NetApp, Inc. (Form: 10-Q, Received: 11/25/2025 16:16:46)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


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

For the quarterly period ended October 24, 2025


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

For the transition period from to

Commission File Number 000-27130

NetApp, Inc.

(Exact name of registrant as specified in its charter)


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

3060 Olsen Drive,

San Jose, California 95128

(Address of principal executive offices, including zip code)

(408) 822-6000

(Registrant’s telephone number, including area code)

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


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

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of November 21, 2025, there were 198,060,348 shares of the registrant’s common stock, $0.001 par value, outstanding.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION

Item 1	Condensed Consolidated Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	36

PART II — OTHER INFORMATION

Item 1	Legal Proceedings	37
Item 1A	Risk Factors	37
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults upon Senior Securities	37
Item 4	Mine Safety Disclosures	37
Item 5	Other Information	37
Item 6	Exhibits	37
SIGNATURE		39

TRADEMARKS

© 2025 NetApp, Inc. All Rights Reserved. No portions of this document may be reproduced without prior written consent of NetApp, Inc. NetApp, the NetApp logo, and the marks listed at http://www.netapp.com/TM are trademarks of NetApp, Inc. Other company and product names may be trademarks of their respective owners.

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

NETAPP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

(Unaudited)


	October 24, 2025			April 25, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	2,072		$	2,742
Short-term investments		942			1,104
Accounts receivable		988			1,246
Inventories		127			186
Other current assets		525			573
Total current assets		4,654			5,851
Property and equipment, net		568			563
Goodwill		2,731			2,723
Purchased intangible assets, net		31			43
Other non-current assets		1,646			1,643
Total assets	$	9,630		$	10,823

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	436		$	511
Accrued expenses		890			1,122
Current portion of long-term debt		—			750
Short-term deferred revenue and financed unearned services revenue		2,144			2,279
Total current liabilities		3,470			4,662
Long-term debt		2,486			2,485
Other long-term liabilities		387			379
Long-term deferred revenue and financed unearned services revenue		2,301			2,257
Total liabilities		8,644			9,783

Commitments and contingencies (Note 14)

Stockholders' equity:
Common stock and additional paid-in capital, $0.001 par value, 885 shares authorized; 198 and 201 shares issued and outstanding as of October 24, 2025 and April 25, 2025, respectively		1,036			1,106
Retained earnings		—			—
Accumulated other comprehensive loss		(50	)		(66	)
Total stockholders' equity		986			1,040
Total liabilities and stockholders' equity	$	9,630		$	10,823

See accompanying notes to condensed consolidated financial statements.

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended					Six Months Ended
	October 24, 2025			October 25, 2024		October 24, 2025			October 25, 2024
Revenues:
Product	$	788		$	768	$	1,442		$	1,437
Services		917			890		1,822			1,762
Net revenues		1,705			1,658		3,264			3,199
Cost of revenues:
Cost of product		321			307		623			576
Cost of services		157			174		316			348
Total cost of revenues		478			481		939			924
Gross profit		1,227			1,177		2,325			2,275
Operating expenses:
Sales and marketing		465			485		926			956
Research and development		251			257		493			509
General and administrative		89			77		173			152
Restructuring charges		23			12		25			29
Acquisition-related expense		—			1		—			2
Total operating expenses		828			832		1,617			1,648
Income from operations		399			345		708			627
Other (expense) income, net		(6	)		15		(11	)		32
Income before income taxes		393			360		697			659
Provision for income taxes		88			61		159			112
Net income	$	305		$	299	$	538		$	547
Net income per share:
Basic	$	1.53		$	1.47	$	2.69		$	2.67
Diluted	$	1.51		$	1.42	$	2.66		$	2.59
Shares used in net income per share calculations:
Basic		199			204		200			205
Diluted		202			210		202			211

See accompanying notes to condensed consolidated financial statements.

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended						Six Months Ended
	October 24, 2025			October 25, 2024			October 24, 2025			October 25, 2024
Net income	$	305		$	299		$	538		$	547
Other comprehensive income (loss):
Foreign currency translation adjustments		(12	)		3			14			4
Unrealized gains on available-for-sale securities:
Unrealized holding gains arising during the period		1			1			—			1
Unrealized losses on cash flow hedges:
Unrealized holding losses arising during the period		—			(2	)		(1	)		(3	)
Reclassification adjustments for losses included in net income		1			2			3			2
Other comprehensive income (loss)		(10	)		4			16			4
Comprehensive income	$	295		$	303		$	554		$	551

See accompanying notes to condensed consolidated financial statements.

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Six Months Ended
	October 24, 2025			October 25, 2024
Cash flows from operating activities:
Net income	$	538		$	547
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		103			126
Non-cash operating lease cost		21			21
Stock-based compensation		185			188
Deferred income taxes		19			(69	)
Other items, net		75			35
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable		261			138
Inventories		60			(132	)
Other operating assets		(8	)		(107	)
Accounts payable		(73	)		36
Accrued expenses		(277	)		(84	)
Deferred revenue and financed unearned services revenue		(107	)		(164	)
Long-term taxes payable		3			(91	)
Other operating liabilities		—			2
Net cash provided by operating activities		800			446
Cash flows from investing activities:
Purchases of investments		(1,185	)		(882	)
Maturities, sales and collections of investments		1,340			1,479
Purchases of property and equipment		(102	)		(86	)
Other investing activities, net		15			2
Net cash provided by investing activities		68			513
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock award plans		54			55
Payments for taxes related to net share settlement of stock awards		(87	)		(132	)
Repurchase of common stock		(550	)		(700	)
Repayments and extinguishment of debt		(750	)		(400	)
Dividends paid		(207	)		(213	)
Net cash used in financing activities		(1,540	)		(1,390	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		2			9
Net change in cash, cash equivalents and restricted cash		(670	)		(422	)
Cash, cash equivalents and restricted cash:
Beginning of period		2,749			1,909
End of period	$	2,079		$	1,487

See accompanying notes to condensed consolidated financial statements.

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended October 24, 2025
										Accumulated
	Common Stock and									Other
	Additional Paid-in Capital						Retained			Comprehensive
	Shares			Amount			Earnings			Loss			Total
Balances, July 25, 2025		200		$	1,015		$	—		$	(40	)	$	975
Net income		—			—			305			—			305
Other comprehensive loss		—			—			—			(10	)		(10	)
Issuance of common stock under employee stock award plans, net of taxes		—			(30	)		—			—			(30	)
Repurchase of common stock		(2	)		(10	)		(240	)		—			(250	)
Excise tax on net stock repurchases		—			(3	)		—			—			(3	)
Stock-based compensation		—			102			—			—			102
Cash dividends declared ($0.52 per common share)		—			(38	)		(65	)		—			(103	)
Balances, October 24, 2025		198		$	1,036		$	—		$	(50	)	$	986


	Three Months Ended October 25, 2024
										Accumulated
	Common Stock and									Other
	Additional Paid-in Capital						Retained			Comprehensive
	Shares			Amount			Earnings			Loss			Total
Balances, July 26, 2024		205		$	988		$	—		$	(59	)	$	929
Net income		—			—			299			—			299
Other comprehensive income		—			—			—			4			4
Issuance of common stock under employee stock award plans, net of taxes		1			(35	)		—			—			(35	)
Repurchase of common stock		(3	)		(12	)		(288	)		—			(300	)
Excise tax on net stock repurchases		—			(2	)		—			—			(2	)
Stock-based compensation		—			103			—			—			103
Cash dividends declared ($0.52 per common share)		—			(95	)		(11	)		—			(106	)
Balances, October 25, 2024		203		$	947		$	—		$	(55	)	$	892

See accompanying notes to condensed consolidated financial statements.

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share amounts)

(Unaudited)


	Six Months Ended October 24, 2025
										Accumulated
	Common Stock and									Other
	Additional Paid-in Capital						Retained			Comprehensive
	Shares			Amount			Earnings			Loss			Total
Balances, April 25, 2025		201		$	1,106		$	—		$	(66	)	$	1,040
Net income		—			—			538			—			538
Other comprehensive income		—			—			—			16			16
Issuance of common stock under employee stock award plans, net of taxes		2			(33	)		—			—			(33	)
Repurchase of common stock		(5	)		(77	)		(473	)		—			(550	)
Excise tax on net stock repurchases		—			(3	)		—			—			(3	)
Stock-based compensation		—			185			—			—			185
Cash dividends declared ($1.04 per common share)		—			(142	)		(65	)		—			(207	)
Balances, October 24, 2025		198		$	1,036		$	—		$	(50	)	$	986


	Six Months Ended October 25, 2024
										Accumulated
	Common Stock and									Other
	Additional Paid-in Capital						Retained			Comprehensive
	Shares			Amount			Earnings			Loss			Total
Balances, April 26, 2024		206		$	997		$	208		$	(59	)	$	1,146
Net income		—			—			547			—			547
Other comprehensive income		—			—			—			4			4
Issuance of common stock under employee stock award plans, net of taxes		3			(77	)		—			—			(77	)
Repurchase of common stock		(6	)		(28	)		(672	)		—			(700	)
Excise tax on net stock repurchases		—			(3	)		—			—			(3	)
Stock-based compensation		—			188			—			—			188
Cash dividends declared ($1.04 per common share)		—			(130	)		(83	)		—			(213	)
Balances, October 25, 2024		203		$	947		$	—		$	(55	)	$	892

See accompanying notes to condensed consolidated financial statements.

NETAPP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business and Significant Accounting Policies

NetApp, Inc. (we, us, our, NetApp, or the Company) helps customers make their data infrastructure more seamless, more dynamic, and higher performing. We provide a full range of enterprise-class software, systems and services that customers use to transform their data infrastructures across data types, workloads, and environments to realize business possibilities.

Basis of Presentation and Preparation

Our fiscal year is reported on a 52- or 53-week year ending on the last Friday in April. An additional week is included in the first fiscal quarter approximately every six years to realign fiscal months with calendar months. Fiscal years 2026 and 2025, ending on April 24, 2026 and April 25, 2025, respectively, are each 52-week years, with 13 weeks in each quarter.

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company, and reflect all adjustments, consisting only of normal recurring adjustments, that are, in the opinion of management, necessary for the fair presentation of our financial position, results of operations, comprehensive income, cash flows and stockholders’ equity for the interim periods presented. The statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. Accordingly, these statements do not include all information and footnotes required by GAAP for annual consolidated financial statements, and should be read in conjunction with our audited consolidated financial statements as of and for the fiscal year ended April 25, 2025 contained in our Annual Report on Form 10-K. The results of operations for the three and six months ended October 24, 2025 are not necessarily indicative of the operating results to be expected for the full fiscal year or future operating periods.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to, revenue recognition, reserves and allowances; inventory valuation; valuation of goodwill and intangibles; restructuring reserves; employee benefit accruals; stock-based compensation; loss contingencies; investment impairments; income taxes and fair value measurements. Actual results could differ materially from those estimates, the anticipated effects of which have been incorporated, as applicable, into management's estimates as of October 24, 2025.

2. Recent Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU simplifies the capitalization guidance by removing all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout ASC 350-40. The ASU is effective for annual periods beginning after December 15, 2027, with early adoption permitted. Adoption of this ASU can be applied prospectively; or following a modified transition approach that is based on the status of each project and whether software costs were capitalized before adoption; or retrospectively. We are currently evaluating the effect of this pronouncement on our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure of the nature of expenses included in the income statement. The standard requires disclosures about specific types of expenses included in the expense captions presented in the income statement as well as disclosures about selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. We are currently evaluating the effect of this pronouncement on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. While retrospective application is permitted, we will adopt this standard in our Form 10-K for the year ending April 24, 2026 on a prospective basis. We are currently assessing the effect of the adoption of this standard on our disclosures.

3. Goodwill and Purchased Intangible Assets, Net

Goodwill by reportable segment as of October 24, 2025 is as follows (in millions):


	Hybrid Cloud		Public Cloud		Total
Balance as of April 25, 2025	$	1,714	$	1,009	$	2,723
Impact of foreign currency translation		—		8		8
Balance as of October 24, 2025	$	1,714	$	1,017	$	2,731

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


	October 24, 2025							April 25, 2025
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Assets		Amortization			Assets		Assets		Amortization			Assets
Developed technology	$	55	$	(39	)	$	16	$	55	$	(33	)	$	22
Customer contracts/relationships		50		(35	)		15		50		(29	)		21
Other purchased intangibles		2		(2	)		—		2		(2	)		—
Total purchased intangible assets	$	107	$	(76	)	$	31	$	107	$	(64	)	$	43

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


	Three Months Ended				Six Months Ended				Statements of
	October 24, 2025		October 25, 2024		October 24, 2025		October 25, 2024		Income Classifications
Developed technology	$	3	$	9	$	6	$	17	Cost of revenues
Customer contracts/relationships		3		5		6		11	Operating expenses
Total	$	6	$	14	$	12	$	28

As of October 24, 2025, future amortization expense related to purchased intangible assets is as follows (in millions):


Fiscal Year	Amount
2026 (remainder)	$	9
2027		21
2028		1
Total	$	31

4. Supplemental Financial Information

Cash and cash equivalents (in millions):

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


	October 24, 2025		April 25, 2025
Cash and cash equivalents	$	2,072	$	2,742
Restricted cash		7		7
Cash, cash equivalents and restricted cash	$	2,079	$	2,749

Inventories (in millions):


	October 24, 2025		April 25, 2025
Purchased components	$	43	$	81
Finished goods		84		105
Inventories	$	127	$	186

Property and equipment, net (in millions):


	October 24, 2025			April 25, 2025
Land	$	46		$	46
Buildings and improvements		377			374
Leasehold improvements		106			103
Computer, production, engineering and other equipment		1,210			1,172
Computer software		333			329
Furniture and fixtures		63			62
Construction-in-progress		57			49
		2,192			2,135
Accumulated depreciation and amortization		(1,624	)		(1,572	)
Property and equipment, net	$	568		$	563

Other non-current assets (in millions):


	October 24, 2025		April 25, 2025
Deferred tax assets	$	975	$	994
Operating lease right-of-use (ROU) assets		236		241
Other assets		435		408
Other non-current assets	$	1,646	$	1,643

Other non-current assets as of October 24, 2025 and April 25, 2025 include $94 million and $92 million, respectively, for our 49% non-controlling equity interest in Lenovo NetApp Technology Limited (LNTL), a China-based entity that we formed with Lenovo (Beijing) Information Technology Ltd. in fiscal 2019. LNTL is integral to our sales channel strategy in China, acting as a distributor of our offerings to customers headquartered there, and involved in certain OEM sales to Lenovo. LNTL is also focused on localizing our products and services, and developing new joint offerings for the China market by leveraging NetApp and Lenovo technologies.

Accrued expenses (in millions):


	October 24, 2025		April 25, 2025
Accrued compensation and benefits	$	425	$	513
Product warranty liabilities		17		18
Operating lease liabilities		42		40
Other current liabilities		406		551
Accrued expenses	$	890	$	1,122

Other long-term liabilities (in millions):


	October 24, 2025		April 25, 2025
Liability for uncertain tax positions	$	49	$	45
Product warranty liabilities		9		9
Operating lease liabilities		211		216
Other liabilities		118		109
Other long-term liabilities	$	387	$	379

Deferred revenue and financed unearned services revenue

Deferred revenue primarily represents customer payments made in advance for services, which include software and hardware support contracts, certain public cloud services and other services. Financed unearned services revenue represents undelivered services for which cash has been received under certain third-party financing arrangements. See Note 14 – Commitments and Contingencies for additional information related to these arrangements.

During the six months ended October 24, 2025 and October 25, 2024, we recognized revenue of $1,324 million and $1,264 million, respectively, that was included in the deferred revenue and financed unearned services revenue balance at the beginning of the respective periods.

Remaining performance obligations

As of October 24, 2025, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied was $4.9 billion. Because customer orders are typically placed on an as-needed basis, and cancellable without penalty prior to shipment, orders in backlog may not be a meaningful indicator of future revenue and have not been included in this amount. We expect to recognize as revenue approximately 47% of our remaining performance obligations in the next 12 months and the remainder thereafter.

Deferred commissions (in millions):

The following table summarizes deferred commissions balances as reported in our condensed consolidated balance sheets:


	October 24, 2025		April 25, 2025
Other current assets	$	64	$	64
Other non-current assets		109		104
Total deferred commissions	$	173	$	168

Other (expense) income, net (in millions):


	Three Months Ended						Six Months Ended
	October 24, 2025			October 25, 2024			October 24, 2025			October 25, 2024
Interest income	$	27		$	27		$	63		$	63
Interest expense		(26	)		(15	)		(55	)		(31	)
Other, net		(7	)		3			(19	)		—
Total other (expense) income, net	$	(6	)	$	15		$	(11	)	$	32

Statements of cash flows additional information (in millions):

Supplemental cash flow information related to our operating leases is included in Note 7 ─ Leases. Non-cash investing activities and other supplemental cash flow information are presented below:


	Six Months Ended
	October 24, 2025		October 25, 2024
Non-cash Investing Activities:
Capital expenditures incurred but not paid	$	9	$	16
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	285	$	222
Interest paid	$	58	$	30

5. Financial Instruments and Fair Value Measurements

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

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

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

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

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

Investments

The following is a summary of our investments at their cost or amortized cost as of October 24, 2025 and April 25, 2025 (in millions):


	October 24, 2025		April 25, 2025
U.S. Treasury and government debt securities	$	942	$	2,025
Money market funds		1,370		1,126
Certificates of deposit		27		24
Mutual funds		49		41
Total debt and equity securities	$	2,388	$	3,216

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

As of October 24, 2025, all our debt investments are due to mature in one year or less.

Fair Value of Financial Instruments

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


	October 24, 2025
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash and cash equivalents:
Cash	$	675		$	675	$	—
Money market funds		1,370			1,370		—
Certificates of deposit		27			—		27
Total cash and cash equivalents		2,072			2,045		27
Short-term investments:
U.S. Treasury and government debt securities		942			942		—
Total short-term investments		942			942		—
Total cash, cash equivalents and short-term investments	$	3,014		$	2,987	$	27
Other items:
Mutual funds (1)	$	6		$	6	$	—
Mutual funds (2)	$	43		$	43	$	—
Foreign currency exchange contracts assets (1)	$	1		$	—	$	1
Foreign currency exchange contracts liabilities (3)	$	(25	)	$	—	$	(25	)


	April 25, 2025
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash and cash equivalents:
Cash	$	671		$	671	$	—
Money market funds		1,126			1,126		—
Certificates of deposit		24			—		24
U.S. Treasury and government debt securities		921			921		—
Total cash and cash equivalents		2,742			2,718		24
Short-term investments:
U.S. Treasury and government debt securities		1,104			1,104		—
Total short-term investments		1,104			1,104		—
Total cash, cash equivalents and short-term investments	$	3,846		$	3,822	$	24
Other items:
Mutual funds (1)	$	7		$	7	$	—
Mutual funds (2)	$	34		$	34	$	—
Foreign currency exchange contracts assets (1)	$	29		$	—	$	29
Foreign currency exchange contracts liabilities (3)	$	(2	)	$	—	$	(2	)

(1)

Reported as other current assets in the condensed consolidated balance sheets

(2)

Reported as other non-current assets in the condensed consolidated balance sheets

(3)

Reported as accrued expenses in the condensed consolidated balance sheets

Our Level 2 debt instruments are held by a custodian who prices some of the investments using standard inputs in various asset price models or obtains investment prices from third-party pricing providers that incorporate standard inputs in various asset price models. These pricing providers utilize the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, use other observable inputs like market transactions involving identical or comparable securities. We review Level 2 inputs and fair value for reasonableness and the values may be further validated by comparison to multiple independent pricing sources. 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 October 24, 2025 and April 25, 2025, we have not made any adjustments to the prices obtained from our third-party pricing providers.

Fair Value of Debt

As of October 24, 2025 and April 25, 2025, the fair value of our long-term debt, which includes the current portion of long-term debt, was $2,504 million and $3,143 million, respectively. The fair value of our long-term debt was based on observable market prices in a less active market.

6. 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	October 24, 2025			April 25, 2025
1.875% Senior Notes Due June 2025	2.03%	$	—		$	750
2.375% Senior Notes Due June 2027	2.51%		550			550
2.70% Senior Notes Due June 2030	2.81%		700			700
5.50% Senior Notes Due March 2032	5.71%		625			625
5.70% Senior Notes Due March 2035	5.90%		625			625
Total principal amount			2,500			3,250
Unamortized discount and issuance costs			(14	)		(15	)
Total senior notes			2,486			3,235
Less: Current portion of long-term debt			—			(750	)
Total long-term debt		$	2,486		$	2,485

Senior Notes

On June 23, 2025, upon maturity, we repaid the 1.875% Senior Notes due June 2025 for an aggregate amount of $757 million, comprised of the principal and unpaid interest.

Our Senior Notes, which are unsecured, unsubordinated obligations, rank equally in right of payment with any existing and future senior unsecured indebtedness. Interest on our Senior Notes is payable semi-annually.

We may redeem the Senior Notes in whole or in part, at any time at our option at specified redemption prices. In addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase the Senior Notes under specified terms. The Senior Notes also include covenants that limit our ability to incur debt secured by liens on assets or on shares of stock or indebtedness of our subsidiaries; to engage in certain sale and lease-back transactions; and to consolidate, merge or sell all or substantially all of our assets. As of October 24, 2025, we were in compliance with all covenants associated with the Senior Notes.

As of October 24, 2025, our aggregate future principal debt maturities are as follows (in millions):


Fiscal Year	Amount
2026	$	—
2027		—
2028		550
2029		—
2030		—
Thereafter		1,950
Total	$	2,500

Commercial Paper Program and Credit Facility

We have a commercial paper program (the Program), under which we may issue unsecured commercial paper notes. Amounts available under the Program, as amended in July 2017, may be borrowed, repaid and re-borrowed, with the aggregate face or principal amount of the notes outstanding under the Program at any time not to exceed $1.0 billion. The maturities of the notes can vary, but may not exceed 397 days from the date of issue. The notes are sold under customary terms in the commercial paper market and may be issued at a discount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of their issuance. The proceeds from the issuance of the notes are used for general corporate purposes. There were no commercial paper notes outstanding as of October 24, 2025 or April 25, 2025.

In connection with the Program, we have a senior unsecured credit agreement with a syndicated group of lenders. The credit agreement, which was amended in March 2025, provides for a $1.0 billion revolving unsecured credit facility, with a sublimit of $50 million available for the issuance of letters of credit on our behalf. The credit facility matures on March 5, 2030, with an option for us to extend the maturity date for two additional 1-year periods, subject to certain conditions. The proceeds of the loans may be used by us for general corporate purposes and as liquidity support for our existing commercial paper program. As of October 24, 2025, we were compliant with all associated covenants in the agreement. No amounts were drawn against this credit facility during any of the periods presented.

7. Leases

We lease real estate, equipment and automobiles in the U.S. and internationally. Our real estate leases, which are responsible for the majority of our aggregate ROU asset and liability balances, include leases for office space, data centers and other facilities, and as of October 24, 2025, have remaining lease terms not exceeding 16 years. Some of these leases contain options that allow us to extend or terminate the lease agreement. Our equipment leases are primarily for servers and networking equipment and as of October 24, 2025, have remaining lease terms not exceeding 3 years. As of October 24, 2025, our automobile leases have remaining lease terms not exceeding 4 years. All our leases are classified as operating leases except for certain immaterial equipment finance leases.

The components of lease cost related to our operating leases were as follows (in millions):


	Three Months Ended				Six Months Ended
	October 24, 2025		October 25, 2024		October 24, 2025		October 25, 2024
Operating lease cost	$	13	$	12	$	26	$	25
Variable lease cost		3		4		7		8
Total lease cost	$	16	$	16	$	33	$	33

Variable lease cost is primarily attributable to amounts paid to lessors for common area maintenance and utility charges under our real estate leases.

The supplemental cash flow information related to our operating leases is as follows (in millions):


	Six Months Ended
	October 24, 2025		October 25, 2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	24	$	24
ROU assets obtained in exchange for new operating lease obligations	$	11	$	6

The supplemental balance sheet information related to our operating leases is as follows (in millions, except lease term and discount rate):


	October 24, 2025			April 25, 2025
Other non-current assets	$	236		$	241
Total operating lease ROU assets	$	236		$	241

Accrued expenses	$	42		$	40
Other long-term liabilities		211			216
Total operating lease liabilities	$	253		$	256

Weighted Average Remaining Lease Term	8.0 years			8.5 years

Weighted Average Discount Rate		3.5	%		3.4	%

Future minimum operating lease payments as of October 24, 2025, are as follows (in millions):


Fiscal Year	Amount
2026 (remainder)	$	26
2027		46
2028		40
2029		35
2030		30
Thereafter		114
Total lease payments		291
Less: Interest		(38	)
Total	$	253

8. Stockholders’ Equity

Restricted Stock Units

We granted 4 million restricted stock units (RSUs), including performance-based RSUs (PBRSUs), with a weighted average grant date fair value of $105.45 per share during the six months ended October 24, 2025.

In the six months ended October 24, 2025, we granted PBRSUs to certain of our executives. Each PBRSU has performance-based vesting criteria (in addition to the service-based vesting criteria) such that the PBRSUs cliff-vest at the end of a three year performance period, which began on the date specified in the grant agreements and typically ends on the last day of the third fiscal year, following the grant date. The number of shares that will be used to calculate the settlement amount for all of these PBRSUs at the end of the applicable performance and service period will range from 0% to 200% of a target number of shares originally granted. For half of the PBRSUs granted in the six months ended October 24, 2025, the number of shares used to calculate the settlement amount 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 the remaining half of the PBRSUs granted in the six months ended October 24, 2025, the number of shares used to calculate the settlement amount will depend upon the Company's billings result average over the three-year performance period. The billings result average is computed based on achievement against annual billings targets, with each target set at the beginning of the respective fiscal year, during the three-year performance period. Billings for purposes of measuring the performance of these PBRSUs means the total obtained by adding net revenues as reported on the Company's condensed consolidated statements of income to the amount reported as the change

in deferred revenue and financed unearned services revenue on the condensed consolidated statements of cash flows for the applicable measurement period, excluding the impact of fluctuations in foreign currency exchange rates. The aggregate grant date fair value of PBRSUs granted in the current year was $62 million, which is being recognized to compensation expense over the remaining performance / service periods.

Stock-Based Compensation Expense

Stock-based compensation expense is included in the condensed consolidated statements of income as follows (in millions):


	Three Months Ended				Six Months Ended
	October 24, 2025		October 25, 2024		October 24, 2025		October 25, 2024
Cost of product revenues	$	2	$	2	$	3	$	3
Cost of services revenues		5		6		11		12
Sales and marketing		42		43		76		78
Research and development		34		37		59		68
General and administrative		19		15		36		27
Total stock-based compensation expense	$	102	$	103	$	185	$	188

As of October 24, 2025, total unrecognized compensation expense related to equity awards was $790 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.3 years.

Stock Repurchase Program

In the first quarter of fiscal 2026, our Board of Directors authorized the repurchase of an additional $1.1 billion of our common stock. Under our stock repurchase program, we may purchase shares of our outstanding common stock through solicited or unsolicited transactions in the open market, in privately negotiated transactions, through accelerated share repurchase programs, pursuant to a Rule 10b5-1 plan or in such other manner as deemed appropriate by our management. The stock repurchase program may be suspended or discontinued at any time.

The following table summarizes activity related to the stock repurchase program for the six months ended October 24, 2025 (in millions, except for per share amounts):


Number of shares repurchased		5.2
Average price per share	$	106.05
Stock repurchases allocated to additional paid-in capital	$	77
Stock repurchases allocated to retained earnings	$	473
Remaining authorization at end of period	$	902

Dividends

The following is a summary of our activities related to dividends on our common stock (in millions, except per share amounts):


	Six Months Ended
	October 24, 2025		October 25, 2024
Dividends per share declared	$	1.04	$	1.04
Dividend payments allocated to additional paid-in capital	$	142	$	130
Dividend payments allocated to retained earnings	$	65	$	83

On November 20, 2025, we declared a cash dividend of $0.52 per share of common stock, payable on January 21, 2026 to holders of record as of the close of business on January 2, 2026. The timing and amount of future dividends will depend on market conditions, corporate business and financial considerations and regulatory requirements. All dividends declared have been determined by us to be legally authorized under the laws of the state in which we are incorporated.

9. Derivatives and Hedging Activities

We use derivative instruments to manage exposures to foreign currency risk. Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The maximum length of time over which forecasted foreign currency denominated revenues are hedged is 12 months. The program is not designated for trading or speculative purposes. Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet their obligations under the terms of our agreements. We seek to mitigate such risk by limiting our counterparties to major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. We also have in place master netting arrangements to mitigate the credit risk of our counterparties and to potentially reduce our losses due to counterparty nonperformance. We present our derivative instruments as net amounts in our condensed consolidated balance sheets. The gross and net fair value amounts of such instruments were not material as of October 24, 2025 or April 25, 2025. All contracts have a maturity of less than 12 months.

The notional amount of our outstanding U.S. dollar equivalent foreign currency exchange forward contracts consisted of the following (in millions):


	October 24, 2025		April 25, 2025
Cash Flow Hedges
Forward contracts purchased	$	129	$	81
Balance Sheet Contracts
Forward contracts sold	$	1,437	$	790

The gain (loss) of cash flow hedges recognized in net revenues is presented in the condensed consolidated statements of comprehensive income.

The effect of derivative instruments not designated as hedging instruments recognized in other (expense) income, net on our condensed consolidated statements of income was as follows (in millions):


	Three Months Ended					Six Months Ended
	October 24, 2025			October 25, 2024		October 24, 2025			October 25, 2024
	Gain (Loss) Recognized into Income					Gain (Loss) Recognized into Income
Foreign currency exchange contracts	$	(27	)	$	1	$	(9	)	$	14

10. Restructuring Charges

In the first six months of fiscal 2026, we incurred charges related to a restructuring plan previously approved by management in the fourth quarter of fiscal 2025, as well as a restructuring plan approved by management in the second quarter of fiscal 2026 to redirect resources to the highest return activities and reduce costs. The activities under these plans are expected to be substantially complete by the end of fiscal 2026.

In the first six months of fiscal 2025, management approved restructuring plans to redirect resources to the highest return activities and reduce costs. The activities under these plans were substantially completed by the end of fiscal 2025.

Activities related to our restructuring plans are summarized as follows (in millions):


	Six Months Ended
	October 24, 2025			October 25, 2024
Balance at beginning of period	$	51		$	10
Net charges		25			29
Cash payments		(44	)		(22	)
Balance at end of period	$	32		$	17

11. Income Taxes

Our effective tax rates for the periods presented were as follows:


	Six Months Ended
	October 24, 2025			October 25, 2024
Effective tax rates		22.8	%		17.0	%

Our effective tax rate reflects the impact of a significant amount of earnings being taxed in foreign jurisdictions at rates below the United States (U.S.) statutory rate which is offset by non-deductible stock-based compensation and state taxes. Our effective tax rate for the six months ended October 24, 2025 includes a decrease in discrete tax benefits related to stock-based compensation compared to the corresponding period of the prior year.

On July 4, 2025, the reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act (OBBB), was signed into law in the United States. The OBBB contains several changes to corporate taxation including the extension of key provisions of the 2017 Tax Cuts and Jobs Act and modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective in our fiscal year 2026 and others phased in through our fiscal year 2027. We are still in the process of evaluating the impact of the OBBB on our financial statements, but an estimate of the tax benefit has been included in our operating results for the six months ended October 24, 2025. The OBBB did not have a material impact to our income tax provision for the six months ended October 24, 2025.

We are currently subject to Pillar Two rules relating to a global minimum tax enacted by The Organisation for Economic Co-operation and Development (OECD). As of October 24, 2025, Pillar Two taxes did not have a significant impact on our financial statements, particularly due to the safe harbor relief during the transition period, but we are still closely monitoring developments.

We are currently undergoing various income tax audits in the U.S. and audits in several foreign tax jurisdictions. Transfer pricing calculations are key topics under these audits and are often subject to dispute and appeals.

We continue to monitor the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. We engage in continuous discussion and negotiation with taxing authorities regarding tax matters in multiple jurisdictions. We believe that within the next 12 months, it is reasonably possible that either certain audits will conclude, certain statutes of limitations will lapse, or both. 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 October 24, 2025, we had $70 million of gross unrecognized tax benefits. Inclusive of penalties, interest and certain income tax benefits, $49 million of net unrecognized tax benefits would affect our provision for income taxes if recognized and have been recorded in other long-term liabilities.

12. Net Income per Share

The following is a calculation of basic and diluted net income per share (in millions, except per share amounts):


	Three Months Ended				Six Months Ended
	October 24, 2025		October 25, 2024		October 24, 2025		October 25, 2024
Numerator:
Net income	$	305	$	299	$	538	$	547
Denominator:
Shares used in basic computation		199		204		200		205
Dilutive impact of employee equity award plans		3		6		2		6
Shares used in diluted computation		202		210		202		211
Net Income per Share:
Basic	$	1.53	$	1.47	$	2.69	$	2.67
Diluted	$	1.51	$	1.42	$	2.66	$	2.59

No potential shares from outstanding employee equity awards were omitted from the calculation of diluted net income per share for the three and six month periods ending on October 24, 2025, and October 25, 2024, respectively.

13. Segment, Geographic, and Significant Customer Information

Our operations are organized into two segments: Hybrid Cloud and Public Cloud. The two segments are based on the information reviewed by our Chief Operating Decision Maker (CODM), who is the Chief Executive Officer, to evaluate results and allocate resources. The CODM measures performance of each segment based on segment revenue and segment gross profit by comparing actual revenue and gross profit results to historical results and previously forecasted financial information. We do not allocate to our segments certain cost of revenues which we manage at the corporate level. These unallocated costs include stock-based compensation and amortization of intangible assets. We do not allocate assets to our segments.

Hybrid Cloud offers a unified data storage portfolio of storage management and infrastructure solutions that helps customers modernize their data centers. This portfolio accommodates both structured and unstructured data with unified storage optimized for flash, disk, and cloud storage, capable of handling data-intensive workloads and applications. Hybrid Cloud includes software, hardware, and related support, along with professional and other services.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support. This portfolio includes cloud storage, data services, and operational services. Public Cloud includes certain reseller arrangements in which the timing of our consideration follows the end user consumption of the reseller services.

Segment Revenues and Gross Profit

Financial information by segment is as follows (in millions, except percentages):


	Three Months Ended October 24, 2025
	Hybrid Cloud			Public Cloud			Total
Product revenues	$	788		$	—		$	788
Support revenues		647			—			647
Professional and other services revenues		99			—			99
Public cloud revenues		—			171			171
Net revenues		1,534			171			1,705
Cost of product revenues		319			—			319
Cost of support revenues		51			—			51
Cost of professional and other services revenues		69			—			69
Cost of public cloud revenues		—			29			29
Segment cost of revenues		439			29			468
Segment gross profit	$	1,095		$	142		$	1,237
Segment gross margin		71.4	%		83.0	%		72.6	%
Unallocated cost of revenues1								10
Total gross profit							$	1,227
Total gross margin								72.0	%
1 Unallocated cost of revenues are composed of $7 million of stock-based compensation expense and $3 million of amortization of intangible assets.


	Three Months Ended October 25, 2024
	Hybrid Cloud			Public Cloud			Total
Product revenues	$	768		$	—		$	768
Support revenues		635			—			635
Professional and other services revenues		87			—			87
Public cloud revenues		—			168			168
Net revenues		1,490			168			1,658
Cost of product revenues		305			—			305
Cost of support revenues		51			—			51
Cost of professional and other services revenues		64			—			64
Cost of public cloud revenues		—			44			44
Segment cost of revenues		420			44			464
Segment gross profit	$	1,070		$	124		$	1,194
Segment gross margin		71.8	%		73.8	%		72.0	%
Unallocated cost of revenues1								17
Total gross profit							$	1,177
Total gross margin								71.0	%
1 Unallocated cost of revenues are composed of $8 million of stock-based compensation expense and $9 million of amortization of intangible assets.


	Six Months Ended October 24, 2025
	Hybrid Cloud			Public Cloud			Total
Product revenues	$	1,442		$	—		$	1,442
Support revenues		1,294			—			1,294
Professional and other services revenues		196			—			196
Public cloud revenues		—			332			332
Net revenues		2,932			332			3,264
Cost of product revenues		620			—			620
Cost of support revenues		101			—			101
Cost of professional and other services revenues		137			—			137
Cost of public cloud revenues		—			61			61
Segment cost of revenues		858			61			919
Segment gross profit	$	2,074		$	271		$	2,345
Segment gross margin		70.7	%		81.6	%		71.8	%
Unallocated cost of revenues1								20
Total gross profit							$	2,325
Total gross margin								71.2	%
1 Unallocated cost of revenues are composed of $14 million of stock-based compensation expense and $6 million of amortization of intangible assets.


	Six Months Ended October 25, 2024
	Hybrid Cloud			Public Cloud			Total
Product revenues	$	1,437		$	—		$	1,437
Support revenues		1,266			—			1,266
Professional and other services revenues		169			—			169
Public cloud revenues		—			327			327
Net revenues		2,872			327			3,199
Cost of product revenues		573			—			573
Cost of support revenues		101			—			101
Cost of professional and other services revenues		128			—			128
Cost of public cloud revenues		—			90			90
Segment cost of revenues		802			90			892
Segment gross profit	$	2,070		$	237		$	2,307
Segment gross margin		72.1	%		72.5	%		72.1	%
Unallocated cost of revenues1								32
Total gross profit							$	2,275
Total gross margin								71.1	%
1 Unallocated cost of revenues are composed of $15 million of stock-based compensation expense and $17 million of amortization of intangible assets.

Geographical Revenues and Certain Assets

Revenues summarized by geographic region are as follows (in millions):


	Three Months Ended				Six Months Ended
	October 24, 2025		October 25, 2024		October 24, 2025		October 25, 2024
United States, Canada and Latin America (Americas)	$	863	$	862	$	1,654	$	1,625
Europe, Middle East and Africa (EMEA)		572		543		1,075		1,056
Asia Pacific (APAC)		270		253		535		518
Net revenues	$	1,705	$	1,658	$	3,264	$	3,199

Americas revenues consist of sales to Americas commercial and U.S. public sector markets. Sales to customers inside the U.S. were $820 million and $807 million during the three months ended October 24, 2025 and October 25, 2024, respectively, and were $1,566 million and $1,506 million during the six months ended October 24, 2025 and October 25, 2024, respectively.

The majority of our assets, excluding cash, cash equivalents, short-term investments and accounts receivable, were attributable to our domestic operations. The following table presents cash, cash equivalents and short-term investments held in the U.S. and internationally in various foreign subsidiaries (in millions):


	October 24, 2025		April 25, 2025
U.S.	$	716	$	1,320
International		2,298		2,526
Total	$	3,014	$	3,846

With the exception of property and equipment, we do not identify or allocate our long-lived assets by geographic area. The following table presents property and equipment information for geographic areas based on the physical location of the assets (in millions):


	October 24, 2025		April 25, 2025
U.S.	$	346	$	344
International		222		219
Total	$	568	$	563

Significant Customers

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


	Three Months Ended						Six Months Ended
	October 24, 2025			October 25, 2024			October 24, 2025			October 25, 2024
Arrow Electronics, Inc.		21	%		21	%		22	%		22	%
TD Synnex Corporation		22	%		24	%		22	%		23	%

The following customers accounted for 10% or more of accounts receivable:


	October 24, 2025			April 25, 2025
Arrow Electronics, Inc.	*				10	%
TD Synnex Corporation		24	%		27	%
* Customer accounted for less than 10% of accounts receivable.

14. Commitments and Contingencies

Purchase Orders and Other Commitments

In the ordinary course of business, we make commitments to third-party contract manufacturers and component suppliers to manage manufacturer lead times and meet product forecasts, and to other parties, to purchase various key components used in the manufacture of our products. A significant portion of our reported purchase commitments arising from these agreements consist of firm, non-cancelable, and unconditional commitments. As of October 24, 2025, we had $0.7 billion in non-cancelable purchase commitments for inventory. We record a liability for firm, non-cancelable and unconditional purchase commitments for quantities in excess of our future demand forecasts consistent with the valuation of our excess and obsolete inventory. As of October 24, 2025 and April 25, 2025, such liability amounted to $21 million and $22 million, respectively, and is included in accrued expenses in our condensed consolidated balance sheets. To the extent that such forecasts are not achieved, our commitments and associated accruals may change.

In addition to inventory commitments with contract manufacturers and component suppliers, we have open purchase orders and contractual obligations associated with our ordinary course of business for which we have not yet received goods or services. As of October 24, 2025, we had $0.5 billion in other purchase obligations.

Financing Guarantees

While most of our arrangements for sales include short-term payment terms, from time to time we provide long-term financing to creditworthy customers. We have generally sold receivables financed through these arrangements on a non-recourse basis to third party financing institutions within 10 days of the contracts’ dates of execution. We sold $16 million and $26 million of receivables during the six months ended October 24, 2025 and October 25, 2024, respectively.

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

Some of the leasing arrangements described above have been financed on a recourse basis through third-party financing institutions. Under the terms of recourse leases, which are generally three years or less, we remain liable for the aggregate unpaid remaining lease payments to the third-party leasing companies in the event of end-user customer default. These arrangements are generally collateralized by a security interest in the underlying assets. As of October 24, 2025 and April 25, 2025, the aggregate amount by which such contingencies exceeded the associated liabilities was not significant. To date, we have not experienced significant losses under our lease financing programs or other financing arrangements.

We have entered into service contracts with certain of our end-user customers that are supported by third-party financing arrangements. If a service contract is terminated as a result of our non-performance under the contract or our failure to comply with the terms of the financing arrangement, we could, under certain circumstances, be required to acquire certain assets related to the service contract or to pay the aggregate unpaid financing payments under such arrangements. As of October 24, 2025, we have not been required to make any payments under these arrangements, and we believe the likelihood of having to acquire a material amount of assets or make material payments under these arrangements is remote.

Legal Contingencies

When a loss is considered probable and reasonably estimable, we record a liability in the amount of our best estimate for the ultimate loss. However, the likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a

meaningful estimate of the loss or a range of loss may not be practicable based on the information available and the potential effect of future events and decisions by third parties that will determine the ultimate resolution of the contingency.

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 litigation brought by non-practicing entities and other third parties. We believe we have strong arguments that our products do not infringe and/or the asserted patents are invalid, and we intend to vigorously defend against the plaintiffs’ claims. However, there is no guarantee that we will prevail at trial and if a jury were to find that our products infringe, we could be required to pay significant monetary damages, and may cause product shipment delays or stoppages, require us to redesign our products, or require us to enter into royalty or licensing agreements.

Although management at present believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations, cash flows, or overall trends, legal proceedings are subject to inherent uncertainties, and unfavorable rulings or other events could occur. 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. An unfavorable outcome may result in a material adverse impact on our business, results of operations, financial position, cash flows and overall trends. No material accrual has been recorded as of October 24, 2025 related to such matters.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This section and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, that involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements also can be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the actual results of NetApp, Inc. ("NetApp," “we,” “us,” "our," or the “Company”) may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those described in our Annual Report on Form 10-K for the year ended April 25, 2025 ("2025 Annual Report on Form 10-K"), including under the heading “Risk Factors” and discussed in this Form 10-Q under the heading “Risk Factors,” which are incorporated herein by reference. The following discussion should be read in conjunction with our consolidated financial statements as of and for the fiscal year ended April 25, 2025, and the notes thereto, contained in our 2025 Annual Report on Form 10-K, and the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Overview

Our Company

NetApp helps customers make their data infrastructure more seamless, more dynamic, and higher performing. We were incorporated in 1992, are headquartered in San Jose, California, and provide a full range of enterprise-class software, systems and services that customers use to transform their data infrastructures across data types, workloads, and environments to realize business possibilities.

We leverage over thirty years of innovation to make data infrastructure intelligent. Our unified data storage solutions deliver flexible, simplified, and silo-free infrastructure. Our active data management capabilities focus on security, compliance, and sustainability, while our adaptive operations enhance performance, efficiency, and productivity. Our extensive portfolio integrates hybrid and multi-cloud environments, addressing key customer priorities such as modernizing legacy systems, enhancing resilience against ransomware, and developing scalable, high-performance data pipelines for artificial intelligence (AI) workloads.

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

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

Hybrid Cloud offers a unified data storage portfolio of storage management and infrastructure solutions that helps customers modernize their data centers. Our Hybrid Cloud portfolio accommodates both structured and unstructured data with unified storage optimized for flash, disk, and cloud storage, capable of handling data-intensive workloads and applications. Hybrid Cloud includes software, hardware, and related support, along with professional and other services.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support. This portfolio includes cloud storage, data services, and operational services. These services are generally available on the leading public clouds, including Amazon AWS, Microsoft Azure, and Google Cloud.

Stock Repurchase and Dividend Activity

During the first six months of fiscal 2026, we repurchased 5.2 million shares of our common stock at an average price of $106.05 per share, for an aggregate purchase price of $550 million. We also declared aggregate cash dividends of $1.04 per share in that period, for which we paid $207 million.

Restructuring Events

In the first six months of fiscal 2026, we approved a restructuring plan to redirect resources to highest return activities and reduce costs. Aggregate charges recorded from restructuring plans during the second quarter and first six months of fiscal 2026 totaled $23 million and $25 million, respectively.

Results of Operations

Our fiscal year is reported as a 52- or 53-week year that ends on the last Friday in April. Fiscal years 2026 and 2025, ending on April 24, 2026 and April 25, 2025, respectively, are each 52-week years, with 13 weeks in each of their quarters. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in April and the associated quarters, months and periods of those fiscal years.

The following table sets forth certain condensed consolidated statements of income data as a percentage of net revenues for the periods indicated:


	Three Months Ended						Six Months Ended
	October 24, 2025			October 25, 2024			October 24, 2025			October 25, 2024
Revenues:
Product		46	%		46	%		44	%		45	%
Services		54			54			56			55
Net revenues		100			100			100			100
Cost of revenues:
Cost of product		19			19			19			18
Cost of services		9			10			10			11
Gross profit		72			71			71			71
Operating expenses:
Sales and marketing		27			29			28			30
Research and development		15			16			15			16
General and administrative		5			5			5			5
Restructuring charges		1			1			1			1
Acquisition-related expense		—			—			—			—
Total operating expenses		49			50			50			52
Income from operations		23			21			22			20
Other income, net		—			1			—			1
Income before income taxes		23			22			21			21
Provision for income taxes		5			4			5			4
Net income		18	%		18	%		16	%		17	%

Percentages may not add due to rounding

Discussion and Analysis of Results of Operations

Net Revenues (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Net revenues	$	1,705	$	1,658		3	%	$	3,264	$	3,199		2	%

The increase in net revenues for the second quarter and first six months of fiscal 2026 compared to the corresponding periods of fiscal 2025 was due to an increase in both product and services revenues. Product revenues as a percentage of net revenues remained relatively flat in the second quarter of fiscal 2026 and decreased one percentage point during the first six months of fiscal 2026, as compared to the corresponding periods of fiscal 2025. Fluctuations in foreign currency exchange rates favorably impacted net revenues percentage growth by approximately one percentage point in the second quarter and first six months of fiscal 2026, compared to the corresponding periods of fiscal 2025.

Product Revenues (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Product revenues	$	788	$	768		3	%	$	1,442	$	1,437		—	%

Hybrid Cloud

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

Total product revenues increased in the second quarter of fiscal 2026 compared to the corresponding period of the prior year primarily due to higher sales of all-flash array systems and the favorable impact from foreign exchange rate fluctuations.

Services Revenues (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Services revenues	$	917	$	890		3	%	$	1,822	$	1,762		3	%
Support		647		635		2	%		1,294		1,266		2	%
Professional and other services		99		87		14	%		196		169		16	%
Public cloud		171		168		2	%		332		327		2	%

Hybrid Cloud

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

Support revenues increased marginally in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year, primarily due to the favorable impact from foreign exchange rate fluctuations.

Professional and other services revenues increased in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year primarily due to an increase in revenues from our Keystone storage-as-a-service offering.

Public Cloud

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

Public Cloud revenues increased marginally in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year, due to higher customer demand, driven by NetApp’s diversified cloud offerings and overall growth in the cloud market, partially offset by the loss of revenue from our Spot by NetApp business which we sold in the fourth quarter of fiscal 2025.

Cost of Revenues

Our cost of revenues consists of:

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

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

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


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Cost of product revenues	$	321	$	307		5	%	$	623	$	576		8	%
Hybrid Cloud		319		305		5	%		620		573		8	%
Unallocated		2		2		—	%		3		3		—	%

Hybrid Cloud

Cost of Hybrid Cloud product revenues represented 40% and 43% of product revenues for the second quarter and first six months of fiscal 2026, respectively, compared to 40% for the corresponding periods of the prior year. Materials costs represented 91% and 90% of cost of Hybrid Cloud product revenues for the second quarter and first six months of fiscal 2026, respectively, compared to 89% for the corresponding periods of the prior year.

Materials costs increased by $18 million and $48 million in the second quarter and first six months of fiscal 2026, respectively, compared to the corresponding periods of the prior year.

Hybrid Cloud product gross margins decreased one percentage point in the second quarter and three percentage points in the first six months of fiscal 2026 compared to the corresponding periods of the prior year primarily due to higher component costs.

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


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Cost of services revenues	$	157	$	174		(10	)%	$	316	$	348		(9	)%
Support		51		51		—	%		101		101		—	%
Professional and other services		69		64		8	%		137		128		7	%
Public cloud		29		44		(34	)%		61		90		(32	)%
Unallocated		8		15		(47	)%		17		29		(41	)%

Hybrid Cloud

Cost of Hybrid Cloud services revenues, which are composed of the costs of support and professional and other services, increased in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year. Cost of Hybrid Cloud services revenues represented 16% of Hybrid Cloud services revenues for both the second quarter and first six months of fiscal 2026 and the corresponding periods of the prior year.

Hybrid Cloud support gross margins were relatively flat in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year. Hybrid Cloud professional and other services gross margins increased by four percentage points in the second quarter of fiscal 2026 and six percentage points in the first six months of 2026 compared to the corresponding periods of the prior year due primarily to the mix of services provided.

Public Cloud

Cost of Public Cloud revenues decreased and gross margins increased by nine percentage points in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year. The decrease in cost of Public Cloud revenues and improved gross margins was due to cost optimization that included a decrease in fixed assets depreciation, and the mix of offerings provided which was impacted by the sale of our Spot by NetApp business in the fourth quarter of fiscal 2025.

Unallocated

Unallocated cost of services revenues decreased in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year, due to lower intangible asset amortization expense from the derecognition of certain intangible assets as a result of the sale of our Spot by NetApp business during the fourth quarter of fiscal 2025.

Operating Expenses

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

Sales and marketing, research and development, and general and administrative expenses for the second quarter and first six months of fiscal 2026 totaled $805 million, or 47% of net revenues, and $1,592 million, or 49% of net revenues, respectively, each reflecting a decrease of two percentage points compared to the corresponding periods of the prior year, primarily due to the increase in net revenues.

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

Total compensation costs included in sales and marketing, research and development and general and administrative expenses in the second quarter and first six months of fiscal 2026 were relatively flat compared to the corresponding periods of the prior year.

Sales and Marketing (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Sales and marketing expenses	$	465	$	485		(4	)%	$	926	$	956		(3	)%

Sales and marketing expenses consist primarily of compensation costs, commissions, outside services, facilities and IT support costs, advertising and marketing promotional expense and travel and entertainment expense.

The decrease in sales and marketing expenses in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year was primarily due to lower compensation costs and lower commissions expenses.

Research and Development (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Research and development expenses	$	251	$	257		(2	)%	$	493	$	509		(3	)%

Research and development expenses consist primarily of compensation costs, facilities and IT support costs, depreciation, equipment and software related costs, prototypes, non-recurring engineering charges and other outside services costs.

Research and development expenses decreased in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year, primarily attributable to lower compensation costs and lower spend on engineering projects.

General and Administrative (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
General and administrative expenses	$	89	$	77		16	%	$	173	$	152		14	%

General and administrative expenses consist primarily of compensation costs, professional and corporate legal fees, outside services and facilities and IT support costs.

General and administrative expenses increased in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year, primarily attributable to higher compensation costs and higher spend on professional services.

Restructuring Charges (in millions, except percentages):


	Three Months Ended							Six Months Ended
	October 24, 2025		October 25, 2024		% Change			October 24, 2025		October 25, 2024		% Change
Restructuring charges	$	23	$	12		92	%	$	25	$	29		(14	)%

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

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


	Three Months Ended									Six Months Ended
	October 24, 2025			October 25, 2024			% Change			October 24, 2025			October 25, 2024			% Change
Interest income	$	27		$	27			—	%	$	63		$	63			—	%
Interest expense		(26	)		(15	)		73	%		(55	)		(31	)		77	%
Other, net		(7	)		3		NM				(19	)		—		NM
Total	$	(6	)	$	15			(140	)%	$	(11	)	$	32			(134	)%

NM – Not Meaningful

Interest expense increased in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year due to a higher average outstanding aggregate principal amount of Senior Notes, with a higher average coupon rate.

The differences in Other, net in the second quarter and first six months of fiscal 2026 compared to the corresponding periods of the prior year are primarily due to fluctuations in foreign exchange gains and losses year-over-year.

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


	Three Months Ended									Six Months Ended
	October 24, 2025			October 25, 2024			% Change			October 24, 2025			October 25, 2024			% Change
Provision for income taxes	$	88		$	61			44	%	$	159		$	112			42	%
Effective tax rate		22.4	%		16.9	%	NM				22.8	%		17.0	%	NM

NM – Not Meaningful

Our effective tax rate reflects the impact of a significant amount of earnings being taxed in foreign jurisdictions at rates below the United States (U.S.) statutory rate which is offset by non-deductible stock-based compensation and state taxes. Our effective tax rate for the three and six months ended October 24, 2025 includes a decrease in discrete tax benefits related to stock-based compensation compared to the corresponding periods of the prior year.

Liquidity, Capital Resources and Cash Requirements


(In millions)	October 24, 2025		April 25, 2025
Cash, cash equivalents and short-term investments	$	3,014	$	3,846
Principal amount of debt	$	2,500	$	3,250

The following is a summary of our cash flow activities:


	Six Months Ended
(In millions)	October 24, 2025			October 25, 2024
Net cash provided by operating activities	$	800		$	446
Net cash provided by investing activities		68			513
Net cash used in financing activities		(1,540	)		(1,390	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		2			9
Net change in cash, cash equivalents and restricted cash	$	(670	)	$	(422	)

Cash Flows

As of October 24, 2025, our cash, cash equivalents and short-term investments were $3.0 billion, which represents a decrease of $832 million during the first six months of fiscal 2026. The decrease was primarily due to a $750 million principal repayment of our 1.875% Senior Notes due June 2025, $550 million used for the repurchase of our common stock, $207 million used for the payment of dividends, and $102 million used for purchases of property and equipment, partially offset by $800 million provided by operating activities. Our working capital was $1.2 billion as of October 24, 2025, relatively flat compared to April 25, 2025.

Cash Flows from Operating Activities

During the first six months of fiscal 2026, cash provided by operating activities reflected net income of $538 million which was increased for non-cash depreciation and amortization expense of $103 million and non-cash stock-based compensation expense of $185 million. During the first six months of fiscal 2025, cash provided by operating activities reflected net income of $547 million which was increased for non-cash depreciation and amortization expense of $126 million and non-cash stock-based compensation expense of $188 million.

Significant changes in assets and liabilities in the first six months of fiscal 2026 included the following:

•

Accounts receivable decreased by $261 million, reflecting lower billings in the first six months of fiscal 2026 compared to the last six months of fiscal 2025.

•

Accrued expenses decreased by $277 million, primarily due to employee compensation payments related to our fiscal 2025 incentive compensation plan accrual.

•

Deferred revenue and financed unearned services revenue decreased by $107 million, reflecting a decrease in deferred revenue for support contracts.

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

Cash Flows from Investing Activities

During the first six months of fiscal 2026, we generated $155 million from maturities and sales of investments, net of purchases, and paid $102 million for capital expenditures, as compared to the same period of fiscal 2025, in which we generated $597 million from maturities and sales of investments, net of purchases, and paid $86 million for capital expenditures.

Cash Flows from Financing Activities

During the first six months of fiscal 2026, we used $750 million for the principal repayment upon maturity of our 1.875% Senior Notes due in June 2025, $550 million for the repurchase of 5.2 million shares of common stock, and $207 million for the payment of dividends. During the first six months of fiscal 2025, we used $700 million for the repurchase of 5.8 million shares of common stock and $213 million for the payment of dividends.

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

Liquidity

Our principal sources of liquidity as of October 24, 2025 consisted of cash, cash equivalents and short-term investments, cash we expect to generate from operations, and our commercial paper program and related credit facility.

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


	October 24, 2025		April 25, 2025
Cash and cash equivalents	$	2,072	$	2,742
Short-term investments		942		1,104
Total	$	3,014	$	3,846

As of October 24, 2025 and April 25, 2025, $2.3 billion and $2.5 billion, respectively, of cash, cash equivalents and short-term investments were held by various foreign subsidiaries and were generally based in U.S. dollar-denominated holdings, while $716 million and $1.3 billion, respectively, were available in the U.S.

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

The principal objectives of our investment policy are the preservation of principal and maintenance of liquidity. We attempt to mitigate default risk by investing in high-quality investment grade securities, limiting the time to maturity and monitoring the counterparties and underlying obligors closely. We believe our cash equivalents and short-term investments are liquid and accessible. We are not aware of any significant deterioration in the fair value of our cash equivalents or investments from the values reported as of October 24, 2025.

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

Senior Notes

The following table summarizes the principal amount of our Senior Notes as of October 24, 2025 (in millions):


	Amount
2.375% Senior Notes Due June 2027	$	550
2.70% Senior Notes Due June 2030		700
5.50% Senior Notes Due March 2032		625
5.70% Senior Notes Due March 2035		625
Total	$	2,500

Interest on the Senior Notes is payable semi-annually. For further information on the underlying terms, see Note 6 – Financing Arrangements of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1.

On June 23, 2025, upon maturity, we repaid our 1.875% Senior Notes due June 2025 for an aggregate amount of $757 million, comprised of the principal and unpaid interest.

Commercial Paper Program and Credit Facility

We have a commercial paper program (the Program), under which we may issue unsecured commercial paper notes. Amounts available under the Program may be borrowed, repaid and re-borrowed, with the aggregate face or principal amount of the notes outstanding under the Program at any time not to exceed $1.0 billion. The maturities of the notes can vary but may not exceed 397 days from the date of issue. The notes are sold under customary terms in the commercial paper market and may be issued at a discount from par or, alternatively, may be sold at par and bear interest at rates dictated by market conditions at the time of their issuance. The proceeds from the issuance of the notes are used for general corporate purposes. No commercial paper notes were outstanding as of October 24, 2025.

Capital Expenditure Requirements

We expect to fund our capital expenditures, including our commitments related to facilities, equipment, operating leases and internal-use software development projects over the next few years through existing cash, cash equivalents, investments and cash generated from operations. The timing and amount of our capital requirements cannot be precisely determined and will depend on a number of factors, including future demand for products, changes in the network storage industry, hiring plans and our decisions related to the financing of our facilities and equipment requirements. We anticipate capital expenditures for the remainder of fiscal 2026 to be between $90 million and $140 million.

Transition Tax Payments

The Tax Cuts and Jobs Act of 2017 imposed a mandatory, one-time transition tax on accumulated foreign earnings and profits that had not previously been subject to U.S. income tax. A final transition tax payment of $179 million was paid during the second quarter of fiscal 2026.

Dividends and Stock Repurchase Program

On November 20, 2025, we declared a cash dividend of $0.52 per share of common stock, payable on January 21, 2026, to holders of record as of the close of business on January 2, 2026.

In the first quarter of fiscal 2026, our Board of Directors authorized the repurchase of an additional $1.1 billion of our common stock under our stock repurchase program. Under this program, we may purchase shares of our outstanding common stock through solicited or unsolicited transactions in the open market, in privately negotiated transactions, through accelerated share repurchase programs, pursuant to a Rule 10b5-1 plan or in such other manner as deemed appropriate by our management. The stock repurchase program may be suspended or discontinued at any time. As of October 24, 2025, the remaining authorized amount for stock repurchases under this program was $902 million.

Purchase Commitments

Financing Guarantees

We enter into financing and leasing contracts through the ordinary course of business. These arrangements and related financing guarantees are described in Note 14 – Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1. There has been no material change in our financing guarantees as described in our 2025 Annual Report on Form 10-K.

Legal Contingencies

We are subject to various legal proceedings and claims which arise in the normal course of business. See further details on such matters in Note 14 – Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates as described in our 2025 Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risk exposures for the six months ended October 24, 2025, as compared to those discussed in our Annual Report on Form 10-K for the year ended April 25, 2025.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The phrase “disclosure controls and procedures” refers to controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission (SEC). Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted 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 October 24, 2025, the end of the fiscal period covered by this Quarterly Report on Form 10-Q (the Evaluation Date). Based on this evaluation, our CEO and CFO concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information required to be disclosed in our SEC reports (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with our evaluation that occurred during the second quarter of fiscal 2026 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

For a discussion of legal proceedings, see Note 14 – Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1.

Item 1A. Risk Factors.

Our future business, operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended April 25, 2025, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock. There have been no material changes to the Company’s risk factors since our Annual Report on Form 10-K for the year ended April 25, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of equity securities

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended October 24, 2025:


					Total Number of Shares		Approximate Dollar Value
	Total Number		Average		Purchased as Part of		of Shares That May Yet
	of Shares		Price Paid		Publicly Announced		Be Purchased Under The
Period	Purchased		per Share		Program		Repurchase Program
	(Shares in thousands)				(Shares in thousands)		(Dollars in millions)
July 26, 2025 - August 22, 2025		735	$	106.13		385,558	$	1,074
August 23, 2025 - September 19, 2025		625	$	118.18		386,183	$	1,000
September 20, 2025 - October 24, 2025		819	$	119.86		387,002	$	902
Total		2,179	$	114.75

In May 2003, our Board of Directors approved a stock repurchase program. Under this program, we may purchase shares of our outstanding common stock through solicited or unsolicited transactions in the open market, in privately negotiated transactions, through accelerated share repurchase programs, pursuant to a Rule 10b5-1 plan or in such other manner as deemed appropriate by our management. The stock repurchase program may be suspended or discontinued at any time.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Insider Adoption or Termination of Trading Arrangements

No directors or executive officers of the Company adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K), during the quarterly period covered by this report.

Item 6. Exhibits.

The following documents are filed as exhibits to this report.


		Incorporation by Reference
Exhibit No	Description	Form	File No.	Exhibit	Filing Date

10.1*	The Company's Amended and Restated Executive Compensation Plan, as amended, effective August 26, 2025	10-Q	000-27130	10.4	August 27, 2025



10.2*	NetApp, Inc. Employee Stock Purchase Plan, as amended effective September 11, 2025.	8-K	000-27130	10.1	September 15, 2025

10.3*	NetApp, Inc. 2021 Equity Incentive Plan, as amended effective September 11, 2025.	8-K	000-27130	10.2	September 15, 2025

10.4*	NetApp, Inc. 2021 Outside Director Compensation Policy, as amended effective September 10, 2025.	8-K	000-27130	10.3	September 15, 2025

31.1	Certification of the Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.	—	—	—	—

31.2	Certification of the Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.	—	—	—	—

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.	—	—	—	—

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.	—	—	—	—

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	—	—	—	—

101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents	—	—	—	—

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	—	—	—	—

*Identifies management plan or compensatory plan or arrangement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

     NETAPP, INC.

    

     (Registrant)

    

     /s/ WISSAM JABRE

    

     Wissam Jabre

    

     Executive Vice President and Chief Financial Officer

    

Date: November 25, 2025

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302(a)

OF THE SARBANES-OXLEY ACT OF 2002

I, George Kurian, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of NetApp, Inc.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

      
/s/ GEORGE KURIAN

     George Kurian

    

     Chief Executive Officer and Director

    

     (Principal Executive Officer and Principal Operating Officer)

    

Date: November 25, 2025

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302(a)

OF THE SARBANES-OXLEY ACT OF 2002

I, Wissam Jabre, certify that:

1) I have reviewed this Quarterly Report on Form 10-Q of NetApp, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

     /s/ WISSAM JABRE

    

     Wissam Jabre

    

     Executive Vice President and Chief Financial Officer

    

     (Principal Financial Officer)

    

Date: November 25, 2025

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, George Kurian, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of NetApp, Inc., on Form 10-Q for the quarterly period ended October 24, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of NetApp, Inc.

     /s/ GEORGE KURIAN

    

     George Kurian

    

     Chief Executive Officer and Director

    

     (Principal Executive Officer and Principal Operating Officer)

    

Date: November 25, 2025

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Wissam Jabre, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of NetApp, Inc., on Form 10-Q for the quarterly period ended October 24, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of NetApp, Inc.

     /s/ WISSAM JABRE

    

     Wissam Jabre

    

     Executive Vice President and Chief Financial Officer

    

     (Principal Financial Officer)

    

Date: November 25, 2025