What changed in NetApp's 2023 10-K compared to 2022?

Across the narrative sections we track, NetApp (NTAP) added 522 paragraphs, removed 521, and edited 412 between the 2022 and 2023 10-K filings. The biggest movers are Item 2. Properties (+356/−352), Item 1. Business (+166/−169).

Where does this NTAP 10-K diff come from?

The source filings are NetApp's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in NetApp's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of NetApp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+522 added−521 removedSource: 10-K (2023-06-14) vs 10-K (2022-06-16)

Top changes in NetApp's 2023 10-K

522 paragraphs added · 521 removed · 412 edited across 2 sections

Item 2. Properties+356 / −352 · 284 edited
Item 1. Business+166 / −169 · 128 edited

Item 1. Business

Business — how the company describes what it does

128 edited+38 added−41 removed210 unchanged

2022 filing

2023 filing

Biggest changeAs an example, the Executive Order on Improving the Nation’s Cybersecurity (EO 14028), released in May 2021, outlines a one-year plan to address the U.S. government’s software supply chain security for “critical software.” While the potential impact of the Executive Order is still being monitored, we could be categorized as a provider of critical software, which may increase our compliance costs and delay or prevent our ability to execute contracts with customers, including in particular with government entities. 20 If we do not achieve forecasted sales orders in any quarter, our operating results, financial condition and cash flows could be harmed.

Biggest changeAs an example, the Executive Order on Improving the Nation’s Cybersecurity (EO 14028), released in May 2021, outlines the U.S. government’s plan to address software supply chain security for “critical software” and other software. NetApp’s products are categorized as critical software, requiring us to achieve compliance with the Secure Software Development Framework (SSDF) under NIST special publication 800-218.

Storage infrastructure NetApp All-Flash FAS (AFF) 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.

Storage infrastructure NetApp All-Flash FAS (AFF A-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.

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 8 telecommunications.

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. 8 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.

We strive to comply with all applicable environmental laws. All of our products meet the requirements of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH); Energy Related Products (ErP); Restriction of Hazardous Substances (RoHS); and China RoHS directives.

We strive to comply with all applicable environmental laws. All of our products meet the applicable requirements of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH); Energy Related Products (ErP); Restriction of Hazardous Substances (RoHS); and China RoHS directives.

Any inaccuracy in our acquisition assumptions or any failure to uncover or mitigate liabilities or risks associated with the acquisition, such as differing or inadequate cybersecurity and data privacy protection controls or contractual limitations of liability, make the acquisition on favorable terms, integrate the acquired business or assets as and when expected or retain key employees of the acquired company may reduce or eliminate the expected benefits of the acquisition to us, increase our costs, disrupt our operations, result in additional liabilities, investigations and litigation, and may also harm our strategy, our business and our operating results.

Any inaccuracy in our acquisition assumptions or any failure to uncover or mitigate liabilities or risks associated with the acquisition, such as differing or inadequate cybersecurity and data privacy protection controls or contractual limitations of liability, and any failure to make the acquisition on favorable terms, integrate the acquired business or assets as and when expected, or retain key employees of the acquired company may reduce or eliminate the expected benefits of the acquisition to us, increase our costs, disrupt our operations, result in additional liabilities, investigations and litigation, and may also harm our strategy, our business and our operating results.

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; 26 • 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.

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 we are unable to move our operations, outsource business processes and implement new business information systems in a manner that complies with local law and maintains adequate standards, controls and procedures, the quality of our products and services may suffer and we may be subject to increased litigation risk, either of which could have an adverse effect on our business, operating results and financial condition.

If we are unable to move our operations, outsource business processes or implement new business information systems in a manner that complies with local law and maintains adequate standards, controls and procedures, the quality of our products and services may suffer and we may be subject to increased litigation risk, either of which could have an adverse effect on our business, operating results and financial condition.

Events such as the U.S. federal government shutdown from December 2018 to January 2019 and continued uncertainty regarding the U.S. budget and debt levels have increased demand uncertainty for our products. In addition, like other customers, the U.S. government may evaluate competing products and delay purchasing in the face of the technology transitions taking place in the storage industry.

Events such as the U.S. federal government shutdown from December 2018 to January 2019 19 and continued uncertainty regarding the U.S. budget and debt levels have increased demand uncertainty for our products. In addition, like other customers, the U.S. government may evaluate competing products and delay purchasing in the face of the technology transitions taking place in the storage industry.

For example, since the effective date of the EU’s General Data Privacy Regulation in 2018, the Court of Justice of the European Union has issued rulings that have impacted how multinational companies must implement that law and the European Commission (EC) has published new regulatory requirements relating to cross-border data transfers applicable to multinational companies like NetApp.

For example, since the 22 effective date of the EU’s General Data Privacy Regulation in 2018, the Court of Justice of the European Union has issued rulings that have impacted how multinational companies must implement that law and the European Commission (EC) has published new regulatory requirements relating to cross-border data transfers applicable to multinational companies like NetApp.

Our growth strategy includes 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. A number of our strategic partners are industry leaders that offer us expanded access to segments in which do not directly participate.

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 25 our operating results, financial condition and cash flows.

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.

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. 13 Additional Information Our internet address is www.netapp.com.

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.

Additionally, we 22 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.

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.

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.

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.

Our lack of direct responsibility for, and control over, these elements of our business, as well as the diverse international geographic locations of our manufacturing partners and suppliers, creates significant risks for us, including, among other things: • Impacts on our supply chain from adverse public health developments, including outbreaks of contagious diseases such as the ongoing COVID-19 pandemic; • 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 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; • 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 21 • 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.

Our lack of direct responsibility for, and control over, these elements of our business, as well 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 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, including outbreaks of contagious diseases such as COVID-19; • 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.

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 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. 26 We could be subject to additional income tax liabilities.

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, 19 some of our partners, particularly large, more diversified technology companies, including major cloud providers, are also competitors, thereby complicating our relationships.

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.

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 operate and sell our products, including antitrust and anti-competition laws, rules and regulations, and regulations related to data privacy, data protection, and cybersecurity.

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 operate and sell our products, including antitrust and anti-competition laws, and regulations related to data privacy, data protection, and cybersecurity.

Rapid changes in the size, alignment or organization of our workforce, including our business unit structure and sales account coverage, could adversely affect our ability to develop, sell and deliver products and services as planned or impair our ability to realize our current or future business and financial objectives.

Rapid changes in the size, alignment or organization of our workforce, including our business unit structure, structure of our sales team, and sales account coverage, could adversely affect our ability to develop, sell and deliver products and services as planned or impair our ability to realize our current or future business and financial objectives.

Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from the investment community as well as enforcement authorities.

Our failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance and growth, and expose us to increased scrutiny from our stakeholders, the investment community as well as enforcement authorities.

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.

Such claims may be made against our products and services, our customers’ use of our products 24 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.

Because our future success is dependent on our ability to continue to enhance and introduce new products, we are particularly dependent on our ability to hire and retain qualified engineers, including in emerging areas of technology such as artificial intelligence and machine learning.

Because our future success is dependent on our ability to continue to enhance and introduce new products and features, we are particularly dependent on our ability to hire and retain qualified engineers, including in emerging areas of technology such as artificial intelligence and machine learning.

Our existing general liability 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.

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.

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.

Customers, privacy advocates and industry groups also may propose new and different 23 self-regulatory standards or standards of care that may legally or contractually apply to us, and these standards may be subject to change.

Customers, privacy advocates and industry groups also may propose new and different self-regulatory standards or standards of care that may legally or contractually apply to us, and these standards may be subject to change.

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.

Any of these could damage our reputation 21 and public perception of the security and reliability of our products, as well as harm our business and cause us to incur significant liabilities.

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 and FinancialForce, holding the chair of the audit committee position at each company. Mr.

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 and Certinia, holding the chair of the audit committee position at each company. Mr.

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. 28 It em 1B. Unresolved Staff Comments Not applicable.

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. 27 It em 1B. Unresolved Staff Comments Not applicable.

Compensation, Benefits and Wellbeing Our healthcare options offer competitive, comprehensive coverage for our employees and their families, including: 11 • National medical plans, • Regional medical plans, • Expert advice from world-renowned doctors through our medical second opinion program, • National dental plans, • National vision plans with two levels of coverage to choose from and a • Robust wellness program.

Benefits, Wellbeing and Engagement Our healthcare options offer competitive, comprehensive coverage for our employees and their families, including: 11 • National medical plans, • Regional medical plans, • Expert advice from world-renowned doctors through our medical second opinion program, • National dental plans, • National vision plans with two levels of coverage to choose from and a • Robust wellness program.

If these risks are not managed effectively, we could experience material risks to our business, operating results, financial condition and cash flows. 15 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.

If these risks are not managed effectively, we could experience material risks to our business, operating results, financial condition and cash flows. 14 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 continuously seek to make our cost structure and business processes more efficient, including by moving 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 involve a significant investment of financial and human resources and significant changes to our current operating processes.

We continuously seek to make our cost structure and business processes more efficient, including by moving 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 may involve a significant investment of financial and human resources and significant 17 changes to our current operating processes.

At NetApp, 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 diversity and inclusion and to support our employees’ well-being and development.

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 diversity and inclusion and to support our employees’ well-being and development.

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.

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, cloud operations 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 a material cybersecurity or other security breach 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, our reputation may be harmed and we may incur significant liabilities.

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, our reputation may be harmed and we may incur significant liabilities.

We recently reorganized our sales resources, which included changes and additions to our sales leadership team, to gain operational efficiencies and improve the alignment of our resources with customer and market opportunities. We expect to continue developing our sales organization and go-to-market model towards these goals throughout fiscal 2023.

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.

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.

We derive a majority 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 back 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.

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 back 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.

Our acquisitions may not achieve expected benefits, and may increase our liabilities, disrupt our existing business and harm our operating results, financial condition and cash flows. 17 As part of our strategy, we seek to acquire other businesses and technologies to complement our current products, expand the breadth of our markets, or enhance our technical capabilities.

Our acquisitions may not achieve expected benefits, and may increase our liabilities, disrupt our existing business and harm our operating results, financial condition and cash flows. 16 As part of our strategy, we seek to acquire other businesses and technologies to complement our current products and services, expand the breadth of our markets, or enhance our technical capabilities.

New or additional product introductions, including new software and cloud offerings, such as Astra by NetApp, cloud operations services including Spot by NetApp and Cloud Insights, and new hardware and all-flash storage products, including AFF A900, 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 and manage 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.

New or additional product and feature introductions, including new software and cloud offerings, such as Astra by NetApp, cloud operations services including Spot by NetApp, Instaclustr and Cloud Insights, and new hardware and all-flash storage products, including AFF A900 and AFF C-series, 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 and manage 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.

We do not review the information or content that our clients and their customers upload and store, and, therefore, we have no direct control over the substance of the information or content stored within our platforms.

We do not generally review the information or content that our clients and their customers upload and store, and we have no direct control over the substance of the information or content stored within our platforms.

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 Memphis, Tennessee; Fremont, California; San Jose, California; San Antonio, Texas; Guadalajara, Mexico; Schiphol Airport, The Netherlands; Komarom and Tiszaujvaros, Hungary; Wuxi and Tianjin, China; Taoyuan City, Taiwan; and Singapore.

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, Hungary; Wuxi, China; Taoyuan City, Taiwan; and Singapore.

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. 14 It em 1A.

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. 13 It em 1A.

The E-Series is available as a hybrid-flash platform, while the EF-Series is all-flash. Running on the SANtricity storage operating system, the E/EF-Series storage appliances are designed for performance-sensitive workloads like real-time analytics, HPC, and databases. NetApp StorageGRID is a software-defined object storage solution for large archives, media repositories, and web data stores.

The E-Series is available as a hybrid-flash platform, while the EF-Series is all-flash. 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.

If our ESG practices do not meet evolving investor or other stakeholder expectations and standards, then our reputation, our ability to attract or retain employees, and our attractiveness as an investment, business partner, acquiror or service provider could be negatively impacted.

NetApp SnapMirror Data Replication software is able to 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 SnapMirror Data Replication software can replicate data at high speeds across environments. SnapMirror delivers 6 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.

Sales to customers Arrow Electronics, Inc. and Tech Data Corporation accounted for 24% and 21% of our net revenues, respectively, in fiscal 2022.

Sales to customers Arrow Electronics, Inc. and Tech Data Corporation accounted for 24% and 21% of our net revenues, respectively, in fiscal 2023.

For example, we acquired seven privately held companies from fiscal 2020 through the end of fiscal 2022. The benefits we have received, and expect to receive, from these and other acquisitions depend on our ability to successfully conduct due diligence, negotiate the terms of the acquisition and integrate the acquired business into our systems, procedures and organizational structure.

For example, we acquired eight privately held companies from fiscal 2020 through the end of fiscal 2023. The benefits we have received, and expect to receive, from these and other acquisitions depend on our ability to successfully conduct due diligence, negotiate the terms of the acquisition and integrate the acquired business into our systems, procedures and organizational structure.

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 2022, sales through our indirect channels represented 77% of our net revenues. Our global partner ecosystem is critical to NetApp’s growth and success.

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 2023, sales through our indirect channels represented 78% of our net revenues. Our global partner ecosystem is critical to NetApp’s growth and success.

We design our products and services from the ground up with cloud connectivity in mind, including 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 $881 million in each of fiscal 2022 and fiscal 2021, and $847 million in fiscal 2020.

We design our products and services from the ground up with cloud connectivity in mind, including 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 $956 million in fiscal 2023, and $881 million in each of fiscal 2022 and fiscal 2021.

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.

If we fail to maintain our relationships with our indirect channel partners and strategic partners, including public cloud providers, 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.

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, such as disk drives, as well as for associated logistics.

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. 20 We do not manufacture certain components used in our products. We rely on third parties to manufacture critical components, as well as for associated logistics.

For products we manufacture in Mexico, tensions between the U.S. and Mexico related to trade and border security issues could delay our shipments to customers, or impact pricing or our business and operating results.

In particular, ongoing trade tensions between the U.S. and China could impact our business and operating results. For products we manufacture in Mexico, tensions between the U.S. and Mexico related to trade and border security issues could delay our shipments to customers, or impact pricing or our business and operating results.

In June 2021, the EC imposed new SCC requirements which impose certain contract and operational requirements on 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.

We may in the future undertake initiatives that could include reorganizing our workforce, restructuring, disposing of, and/or otherwise discontinuing certain products, or a combination of these actions.

We have and may in the future undertake initiatives that could include reorganizing our workforce, restructuring, disposing of, and/or otherwise discontinuing certain products, facility reductions or a combination of these actions.

Human Capital Management We take pride in 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.

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 401(k) plan gives employees more options to maximize retirement savings with pre-tax, Roth and after-tax contributions. We help our employees prepare for retirement by capitalizing on their total compensation and helping them save. Employee Wellbeing.

Moreover, in many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by our internal policies and procedures, or U.S. laws and regulations applicable to us, such as the Foreign Corrupt Practices Act.

Moreover, in many foreign 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 U.S. laws and regulations applicable to us, such as the Foreign Corrupt Practices Act.

When industry supply is constrained, or the supply chain is disrupted, as it has been as a result of the COVID-19 pandemic, our suppliers may allocate volumes away from us and to our competitors, all of which rely on many of the same suppliers as we do. Accordingly, our business, operating results, financial condition and cash flows may be harmed.

When industry supply is constrained, or the supply chain is disrupted, as it was during the COVID-19 pandemic, our suppliers may allocate volumes away from us and to our competitors, all of which rely on many of the same suppliers as we do. Accordingly, our business, operating results, financial condition and cash flows may be harmed.

As of April 29, 2022, we had $2.7 billion aggregate principal amount of outstanding indebtedness for our senior notes that mature at specific dates in calendar years 2022, 2024, 2025, 2027 and 2030. We may incur additional indebtedness in the future under existing credit facilities and/or enter into new financing arrangements.

As of April 28, 2023, 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.

In addition, to increase revenues, we will be required to increase the productivity of our sales force and support infrastructure to achieve adequate customer coverage. Competition for qualified employees, particularly in Silicon Valley, is intense.

Hybrid 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.

Hybrid Cloud Hybrid Cloud offers a portfolio of storage management and infrastructure solutions that help customers recast their traditional data centers into modern data centers with the power of the cloud. Our hybrid cloud portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations.

Although the DOJ and GSA currently have no claims pending against us, we could face claims in the future. Violations of certain regulatory and contractual requirements, including with respect to data security, affirmative action program requirements, or COVID-19 vaccine mandates could also result in us being suspended or debarred from future government contracting.

Although the DOJ and GSA currently have no claims pending against us, we could face claims in the future. Violations of certain regulatory and contractual requirements, including with respect to cybersecurity or affirmative action program requirements could also result in us being suspended or debarred from future government contracting.

For example, the current global shortage of critical product components has caused us to experience increased prices and extended lead times for certain critical components, such as semiconductors. The shortage could reduce our flexibility to react to product mix changes and disrupt our production schedule.

For example, the global shortage of critical product components in fiscal 2023 caused us to experience increased prices and extended lead times for certain critical components, such as semiconductors. Such shortages could reduce our flexibility to react to product mix changes and disrupt our production schedule.

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 29, 2022, our worldwide sales and marketing functions consisted of approximately 5,700 managers, sales representatives and technical support personnel. We have field sales offices in approximately 30 countries.

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 28, 2023, our worldwide sales and marketing functions consisted of approximately 5,700 managers, sales representatives and technical support personnel. We have offices in approximately 25 countries.

Item 1. Business Overview NetApp, Inc. (NetApp, we, or us) is a global cloud-led, data-centric software company. We were incorporated in 1992 and are headquartered in San Jose, California. Building on a rich history of innovation, NetApp gives customers the freedom to manage applications and data across hybrid multicloud environments.

Item 1. Business Overview NetApp, Inc. (NetApp, we, us or the Company) is a global cloud-led, data-centric software company. We were incorporated in 1992 and are headquartered in San Jose, California. Building on more than three decades of innovation, we give customers the freedom to manage applications and data across hybrid multicloud environments.

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.

As a result, many of these changes, if enacted, could increase our worldwide effective tax rate and harm our operating results, financial condition and cash flows.

Information About Our Executive Officers Our executive officers and their ages as of June 10, 2022, were as follows: Name Age Position George Kurian 55 Chief Executive Officer César Cernuda 50 President Michael J. Berry 59 Executive Vice President and Chief Financial Officer Harvinder S. Bhela 50 Executive Vice President and Chief Product Officer Elizabeth M.

Information About Our Executive Officers Our executive officers and their ages as of June 10, 2023, were as follows: Name Age Position George Kurian 56 Chief Executive Officer César Cernuda 51 President 12 Michael J. Berry 60 Executive Vice President and Chief Financial Officer Harvinder S. Bhela 51 Executive Vice President and Chief Product Officer Elizabeth M.

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.

The growth in our industry and the markets in which we compete is driven by the increase in 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.

Any political, military, terrorism, global trade, world health or other issue that hinders this movement or restricts the import or export 27 of materials could lead to significant business disruptions. For example, the ongoing COVID-19 pandemic is impeding the mobility of our personnel, inventories, equipment and products and disrupting our business operations.

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, in recent years, the COVID-19 pandemic impeded the mobility of our personnel, inventories, equipment and products and disrupted our business operations.

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 modernize their IT environment and unlock the best of cloud. Our R&D structure allows us to align and accelerate the execution of our strategies and roadmaps across product groups.

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.

Cloud storage and data services The NetApp Cloud Volumes Platform is an integrated collection of cloud storage infrastructure and data services. The platform is anchored by NetApp Cloud Volumes ONTAP , a cloud-based software for customers who wish to manage their own cloud storage infrastructure, and based on the same ONTAP software that underpins our storage infrastructure offerings.

The platform is anchored by NetApp Cloud Volumes ONTAP , a cloud-based software for customers who wish to manage their own cloud storage infrastructure. It is based on the same ONTAP data management software that underpins our storage infrastructure offerings.

A significant portion of our net revenues is generated through 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.

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.

AFF, powered by ONTAP, allows customers to connect to clouds for more data services, data tiering, caching, and disaster recovery. The AFF 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.

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 QLC-Flash FAS (AFF C-Series) is NetApp’s newest family of storage infrastructure solutions.

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 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.

A resurgence of COVID-19, unfavorable macroeconomic conditions or other circumstances could result in an economic slowdown and possibly cause a global recession.

Unfavorable macroeconomic conditions, rising interest rates, or other circumstances could result in an economic slowdown and possibly cause a global recession.

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 by any of these parties has negatively affected our revenues in the past, and could negatively affect our revenues in the future.

A loss, cancellation or delay in purchases by any of these parties has negatively affected our revenues in the past, and could negatively affect our revenues in the future. A significant portion of our net revenues is generated through sales to a limited number of customers and distributors.

Consolidation among suppliers, particularly within the semiconductor and disk drive industries, has contributed to price rigidity and supply constraints.

Consolidation among suppliers, particularly within the semiconductor and storage media industries, has contributed to price volatility and supply constraints.

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. Intelligent data management software NetApp ONTAP software is our foundational technology that underpins NetApp's critical storage solutions in the data center and the cloud.

Fully managed cloud storage offerings are available natively on Microsoft Azure as Azure NetApp Files , on AWS as Amazon FSx for NetApp ONTAP , and on Google Cloud as NetApp Cloud Volumes Service for Google Cloud. Manageability At the heart of our public cloud storage and data service offerings is NetApp BlueXP .

NetApp Cloud Data Sense (formerly Cloud Compliance) , provides data discovery, mapping, and classification driven by artificial intelligence 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.

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 service provides data discovery, mapping, and classification driven by artificial intelligence 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.

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Item 2. Properties

Properties — owned and leased real estate

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2022 filing

2023 filing

Biggest changeIncome Taxes Income before income taxes is as follows (in millions): Year Ended April 29, 2022 April 30, 2021 April 24, 2020 Domestic $ 546 $ 433 $ 379 Foreign 549 529 565 Total $ 1,095 $ 962 $ 944 80 The provision for income taxes consists of the following (in millions): Year Ended April 29, 2022 April 30, 2021 April 24, 2020 Current: Federal $ 187 $ 82 $ 83 State 55 22 9 Foreign 60 134 50 Total current 302 238 142 Deferred: Federal ( 125 ) 6 ( 26 ) State ( 27 ) 2 ( 6 ) Foreign 8 ( 14 ) 15 Total deferred ( 144 ) ( 6 ) ( 17 ) Provision for income taxes $ 158 $ 232 $ 125 The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate as follows (in millions): Year Ended April 29, 2022 April 30, 2021 April 24, 2020 Tax computed at federal statutory rate $ 230 $ 202 $ 198 State income taxes, net of federal benefit 15 23 10 Foreign earnings in lower tax jurisdictions ( 46 ) ( 26 ) ( 40 ) Stock-based compensation ( 8 ) 6 ( 4 ) Research and development credits ( 18 ) ( 13 ) ( 16 ) Benefit for foreign derived intangible income ( 49 ) ( 2 ) ( 4 ) Global minimum tax on intangible income 1 19 32 Transition tax and related reserves 1 1 15 Tax charge from integration of acquired companies 23 35 — Resolution of income tax matters (1) ( 3 ) ( 6 ) ( 61 ) Other 12 ( 7 ) ( 5 ) Provision for income taxes $ 158 $ 232 $ 125 (1) During fiscal 2022, we recognized a tax benefit related to the lapse of statute of limitations for certain issues in our fiscal 2012 and 2013 state income tax returns.

Biggest changeDuring the third quarter of fiscal 2023, we recorded $ 69 million of discrete tax expense, which includes $ 23 million of withholding tax and $ 46 million of interest, associated with the Danish Supreme Court ruling. 80 The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate as follows (in millions): Year Ended April 28, 2023 April 29, 2022 April 30, 2021 Tax computed at federal statutory rate $ 224 $ 230 $ 202 State income taxes, net of federal benefit 24 15 23 Foreign earnings in lower tax jurisdictions ( 43 ) ( 46 ) ( 26 ) Stock-based compensation 25 ( 8 ) 6 Research and development credits ( 24 ) ( 18 ) ( 13 ) Benefit for foreign derived intangible income — ( 49 ) ( 2 ) Global minimum tax on intangible income 61 1 19 Transition tax and related reserves — 1 1 Tax (benefits) charges from integration of acquired companies ( 27 ) 23 35 Tax benefit due to IP Transfer ( 524 ) — — Resolution of income tax matters (1) 71 ( 3 ) ( 6 ) Other 5 12 ( 7 ) (Benefit) provision for income taxes $ ( 208 ) $ 158 $ 232 (1) During fiscal 2023, we recognized tax expense related to a Danish Supreme Court decision related to withholding tax on a 2005 distribution as well as tax expense related to the currently in progress IRS audit of our fiscal 2018 and 2019 U.S. tax returns.

Fiscal year 2021, which ended on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter. 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 .

Fiscal 2021, which ended on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter. 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 .

Fiscal year 2021, ending on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter.

Fiscal 2021, ending on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter.

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.

The credit facility matures on January 22, 2026 , 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.

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 have entered into service contracts with certain of our end-user customers that are supported by third-party financing arrangements.

We are subject to various other legal proceedings and claims that arise in the normal course of business. We may, from time to time, receive claims that we are infringing third parties’ intellectual property rights, including claims for alleged patent infringement brought by non-practicing entities. We are currently involved in patent litigations brought by non-practicing entities and other third parties.

We are subject to various legal proceedings and claims that arise in the normal course of business. We may, from time to time, receive claims that we are infringing third parties’ intellectual property rights, including claims for alleged patent infringement brought by non-practicing entities. We are currently involved in patent litigations brought by non-practicing entities and other third parties.

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 61 • 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.

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 60 • 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.

In April 2021, we entered into a lease for our new corporate headquarters located in San Jose, California, which is comprised of approximately three hundred thousand square feet of office space and requires future minimum undiscounted payments of 74 approximately $ 180 million over the initial 11 -year lease term.

In April 2021, we entered into a lease for our new corporate headquarters located in San Jose, California, which is comprised of approximately three hundred thousand square feet of office space and requires future minimum undiscounted payments of approximately $ 180 million over the initial 11 -year lease term.

The leasing companies generally have no recourse to us in the event of default by the end-user and we recognize revenue upon delivery to the end-user customer, if all other revenue recognition criteria have been met. Some of the leasing arrangements described above have been financed on a recourse basis through third-party financing institutions.

The leasing companies generally have no recourse to us in the event of default by the end-user and we recognize revenue upon delivery to the end-user customer, if all other revenue recognition criteria have been met. 86 Some of the leasing arrangements described above have been financed on a recourse basis through third-party financing institutions.

The differences in other, net during fiscal 2022 as compared to fiscal 2021 are partially due to foreign exchange gains and losses year-over-year. In fiscal 2021, other, net includes a $6 million gain recognized on our sale of a minority equity interest in a privately held company for proceeds of approximately $8 million.

The differences in Other, net during fiscal 2022 as compared to fiscal 2021 are partially due to foreign exchange gains and losses year-over-year. In fiscal 2021, other, net includes a $6 million gain recognized on our sale of a minority equity interest in a privately held company for proceeds of 41 approximately $8 million.

The preliminary 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.

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.

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.

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. 46 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.

The acquisition-date values of the assets acquired and liabilities assumed are as follows (in millions): 65 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.

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 fair values with the assistance of valuations and appraisals performed by third party specialists and estimates made by management. We expect to realize revenue synergies, leverage and expand the existing Spot and Cloud Jumper sales channels and product development resources, and utilize their existing workforces.

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, leverage and expand the existing Spot and Cloud Jumper sales channels and product development resources, and utilize their existing workforces.

The acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions): Amount Cash $ 24 Intangible assets 84 Goodwill 249 Other assets 6 Total assets acquired 363 Liabilities assumed ( 23 ) Total purchase price $ 340 The components of the Spot intangible assets acquired were as follows (in millions, except useful life): Amount Estimated useful life (years) Developed technology $ 53 5 Customer contracts/relationships 28 5 Trade name 3 3 Total intangible assets $ 84 Cloud Jumper Corporation Acquisition On April 28, 2020, we acquired all the outstanding shares of privately-held Cloud Jumper Corporation (Cloud Jumper), a provider of virtual desktop infrastructure and remote desktop services solutions based in North Carolina, for $ 34 million in cash.

The acquisition-date values of the assets acquired and liabilities assumed are as follows (in millions): Amount Cash $ 24 Intangible assets 84 Goodwill 249 Other assets 6 Total assets acquired 363 Liabilities assumed ( 23 ) Total purchase price $ 340 65 The components of the Spot intangible assets acquired were as follows (in millions, except useful life): Amount Estimated useful life (years) Developed technology $ 53 5 Customer contracts/relationships 28 5 Trade name 3 3 Total intangible assets $ 84 Cloud Jumper Corporation Acquisition On April 28, 2020, we acquired all the outstanding shares of privately-held Cloud Jumper Corporation (Cloud Jumper), a provider of virtual desktop infrastructure and remote desktop services solutions based in North Carolina, for $ 34 million in cash.

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 62 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 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.

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.

Services are typically transferred over time and revenue is recognized based on an appropriate method for measuring our progress toward 61 completion of the performance obligation. Our stand-ready services, including both hardware and software support, are transferred ratably over the period of the contract.

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 . 47 Legal Contingencies We are subject to various legal proceedings and claims which arise in the normal course of business.

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.

Revenue — Refer to Notes 1, 6 and 15 to the financial statements Critical Audit Matter Description Certain of the Company’s revenue contracts with customers include multiple promises (such as hardware systems, software licenses, software and hardware support, and other services).

Revenue — Refer to Notes 1, 6, and 15 to the financial statements Critical Audit Matter Description Certain of the Company’s revenue contracts with customers include multiple promises (such as cloud services, hardware systems, software licenses, software and hardware support, and other services).

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.

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.

If an impairment is considered other-than-temporary based on condition (iii) described above, the amount 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). 59 Inventories — Inventories are stated at the lower of cost or net realizable value, which approximates actual cost on a first-in, first-out basis.

If an impairment is considered other-than-temporary based on condition (iii) described above, the amount 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). 58 Inventories — Inventories are stated at the lower of cost or net realizable value, which approximates actual cost on a first-in, first-out basis.

Cash Flows from Operating Activities During fiscal 2022, we generated cash from operating activities of $1.2 billion, reflecting net income of $937 million, adjusted by non-cash depreciation and amortization of $194 million and non-cash stock-based compensation expense of $245 million.

During fiscal 2022, we generated cash from operating activities of $1.2 billion, reflecting net income of $937 million, adjusted by non-cash depreciation and amortization of $194 million and non-cash stock-based compensation expense of $245 million.

An employee receives the full 4% match when he/she contributes at least 6 % of his/her eligible earnings, up 85 to a maximum calendar year matching contribution of $ 6,000 .

An employee receives the full 4% match when he/she contributes at least 6 % of his/her eligible earnings, up to a maximum calendar year matching contribution of $ 6,000 .

We account for the sales of these receivables as “true 86 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 expect to recognize as revenue approximately 51 % of our deferred revenue and financed unearned services revenue balance in the next 12 months, approximately 23 % in the next 13 to 24 months, and the remainder thereafter.

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.

The 2021 75 Plan provides for the granting of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards to our employees, directors, and consultants.

The 2021 Plan provides for the granting of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards to our employees, directors, and consultants.

The smaller distribution made in 82 2006 was ruled in favor of the Danish Tax Authorities. On May 28, 2021, the Danish Tax Authorities appealed the DHC decision to the Danish Supreme Court.

The smaller distribution made in 2006 was ruled in favor of the Danish Tax Authorities. On May 28, 2021, the Danish Tax Authorities appealed the DHC decision to the Danish Supreme Court.

(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 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(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 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

For most of the PBRSUs granted in fiscal 2022 and fiscal 2021 and half of the PBRSUs granted in fiscal 2020, the number of shares issued will depend upon our Total Stockholder Return (TSR) as compared to the TSR of a specified group of benchmark peer companies (each expressed as a growth rate percentage) calculated as of the end of the performance period.

For half of the PBRSUs granted in fiscal 2023 and most of the PBRSUs granted in fiscal 2022 and fiscal 2021, the number of shares issued will depend upon our Total Stockholder Return (TSR) as compared to the TSR of a specified group of benchmark peer companies (each expressed as a growth rate percentage) calculated as of the end of the performance period.

The acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions): Amount Developed technology $ 16 Customer contracts/relationships 6 Goodwill 12 Other assets 1 Total assets acquired 35 Liabilities assumed ( 1 ) Total purchase price $ 34 66 The acquired assets and assumed liabilities of Spot and Cloud Jumper were recorded at their estimated fair values.

The acquisition-date values of the assets acquired and liabilities assumed are as follows (in millions): Amount Developed technology $ 16 Customer contracts/relationships 6 Goodwill 12 Other assets 1 Total assets acquired 35 Liabilities assumed ( 1 ) Total purchase price $ 34 The acquired assets and assumed liabilities of Spot and Cloud Jumper were recorded at their estimated values.

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.

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.

Business Combinations 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.

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.

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 single option straight-line approach over the requisite service period for the entire award.

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 San Jose site supports research and development, corporate general administration, sales and marketing, global services and operations. We lease approximately 1.2 million square feet in other sales offices and research and development facilities throughout the U.S. and internationally.

The San Jose site supports research and development, corporate general administration, sales and marketing, global services and operations. We lease approximately 1.3 million square feet in other sales offices and research and development facilities throughout the U.S. and internationally.

Certain acquired net operating loss carryforwards are subject to an annual limitation under Internal Revenue Code Section 382, but are expected to be realized with the exception of those which have a valuation allowance. The state and foreign net operating loss carryforwards and credits will expire in various years from fiscal 2023 through 2042 .

Certain acquired net operating loss carryforwards are subject to an annual limitation under Internal Revenue Code Section 382, but are expected to be realized with the exception of those which have a valuation allowance. The state and foreign net operating loss 81 carryforwards and credits will expire in various years from fiscal 2024 through 2042.

Interest on these Senior Notes is payable semi-annually in June and December. 73 Our 3.30 % Senior Notes, with a principal amount of $ 400 million, were issued in September 2017 with interest paid semi-annually in March and September.

Interest on each of these Senior Notes is payable semi-annually in June and December. Our 3.30 % Senior Notes, with a principal amount of $ 400 million, were issued in September 2017 with interest paid semi-annually in March and September.

Based on past performance and our current business outlook, we believe that our sources of liquidity, including 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.

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.

Materials costs increased by approximately $156 million in fiscal 2022 compared to fiscal 2021 reflecting the increase in product revenues in the current year period, the mix of systems sold, and higher component and freight costs as a result of COVID-19 related supply chain challenges. Excess and obsolete inventory reserves were lower in fiscal 2022 compared to fiscal 2021.

Materials costs increased by approximately $156 million in fiscal 2022 compared to fiscal 2021 reflecting the increase in product revenues in fiscal 2022, the mix of systems sold, and higher component and freight costs as a result of COVID-19 related supply chain challenges. Excess and obsolete inventory reserves were lower in fiscal 2022 compared to fiscal 2021.

Although there are several other new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements had or will have a material impact on our consolidated financial position, operating results, cash flows or disclosures. 3.

Recent Accounting Pronouncements Although there are new accounting pronouncements issued or proposed by the FASB that we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements had or will have a material impact on our consolidated financial position, operating results, cash flows or disclosures. 3.

The fair values of these AOI PBRSUs were established consistent with our methodology for valuing time-based RSUs, while compensation cost was recognized based on the probable outcome of the performance condition.

The fair values of these billings PBRSUs were established consistent with our methodology for valuing time-based RSUs, while compensation cost was recognized based on the probable outcome of the performance condition.

Volatile macroeconomic and market conditions caused by the COVID-19 pandemic 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.

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.

The marketable securities related to these investments are held in a Rabbi Trust.

The marketable 85 securities related to these investments are held in a Rabbi Trust.

Gain on Sale or Derecognition of Assets (in millions, except percentages): Fiscal Year 2022 2021 % Change 2020 % Change Gain on sale or derecognition of assets $ — $ (156 ) (100 )% $ (38 ) 311 % In April 2021, we sold certain land and buildings located in Sunnyvale, California with an aggregate net book value of $210 million and received cash proceeds of $365 million, resulting in a gain, net of direct selling cost, and adjusted for below-market rent, of $156 million.

Gain on Sale or Derecognition of Assets (in millions, except percentages): Fiscal Year 2023 2022 % Change 2021 % Change Gain on sale or derecognition of assets $ — $ — — $ (156 ) (100 )% In April 2021, we sold certain land and buildings located in Sunnyvale, California with an aggregate net book value of $210 million and received cash proceeds of $365 million, resulting in a gain, net of direct selling cost, and adjusted for below-market rent, of $156 million.

Provided all other revenue recognition criteria have been met, we recognize product revenues for these arrangements, net of any payment discounts from financing transactions, upon product acceptance. We sold $ 59 million, $ 102 million and $ 59 million of receivables during fiscal 2022, 2021 and 2020, respectively.

Provided all other revenue recognition criteria have been met, we recognize product revenues for these arrangements, net of any payment discounts from financing transactions, upon product acceptance. We sold $ 38 million, $ 59 million and $ 102 million of receivables during fiscal 2023, 2022 and 2021, respectively.

The fair value of each reporting unit is based on a combination of the income approach and the market approach. 60 Under the income approach, we estimate the fair value of a reporting unit based on the present value of estimated future cash flows.

The fair value of each reporting unit is based on a combination of the income approach and the market approach. 59 Under the income approach, we estimate the fair value of a reporting unit based on the present value of estimated future cash flows.

Dividends The following is a summary of our fiscal 2022, 2021 and 2020 activities related to dividends on our common stock (in millions, except per share amounts).

Dividends The following is a summary of our fiscal 2023, 2022 and 2021 activities related to dividends on our common stock (in millions, except per share amounts).

For leases that we are not a party to, other than providing recourse, we recognize revenue when control is transferred. As of April 29, 2022 and April 30, 2021, 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.

For leases that we are not a party to, other than providing recourse, we recognize revenue when control is transferred. As of April 28, 2023 and April 29, 2022, 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.

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 29, 2022, the end of the fiscal period covered by this Annual Report on Form 10-K (the Evaluation Date).

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 28, 2023, the end of the fiscal period covered by this Annual Report on Form 10-K (the Evaluation Date).

It em 4. Mine Safety Disclosures Not applicable. 29 PA RT II It em 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.

Mine Safety Disclosures Not applicable. 28 PA RT II It em 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.

Revenues by Geographic Area: Fiscal Year 2022 2021 2020 United States, Canada and Latin America (Americas) 55 % 54 % 53 % Europe, Middle East and Africa (EMEA) 31 % 31 % 32 % Asia Pacific (APAC) 14 % 15 % 15 % Percentages may not add due to rounding Americas revenues consist of sales to Americas commercial and United States (U.S.) public sector markets.

Revenues by Geographic Area: Fiscal Year 2023 2022 2021 United States, Canada and Latin America (Americas) 53 % 55 % 54 % Europe, Middle East and Africa (EMEA) 33 % 31 % 31 % Asia Pacific (APAC) 14 % 14 % 15 % Percentages may not add due to rounding Americas revenues consist of sales to Americas commercial and United States (U.S.) public sector markets.

As a result of uncertainties regarding tax audits and their possible outcomes, an estimate of the range of possible impacts to unrecognized tax benefits in the next twelve months cannot be made at this time. As of April 29, 2022, we continue to record a deferred tax liability related to state taxes on unremitted earnings of certain foreign entities.

As a result of uncertainties regarding tax audits and their possible outcomes, an estimate of the range of possible impacts to unrecognized tax benefits in the next twelve months cannot be made at this time. As of April 28, 2023, we continue to record a deferred tax liability related to state taxes on unremitted earnings of certain foreign entities.

Item 2. P roperties We owned or leased, domestically and internationally, the following properties as of April 29, 2022. 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.

Item 2. P roperties We owned or leased, domestically and internationally, the following properties as of April 28, 2023. 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.

In the first quarter of fiscal 2022, we executed a restructuring plan to reduce the amount of office space we occupy as we allow more employees to continue to work remotely. In connection with the plan, we also reduced our global workforce by approximately 1 %.

In the first quarter of fiscal 2022, we executed a restructuring plan to reduce the amount of office space we occupied as we allow more employees to work remotely. In connection with the plan, we also reduced our global workforce by approximately 1 %.

These arrangements are generally collateralized by a security interest in the underlying assets. As of April 29, 2022 and April 30, 2021, 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.

These arrangements are generally collateralized by a security interest in the underlying assets. As of April 28, 2023 and April 29, 2022, 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.

Unfavorable resolutions could include significant monetary damages. In addition, in matters for which injunctive relief or other conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways or requiring other remedies.

In addition, in matters for which injunctive relief or other conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways or requiring other remedies.

In addition, we review third-party pricing provider models, key inputs and assumptions and understand the pricing processes at our third-party providers in determining the overall reasonableness of the fair value of our Level 2 debt instruments. As of April 29, 2022 and April 30, 2021, we have not made any adjustments to the prices obtained from our third-party pricing providers.

In addition, we review third-party pricing provider models, key inputs and assumptions and understand the pricing processes at our third-party providers in determining the overall reasonableness of the fair value of our Level 2 debt instruments. As of April 28, 2023 and April 29, 2022, we have not made any adjustments to the prices obtained from our third-party pricing providers.

Our employer matching contributions to the 401(k) Plan were as follows (in millions): Year Ended April 29, 2022 April 30, 2021 April 24, 2020 401(k) matching contributions $ 31 $ 29 $ 29 Deferred Compensation Plan We have a non-qualified deferred compensation plan that allows a group of employees within the U.S. to contribute base salary and commissions or incentive compensation on a tax deferred basis in excess of the IRS limits imposed on 401(k) plans.

Our employer matching contributions to the 401(k) Plan were as follows (in millions): Year Ended April 28, 2023 April 29, 2022 April 30, 2021 401(k) matching contributions $ 33 $ 31 $ 29 Deferred Compensation Plan We have a non-qualified deferred compensation plan that allows a group of employees within the U.S. to contribute base salary and commissions or incentive compensation on a tax deferred basis in excess of the IRS limits imposed on 401(k) plans.

The effectiveness of our internal control over financial reporting as of April 29, 2022 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.

The effectiveness of our internal control over financial reporting as of April 28, 2023 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.

Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of NetApp, Inc. and subsidiaries (the "Company") as of April 29, 2022 and April 30, 2021, the related consolidated statements of income, comprehensive income, cash flows and stockholders' equity, for each of the three years in the period ended April 29, 2022, and the related notes (collectively referred to as the "financial statements").

Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of NetApp, Inc. and subsidiaries (the "Company") as of April 28, 2023 and April 29, 2022, the related consolidated statements of income, comprehensive income, cash flows and stockholders' equity, for each of the three years in the period ended April 28, 2023, and the related notes (collectively referred to as the "financial statements").

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 29, 2022. Our investment portfolio has been and will continue to be exposed to market risk due to trends in the credit and capital markets.

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 28, 2023. Our investment portfolio has been and will continue to be exposed to market risk due to trends in the credit and capital markets.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 29, 2022 and April 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended April 29, 2022, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 28, 2023 and April 29, 2022, and the results of its operations and its cash flows for each of the three years in the period ended April 28, 2023, in conformity with accounting principles generally accepted in the United States of America.

Financing Arrangements Long-Term Debt The following table summarizes information relating to our long-term debt, which we collectively refer to as our Senior Notes (in millions, except interest rates): Effective Interest Rate April 29, 2022 April 30, 2021 3.25% Senior Notes Due December 2022 3.43 % $ 250 $ 250 3.30% Senior Notes Due September 2024 3.42 % 400 400 1.875% Senior Notes Due June 2025 2.03 % 750 750 2.375% Senior Notes Due June 2027 2.51 % 550 550 2.70% Senior Notes Due June 2030 2.81 % 700 700 Total principal amount 2,650 2,650 Unamortized discount and issuance costs ( 14 ) ( 18 ) Total senior notes 2,636 2,632 Less: Current portion of long-term debt ( 250 ) — Total long-term debt $ 2,386 $ 2,632 Senior Notes Our $ 750 million aggregate principal amount of 1.875 % Senior Notes due 2025, $ 550 million aggregate principal amount of 2.375 % Senior Notes due 2027 and $ 700 million aggregate principal amount of 2.70 % Senior Notes due 2030, were issued in June 2020.

Financing Arrangements Long-Term Debt The following table summarizes information relating to our long-term debt, which we collectively refer to as our Senior Notes (in millions, except interest rates): Effective Interest Rate April 28, 2023 April 29, 2022 3.25% Senior Notes Due December 2022 3.43 % $ — $ 250 3.30% Senior Notes Due September 2024 3.42 % 400 400 1.875% Senior Notes Due June 2025 2.03 % 750 750 2.375% Senior Notes Due June 2027 2.51 % 550 550 2.70% Senior Notes Due June 2030 2.81 % 700 700 Total principal amount 2,400 2,650 Unamortized discount and issuance costs ( 11 ) ( 14 ) Total senior notes 2,389 2,636 Less: Current portion of long-term debt — ( 250 ) Total long-term debt $ 2,389 $ 2,386 Senior Notes Our $ 750 million aggregate principal amount of 1.875 % Senior Notes due 2025, $ 550 million aggregate principal amount of 2.375 % Senior Notes due 2027 and $ 700 million aggregate principal amount of 2.70 % Senior Notes due 2030, were each issued in June 2020.

Unrecognized tax benefits of $ 130 million, including penalties, interest and indirect benefits, would affect our provision for income taxes if recognized.

Unrecognized tax benefits of $ 144 million, including penalties, interest and indirect benefits, would affect our provision for income taxes if recognized.

In September 2010, the Danish Tax Authorities issued a decision concluding that distributions declared in 2005 and 2006 by our Danish subsidiary were subject to Danish at-source dividend withholding tax. We do not believe that our Danish subsidiary is liable for such withholding tax and filed an appeal with the Danish Tax Tribunal.

In September 2010, the Danish Tax Authorities issued a decision concluding that distributions declared in 2005 and 2006 by our Danish subsidiary were subject to Danish at-source dividend withholding tax. We did not believe that our Danish subsidiary was liable for such withholding tax and filed an appeal with the Danish Tax Tribunal.

Cash Flows from Financing Activities During fiscal 2022, cash flows used in financing activities totaled $1.0 billion and include $600 million for the repurchase of approximately seven million shares of common stock and $446 million for the payment of dividends.

During fiscal 2022, cash flows used in financing activities totaled $1.0 billion and included $600 million for the repurchase of approximately seven million shares of common stock and $446 million for the payment of dividends.

The aggregate charges in fiscal 2022 also included legal and tax-related consulting fees associated with our plan to establish an international headquarters in Cork, Ireland. See Note 12 – Restructuring Charges of the Notes to Consolidated Financial Statements for more details regarding our restructuring plans.

The aggregate charges in fiscal 2023 and fiscal 2022 also 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 for more details regarding our restructuring plans.

The tax years that remain subject to examination for our major tax jurisdictions are shown below: Fiscal Years Subject to Examination for Major Tax Jurisdictions at April 29, 2022 2016 — 2022 United States — federal income tax 2018 — 2022 United States — state and local income tax 2020 — 2022 Australia 2015 — 2022 Germany 2007 — 2022 India 2017 — 2022 The Netherlands 2016 — 2022 Canada We are currently undergoing various income tax audits in the U.S. and several foreign tax jurisdictions.

The tax years that remain subject to examination for our major tax jurisdictions are shown below: Fiscal Years Subject to Examination for Major Tax Jurisdictions at April 28, 2023 2016 — 2023 United States — federal income tax 2018 — 2023 United States — state and local income tax 2020 — 2023 Australia 2018 — 2023 Germany 2007 — 2023 India 2017 — 2023 The Netherlands 2016 — 2023 Canada We are currently undergoing various income tax audits in the U.S. and several foreign tax jurisdictions.

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 such as the COVID-19 pandemic, and, to date, such losses have been within management’s expectations.

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.

As of April 29, 2022, we were compliant with all associated covenants in the agreement . No amounts were drawn against this credit facility during any of the periods presented. 9 . Leases We lease real estate, equipment and automobiles in the U.S. and internationally.

As of April 28, 2023, we were compliant with all associated covenants in the agreement . No amounts were drawn against this credit facility during any of the periods presented. 9. Leases We lease real estate, equipment and automobiles in the U.S. and internationally.

The aggregate grant date fair value of all PBRSUs granted in fiscal 2022, 2021 and 2020 was $ 59 million, $ 27 million and $ 18 million, respectively, and these amounts are being recognized to expense over the shorter of the remaining applicable performance or service periods.

The aggregate grant date fair value of all PBRSUs granted in fiscal 2023, 2022 and 2021 was $ 28 million, $ 59 million and $ 27 million, respectively, and these amounts are being recognized to expense over the shorter of the remaining applicable performance or service periods.

We present our derivative instruments as net amounts in our consolidated balance sheets. The gross and net fair value amounts of such instruments were not material as of April 29, 2022 or April 30, 2021. All contracts have a maturity of less than 12 months.

We present our derivative instruments as net amounts in our consolidated balance sheets. The gross and net fair value amounts of such instruments were not material as of April 28, 2023 or April 29, 2022. All contracts have a maturity of less than 12 months.

As of April 29, 2022 and April 30, 2021, such liability amounted to $ 18 million and $ 15 million, respectively, and is included in accrued expenses in our consolidated balance sheets. To the extent that such forecasts are not achieved, our commitments and associated accruals may change.

As of April 28, 2023 and April 29, 2022, such liability amounted to $ 15 million and $ 18 million, respectively, and is included in accrued expenses in our consolidated balance sheets. To the extent that such forecasts are not achieved, our commitments and associated accruals may change.

Additional information related to our stock options is summarized below (in millions): Year Ended April 29, 2022 April 30, 2021 April 24, 2020 Intrinsic value of exercises $ 14 $ 11 $ 5 Proceeds received from exercises $ 1 $ 8 $ 4 Fair value of options vested $ 5 $ 5 $ 1 Restricted Stock Units In fiscal 2022, 2021 and 2020, we granted PBRSUs to certain of our executives.

Additional information related to our stock options is summarized below (in millions): Year Ended April 28, 2023 April 29, 2022 April 30, 2021 Intrinsic value of exercises $ 7 $ 14 $ 11 Proceeds received from exercises $ 1 $ 1 $ 8 Fair value of options vested $ 4 $ 5 $ 5 Restricted Stock Units In fiscal 2023, 2022 and 2021, we granted PBRSUs to certain of our executives.

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 $59 million and $102 million of receivables during fiscal 2022 and 2021, respectively.

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 $38 million and $59 million of receivables during fiscal 2023 and 2022, respectively.

Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of NetApp, Inc. and subsidiaries (the "Company") as of April 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of NetApp, Inc. and subsidiaries (the "Company") as of April 28, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 15, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of April 28, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 14, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

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.

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 27, 2018 in stock or index, including reinvestment of dividends.

As of April 29, 2022, 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.

As of April 28, 2023, 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.

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Top changes in NetApp's 2023 10-K

Item 1. Business

Item 2. Properties

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