~209~~433

4,~~220~~209

Operating expenses:

Sales and marketing

1,~~828~~865

1,~~829~~828

1,~~857~~829

Research and development

1,~~029~~012

~~956~~1,029

~~881~~956

General and administrative

~~308~~311

~~265~~308

~~279~~265

Restructuring charges

4483

~~120~~44

33120

Acquisition-related expense

105

2110

1321

Total operating expenses

3,~~219~~276

3,~~191~~219

3,~~063~~191

Income from operations

1,~~214~~337

1,~~018~~214

1,~~157~~018

Other income (expense), net

(62

)

Other income, net

Income before income taxes

1,~~263~~383

1,~~066~~263

1,~~095~~066

Provision (benefit) for income taxes

~~277~~197

~~(208~~277

)

~~158~~(208

)

Net income

~~986~~1,186

~~1,274~~986

~~937~~1,274

Net income per share:

Basic

45.7481

54.8774

45.2087

Diluted

45.6367

54.7963

45.0979

Shares used in net income per share calculations:

Basic

~~208~~204

~~217~~208

~~223~~217

Diluted

~~213~~209

~~220~~213

~~229~~220

See accompanying notes to consolidated financial statements.

NETAPP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Year Ended
	April 26, 2024			April 28, 2023			April 29, 2022
	April 25, 2025			April 26, 2024			April 28, 2023
Net income	$	~~986~~1,186		$	~~1,274~~986		$	~~937~~1,274
Other comprehensive loss:
Other comprehensive loss
Foreign currency translation adjustments		(53	)		(45	)		(174	)
Defined benefit obligations:
Defined benefit obligation adjustments		(42	)		(24	)		3(2	)
Unrealized gains on available-for-sale securities:
Unrealized holding losses arising during the period		—			—			(1	)
Unrealized holding gains arising during the period		1			—			—
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) arising during the period		(2	)		(62	)		8(6	)
Reclassification adjustments for (gains) losses included in net income		(1	)		5(1	)		(75	)
Other comprehensive loss		(87	)		(78	)		(147	)
Comprehensive income	$	~~978~~1,179		$	~~1,267~~978		$	~~923~~1,267

See accompanying notes to consolidated financial statements.

NETAPP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Year Ended
	April 26, 2024			April 28, 2023			April 29, 2022
	April 25, 2025			April 26, 2024			April 28, 2023
Cash flows from operating activities:
Net income	$	~~986~~1,186		$	~~1,274~~986		$	~~937~~1,274
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		~~255~~243			~~248~~255			~~194~~248
Non-cash operating lease cost		4541			5245			5552
Stock-based compensation		~~357~~386			~~312~~357			~~245~~312
Deferred income taxes		53(100	)		~~(606~~53	)		(~~144~~606	)
Other items, net		~~(13~~—	)		(6713	)		(5467	)
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable		(33219	)		~~260~~(33	)		~~(313~~260	)
Inventories		(181	)		37(18	)		~~(90~~37	)
Other operating assets		(6287	)		(6362	)		(2163	)
Accounts payable		~~123~~(8	)		~~(207~~123	)		~~181~~(207	)
Accrued expenses		~~113~~62			~~(103~~113	)		(~~111~~103	)
Deferred revenue and financed unearned services revenue		~~(14~~208	)		46(14	)		~~384~~46
Long-term taxes payable		(~~106~~207	)		(76106	)		(4576	)
Other operating liabilities		(12	)		—(1	)		(7—	)
Net cash provided by operating activities		1,~~685~~506			1,~~107~~685			1,~~211~~107
Cash flows from investing activities:
Purchases of investments		(21,~~635~~782	)		(12,~~269~~635	)		(181,269	)
Maturities, sales and collections of investments		2,~~055~~027			~~550~~2,055			63550
Purchases of property and equipment		(~~155~~168	)		(~~239~~155	)		(~~226~~239	)
Acquisitions of businesses, net of cash acquired		—			(491	)		(380	)
Acquisition of businesses, net of cash acquired		—			—			(491	)
Other investing activities, net		—70			59—			—59
Net cash used in investing activities		(735	)		(1,390	)		(561	)
Net cash provided by (used in) investing activities		147			(735	)		(1,390	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock award plans		~~100~~108			~~108~~100			~~105~~108
Payments for taxes related to net share settlement of stock awards		(~~127~~199	)		(84127	)		(7484	)
Repurchase of common stock		(~~900~~1,150	)		(~~850~~900	)		(~~600~~850	)
Repayments and extinguishment of debt		—			(250	)		—
Issuances of debt, net of issuance costs		1,240			—			—
Dividends paid		(416	)		(432	)		(446	)
Repayments and extinguishment of debt		(400	)		—			(250	)
Other financing activities, net		(1	)		(5	)		(2	)
Dividends paid		(424	)		(416	)		(432	)
Net cash used in financing activities		(1,344	)		(1,513	)		(1,017	)
Other financing activities, net		(3	)		(1	)		(5	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(19	)		(1	)		(49	)
Net cash used in financing activities		(828	)		(1,344	)		(1,513	)
Net change in cash, cash equivalents and restricted cash		(413	)		(1,797	)		(416	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		15			(19	)		(1	)
Net change in cash, cash equivalents and restricted cash		840			(413	)		(1,797	)
Cash, cash equivalents and restricted cash:
Beginning of period		21,~~322~~909			42,~~119~~322			4,~~535~~119
End of period	$	12,~~909~~749		$	21,~~322~~909		$	42,~~119~~322

See accompanying notes to consolidated financial statements.

NETAPP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share amounts)

										Accumulated
	Common Stock and									Other
	Additional Paid-in Capital						Retained			Comprehensive
	Shares			Amount			Earnings			Loss			Total
Balances, April 30, 2021		222		$	504		$	211		$	(30	)	$	685
Balances, April 29, 2022		220		$	760		$	122		$	(44	)	$	838
Net income		—			—			937			—			937
Other comprehensive loss		—			—			—			(14	)		(14	)
Issuance of common stock under employee stock award plans, net of taxes		5			31			—			—			31
Repurchase of common stock		(7	)		(20	)		(580	)		—			(600	)
Stock-based compensation		—			245			—			—			245
Cash dividends declared ($2.00 per common share)		—			—			(446	)		—			(446	)
Balances, April 29, 2022		220			760			122			(44	)		838
Net income		—			—			1,274			—			1,274
Other comprehensive loss		—			—			—			(7	)		(7	)
Issuance of common stock under employee stock award plans, net of taxes		5			24			—			—			24
Repurchase of common stock		(13	)		(45	)		(805	)		—			(850	)
Stock-based compensation		—			312			—			—			312
Cash dividends declared ($2.00 per common share)		—			(106	)		(326	)		—			(432	)
Balances, April 28, 2023		212			945			265			(51	)		1,159
Net income		—			—			986			—			986
Other comprehensive loss		—			—			—			(8	)		(8	)
Issuance of common stock under employee stock award plans, net of taxes		6			(27	)		—			—			(27	)
Repurchase of common stock		(12	)		(102	)		(798	)		—			(900	)
Excise tax on net stock repurchases		—			(5	)		—			—			(5	)
Stock-based compensation		—			353			—			—			353
Modification of liability-classified awards		—			4			—			—			4
Cash dividends declared ($2.00 per common share)		—			(171	)		(245	)		—			(416	)
Balances, April 26, 2024		206		$	997		$	208		$	(59	)	$	1,146
Net income		—			—			1,186			—			1,186
Other comprehensive loss		—			—			—			(7	)		(7	)
Issuance of common stock under employee stock award plans, net of taxes		5			(91	)		—			—			(91	)
Repurchase of common stock		(10	)		(50	)		(1,100	)		—			(1,150	)
Excise tax on net stock repurchases		—			(6	)		—			—			(6	)
Stock-based compensation		—			386			—			—			386
Cash dividends declared ($2.08 per common share)		—			(130	)		(294	)		—			(424	)
Balances, April 25, 2025		201		$	1,106		$	—		$	(66	)	$	1,040

See accompanying notes to consolidated financial statements.

NETAPP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Significant Accounting Policies

Description of Business — NetApp, Inc. (we, us, NetApp, or the Company) ~~makes~~helps ~~data~~customers ~~infrastructure~~make ~~intelligent~~their ~~by combining unified~~ data ~~storage,~~infrastructure ~~integrated~~more ~~data services~~seamless, ~~and~~more ~~CloudOps solutions. NetApp creates silo-free infrastructure~~dynamic, ~~harnessing observability~~ and ~~artificial~~higher ~~intelligence to enable seamless data management~~performing. We provide a full range of enterprise-class software, systems and services that customers use to transform their data infrastructures across data types, workloads, and environments to realize business possibilities.

Fiscal Year — Our fiscal year is reported on a 52- or 53-week year ending on the last Friday in April. An additional week is included in the first fiscal quarter approximately every six years to realign fiscal months with calendar months. Fiscal years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, which ended on April 2625, ~~2024~~2025, April 2826, ~~2023~~2024 and April 2928, ~~2022~~2023, respectively, are all 52-week years, with 13 weeks in each of their quarters. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended on the last Friday of April and the associated quarters, months and periods of those fiscal years.

Principles of Consolidation — The consolidated financial statements include the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates — The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to, revenue recognition, reserves and allowances; inventory valuation; valuation of goodwill and intangibles; restructuring reserves; employee benefit accruals; stock-based compensation; loss contingencies; investment impairments; income taxes and fair value measurements. Actual results could differ materially from those estimates, the anticipated effects of which have been incorporated, as applicable, into management’s estimates as of and for the year ended April 2625, ~~2024~~2025.

Cash Equivalents — We consider all highly liquid debt investments with original maturities of three months or less at the time of purchase to be cash equivalents.

Available-for-Sale Investments — We classify our investments in debt securities as available-for-sale investments. Debt securities primarily consist of ~~corporate bonds,~~ U.S. Treasury and government debt securities and certificates of deposit. These investments are primarily held in the custody of a major financial institution. A specific identification method is used to determine the cost basis of debt securities sold. These investments are recorded in the consolidated balance sheets at fair value.

Unrealized gains and temporary losses, net of related taxes, are included in accumulated other comprehensive income (loss) (AOCI). Upon realization, those amounts are reclassified from AOCI to earnings. The amortization of premiums and discounts on the investments are included in our results of operations. Realized gains and losses are calculated based on the specific identification method.

We classify our investments as current or noncurrent based on the nature of the investments and their availability for use in current operations.

Impairments on Investments — All of our available-for-sale investments are subject to periodic impairment review. When the fair value of a debt security is less than its amortized cost, we assess what amount of the difference, if any, is caused by expected credit losses. The amount of the difference representing credit losses (defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis of the debt security) is recognized in earnings, and the amount relating to all other factors is recognized in other comprehensive income (OCI). If we intend to sell the security, or if it is more likely than not we will be required to sell the security before recovery of the amortized cost basis, the entire difference between the amortized cost and the fair value of the debt security is recognized in earnings.

Inventories — Inventories are stated at the lower of cost or net realizable value, which approximates actual cost on a first-in, first-out basis. We write down excess and obsolete inventory based on the difference between the cost of inventory and the estimated net realizable value. Net realizable value is estimated using management’s best estimate of forecasts for future demand and expectations regarding market conditions. At the point of a loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts or circumstances do not result in the restoration or increase in that newly established basis. In addition, we record a liability for firm, non-cancelable and unconditional purchase commitments with contract manufacturers and suppliers for quantities in excess of our future demand forecasts consistent with our valuation of excess and obsolete inventory.

Property and Equipment — Property and equipment are recorded at cost.

Depreciation and amortization is computed using the straight-line method, generally over the following periods:


		Depreciation Life
Buildings and improvements		10 to 40 years
Furniture and fixtures		5 years
Computer, production, engineering and other equipment		2 to 3 years
Computer software		3 to 5 years
Leasehold improvements		Shorter of remaining lease term or useful life

Construction in progress will be depreciated over the estimated useful lives of the respective assets when they are ready for use. We capitalize interest on significant facility assets under construction and on significant software development projects. Interest capitalized during the periods presented was not material.

Software Development Costs — The costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized in accordance with the accounting guidance for software. Because our current process for developing software is essentially completed concurrently with the establishment of technological feasibility, which occurs upon the completion of a working model, no costs have been capitalized for any of the periods presented.

Internal-Use Software Development Costs — We capitalize qualifying costs, which are incurred during the application development stage, for computer software developed or obtained for internal-use to property and equipment, net and amortize them over the software’s estimated useful life.

Business Combinations — We recognize identifiable assets acquired and liabilities assumed at their acquisition date fair values, with the exception of contract assets and liabilities, which ~~beginning in fiscal 2022,~~ we recognize in accordance with our revenue recognition policy as if we had originally executed the customer contract. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date values of the assets acquired and liabilities assumed. While we use our best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that we identify adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income.

Goodwill and Purchased Intangible Assets — Goodwill is recorded when the consideration paid for an acquisition exceeds the value of net tangible and intangible assets acquired. Purchased intangible assets with finite lives are generally amortized on a straight-line basis over their economic lives of three to five years for developed technology, two to five years for customer contracts/relationships, two to three years for covenants not to compete and two to five years for trademarks and trade names as we believe this method most closely reflects the pattern in which the economic benefits of the assets will be consumed. In-process research and development is accounted for as an indefinite lived intangible asset and is assessed for potential impairment annually until development is complete or when events or circumstances indicate that their carrying amounts might be impaired. Upon completion of development, in-process research and development is accounted for as a finite-lived intangible asset.

The carrying value of goodwill is tested for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if we believe indicators of impairment exist. Triggering events for impairment reviews may be indicators such as adverse industry or economic trends, restructuring actions, lower projections of profitability, or a sustained decline in our market capitalization. For the purpose of impairment testing, we have two reporting units, which are the same as our two reportable segments. We initially conduct a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. The performance of the quantitative impairment test requires comparing the fair value of each reporting unit to its carrying amount, including goodwill. The fair value of each reporting unit is based on a combination of the income approach and the market approach.

Under the income approach, we estimate the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on discrete forecast periods as well as terminal value determinations, and are derived based on forecasted revenue growth rates and operating margins. These cash flow projections are discounted to arrive at the fair value of each reporting unit. The discount rate used is based on the weighted-average cost of capital of comparable public companies adjusted for the relevant risk associated with business specific characteristics and the uncertainty related to the reporting unit's ability to execute on the projected cash flows. Under the market approach, we estimate the fair value based on market multiples of revenue and earnings derived from comparable publicly traded companies with operating and investment characteristics similar to the reporting unit. In addition, we make certain judgments and assumptions in allocating shared assets and liabilities to individual reporting units to determine the carrying amount of each reporting unit. An impairment exists if the fair value of a reporting unit is lower than its carrying amount. The impairment loss is measured based on the amount by which the carrying amount of the reporting unit exceeds its fair value, with the recognized loss not to exceed the total amount of allocated goodwill. We did not recognize any impairment charges on our goodwill in any of the periods presented.

Impairment of Long-Lived Assets — We review the carrying values of long-lived assets whenever events and circumstances, such as reductions in demand, lower projections of profitability, significant changes in the manner of our use of acquired assets, or significant negative industry or economic trends, indicate that the net book value of an asset may not be recovered through expected future cash flows from its use and eventual disposition. If this review indicates that there is an impairment, the impaired asset is written down to its fair value, which is typically calculated using: (i) quoted market prices and/or (ii) expected future cash flows utilizing a discount rate. Our estimates regarding future anticipated cash flows, the remaining economic life of the products and technologies, or both, may differ materially from actual cash flows and remaining economic life. In that event, impairment charges or shortened useful lives of certain long-lived assets may be required, resulting in charges to our consolidated statements of income when such determinations are made.

Derivative Instruments — Our derivative instruments, which are carried at fair value in our consolidated balance sheets, consist of foreign currency exchange contracts as described below:

Balance Sheet Hedges — We utilize foreign currency exchange forward and option contracts to hedge against the short-term impact of foreign currency exchange rate fluctuations related to certain foreign currency denominated monetary assets and liabilities, primarily intercompany receivables and payables. These derivative instruments are not designated as hedging instruments and do not subject us to material balance sheet risk due to exchange rate movements because the gains and losses on these contracts are intended to offset the gains and losses in the underlying foreign currency denominated monetary assets and liabilities being hedged, and the net amount is included in earnings.

Cash Flow Hedges — We utilize foreign currency exchange forward contracts to hedge foreign currency exchange exposures related to forecasted sales transactions denominated in certain foreign currencies. These derivative instruments are designated and qualify as cash flow hedges and, in general, closely match the underlying forecasted transactions in duration. The effective portion of the contracts’ gains and losses resulting from changes in fair value is recorded in AOCI until the forecasted transaction is recognized in the consolidated statements of income. When the forecasted transactions occur, we reclassify the related gains or losses on the cash flow hedges into net revenues. If the underlying forecasted transactions do not occur, or it becomes probable that they will not occur within the defined hedge period, the gains or losses on the related cash flow hedges are reclassified from AOCI and recognized immediately in earnings. We measure the effectiveness of hedges of forecasted transactions on a monthly basis by comparing the fair values of the designated foreign currency exchange forward purchase contracts with the fair values of the forecasted transactions.

Factors that could have an impact on the effectiveness of our hedging programs include the accuracy of forecasts and the volatility of foreign currency markets. These programs reduce, but do not entirely eliminate, the impact of currency exchange movements. Currently, we do not enter into any foreign currency exchange forward contracts to hedge exposures related to firm commitments. Cash flows from our derivative programs are included under operating activities in the consolidated statements of cash flows.

Revenue Recognition — We recognize revenue by applying the following five step approach.

•

Identification of the contract, or contracts, with a customer — A contract with a customer is within the scope of ASC 606 when it meets all the following criteria:

It is enforceable

It defines each party’s rights

It identifies the payment terms

It has commercial substance, and

We determine that collection of substantially all consideration for goods or services that will be transferred is probable based on the customer’s intent and ability to pay

•

Identification of the performance obligations in the contract — Performance obligations promised in a contract are identified based on the goods or services (or a bundle of goods and services) that will be transferred to the customer that are distinct.

•

Determination of the transaction price — The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer.

•

Allocation of the transaction price to the performance obligations in the contract — Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation.

•

Recognition of revenue when, or as, we satisfy a performance obligation — We satisfy performance obligations either over time or at a point in time.

Customarily we have a purchase order from or executed contract with our customers that establishes the goods and services to be transferred and the consideration to be received.

We combine two or more contracts entered into at or near the same time with the same customer as a single contract if the contracts are negotiated as one package with a single commercial objective, if the amount of consideration to be paid on one contract depends on the price or performance of the other contract or if the goods and services promised in each of the contracts are a single performance obligation.

Our contracts with customers may include hardware systems, software licenses, software support, hardware support, public cloud services and other services. Software support contracts entitle our customers to receive unspecified upgrades and enhancements on a when-and-if-available basis, and patch releases. Hardware support services include contracts for extended warranty and technical support with minimum response times. Other services include professional services and customer education and training services.

We identify performance obligations in our contracts to be those goods and services that are distinct. A good or service is distinct where the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from us, and is distinct in the context of the contract, where the transfer of the good or service is separately identifiable from other promises in the contract.

If a contract includes multiple promised goods or services, we apply judgment to determine whether promised goods or services are distinct. If they are not, we combine the goods and services until we have a distinct performance obligation. For example, a configured storage system inclusive of the operating system (OS) software essential to its functionality is considered a single performance obligation, while optional add-on software is a separate performance obligation. In general, hardware support, software support, and different types of professional services are each separate performance obligations.

We determine the transaction price of our contracts with customers based on the consideration to which we will be entitled in exchange for transferring goods or services. Consideration promised may include fixed amounts, variable amounts or both. We sell public cloud services either on a subscription basis or a consumption basis. We sell professional services either on a time and materials basis or under fixed price projects.

We evaluate variable consideration in arrangements with contract terms such as rights of return, potential penalties and acceptance clauses. We generally use the expected value method, primarily relying on our history, to estimate variable consideration. However, when we believe it to provide a better estimate, we use the most likely amount method. In either case, we consider variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Reassessments of our variable consideration may occur as historical information changes. Transaction prices are also adjusted for the effects of time value of money if the timing of payments provides either the customer or us a significant benefit of financing.

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis. We determine standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price by maximizing the use of observable inputs including pricing strategy, market data, internally-approved pricing guidelines related to the performance obligations and other observable inputs. We regularly review standalone selling prices and maintain internal controls over the establishment and updates of these estimates. Variable consideration is also allocated to the performance obligations. If the terms of variable consideration relate to one performance obligation, it is entirely allocated to that obligation. Otherwise, it is allocated to all the performance obligations in the contract.

We typically recognize revenue at a point in time upon the transfer of goods to a customer. Products we transfer at a point in time include our configured hardware systems, OS software licenses, optional add-on software licenses and add-on hardware. Services are typically transferred over time and revenue is recognized based on an appropriate method for measuring our progress toward

completion of the performance obligation. Our stand-ready services, including both hardware and software support, are transferred ratably over the period of the contract. Our public cloud services are transferred either 1) for subscription arrangements, ratably over the subscription period or 2) for consumption-based arrangements, as actually consumed by the customer. For other services such as our fixed professional services contracts, we use an input method to determine the percentage of completion. That is, we estimate the effort to date versus the expected effort required over the life of the contract.

Deferred Commissions — We capitalize sales commissions that are incremental direct costs of obtaining customer contracts for which revenue is not immediately recognized and classify them as current or non-current based on the terms of the related contracts. Capitalized commissions are amortized based on the transfer of goods or services to which they relate, typically over one to three years, and are also periodically reviewed for impairment. Amortization expense is recorded to sales and marketing expense in our consolidated statements of income.

Leases — We determine if an arrangement is or contains a lease at inception, and we classify leases as operating or finance leases at commencement. In our consolidated balance sheets, operating lease right-of-use (ROU) assets are included in other non-current assets, while finance lease ROU assets are included in property and equipment, net. Lease liabilities for both types of leases are included in accrued expenses and other long-term liabilities. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments over that term.

Operating and finance lease ROU assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term. ROU assets also include any lease payments made prior to lease commencement and exclude lease incentives. The lease term is the noncancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised. As the rate implicit in our leases is typically not readily determinable, in computing the present value of lease payments we generally use our incremental borrowing rate based on information available at the commencement date. Variable lease payments not dependent on an index or rate are expensed as incurred and not included within the calculation of ROU assets and lease liabilities. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.

We do not separate non-lease components from lease components for any class of leases, and we do not recognize ROU assets and lease liabilities for leases with a lease term of twelve months or less.

Foreign Currency Translation — For international subsidiaries whose functional currency is the local currency, gains and losses resulting from translation of these foreign currency financial statements into U.S. dollars are recorded in AOCI. For international subsidiaries where the functional currency is the U.S. dollar, gains and losses resulting from the process of remeasuring foreign currency financial statements into U.S. dollars are included in other (expense) income, net.

Benefit Plans — We record actuarial gains and losses associated with defined benefit plans within AOCI and amortize net gains or losses in excess of 10 percent of the greater of the market value of plan assets as of the beginning of the fiscal year or the plans' projected benefit obligation on a straight-line basis over the remaining estimated service life of plan participants. The measurement date for all defined benefit plans is our fiscal year end.

Stock-Based Compensation — We measure and recognize stock-based compensation for all stock-based awards, including employee stock options, restricted stock units (RSUs), including time-based RSUs and performance-based RSUs (PBRSUs), and rights to purchase shares under our employee stock purchase plan (ESPP), based on their estimated fair value, and recognize the costs in our financial statements using the straight-line attribution approach over the requisite service period for the entire award.

The fair value of employee time-based RSUs, and PBRSUs that include a performance condition, is equal to the market value of our common stock on the grant date of the award, less the present value of expected dividends during the vesting period, discounted at a risk-free interest rate. The fair value of PBRSUs that include a market condition is measured using a Monte Carlo simulation model on the date of grant.

The fair value of time-based RSUs, and PBRSUs that include a market condition, is not remeasured as a result of subsequent stock price fluctuations. When there is a change in management’s estimate of expected achievement relative to the performance target for PBRSUs that include a performance condition, such as our achievement against a billings result average target, the change in estimate results in the recognition of a cumulative adjustment of stock-based compensation expense.

Our expected term assumption is based primarily on historical exercise and post-vesting forfeiture experience. Our stock price volatility assumption is based on a combination of our historical and implied volatility. The risk-free interest rates are based upon United States (U.S.) Treasury bills with equivalent expected terms, and the expected dividends are based on our history and expected dividend payouts.

We account for forfeitures of stock-based awards as they occur.

Income Taxes — Deferred income tax assets and liabilities are provided for temporary differences that will result in tax deductions or income in future periods, as well as the future benefit of tax credit carryforwards. A valuation allowance reduces tax assets to their estimated realizable value.

We recognize the tax liability for uncertain income tax positions on the income tax return based on the two-step process prescribed in the interpretation. The first step is to determine whether it is more likely than not that each income tax position would be sustained upon audit. The second step is to estimate and measure the tax benefit as the amount that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Estimating these amounts requires us to determine the probability of various possible outcomes. We evaluate these uncertain tax positions on a quarterly basis. We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes line on the accompanying consolidated statements of income.

Net Income per Share — Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding. Diluted net income per share is computed giving effect to the weighted-average number of dilutive potential shares that were outstanding during the period using the treasury stock method. Potential dilutive common shares consist primarily of outstanding stock options, shares to be purchased under our employee stock purchase plan and unvested RSUs.

Treasury Stock — We account for treasury stock under the cost method. Upon the retirement of treasury stock, we allocate the value of treasury shares between common stock, additional paid-in capital and retained earnings.

2. Recent Accounting Pronouncements

InRecent ~~December 2023, the Financial~~ Accounting ~~Standards~~Pronouncements ~~Board~~Not ~~(“FASB”)~~Yet issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. We are currently evaluating the effect of this pronouncement on our income tax disclosures.Adopted

In November ~~2023~~2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) ~~2023~~2024-0703, ~~Segment~~Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~280~~220-40): ~~Improvements~~Disaggregation toof ~~Reportable~~Income ~~Segment~~Statement ~~Disclosures~~Expenses, which requires additional disclosure of ~~incremental~~the ~~segment~~nature ~~information~~of onexpenses anincluded ~~annual~~in ~~and~~the ~~interim~~income ~~basis~~statement. The standard requires disclosures about specific types of expenses included in the expense captions presented in the income statement as well as disclosures about selling expenses. This ASU is effective for fiscal years beginning after December 15, ~~2023~~2026, and interim periods ~~within fiscal years~~ beginning after December 15, ~~2024~~2027, with early adoption permitted. The requirements should be applied on a ~~retrospective~~prospective basis while retrospective application is permitted. We are currently evaluating the effect of this pronouncement on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. We are currently evaluating the effect of this pronouncement on our income tax disclosures.

Recently Adopted Accounting Pronouncement

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. We adopted this standard for our annual period beginning fiscal year 2025 on a retrospective basis to all periods presented. The adoption of this standard did not result in a significant change to our consolidated financial statement disclosures. See Note 15 – Segment, Geographic, and Significant Customer Information of the Notes to Consolidated Financial Statements for our reportable segment disclosures.

3. Concentration of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, investments, foreign currency exchange contracts and accounts receivable. We maintain the majority of our cash and cash equivalents with several major financial institutions where the deposits exceed federally insured limits. Cash equivalents and short-term investments consist primarily of money market funds, U.S. Treasury and government debt securities and certificates of deposit, all of which are considered high investment grade. Our policy is to limit the amount of credit exposure through diversification and investment in highly rated securities. We further mitigate concentrations of credit risk in our investments by limiting our investments in the debt securities of a single issuer and by diversifying risk across geographies and type of issuer. General macroeconomic uncertainty has led to an increase in market volatility, however, management believes that the financial institutions that hold our cash, cash equivalents and investments are financially sound and, accordingly, are subject to minimal credit risk.

By entering into foreign currency exchange contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. The counterparties to these contracts are major multinational commercial banks, and we do not expect any losses as a result of counterparty defaults.

We sell our products primarily to large organizations in different industries and geographies. We do not require collateral or other security to support accounts receivable. In addition, we maintain an allowance for potential credit losses. To reduce credit risk, we perform ongoing credit evaluations on our customers’ financial condition. We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information, including the expected impact of macroeconomic disruptions, and, to date, such losses have been within management’s expectations. Concentrations of credit risk with respect to trade accounts receivable are limited due to the wide variety of customers who are dispersed across many geographic regions.

There are no concentrations of business transacted with a particular market that would severely impact our business in the near term. However, we rely on a limited number of suppliers for certain key components and a few key contract manufacturers to manufacture most of our products; any disruption, or termination of these arrangements could materially adversely affect our operating results.

4. Business Combinations

Fiscal 2023 Acquisition

Instaclustr Acquisition

On May 20, 2022, we acquired all the outstanding shares of privately-held Instaclustr US Holding, Inc. (Instaclustr) for ~~approximately~~ $498 million. Instaclustr is a leading platform provider of fully managed open-source database, pipeline and workflow applications delivered as-a-service.

The acquisition-date values of the assets acquired and liabilities assumed are as follows (in millions):


	Amount
Cash	$	4
Intangible assets		107
Goodwill		413
Other assets		19
Total assets acquired		543
Liabilities assumed		(45	)
Total purchase price	$	498

The components of the intangible assets acquired were as follows (in millions, except useful life):


	Amount		Estimated useful life (years)
Developed technology	$	55		5
Customer contracts/relationships		50		5
Trade name		2		3
Total intangible assets	$	107

The acquired net assets and assumed debt of Instaclustr were recorded at their estimated values. We determined the estimated values with the assistance of valuations and appraisals performed by third party specialists and estimates made by management. We expect to realize revenue synergies and anticipate opportunities for growth through the ability to leverage additional future products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated value of its identifiable net assets acquired, and as a result, we have recorded goodwill in connection with the acquisition. The goodwill is not deductible for income tax purposes.

The results of operations related to the acquisition of Instaclustr have been included in our consolidated statements of income from the acquisition date. Pro forma results of operations have not been presented because the impact from the acquisition was not material to our consolidated results of operations.

Fiscal 2022 Acquisitions

Fylamynt Acquisition

On February 18, 2022, we acquired all the outstanding shares of privately-held NeurOps Inc. (which operated under the name "Fylamynt") for approximately $27 million in cash, of which $22 million was paid at closing. The purchase price includes $5 million related to an indemnity holdback provision, of which $4 million was paid in the fourth quarter of fiscal 2023. Fylamynt is an innovative CloudOps automation technology company that enables customers to build, run, manage and analyze workflows securely in any cloud with little to no code.

The acquisition-date values of the assets acquired are as follows (in millions):

	Amount
Cash	$	1
Developed technology		6
Goodwill		20
Total assets acquired		27
Total purchase price	$	27

CloudCheckr Acquisition

On November 5, 2021, we acquired all the outstanding shares of privately-held CloudCheckr Inc., (CloudCheckr) for approximately $347 million in cash. CloudCheckr is a leading cloud optimization platform that provides cloud visibility and insights to lower costs, maintain security and compliance, and optimize cloud resources.

The acquisition-date values of the assets acquired and liabilities assumed are as follows (in millions):

	Amount
Cash	$	2
Intangible assets		76
Goodwill		276
Other assets		6
Total assets acquired		360
Liabilities assumed		(13	)
Total purchase price	$	347

The components of the intangible assets acquired were as follows (in millions, except useful life):

	Amount		Estimated useful life(years)
Developed technology	$	45		5
Customer contracts/relationships		30		5
Trade name		1		3
Total intangible assets	$	76

Data Mechanics Acquisition

On June 18, 2021, we acquired all the outstanding shares of privately-held Data Mechanics Inc. (Data Mechanics), a provider of managed platforms for big data processing and cloud analytics headquartered in Paris, France, for approximately $15 million in cash.

The acquisition-date values of the assets acquired and liabilities assumed are as follows (in millions):

	Amount
Cash	$	1
Developed technology		5
Goodwill		11
Total assets acquired		17
Liabilities assumed		(2	)
Total purchase price	$	15

The acquired assets and assumed liabilities of Fylamynt, CloudCheckr and Data Mechanics were recorded at their estimated values. We determined the estimated values with the assistance of valuations and appraisals performed by third party specialists and estimates made by management. We expect to realize incremental revenue by offering continuous cost optimization and managed services from our existing capabilities to help customers improve their cloud resources and realize the benefits of cloud faster and at scale. We also anticipate opportunities for growth through the ability to leverage additional future products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of their identifiable net assets acquired, and as a result, we have recorded goodwill in connection with these acquisitions. The goodwill is not deductible for income tax purposes.

The results of operations related to the acquisitions of Fylamynt, CloudCheckr and Data Mechanics have been included in our consolidated statements of income from their respective acquisition dates. Pro forma results of operations have not been presented because the impact from these acquisitions was not material to our consolidated results of operations.

5. Goodwill and Purchased Intangible Assets, Net

Goodwill activity is summarized as follows (in millions):

	Amount
Balance as of April 29, 2022	$	2,346
Balance as of April 28, 2023	$	2,759
Additions		413
Balance as of April 28, 2023		2,759
Additions		—
Balance as of April 26, 2024	$	2,759
Additions		—
Derecognition		(36	)
Balance as of April 25, 2025	$	2,723

67During fiscal 2025, we derecognized a portion of the Public Cloud goodwill in connection with the sale of our cloud optimization and management software business known as Spot by NetApp, which formed part of our Public Cloud reportable segment. See "Gains/losses on the sale or derecognition of assets" section contained in Note 6 – Supplemental Financial Information for additional information related to this derecognition.

Goodwill by reportable segment as of April 2625, ~~2024~~2025 is as follows (in millions):

	Amount
Hybrid Cloud	$	1,714
Public Cloud		1,~~045~~009
Total goodwill	$	2,~~759~~723

Purchased intangible assets, net are summarized below (in millions):

	April 26, 2024							April 28, 2023
	April 25, 2025							April 26, 2024
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Assets		Amortization			Assets		Assets		Amortization			Assets
Developed technology	$	~~179~~55	$	(~~108~~33	)	$	7122	$	~~212~~179	$	(~~107~~108	)	$	~~105~~71
Customer contracts/relationships		~~114~~50		(6229	)		5221		~~118~~114		(4462	)		7452
Other purchased intangibles		62		(52	)		1—		6		(45	)		21
Total purchased intangible assets	$	~~299~~107	$	(~~175~~64	)	$	~~124~~43	$	~~336~~299	$	(~~155~~175	)	$	~~181~~124

During fiscal ~~2024~~2025, we retired ~~approximately~~ $3725 million of fully amortized intangible assets. ~~Amortization~~We ~~expense~~also ~~for~~derecognized ~~purchased~~certain intangible assets, isnet ~~summarized~~in ~~below~~connection (with the sale of our Spot by NetApp business. See "Gains/losses on the sale or derecognition of assets" section contained in ~~millions):~~Note 6 – Supplemental Financial Information for additional information related to this derecognition.

	Year Ended						Statements of
	April 26, 2024		April 28, 2023		April 29, 2022		IncomeClassifications
Developed technology	$	34	$	42	$	33	Cost of revenues
Customer contracts/relationships		22		24		11	Operating expenses
Other purchased intangibles		1		2		2	Operating expenses
Total	$	57	$	68	$	46

Amortization expense for purchased intangible assets is summarized below (in millions):

As of April 26, 2024, future amortization expense related to purchased intangible assets is as follows (in millions):


	Year Ended						Statements of
	April 25, 2025		April 26, 2024		April 28, 2023		Income Classifications
Developed technology	$	28	$	34	$	42	Cost of revenues
Customer contracts/relationships		19		22		24	Operating expenses
Other purchased intangibles		—		1		2	Operating expenses
Total	$	47	$	57	$	68

Fiscal Year	Amount
2025	$	55
2026		39
2027		29
2028		1
Total	$	124

As of April 25, 2025, future amortization expense related to purchased intangible assets is as follows (in millions):


Fiscal Year	Amount
2026	$	21
2027		21
2028		1
2029		—
Total	$	43

6. Supplemental Financial Information

Cash and cash equivalents (in millions):

The following table presents cash and cash equivalents as reported in our consolidated balance sheets, as well as the sum of cash, cash equivalents and restricted cash as reported on our consolidated statements of cash flows:

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Cash and cash equivalents	$	12,~~903~~742	$	21,~~316~~903
Restricted cash		67		6
Cash, cash equivalents and restricted cash	$	12,~~909~~749	$	21,~~322~~909

Inventories (in millions):

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Purchased components	$	~~116~~81	$	65116
Finished goods		70105		~~102~~70
Inventories	$	186	$	~~167~~186

Property and equipment, net (in millions):

	April 26, 2024			April 28, 2023
	April 25, 2025			April 26,2024
Land	$	46		$	46
Buildings and improvements		~~367~~374			~~359~~367
Leasehold improvements		81103			9181
Computer, production, engineering and other equipment		1,~~101~~172			1,~~053~~101
Computer software		~~340~~329			~~325~~340
Furniture and fixtures		7762			8477
Construction-in-progress		7049			5570
		2,082			2,013
		2,135			2,082
Accumulated depreciation and amortization		(1,~~478~~572	)		(1,~~363~~478	)
Property and equipment, net	$	~~604~~563		$	~~650~~604

During fiscal 2025, we derecognized certain property and equipment, net in connection with the sale of our Spot by NetApp business. See "Gains/losses on the sale or derecognition of assets" section below for additional information related to this derecognition.

Depreciation and amortization expense related to property and equipment, net is summarized below (in millions):

Year Ended

April 26, 2024

April 28, 2023

April 29,2022

April 25, 2025

April 26,2024

April 28,2023

Depreciation and amortization expense

~~198~~196

~~181~~198

~~148~~181

Other non-current assets (in millions):

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Deferred tax assets	$	~~896~~994	$	~~948~~896
Operating lease ROU assets		~~247~~241		~~281~~247
Other assets		~~360~~408		~~319~~360
Other non-current assets	$	1,~~503~~643	$	1,~~548~~503

Other non-current assets as of April 2625, ~~2024~~2025 and April 2826, ~~2023~~2024 include $8592 million and $8085 million, respectively, for our 49% non-controlling equity interest in Lenovo NetApp Technology Limited (LNTL), a China-based entity that we formed with Lenovo (Beijing) Information Technology Ltd. in fiscal 2019. LNTL is integral to our sales channel strategy in China, acting as a distributor of our offerings to customers headquartered there, and involved in certain OEM sales to Lenovo. LNTL is also focused on localizing our products and services, and developing new joint offerings for the China market by leveraging NetApp and Lenovo technologies.

Accrued expenses (in millions):

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Accrued compensation and benefits	$	~~538~~513	$	~~363~~538
Product warranty liabilities		18		1718
Operating lease liabilities		40		4740
Other current liabilities		~~417~~551		~~430~~417
Accrued expenses	$	1,~~013~~122	$	~~857~~1,013

Other long-term liabilities (in millions):

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
Liability for uncertain tax positions	$	~~153~~45	$	~~144~~153
Income taxes payable		~~100~~—		~~215~~100
Product warranty liabilities		9		89
Operating lease liabilities		~~220~~216		~~248~~220
Other liabilities		~~103~~109		93103
Other long-term liabilities	$	~~585~~379	$	~~708~~585

Deferred revenue and financed unearned services revenue

The following table summarizes the components of our deferred revenue and financed unearned services revenue balance as reported in our consolidated balance sheets (in millions):

	April 26, 2024			April 28, 2023
		April 25, 2025			April 26,2024
Deferred product revenue	$	59$	66	$	18$	59
Deferred services revenue		~~4,123~~	4,428		~~4,247~~	4,123
Financed unearned services revenue		52	42		48	52
Total	$	~~4,234~~$	4,536	$	~~4,313~~$	4,234
Reported as:
Short-term	$	~~2,176~~$	2,279	$	~~2,218~~$	2,176
Long-term		~~2,058~~	2,257		~~2,095~~	2,058
Total	$	~~4,234~~$	4,536	$	~~4,313~~$	4,234

Deferred product revenue represents unrecognized revenue related to undelivered product commitments and other product deliveries that have not met all revenue recognition criteria. Deferred services revenue represents customer payments made in advance for services, which include software and hardware support contracts, certain public cloud services and other services. Financed unearned services revenue represents undelivered services for which cash has been received under certain third-party financing arrangements. See Note 17 – Commitments and Contingencies for additional information related to these arrangements.

During the years ended April 2625, ~~2024~~2025 and April 2826, ~~2023~~2024, we recognized revenue of $2,~~218~~176 million and $2,~~171~~218 million, respectively, that was included in the deferred revenue and financed unearned services revenue balance at the beginning of the respective periods.

AsRemaining ~~of April 26, 2024, the aggregate amount of the transaction price allocated to the remaining~~ performance obligations related to customer contracts that are unsatisfied or partially unsatisfied approximated our deferred revenue and unearned services revenue balance. Because customer orders are typically placed on an as-needed basis, and cancellable without penalty prior to shipment, orders in backlog may not be a meaningful indicator of future revenue and have not been included in this amount. We expect to recognize as revenue approximately 51% of our deferred revenue and financed unearned services revenue balance in the next 12 months, approximately 24% in the next 13 to 24 months, and the remainder thereafter.

As of April 25, 2025, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied was $5.0 billion. Because customer orders are typically placed on an as-needed basis, and cancellable without penalty prior to shipment, orders in backlog may not be a meaningful indicator of future revenue and have not been included in this amount. We expect to recognize as revenue approximately 49% of our remaining performance obligations in the next 12 months and the remainder thereafter.

Deferred commissions

The following table summarizes deferred commissions balances as reported in our consolidated balance sheets (in millions):

	April 26, 2024		April 28, 2023
Other current assets	$	69	$	64
Other non-current assets		100		99
Total deferred commissions	$	169	$	163

During the years ended April 26, 2024 and April 28, 2023, we recognized amortization expense from deferred commissions of $101 million and $116 million, respectively, and there were no impairment charges recognized.


	April 25, 2025		April 26, 2024
Other current assets	$	64	$	69
Other non-current assets		104		100
Total deferred commissions	$	168	$	169

~~Other~~During ~~income~~the (years ended April 25, 2025 and April 26, 2024, we recognized amortization expense) from deferred commissions of $123 million and $101 million, ~~net~~respectively, ~~(in~~and ~~millions):~~there were no impairment charges recognized.

	Year Ended
	April 26, 2024			April 28, 2023			April 29, 2022
Interest income	$	112		$	69		$	7
Interest expense		(64	)		(67	)		(73	)
Other, net		1			46			4
Other income (expense), net	$	49		$	48		$	(62	)

Other income, net (in millions):


	Year Ended
	April 25, 2025			April 26, 2024			April 28, 2023
Interest income	$	112		$	112		$	69
Interest expense		(64	)		(64	)		(67	)
Other, net		(2	)		1			46
Total other income, net	$	46		$	49		$	48

Statements of cash flows additional information (in millions):

Supplemental cash flow information related to our operating leases is included in Note 9 – Leases. Non-cash investing ~~and financing~~ activities and other supplemental cash flow information are presented below:


	Year Ended
	April 25, 2025		April 26, 2024		April 28, 2023
Non-cash Investing Activities:
Capital expenditures incurred but not paid	$	14	$	16	$	12
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	412	$	357	$	386
Interest paid	$	53	$	59	$	65

Gains/losses on the sale or derecognition of assets

In January 2025, we and Flexera Software LLC entered into a definitive agreement for the sale of our cloud optimization and management software business known as Spot by NetApp, which formed part of our Public Cloud reportable segment. Total sale consideration consists of (i) $70 million in up-front cash consideration and (ii) up to $49 million in cash consideration contingent upon the achievement of certain financial performance metrics during the period from January 1, 2025 through December 31, 2025. The transaction closed on March 3, 2025, and we received the up-front cash consideration, recognized $20 million for contingent consideration in other current assets, derecognized the assets and liabilities conveyed to Flexera, and recorded certain transaction costs. No material gain or loss was recorded to our consolidated statements of income.

The major classes of assets and liabilities derecognized on the transaction close date are (in millions):


	Amount
Assets:
Property and equipment, net	$	13
Goodwill		36
Purchased intangible assets, net		34
Total Assets		83
Liabilities:
Short-term deferred revenue and financed unearned service revenue		1

	Year Ended
	April 26, 2024		April 28, 2023		April 29, 2022
Non-cash Investing and Financing Activities:
Capital expenditures incurred but not paid	$	16	$	12	$	22
Liabilities incurred to former owners of acquired business	$	—	$	—	$	5
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	357	$	386	$	398
Interest paid	$	59	$	65	$	67

7. Financial Instruments and Fair Value Measurements

The accounting guidance for fair value measurements provides a framework for measuring fair value on either a recurring or nonrecurring basis, whereby the inputs used in valuation techniques are assigned a hierarchical level. The following are the three levels of inputs to measure fair value:

Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Inputs that reflect quoted prices for identical assets or liabilities in less active markets; quoted prices for similar assets or liabilities in active markets; benchmark yields, reported trades, broker/dealer quotes, inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3: Unobservable inputs that reflect our own assumptions incorporated in valuation techniques used to measure fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, our own or the counterparty’s non-performance risk is considered in measuring the fair values of liabilities and assets, respectively.

Investments

The following is a summary of our investments at their cost or amortized cost as of April 2625, ~~2024~~2025 and April 2826, ~~2023~~2024 (in millions):

	April 26, 2024		April 28, 2023
	April 25, 2025		April 26,2024
U.S. Treasury and government debt securities	$	12,~~349~~025	$	~~754~~1,349
Money market funds		1,~~161~~126		~~794~~1,161
Certificates of deposit		1224		5912
Mutual funds		3841		3638
Total debt and equity securities	$	23,~~560~~216	$	12,~~643~~560

The fair value of our investments approximates their cost or amortized cost for both periods presented. Investments in mutual funds relate to the non-qualified deferred compensation plan offered to certain employees.

As of April 2625, ~~2024~~2025, all our debt investments are due to mature in one year or less.

Fair Value of Financial Instruments

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis (in millions):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Filing Compare · NetApp, Inc.