AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Installed-base support and integrated software provide a credible switching-cost mechanism supported by growing support demand. Actual replacement costs and superiority over alternatives are undisclosed.
durability · 2/4 · Three years of support revenue and obligations extending beyond twelve months support continuity. Repeated issuer-reported industry recognition adds context but cannot establish durable customer captivity.
customer dependency · 2/4 · Support includes software upgrades, bug fixes and patches, indicating ongoing reliance after installation. Higher aggregate installed-base support value supports dependency indirectly; no migration or renewal measurements are supplied.
erosion resilience · 2/4 · Support growth and realized cost offset through selling prices show resilience. Earlier inflation-related margin damage, cancellable orders and missed strategic incentive thresholds limit confidence.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Implemented increases are corroborated by higher realized selling prices offsetting component costs in quarterly product margins. This demonstrates cost pass-through over the observed period, rather than sustained premium pricing or tested demand elasticity.
retention · 2/4 · Support revenue rose across the disclosed years and installed-base aggregate contract value increased. These are indirect indicators of repeat demand; expansion, currency and customer additions prevent interpreting them as a measured renewal rate.
margin resilience · 2/4 · Latest product gross margins remained relatively flat as higher prices offset component inflation, following disclosed earlier margin pressure. Evidence supports mixed resilience rather than immunity to input costs.
contractual freedom · 2/4 · Actual pricing changes demonstrate practical ability to reset offered prices. Customers generally can cancel orders before shipment and require adjustment time, constraining leverage. Existing-contract repricing rights are undisclosed.
Predictability91
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 2.86
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 5.06
Financial strength86
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 95.28
- netDebtEbitGrade
- 95.02
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 54.92
- Debt / FCF (x)
- 1.33
- Net debt / operating income (x)
- 0.25
- Interest coverage (x)
- 15.36
- Current ratio (x)
- 1.44
Capital allocation95
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 90.17
- 3-year average dilution (%)
- -2.84
- 3-year average SBC / revenue (%)
- 5.70
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2026 operating cash flow of $2.07 billion accompanied repurchases, dividends and debt repayment. Latest quarterly operating cash flow fell while capital spending, inventories and non-cancelable commitments rose. Cash generation supports distributions, but buyback value creation and returns on increased commitments remain unproven; stock compensation is an additional economic cost.
incentive alignment · 3/4 · Actual fiscal 2026 compensation emphasized performance-based awards, and missed strategic metrics produced zero payouts and an aggregate company payout below target. Clawbacks, capped payouts and hedging restrictions reinforce alignment. Target compensation is not realized value, and ownership guideline accounting includes some unvested RSUs.
execution · 2/4 · Revenue, operating income and operating cash flow improved in fiscal 2026, and subsequent realized pricing offset component costs. Execution is assessed from operating results; zero payouts on cloud storage and block storage growth metrics plus renewed restructuring make the overall record mixed.
governance · 3/4 · Nine of ten directors were independent, actual attendance met the disclosed threshold, and compensation governance included independent oversight and clawbacks. Broad preferred-stock authority limits shareholder control. These disclosures support strong governance structures without establishing exceptional oversight outcomes or adoption of proposed amendments.
Evidence
Services Revenues (in millions, except percentages): Year Ended April 24, 2026 April 25, 2025 % Change April 26, 2024 % Change Services revenues $ 3,731 $ 3,532 6 % $ 3,419 3 % Support 2,636 2,512 5 % 2,488 1 % Professional and other services 407 355 15 % 320 11 % Public cloud 688 665 3 % 611 9 % 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.
Results of Operations / Services Revenues and support contract description · Filed 05/06/2026
Support revenues increased in fiscal 2026 compared to fiscal 2025 primarily due to a higher aggregate support contract value for our installed base and the favorable impact from foreign exchange rate fluctuations.
Results of Operations / installed-base support contract value · Filed 05/06/2026
Remaining performance obligations As of July 31, 2026, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied was $5.6 billion.
Revenue disclosures / remaining performance obligations · Filed 02/09/2026
We expect to recognize as revenue 44% of our remaining performance obligations in the next 12 months and the remainder thereafter.
Revenue disclosures / expected recognition of remaining performance obligations · Filed 02/09/2026
Our flagship ONTAP® data management software, together with a comprehensive portfolio of all-flash, hybrid-flash, and cloud-native offerings, forms the foundation for customers’ digital transformation initiatives.
Business overview / ONTAP and storage portfolio · Filed 02/09/2026
NetApp’s deep integration with all major public cloud providers—Amazon Web Services (AWS), Microsoft Azure, and Google Cloud—enables our customers to run critical workloads anywhere, with consistent performance, security, and governance.
Business overview / public cloud integration · Filed 02/09/2026
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.
Revenue disclosures / order cancellation and backlog limitations · Filed 02/09/2026
For example, we have experienced inflationary pressure and supply chain constraints beginning in the second half of fiscal 2026, resulting in increased costs for memory and other components, which have affected our gross margins.
Risk Factors / realized component inflation and margin impact · Filed 05/06/2026
To address these challenges, we have implemented several strategic actions: • We raised our pricing in the fourth quarter of fiscal 2026 and at the beginning of the second quarter of fiscal 2027, in line with market trends.
Management discussion / implemented pricing increases · Filed 02/09/2026
Company Performance (in millions, except percentages)(1) Payout as a % of Target Weighted Payout % of Target(2) Threshold (25% of Target Payout) Target (100% of Target Payout) Maximum (200% of Target Payout) AOI (50% weighting) 119.2% 59.6% Revenue (30% weighting) 99.7% 29.9% Cloud Storage Revenue (10% weighting) 0.0% 0.0% ASA (Block Storage) Revenue Growth (10% weighting) 0.0% 0.0% Total Weighted Company Payout 89.5% (1) Payout percentages were determined by interpolating for performance between discrete points shown in the table above.
Executive Compensation / fiscal 2026 actual incentive results · Filed 28/07/2026
Hybrid Cloud product gross margins were relatively flat in the first quarter of fiscal 2027 compared to the corresponding period of the prior year primarily reflecting higher selling prices offset by higher component costs.
Results of Operations / selling prices, component costs and product gross margins · Filed 02/09/2026
While we aim to match supplier costs with our pricing to customers, we recognize the need to give customers time to adjust to these changes.
Management discussion / customer adjustment to pricing changes · Filed 02/09/2026
Innovate to Elevate Drive Results Excel as a Team • Remain curious and continuously seek to learn and improve • Challenge the way we do work to be the best in the world • Remove barriers and commit to high standards • Make customer and partner imperatives your own and prioritize high-impact results • Take accountability – Get things done with urgency, follow-through, and resilience • Deliver on commitments and actively contribute to change • Cultivate a collaborative and inclusive problem-solving culture – challenge respectively, execute collectively • Communicate effectively to drive clarity and coach with actionable feedback • Win together by doing the right thing Fiscal 2026(1) Business Highlights $6.93B Net Revenues (+5.4% year-over-year) $1.67B Operating Income (+25.2% year-over-year) $6.35 EPS(2) (+12.0% year-over-year) $2.07B Operating Cash Flow (+37.3% year-over-year) $1.71B AOI(3) (+15.6% year-over-year) $8.13 Non-GAAP EPS(2) (+12.1% year-over-year) (1) Our fiscal year is reported on a 52- or 53- week year that ends on the last Friday in April, and our 2026 fiscal year began on April 26, 2025 and ended on April 24, 2026 ("fiscal 2026").
Fiscal 2026 Business Highlights / revenue, earnings and operating cash flow · Filed 28/07/2026
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) Three Months Ended July 31, 2026 July 25, 2025 Cash flows from operating activities: Net income $ 375 $ 233 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 33 51 Non-cash operating lease cost 11 11 Stock-based compensation 98 83 Deferred income taxes (5 ) 9 Other items, net (15 ) 46 Changes in assets and liabilities: Accounts receivable 317 466 Inventories (176 ) 54 Other operating assets (114 ) 110 Accounts payable 19 (107 ) Accrued expenses (75 ) (240 ) Deferred revenue 32 (48 ) Other operating liabilities 3 5 Net cash provided by operating activities 503 673 Cash flows from investing activities: Purchases of investments (1,603 ) (741 ) Maturities, sales and collections of investments 1,109 598 Purchases of property and equipment (102 ) (53 ) Acquisition of business, net of cash acquired (78 ) — Other investing activities, net — 15 Net cash used in investing activities (674 ) (181 ) Cash flows from financing activities: Proceeds from issuance of common stock under employee stock award plans 57 54 Payments for taxes related to net share settlement of stock awards (74 ) (57 ) Repurchase of common stock (200 ) (300 ) Repayments and extinguishment of debt — (750 ) Dividends paid (102 ) (104 ) Net cash used in financing activities (319 ) (1,157 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (6 ) 7 Net change in cash, cash equivalents and restricted cash (496 ) (658 ) Cash, cash equivalents and restricted cash: Beginning of period 2,075 2,749 End of period $ 1,579 $ 2,091 See accompanying notes to condensed consolidated financial statements.
Condensed Consolidated Statements of Cash Flows / quarterly cash generation, investment, stock compensation and distributions · Filed 02/09/2026
Stock Repurchase Program and Dividend Activity During fiscal 2026, we repurchased 9.0 million shares of our common stock at an average price of $105.89 per share, for an aggregate purchase price of $950 million.
Management discussion / fiscal 2026 share repurchases · Filed 05/06/2026
We also declared aggregate cash dividends of $2.08 per share in fiscal 2026, for which we paid a total of $413 million.
Management discussion / fiscal 2026 dividends · Filed 05/06/2026
Senior Notes Repayment 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.
Management discussion / senior notes repayment · Filed 05/06/2026
As of July 31, 2026, we had $1.9 billion in non-cancelable purchase commitments for inventory.
Commitments and Contingencies / non-cancelable inventory commitments · Filed 02/09/2026
As of April 24, 2026, we had $1.0 billion in non-cancelable purchase commitments for inventory.
Commitments and Contingencies / prior inventory commitments · Filed 05/06/2026
Demonstrating our continued commitment to align compensation with overall Company performance, in fiscal 2026, 95% of our Chief Executive Officer’s target direct compensation was “at-risk” compensation in the form of an annual cash bonus incentive and equity awards, and 65% was in the form of performance-based long-term incentive awards, with payouts tied to Company performance.
Executive Compensation Highlights / fiscal 2026 CEO incentive structure · Filed 28/07/2026
Executive Compensation Policies and Practices NetApp’s Committee is committed to following best practices in compensation-related governance, as highlighted in the following table: What We Do What We Don’t Do ✓ Employ a pay-for-performance philosophy reflected in our program design and target pay levels for NEOs ✓ Cap maximum annual incentive and performance-vested equity award payouts ✓ Maintain robust stock ownership guidelines for officers and directors ✓ Maintain a 100% independent Committee and engage an independent compensation consultant ✓ Maintain comprehensive clawback policies, which covers time-based equity awards in addition to performance-based compensation ✓ Provide only double-trigger change of control vesting ✓ Engage regularly with stockholders û Guarantee bonuses, compensation increases or multi-year equity grants û Provide tax gross-ups û Pay dividends/dividend equivalents on unvested equity awards û Permit hedging or pledging Company stock by employees or directors û Provide excessive perquisites û Provide executive-only pension plans or supplemental executive retirement plans û Encourage unnecessary or excessive risk taking û Reprice or cash out underwater options 43 Components of Compensation The key elements of our fiscal 2026 executive compensation program – Base Salary, Annual ICP and Long-Term (Incentive) Equity Compensation – are described in more detail below.
Executive Compensation Policies and Practices / clawbacks, payout limits and equity restrictions · Filed 28/07/2026
Shares counted toward the guideline include 50% of shares underlying unvested restricted stock units, shares owned outright by the director or executive or their immediate family, shares held in trust for the benefit of the director or executive or their immediate family, and any shares underlying vested restricted stock units that have been deferred under the Company's deferred compensation plans.
Stock Ownership Guidelines / eligible holdings including unvested RSUs · Filed 28/07/2026
With Paul’s appointment, our Board now consists of ten directors, nine of whom are independent.
Board composition / director independence · Filed 28/07/2026
During fiscal 2026, each director attended at least 75% of the aggregate of the total number of meetings of our Board held and the total number of meetings held by all Board committees on which such director served during the period which such director served.
Board Engagement / actual director attendance · Filed 28/07/2026
Preferred Stock Our Board of Directors has the authority to issue up to 5 million shares of preferred stock and to determine the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without any further vote or action by the stockholders.
Stockholders' Equity / board authority over preferred stock · Filed 05/06/2026
Fiscal 2027, ending on April 30, 2027, is a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter.
Results of Operations / additional week in first-quarter fiscal 2027 · Filed 02/09/2026
• We were recognized as a Leader in the 2025 Gartner Magic Quadrant for Primary Storage Platforms, marking the 13th consecutive year of this acknowledgment and highlighting NetApp’s commitment to innovation and its vision for a comprehensive hybrid cloud storage infrastructure.
Industry Recognition / issuer report of repeated Gartner recognition · Filed 28/07/2026
Aggregate restructuring charges recorded during the first quarter of fiscal 2027 totaled $56 million.
Management discussion / actual quarterly restructuring charges · Filed 02/09/2026
