NetApp (NTAP) 10-K risk factor changes: FY2022 vs FY2021

The information included elsewhere in this Annual Report on Form 10-K should be considered and understood in the context of the following risk factors, which describe circumstances that may materially harm our future business, operating results or financial condition.

The following 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

If we are unable to develop, introduce and gain market acceptance for new products and services while managing the transition from older ones, or if we cannot provide the expected level of quality and support for our new products and services, our business, operating results, financial condition and cash flows could be harmed.

Our future growth depends upon the successful development and introduction of new hardware and software products and services.

Due to the complexity of storage software, subsystems and appliances and the difficulty in gauging the engineering effort required to produce new products and services, such products and services are subject to significant technical and quality control risks.

If we are unable, for technological, customer reluctance or other reasons, to develop, introduce and gain market acceptance for new products and services, as and when required by the market and our customers, our business, operating results, financial condition and cash flows could be materially and adversely affected.

New or additional product introductions, including new software and cloud offerings, such as Astra by NetApp, Spot by NetApp and new hardware and all-flash storage products, subject us to additional financial and operational risks, including our ability to forecast customer preferences and/or demand, our ability to successfully manage the transition from older products and solutions, our ability to forecast the impact of customers’ demand for new products, services and solutions or the products being replaced, and our ability to manage production capacity to meet the demand for new products and services.

In addition, as new or enhanced products and services are introduced, we 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, services and solutions include the uncertainty of price-performance relative to products of competitors, competitors’ responses to the introductions, delays in sales caused by the desire of customers to evaluate new products for extended periods of time and our partners’ investment in selling our new products and solutions.

If these risks are not managed effectively, we could experience material risks to our business, operating results, financial condition and cash flows.

As we enter new or emerging markets, we will likely increase demands on our service and support operations and may be exposed to additional competition.

We may not be able to provide products, services and support to effectively compete for these market opportunities.

Our business may be harmed by technological trends in our market or if we are unable to keep pace with rapid industry, technological and market changes.

Our industry and the markets in which we compete have historically experienced significant growth due to the increase in the demand for storage and data management solutions by consumers, enterprises and governments around the world, and the purchases of storage and data management solutions to address this demand.

However, despite continued data growth, our traditional market, the networked storage hardware market, experienced a decline in each of the last three calendar years due to a combination of customers delaying purchases in the face of technology transitions, increasing adoption of cloud environments built on commodity hardware, increased storage efficiency, and changing economic and business environments.

While customers are navigating through their information technology (IT) transformations, which leverage modern architectures and hybrid cloud environments, they are also reducing IT budgets, looking for simpler solutions, and changing how they consume IT.

This evolution is diverting spending towards transformational projects and architectures like flash, hybrid cloud, IT as a service, converged infrastructure, and software defined storage.

We are unable to predict whether the impact of the COVID-19 pandemic will accelerate the decline of our traditional market and increase demand for our cloud offerings.

Our business may be adversely impacted if we are unable to keep pace with rapid industry, technological or market changes or if our Data Fabric strategy is not accepted in the marketplace.

As a result of these and other factors discussed in this report, our revenue may decline on a year-over-year basis, as it did in fiscal years 2017 and 2020.

The future impact of these trends on both short- and long-term growth patterns is uncertain.

If the general historical rate of industry growth declines, if the growth rates of the specific markets in which we compete decline, and/or if the consumption model of storage changes and our new and existing products, services and solutions do not receive customer acceptance, our business, operating results, financial condition and cash flows could suffer.

Our sales and distribution structure makes forecasting revenues difficult and, if disrupted, could harm our business, operating results, financial condition and cash flows.

Our business and sales models make revenues difficult to forecast.

We sell to a variety of customers directly and through various channels, with a corresponding variety of sales cycles.

The majority of our sales are made and/or fulfilled indirectly through channel partners, including value-added resellers, systems integrators, distributors, original equipment manufacturers (OEMs) and strategic business partners, which now include public cloud providers.

This structure significantly complicates our ability to forecast future revenue, especially within any particular fiscal quarter or year.

Moreover, our relationships with our indirect channel partners and strategic business partners are critical to our success.

The loss of one or more of our key indirect channel partners in a given geographic area or the failure of our channel or strategic partners to promote our products could harm our operating results.

Qualifying and developing new indirect channel partners typically requires a significant investment of time and resources before acceptable levels of productivity are met.

If we fail to maintain our relationships with our indirect channel partners and strategic partners, if their financial condition, business or customer relationships were to weaken, if they fail to comply with legal or regulatory requirements, or if we were to cease to do business with them for these or other reasons, our business, operating results, financial condition and cash flows could be harmed.

Increasing competition and industry consolidation could harm our business, operating results, financial condition and cash flows.

The storage and data management markets are intensely competitive and are characterized by rapidly changing technology and fragmentation.

We compete with many companies in the markets we serve, including established public companies, newer public companies with a strong flash focus, and new market entrants addressing the growing opportunity for application data management for Kubernetes.

Some offer a broad spectrum of IT products and services (full-stack vendors) and others offer a more limited set of storage and data management products or services.

Technology trends, such as the emergence of hosted or public cloud storage, SaaS and flash storage are driving significant changes in storage architectures and solution requirements.

Cloud service provider competitors provide customers storage for their data centers on demand, without requiring a capital expenditure, which meets rapidly evolving business needs and has changed the competitive landscape.

The impacts of the COVID-19 pandemic, including the increase in the number of employees working remotely, has accelerated customer adoption of competitors’ cloud solutions and contributed to increased competition in the market.

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 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 Item 1A.

– Risk Factors are hereby incorporated into the discussion by reference.

Executive Overview

Our Company

NetApp is a global cloud-led, data-centric software company that give organizations the freedom to put data to work in the applications that elevate their business.

We help our customers get the most out of their data with industry-leading cloud data services, storage systems, and software.

Throughout our history, we have kept our focus on one thing – the data, continuously improving how data are managed, stored, analyzed, protected, and moved.

Our strategy has been shaped around helping our customers embrace the full potential of new technologies – from the rise of the internet, to helping large enterprise customers in vertical markets, to bringing new systems to market.

Today, we are focused on unlocking the best of cloud.

NetApp helps customers move from building data centers to building data fabrics that achieve business objectives.

A data fabric simplifies the integration and orchestration of data services across clouds and on-premises to accelerate digital transformation.

We help organizations to get the most out of their cloud experience – whether private, public, or hybrid – by enabling IT to discover, integrate, automate, optimize, protect, and secure data and applications.

NetApp delivers the full range of capabilities organizations need for their data fabrics, enabling the business to deliver the right data and applications to the right place at the right time with the right capabilities to fuel innovation.

We bring the enterprise-grade data services our customers rely on into the cloud, and the simple flexibility of cloud into the data center.

Our industry-leading solutions work across diverse environments and the world’s biggest clouds.

NetApp can help a company wherever it is on its hybrid cloud journey.

We focus on delivering an exceptional customer experience to become our customers’ preferred data partner.

NetApp’s unique approach to data enables organizations to create new customer experiences, seize every opportunity to innovate, and optimize operations for cost, scale, speed, and agility – all while thriving in a multi-cloud world.

We employ a multichannel distribution strategy, selling products and services to end users and service providers through a direct sales force and through channel partners, including value-added resellers, system integrators, original equipment manufacturers (OEMs) and distributors.

As our product portfolio evolves, market dynamics change, and management continues to assess our largest opportunities, we periodically change how we group product revenue.

To provide improved visibility into the value created by our software innovation and R&D investment, beginning in fiscal 2021, we no longer group our products by “Strategic” and “Mature” solutions, but instead disclose the “Software” and “Hardware” components of our product revenues.

The engineering DNA of NetApp and the value we provide to customers is grounded in software (particularly our ONTAP OS) and we will continue to look for opportunities to highlight and reinvest in this innovation engine.

Software product revenue includes the OS software and optional add-on software solutions attached to our systems across our entire product set: All-Flash FAS, SolidFire, EF-series, Hybrid FAS, E-series, NetApp HCI, and StorageGrid.

Hardware product revenues include the non-software component of our systems across our entire product set.

In addition to our products and solutions, we provide a variety of services to our customers, including software support, hardware support and other services including professional services, and customer education and training to help customers most effectively build their unique data fabrics and efficiently manage their data.

Revenues generated by our Public Cloud Services (formerly referred to as Cloud Data Services) offerings, are included in software support revenues.

COVID-19

The novel coronavirus, or COVID-19, pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations.

We have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers, and the communities in which we operate.

Since March 2020, the vast majority of our employees have been working remotely and we have suspended business travel.

During fiscal 2021, due to macroeconomic uncertainty caused by COVID-19, we continued to observe certain customers delay purchases of our products and services, while other customers accelerated or placed new orders to address the demands of remote working and digital business.

We also experienced certain logistical challenges in delivering our products and services to customers in

certain regions, and minor supply chain constraints.

Given recent developments in the broader technology supply chain, we have begun to invest in inventory and certain longer-term commitments to help mitigate the risk of supply shortages.

We believe our existing balances of cash, cash equivalents and investments, cash generated from operations, and ability to access capital markets and committed lines of credit will be sufficient to satisfy our working capital needs, capital expenditures, dividends, stock repurchases, required debt repayments and other liquidity requirements associated with our operations.

The magnitude and duration of the disruption to our business, and impact to our operational and financial performance, caused by COVID-19 pandemic remain uncertain.

Refer to Item 1A.

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 30, 2021, we had fixed income debt investments of $67 million.

Our 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 investments, which consist primarily of corporate bonds, U.S. Treasury and government debt securities, and 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 30, 2021 would have resulted in a decrease in the fair value of our fixed-income securities of less than $1 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 that is other-than-temporary.

We monitor and evaluate our investment portfolio on a quarterly basis for any other-than-temporary impairments.

Debt — As of April 30, 2021 we have outstanding $2.7 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 9 – Financing Arrangements of the Notes to Consolidated Financial Statements 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 30, 2021, 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 and option 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 and option 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 less than 12 months.

See Note 12 – Derivatives and Hedging Activities of the Notes to Consolidated Financial Statements for more information regarding our derivatives and hedging activities.

[removed: Overview][added: Overview]

NetApp, Inc. (NetApp, we, or us) is a global cloud-led, data-centric software [removed: company, building on a rich history of software innovation.][added: company.]

[removed: Product,] [added: Product,] Solutions and Services [removed: Portfolio][added: Portfolio]

[removed: Public Cloud Services][added: Public Cloud]

Our [removed: portfolio of] enterprise-class solutions and services enables customers to [removed: fully] control and manage storage [removed: systems] in the cloud, consume high-performance storage services for primary workloads, and optimize cloud environments for cost and efficiency.

These solutions and services are generally available on the leading public clouds, including Microsoft Azure, Google Cloud Platform and Amazon [removed: Web Services (AWS).][added: AWS.]

[removed: Cloud Storage][added: Cloud storage and data services]

[removed: Customers benefit from the ability to] [added: With ONTAP’s built-in data transport features (NetApp Cloud Sync), customers can] migrate data to the cloud securely and efficiently [removed: with built-in data transport features] and [removed: services for existing NetApp or third-party storage and] can choose where to deploy primary workloads without having to re-architect [removed: the] applications or databases.

[removed: These] [added: Fully managed] cloud storage offerings are available [added: natively] on [removed: the major cloud providers, including] Microsoft [removed: (Azure] [added: Azure as Azure] NetApp [removed: Files), Google (Cloud Volumes Service] [added: Files, on AWS as Amazon FSx] for [removed: Google Cloud),] [added: NetApp ONTAP,] and [removed: Amazon (Cloud] [added: on Google Cloud as NetApp Cloud] Volumes Service for [removed: AWS).][added: Google Cloud.]

[removed: For those] [added: The platform is anchored by NetApp Cloud Volumes ONTAP, a cloud-based software for] customers who wish to manage their own cloud storage [removed: implementation, we offer Cloud Volumes ONTAP, a cloud-based data management service built] [added: infrastructure, and based] on [removed: NetApp] [added: the same] ONTAP [added: software that underpins our] storage [removed: software.][added: infrastructure offerings.]

[removed: Cloud Services and Analytics][added: Cloud operations services]

[removed: NetApp] [added: NetApp] Cloud [removed: Insights] [added: Insights] is an infrastructure monitoring tool that gives organizations visibility into their entire infrastructure with the ability to monitor, troubleshoot, and optimize cost across all resources, including public clouds and private data centers.

[removed: NetApp] [added: NetApp] Cloud [removed: Compliance,] [added: Data Sense (formerly Cloud Compliance), provides data discovery, mapping, and classification] driven by artificial intelligence algorithms with automated controls [added: and reporting] for data privacy regulations such as the General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), and [removed: more, enables organizations to get their business application data, on-premises data, and cloud environments privacy-ready.][added: more.]

[removed: NetApp] [added: NetApp] Cloud [removed: Backup] [added: Backup] delivers seamless and cost-effective backup and restore capabilities for protecting and archiving cloud and on-premises ONTAP data.

[removed: NetApp] [added: NetApp Cloud Volumes Edge Cache (formerly] Global File [removed: Cache is a software-based solution that] [added: Cache) software] delivers fast and secure access to data for users by caching active data sets to distributed offices globally.

[removed: Hybrid Cloud Solutions][added: Hybrid Cloud]

ONTAP [removed: 9] provides flexibility to design and deploy a storage environment across the broadest range of architectures - engineered systems, software-defined storage (SDS), and the cloud – while unifying data management across all of them, as well as SAN and NAS environments.

[removed: With ONTAP, customers] [added: Customers also] get a comprehensive, industry-leading portfolio of storage efficiency capabilities.

[removed: Inline data compression, deduplication,] and [removed: compaction] [added: cloud tiering (NetApp Cloud Tiering)] work together to reduce storage costs and maximize the amount of data stored.

Customers can [removed: multiply] [added: realize] savings with space-efficient [removed: NetApp Snapshot™] [added: NetApp Snapshot™] copies, thin provisioning, replication, and cloning technologies.

[removed: NetApp] [added: NetApp] All-Flash FAS (AFF) [removed: series] [added: series] is a scale-out platform built for virtualized environments, combining low-latency performance via flash memory (also known as a solid-state storage disk) with best-in-class data management, built-in efficiencies, integrated data protection, multiprotocol support, and nondisruptive operations; cloud and on-premises.

[removed: NetApp] [added: NetApp] Fabric Attached Storage [removed: (FAS)] [added: (FAS)] series are [removed: high-volume unstructured,] [added: high-volume,] high-capacity data storage devices powered by NetApp ONTAP.

[removed: NetApp FlexPod] [added: NetApp FlexPod] is a converged infrastructure solution.

[removed: NetApp] [added: NetApp] E/EF [removed: series] [added: series] is built for dedicated, high-bandwidth applications that need simple, fast SAN storage with enterprise-grade reliability.

[removed: NetApp StorageGRID] [added: NetApp StorageGRID] is a software-defined object storage solution for large archives, media repositories, and web data stores.

[removed: NetApp] [added: NetApp] SnapCenter Backup [removed: Management software] [added: Management software] is designed to deliver high-performance backup and recovery for database and application workloads hosted on ONTAP storage.

[removed: NetApp] [added: NetApp] SnapMirror Data [removed: Replication] [added: Replication] software is [removed: a cost-effective, easy-to-use unified replication solution, replicating] [added: able to replicate] data at high speeds across [removed: the Data Fabric.][added: environments.]

[removed: NetApp] [added: NetApp] SnapLock Data [removed: Compliance] [added: Compliance] software delivers high-performance disk-based data permanence for HDD and SSD deployments.

[removed: Data Management][added: Intelligent data management software]

[removed: NetApp] [added: NetApp] ElementOS [removed: software] [added: software] delivers agility through scale-out flexibility, predictable performance, and automation integrations so organizations can build clouds to accelerate new services.

[removed: Integrated into the NetApp Data Fabric,] ElementOS software enables innovative architectures with flexible scale for our customers' private clouds.

[removed: NetApp SANtricity software] [added: NetApp SANtricity software] is the data management software that powers and administers the NetApp E/EF Series storage arrays.

[removed: NetApp Astra] [added: NetApp Astra] is a fully managed application-aware data management service built for Kubernetes workloads.

[removed: Professional] [added: Professional] and Support [removed: Services][added: Services]

NetApp and our [removed: partners'] [added: certified] services [removed: teams] [added: partners] offer [added: a comprehensive portfolio of] assessment, design, [added: implementation, migration,] and [removed: implementation] [added: proactive support] services [removed: that] [added: to] help customers optimize [added: the performance and efficiency of] their [removed: on-premises, private cloud,] [added: on-premises and] hybrid [removed: cloud, and/or public cloud IT] [added: multicloud storage] environments.

NetApp strategic consulting services provide executive-level, high-touch consulting [removed: services] [added: engagements] to help organizations facilitate the alignment of their business and technology goals.

Our proven expertise can help organizations define [removed: a] long-term data fabric [removed: strategy] [added: strategies] and operations [removed: model for their enterprise and execute IT initiatives] [added: models] to drive [added: IT initiatives for] digital transformation.

[removed: NetApp's] [added: NetApp] Professional Services [removed: team helps organizations] [added: provide the expertise to] mitigate risk and streamline [removed: solution] [added: the] design, [removed: deployment,] [added: implementation,] migration, and [removed: integration—on-premises, in private and] [added: integration of NetApp] hybrid [removed: clouds, as well as in the public clouds —] [added: cloud solutions] to [removed: bring] [added: realize] the [added: business] benefits of new technology [removed: to their businesses] [added: investments] faster.

Highly skilled services experts [removed: can deliver a] [added: help enable] secure, optimized [removed: environment] [added: environments] that [removed: provides] [added: deliver] the consistent, high-quality outcomes [removed: one expects] [added: customers expect] from the start.

NetApp Managed Services [removed: help] optimize performance and efficiency in [removed: your] hybrid cloud and on-premises environments.

Building on a rich history of innovation, NetApp gives customers the freedom to manage applications and data across hybrid multicloud environments.

Our portfolio of cloud services, and storage infrastructure, powered by intelligent data management software, enables applications to run faster, more reliably, and more securely, all at a lower cost.

In the last two years, we have seen an unprecedented acceleration of digital transformation.

Organizations accelerated digital initiatives to strengthen and optimize operations, as well as to create new experiences for customers and employees.

All these efforts require these organizations to manage and protect data while ensuring that the underlying cloud and data center infrastructure can support application performance and reliability cost-effectively.

Increasingly, complexity is the primary barrier to building new applications and capabilities quickly.

Our vision is to help our customers increase the pace of innovation by reducing complexity with intelligent software services that manage, protect and optimize data, storage infrastructure, and cloud resources.

Our strategy is to help our customers:

Build their data fabric with a single, unified, enterprise-grade data experience across the hybrid multicloud.

Modernize data centers with cloud-like capabilities and consumption models.

Accelerate cloud deployment by removing economic and operational barriers.

Simplify the management of hybrid multicloud environments with a single management plane.

NetApp delivers a portfolio of cloud services, and storage infrastructure, powered by intelligent data management software.

At the end of the first quarter of fiscal year 2022, corresponding with how we manage the company, we established two segments for financial reporting purposes: Hybrid Cloud and Public Cloud.

*Hybrid Cloud* offers a portfolio of storage management and infrastructure solutions that help customers recast their data centers with the power of cloud.

This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations.

We offer a broad portfolio of cloud-connected all-flash, hybrid-flash, and object storage systems, powered by intelligent data management software.

Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

NetApp ONTAP software is the foundational technology that underpins NetApp's key storage solutions in the data center and in the cloud.

ONTAP includes a wide variety of data management and protection features and capabilities, including automatic ransomware protection against cyber-attacks, built-in data transport features, and storage efficiency capabilities.

ONTAP includes a number of data protection features designed to safeguard data from corruption, compromise, or loss and to help our customers quickly recover when unexpected events occur.

Storage infrastructure

*Public Cloud* offers a portfolio of products delivered primarily as-a-service, including related support.

This portfolio includes cloud storage and data services, and cloud operations services.

The NetApp Cloud Volumes Platform is an integrated collection of cloud storage infrastructure and data services.

Inline data compression, deduplication, compaction,

Our Spot by NetApp suite of products delivers a platform for cloud operations, enabling customers to deploy and operate cloud applications reliably and securely in their choice of cloud while reducing costs and complexity.

Combining machine learning, predictive analytics and cloud automation, the Spot platform continuously optimizes cloud infrastructure and operations to deliver scalable, reliable and secure infrastructure for applications.

With solutions for virtual machines, containers, and key workloads, the Spot portfolio’s automation and optimization capabilities give customers more cloud at less cost.

Spot Elastigroup enables customers to scale mission-critical workloads on AWS with automated, optimized cloud infrastructure management.

The Spot Ocean Kubernetes Suite enables customers to dynamically provision, scale and optimize cloud resources for microservices and big data workloads.

Spot Security delivers cloud security analysis and threat reduction for actionable compliance, remediation, and prevention.

Spot Eco enables customers to maximize their cloud savings with intelligent management of AWS reserved instances and savings plans.

Spot CloudCheckr provides actionable cloud cost analysis with visibility into performance and optimization opportunities.

Our portfolio of offerings include strategic consulting, professional, managed, and support services.

Personalized support options provide actionable intelligence to resolve problems faster, reduce downtime, and optimize performance of the entire NetApp ecosystem.

telecommunications.

We design our products to meet the evolving requirements of a hybrid, multicloud world, driven by digital transformation and cloud initiatives.

We

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).

We bring enterprise-grade data services to the leading clouds, and the simple flexibility of cloud into the data center.

We help organizations run large and demanding workloads on the public cloud and in hybrid cloud environments with industry-leading solutions that work across diverse environments and the leading public clouds.

We empower organizations to lead with data in the age of accelerated digital transformation.

In a world where technology is pervasive and changing expectations, digital transformation tops the strategic agenda in most organizations.

To successfully transform, data must become the lifeblood of an organization, accelerating efforts to create new customer experiences and seize opportunities for innovation, while at the same time, optimizing operations for cost, scale, speed, and agility.

Digital transformations are driving IT organizations to future-proof on-premises investments for a cloud-next world, move enterprise workloads to the cloud, and continually pursue the promise of cloud-native innovation.

Meeting these requirements means transforming IT to take control and thrive in a multi-cloud world.

This puts IT leaders under pressure to harness today’s wealth of data and leverage technology to create value across the entire organization.

Our strategy is to apply our rich data-centric software innovation to enable customers to thrive in a hybrid cloud world and build data fabrics to accelerate data-driven digital transformations.

A data fabric simplifies the integration and orchestration of data services across clouds and on-premises to accelerate digital transformation.

We help organizations to get the most out of their cloud experience – whether public, private or hybrid – by enabling IT to discover, integrate, automate, optimize, protect, and secure data and applications.

NetApp delivers the full range of capabilities organizations need for their data fabrics, enabling the business to deliver the data and applications to the right place at the right time with the right capabilities to fuel innovation.

NetApp provides software, systems and cloud services that allow organizations to run their applications from the data center to the cloud, whether they are developing in the cloud, moving to the cloud, or creating their own cloudlike experiences on-premises.

NetApp's public cloud services (formerly referred to as “Cloud Data Services”) are delivered as cloud-based software and as Software-as-a-Service (SaaS).

The public cloud services portfolio can be categorized into four solution areas:

| | • | Cloud Storage – Software and services available for the management of storage in the public clouds. |

| --- | --- | --- |

| | • | Cloud Controls – A centralized control plane to automate, monitor, orchestrate, manage, and optimize applications, services, and data in the cloud and hybrid-cloud environments. |

| | • | Cloud Services and Analytics – SaaS services that help protect, leverage, and optimize customer investments in the cloud. |

| | • | Cloud Optimization – Services that automate and continuously optimize cloud compute infrastructure, helping companies reduce their compute costs while ensuring scalability and availability, as well as offerings that provide managed virtual desktop services. |

NetApp Cloud Volumes delivers cloud storage as customer-managed software or as a fully managed service, enabling customers to choose whether to fully control and manage their own storage systems in the cloud or simply select their performance levels, service level agreements (SLAs), and service level objectives (SLOs).

Cloud Controls

NetApp Cloud Manager provides IT experts and cloud architects with a centralized control plane to manage, monitor, and automate data in hybrid-cloud environments, delivering an integrated experience of NetApp's Cloud Solutions and Services.

NetApp Virtual Desktop Service (VDS) enables organizations to deploy, manage, and optimize virtual desktop environments through a SaaS-delivered global control plane for virtual desktop management that functions as an extension of their cloud environment.

NetApp Cloud Sync delivers simple, rapid, and continuous data migration and synchronization service for file systems with any cloud or on-premises target.

NetApp Cloud Tiering service allows customers to retain on-premises, high-performance All-Flash FAS (AFF) and FAS Solid-State Disk (SSD) storage and combine it with the benefits of cloud economics.

By leveraging the low costs of Azure Blob and Amazon S3 object storage for cold data, organizations can optimize their investments.

NetApp SaaS Backup service is a secure, encrypted cloud-native offering that safeguards business-critical Microsoft Office 365 data from corruption, malicious or accidental deletion via a backup and restore offering.

Cloud Optimization

Spot by NetApp offers a portfolio of compute and storage services that monitor and analyze applications' needs and automatically optimize cloud resources to meet those needs.

These cloud operations services help drive cloud resource optimization in real-time for both compute and storage, offering significant operational savings while maintaining SLAs and SLOs.

Spot Cloud Analyzer by NetApp is a cloud management and optimization dashboard.

It provides a gateway to other tools that optimize cloud spending, including tracking and monitoring of cloud expenses, identifying waste and potential optimization points, and providing executable action items.

Spot Eco by NetApp automates reserved instance lifecycle management.

By providing comprehensive lifecycle management, Eco is a flexible reserved capacity management service that allows users to plan, buy, and sell reserved instances.

Spot Ocean by NetApp provides automation for cloud infrastructure containers.

It continuously analyzes how containers are using infrastructure and automatically scales compute resources to maximize utilization and availability.

Spot Wave by NetApp allows organizations to automate infrastructure provisioning, management, and scaling for big data cloud environments.

Wave simplifies, automates, and optimizes cloud infrastructure for Apache Spark running on Kubernetes.

Spot Elastigroup by NetApp simplifies and automates cloud infrastructure for scale-out applications running in Microsoft Azure, Google Cloud Platform and Amazon AWS, freeing operations teams from infrastructure management burdens.

For a discussion of legal proceedings, see Note 18 – Commitments and Contingencies of the Notes to Consolidated Financial Statements.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: Form 10-K][added: Form 10-K]

[removed: |] ☑ [removed: |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: |]

[removed: | | For] [added: For] the fiscal year [removed: ended April 30, 2021 |][added: ended April 29, 2022]

[removed: |] ☐ [removed: |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: |]

[removed: | | For] [added: For] the transition period from [removed: to |][added: to]

[removed: Commission] [added: Commission] File [removed: Number 000-27130][added: Number 000-27130]

[removed: ][added: ]

[removed: NetApp, Inc.][added: NetApp, Inc.]

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

| [removed: Delaware] [added: Delaware] | | [removed: 77-0307520] [added: 77-0307520] |

| [removed: (State] [added: (State] or other jurisdiction [removed: of] [added: of] | | [removed: (I.R.S. Employer] [added: (I.R.S. Employer] |

| [removed: incorporation] [added: incorporation] or [removed: organization)] [added: organization)] | | [removed: Identification No.)] [added: Identification No.)] |

[removed: 3060] [added: 3060] Olsen [removed: Drive,][added: Drive,]

[removed: San Jose, California 95128][added: San Jose, California 95128]

[removed: (Address] [added: (Address] of principal executive offices, including zip [removed: code)][added: code)]

[removed: (408) 822-6000][added: (408) 822-6000]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | [removed: Trading Symbol(s)] [added: Trading Symbol(s)] | | [removed: Name] [added: Name] of exchange on which [removed: registered] [added: registered] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: None][added: None]

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 [removed: report.][added: report.☑]

The aggregate market value of voting stock held by non-affiliates of the registrant, as of October [removed: 30, 2020,] [added: 29, 2021,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $5,651,372,914] [added: $12,494,943,961] (based on the closing price for shares of the registrant’s common stock as reported by the NASDAQ Global Select Market on that date).

On June [removed: 2, 2021, 223,217,394] [added: 1, 2022, 221,190,424] shares of the registrant’s common stock, $0.001 par value, were outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: 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 [removed: 30, 2021.][added: 29, 2022.]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | [removed: PART I] [added: PART I] | | |

| Item 1 | | [removed: [Business](#Item_1_Business)] [added: [Business](#item_1_business)] | | [removed: 5] [added: 6] |

| Item 1B | | [Unresolved Staff [removed: Comments](#Item_1B_Unresolved_Staff_Comments)] [added: Comments](#item_1b_unresolved_staff_comments)] | | [removed: 28] [added: 29] |

| Item 2 | | [removed: [Properties](#ITEM_2_PROPERTIES)] [added: [Properties](#item_2_properties)] | | [removed: 28] [added: 29] |

| Item 3 | | [Legal [removed: Proceedings](#Item_3_Legal_Proceedings)] [added: Proceedings](#item_3_legal_proceedings)] | | [removed: 28] [added: 29] |

| Item 4 | | [Mine Safety [removed: Disclosures](#Item_4_Mine_Safety_Disclosures)] [added: Disclosures](#item_4_mine_safety_disclosures)] | | [removed: 28] [added: 29] |

| | | [removed: PART II] [added: PART II] | | |

| Item 5 | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#Item_5_Market_for_Registrants_Common)] [added: Securities](#item_5_market_for_registrants_common)] | | [removed: 29] [added: 30] |

| Item 6 | | [removed: [Selected Financial Data](#Item_6_Selected_Financial_Data)] [added: [\[Reserved\]](#item_6_selected_financial_data)] | | [removed: 32] [added: 33] |

| Item 7 | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#Item_7_MDA)] [added: Operations](#item_7_mda)] | | [removed: 33] [added: 34] |

or

| | | |

| | | | |

| | | | | | | |

| Item 9C | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#item9c) | | 92 |

| | | | | |

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

our ability to achieve our goals related to environmental, social and governance matters; and

PART I

| --- | --- |

or

| --- | --- | --- |

| | • | our ability to expand our total available market and grow our portfolio of products and solutions; |

| | • | our ability to successfully execute on our Data Fabric strategy to generate profitable growth and stockholder return; |

| | • | our ability to timely and successfully introduce and increase volumes of new products and services and to forecast demand and pricing for the same; |

| | • | our ability to grow direct and indirect sales and to efficiently provide global service and support; |

| | • | our ability to design, manufacture and market products meeting global environmental standards; |

PART I

We owned or leased, domestically and internationally, the following properties as of April [removed: 30, 2021.][added: 29, 2022.]

We lease [added: approximately 1.2 million square feet in] other sales offices and research and development facilities throughout the U.S. and internationally.

We lease approximately 0.3 million square feet of office space for our corporate headquarters located in San Jose, California.

Item 3. Legal Proceedings

For a discussion of legal proceedings, see Note 17 – Commitments and Contingencies of the Notes to Consolidated Financial Statements.

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 2022 | | | | | | | | Fiscal 2021 | | | | | | |

| | | High | | | | Low | | | | High | | | | Low | | |

| First Quarter | | $ | 84.19 | | | $ | 73.30 | | | $ | 49.65 | | | $ | 39.81 | |

| Second Quarter | | $ | 94.69 | | | $ | 78.05 | | | $ | 48.94 | | | $ | 40.08 | |

| Third Quarter | | $ | 96.81 | | | $ | 82.50 | | | $ | 70.64 | | | $ | 43.92 | |

| Fourth Quarter | | $ | 96.82 | | | $ | 58.83 | | | $ | 78.77 | | | $ | 58.83 | |

Holders

As of June 1, 2022 there were approximately 461 holders of record of our common stock.

Dividends

The Company paid cash dividends of $0.50 per outstanding common share in each quarter of fiscal 2022 for an aggregate of $446 million, $0.48 per outstanding common share in each quarter of fiscal 2021 and fiscal 2020 for an aggregate of $427 million and $439 million, respectively.

In the first quarter of fiscal 2023, the Company declared a cash dividend of $0.50 per share of common stock, payable on July 27, 2022 to shareholders of record as of the close of business on July 8, 2022.

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 29, 2022.

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 28, 2017 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 2017 | | | | April 2018 | | | | April 2019 | | | | April 2020 | | | | April 2021 | | | | April 2022 | | |

| NetApp, Inc. | | $ | 100.00 | | | $ | 171.89 | | | $ | 187.52 | | | $ | 116.49 | | | $ | 209.35 | | | $ | 210.14 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 114.20 | | | $ | 128.28 | | | $ | 126.28 | | | $ | 189.28 | | | $ | 189.68 | |

| S&P 500 Information Technology Index | | $ | 100.00 | | | $ | 125.28 | | | $ | 152.70 | | | $ | 175.04 | | | $ | 278.43 | | | $ | 283.70 | |

| S&P 1500 Technology Hardware & Equipment Index | | $ | 100.00 | | | $ | 116.43 | | | $ | 142.62 | | | $ | 163.10 | | | $ | 290.03 | | | $ | 330.01 | |

We believe that a number of factors may cause the market price of our common stock to fluctuate significantly.

We executed a lease for our new corporate headquarters located in San Jose, California in April 2021.

The lease commenced on June 1, 2021 and includes approximately 0.3 million square feet of office space.

Not Applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by Item 10 with respect to our executive officers is incorporated herein by reference from the information under Item 1 – Business of Part I of this Annual Report on Form 10-K under the section entitled “Executive Officers.” The information required by Item 10 with respect to the Company’s directors and corporate governance is incorporated herein by reference from the information provided under the headings “Election of Directors” and “Corporate Governance,” respectively, in the Proxy Statement for the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our year ended April 29, 2022.

The information required by Item 405 of Regulation S-K is incorporated herein by reference from the information provided under the heading “Delinquent Section 16(a) Reports” in the Proxy Statement for the 2022 Annual Meeting of Stockholders.

We have adopted a written code of ethics that applies to our Board of Directors and all of our employees, including our principal executive officer and principal financial and accounting officer.

A copy of the code of ethics, which we refer to as our “Code of Conduct,” is available on our website at http://netapp.com/us/media/code-of-conduct.pdf.

We will post any amendments to or waivers from the provisions of our Code of Conduct on our website.

Item 11. Executive Compensation

Information regarding the compensation of executive officers and directors of the Company is incorporated by reference from the information under the headings “Executive Compensation and Related Information” and “Director Compensation,” respectively, in our Proxy Statement for the 2022 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information regarding security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference from the information under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement for the 2022 Annual Meeting of Stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information regarding certain relationships and related transactions and director independence is incorporated by reference from the information under the headings “Corporate Governance” and “Certain Transactions with Related Parties” in our Proxy Statement for the 2022 Annual Meeting of Stockholders.

Item 14. Principal Accountant Fees and Services

The information required by this item is incorporated by reference from the information under the caption “Audit Fees” in our Proxy Statement for the 2022 Annual Meeting of Stockholders.

With the exception of the information incorporated in Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K, NetApp’s Proxy Statement is not deemed “filed” as part of this Annual Report on Form 10-K.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) Documents filed as part of this report

(1) All Financial Statements

See index to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K

(2) Financial Statement Schedules

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Form 10-K.

(3) Exhibits required by Item 601 of Regulation S-K

The information required by this Section (a)(3) of Item 15 is as follows:

EXHIBIT INDEX

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | Incorporation by Reference | | | | | | |

| Exhibit No | | Description | | Form | | File No. | | Exhibit | | Filing Date |

| | | | | | | | | | | |

| 3.1 | | [Certificate of Incorporation of the Company, as amended.](https://www.sec.gov/Archives/edgar/data/1002047/000119312513454984/d594786dex31.htm) | | 10-Q | | 000-27130 | | 3.1 | | September 13, 2021 |

| | | | | | | | | | | |

| 3.2 | | [Bylaws of the Company.](https://www.sec.gov/Archives/edgar/data/0001002047/000119312521271444/d203848dex32.htm) | | 8-K | | 000-27130 | | 3.2 | | September 13, 2021 |

| | | | | | | | | | | |

| 4.1 | | [Indenture dated December 12, 2012, by and between the Company and U.S. Bank National Association.](https://www.sec.gov/Archives/edgar/data/1002047/000119312512500180/d451808dex41.htm) | | 8-K | | 000-27130 | | 4.1 | | December 12, 2012 |

| | | | | | | | | | | |

| 4.2 | | [First Supplemental Indenture dated December 12, 2012, by and between the Company and U.S. Bank National Association.](https://www.sec.gov/Archives/edgar/data/1002047/000119312512500180/d451808dex42.htm) | | 8-K | | 000-27130 | | 4.2 | | December 12, 2012 |

| | | | | | | | | | | |

Not applicable.

Not applicable.

PART II

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 2021 | | | | | | | | Fiscal 2020 | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | High | | | | Low | | | | High | | | | Low | | |

| First Quarter | | $ | 49.65 | | | $ | 39.81 | | | $ | 73.69 | | | $ | 58.04 | |

| Second Quarter | | $ | 48.94 | | | $ | 40.08 | | | $ | 59.84 | | | $ | 44.55 | |

| Third Quarter | | $ | 70.64 | | | $ | 43.92 | | | $ | 65.38 | | | $ | 55.00 | |

| Fourth Quarter | | $ | 78.77 | | | $ | 58.83 | | | $ | 60.96 | | | $ | 34.66 | |

Holders

As of June 2, 2021 there were 456 holders of record of our common stock.

Dividends

The Company paid cash dividends of $0.48 per outstanding common share in each quarter of fiscal 2021 for an aggregate of $427 million, $0.48 per outstanding common share in each quarter of fiscal 2020 for an aggregate of $439 million, and $0.40 per outstanding common share in each quarter of fiscal 2019 for an aggregate of $403 million.

In the first quarter of fiscal 2022, the Company declared a cash dividend of $0.50 per share of common stock, payable on July 28, 2021 to shareholders of record as of the close of business on July 9, 2021.

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 30, 2021.

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 29, 2016 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 2016 | | | | April 2017 | | | | April 2018 | | | | April 2019 | | | | April 2020 | | | | April 2021 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| NetApp, Inc. | | $ | 100.00 | | | $ | 172.47 | | | $ | 296.45 | | | $ | 323.40 | | | $ | 200.91 | | | $ | 361.06 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 117.92 | | | $ | 134.66 | | | $ | 151.27 | | | $ | 148.91 | | | $ | 223.20 | |

| S&P 500 Information Technology Index | | $ | 100.00 | | | $ | 135.36 | | | $ | 169.58 | | | $ | 206.69 | | | $ | 236.93 | | | $ | 376.88 | |

| S&P 1500 Technology Hardware & Equipment Index | | $ | 100.00 | | | $ | 148.11 | | | $ | 172.45 | | | $ | 211.24 | | | $ | 241.57 | | | $ | 429.57 | |

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 30, 2021:

| | | | | | | | | | | 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 | | |

We have elected to early adopt the amendment to Item 301 of Regulation S-K and are omitting this disclosure in reliance thereon.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

| | |

| --- | --- |

| | |

| [Consolidated Balance Sheets as of April 30, 2021 and April 24, 2020](#CONSOLIDATED_BALANCE_SHEETS) | 53 |

| | |

| [Consolidated Statements of Income for the years ended April 30, 2021, April 24, 2020 and April 26, 2019](#CONSOLIDATED_STATEMENTS_OPERATIONS) | 54 |

| | |

| [Consolidated Statements of Comprehensive Income for the years ended April 30, 2021, April 24, 2020 and April 26, 2019](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN) | 55 |

| | |

| [Consolidated Statements of Cash Flows for the years ended April 30, 2021, April 24, 2020 and April 26, 2019](#CONSOLIDATED_STATEMENTS_CASH_FLOWS) | 56 |

| | |

| [Consolidated Statements of Stockholders’ Equity for the years ended April 30, 2021, April 24, 2020 and April 26, 2019](#CONSOLIDATED_STATEMENTS_STOCKHOLDERS_EQU) | 57 |

| | |

| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | 58 |

| | |

| [Reports of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | 87 |

| | |

NETAPP, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

| | | April 30, 2021 | | | | April 24, 2020 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ASSETS | | | | | | | | |

| Current assets: | | | | | | | | |

| Cash and cash equivalents | | $ | 4,529 | | | $ | 2,658 | |

| Short-term investments | | | 67 | | | | 224 | |

| Accounts receivable | | | 945 | | | | 973 | |

| Inventories | | | 114 | | | | 145 | |

| Other current assets | | | 346 | | | | 274 | |

| Total current assets | | | 6,001 | | | | 4,274 | |

| Property and equipment, net | | | 525 | | | | 727 | |

| Goodwill | | | 2,039 | | | | 1,778 | |

| Other intangible assets, net | | | 101 | | | | 44 | |

| Other non-current assets | | | 694 | | | | 699 | |

| Total assets | | $ | 9,360 | | | $ | 7,522 | |

| | | | | | | | | |

| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |

| Current liabilities: | | | | | | | | |

| Accounts payable | | $ | 420 | | | $ | 426 | |

None.

(a) Evaluation of Disclosure Controls and Procedures

The phrase “disclosure controls and procedures” refers to controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission (SEC).

Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and CFO, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of April 30, 2021, the end of the fiscal period covered by this Annual Report on Form 10-K (the Evaluation Date).

Based on this evaluation, our CEO and CFO concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, our management concluded that, as of April 30, 2021, our internal control over financial reporting was effective at the reasonable assurance level based on those criteria.

The effectiveness of our internal control over financial reporting as of April 30, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is included in Part II, Item 8 of this Annual Report on Form 10-K.

(c) Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with our evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act that occurred during the fourth quarter of fiscal 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Disclosure Pursuant to Section 13(r) of the Exchange Act

This disclosure is made pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 which added subsection (r) to Section 13 of the Exchange Act (Section 13(r)).

Section 13(r) requires an issuer to disclose in its annual or quarterly reports whether it or any of its affiliates have knowingly engaged in certain activities, transactions or dealings relating to certain countries including Russia.

Disclosure of such activities, transactions or dealings is required even when conducted outside the United States by non-U.S. persons in compliance with applicable law, and whether or not such activities are sanctionable under U.S. law.

During the period from April 25, 2020 to April 30, 2020, we filed notifications with the Russian Federal Security Service (“FSB”) for two products.

Those notifications are required under Russian law to qualify our products for importation into, and distribution within, the Russian Federation.

The filing of those notifications with the FSB is specifically authorized under OFAC General License 1B, as amended as of March 2, 2021.

The filing of the production notifications with the FSB is a regulatory compliance procedure required under Russian law for the importation and distribution of our products in Russia.

We have not sold or supplied any goods or services directly or indirectly to the FSB, and we have not derived any revenues from any such notifications to the FSB.

We may, in the future, file additional notifications for our products with the FSB to the extent those product notifications are required under Russian law to qualify the products for importation or distribution in Russia, but only so long as those activities are authorized by OFAC General License 1B or any successor general license or other authorization issued by OFAC.

PART III

The information required by Item 10 with respect to our executive officers is incorporated herein by reference from the information under Item 1 – Business of Part I of this Annual Report on Form 10-K under the section entitled “Executive Officers.” The information required by Item 10 with respect to the Company’s directors and corporate governance is incorporated herein by reference from the information provided under the headings “Election of Directors” and “Corporate Governance,” respectively, in the Proxy Statement for the 2021 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our year ended April 30, 2021.

The information required by Item 405 of Regulation S-K is incorporated herein by reference from the information provided under the heading “Delinquent Section 16(a) Reports” in the Proxy Statement for the 2021 Annual Meeting of Stockholders.

We have adopted a written code of ethics that applies to our Board of Directors and all of our employees, including our principal executive officer and principal financial and accounting officer.

A copy of the code of ethics, which we refer to as our “Code of Conduct,” is available on our website at http://netapp.com/us/media/code-of-conduct.pdf.

We will post any amendments to or waivers from the provisions of our Code of Conduct on our website.

Information regarding the compensation of executive officers and directors of the Company is incorporated by reference from the information under the headings “Executive Compensation and Related Information” and “Director Compensation,” respectively, in our Proxy Statement for the 2021 Annual Meeting of Stockholders.

Information regarding security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference from the information under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement for the 2021 Annual Meeting of Stockholders.

Information regarding certain relationships and related transactions and director independence is incorporated by reference from the information under the headings “Corporate Governance” and “Certain Transactions with Related Parties” in our Proxy Statement for the 2021 Annual Meeting of Stockholders.

The information required by this item is incorporated by reference from the information under the caption “Audit Fees” in our Proxy Statement for the 2021 Annual Meeting of Stockholders.

With the exception of the information incorporated in Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K, NetApp’s Proxy Statement is not deemed “filed” as part of this Annual Report on Form 10-K.

PART IV

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| (a) | Documents filed as part of this report |

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| (1) | All Financial Statements |

See index to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K

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| (2) | Financial Statement Schedules |

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Form 10-K.

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| (3) | Exhibits required by Item 601 of Regulation S-K |

The information required by this Section (a)(3) of Item 15 is as follows:

EXHIBIT INDEX

| | | | | Incorporation by Reference | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibit No | | Description | | Form | | File No. | | Exhibit | | Filing Date |

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| 3.1 | | [Certificate of Incorporation of the Company, as amended.](http://www.sec.gov/Archives/edgar/data/1002047/000119312513454984/d594786dex31.htm) | | 10-Q | | 000-27130 | | 3.1 | | November 26, 2013 |

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| 3.2 | | [Bylaws of the Company.](http://www.sec.gov/Archives/edgar/data/1002047/000119312518143036/d557272dex31.htm) | | 8-K | | 000-27130 | | 3.1 | | April 30, 2018 |

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| 4.1 | | [Indenture dated December 12, 2012, by and between the Company and U.S. Bank National Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312512500180/d451808dex41.htm) | | 8-K | | 000-27130 | | 4.1 | | December 12, 2012 |

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| 4.2 | | [First Supplemental Indenture dated December 12, 2012, by and between the Company and U.S. Bank National Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312512500180/d451808dex42.htm) | | 8-K | | 000-27130 | | 4.2 | | December 12, 2012 |

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| 4.3 | | [Second Supplemental Indenture dated June 5, 2014 by and between the Company and U.S. Bank National Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514227067/d739441dex41.htm) | | 8-K | | 000-27130 | | 4.1 | | June 5, 2014 |

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| 4.4 | | [Third Supplemental Indenture dated September 29, 2017 by and between the Company and U.S. Bank National Association.](http://www.sec.gov/Archives/edgar/data/1002047/000119312517299733/d458010dex42.htm) | | 8-K | | 000-27130 | | 4.2 | | September 29, 2017 |

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| 4.5 | | [Fourth Supplemental Indenture, dated June 22, 2020, by and between NetApp, Inc. and U.S. Bank National Association.](http://www.sec.gov/Archives/edgar/data/0001002047/000119312520175676/d949594dex42.htm) | | 8-K | | 000-27130 | | 4.2 | | June 22, 2020 |

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| 4.6 | | [Description of Capital Stock of the Company](https://www.sec.gov/Archives/edgar/data/1002047/000156459021033645/ntap-ex46_775.htm) | | — | | — | | — | | — |

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| 10.1* | | [Form of Indemnification Agreement by and between the Company and each of its directors and executive officers.](http://www.sec.gov/Archives/edgar/data/1002047/000119312514325455/d746932dex101.htm) | | 10-Q | | 000-27130 | | 10.1 | | August 28, 2014 |

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| 10.2* | | [Form of Change of Control Severance Agreement.](http://www.sec.gov/Archives/edgar/data/1002047/000156459019020164/ntap-ex101_40.htm) | | 8-K | | 000-27130 | | 10.1 | | May 22, 2019 |