NetApp (NTAP) Risk Factor Changes

Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, including in connection with our ERP system, could result in significant deficiencies o…

Many countries around the world are beginning to implement legislation and other guidance to align their international tax rules with the Organization for Economic Co-operation and Development’s Base Erosion and Profi…

Our effective tax rate is influenced by a variety of factors, many of which are outside of our control, including fluctuations in our earnings and financial results in the various countries and states in which we do b…

We depend on the ability of our personnel, inventory, equipment and products to move reasonably unimpeded around the world.

As of April 24, 2026, we had $2.5 billion aggregate principal amount of outstanding indebtedness for our senior notes that mature at specific dates in calendar years 2027, 2030, 2032 and 2035.

Our quarterly operating results may fluctuate and differ materially from our forecasts, which could harm our stock price.

Furthermore, speculation in the press or investment community about our strategic position, financial condition, results of operations or business can cause changes in our stock price.

Our stock price is subject to changes in recommendations or earnings estimates by financial analysts, changes in investors' or analysts' valuation measures for our stock, changes in our capital structure, including is…

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

Patent litigation is particularly common in our industry, and we expect infringement claims to continue to increase as the number of products and competitors in our industry segment grows and the functionality of prod…

Our success depends significantly upon developing, maintaining and protecting our proprietary technology.

The laws and regulations governing the manufacturing, sourcing, distribution and use of our products have become increasingly complex and stringent and costly to comply with.

Our products and services are complex.

Our business could face stricter obligations, greater fines, and private causes of action under new privacy, data protection, and information security laws and regulations, including the GDPR, which provides for penal…

As a technology provider, our customers expect us to demonstrate compliance with privacy, data protection, and information security laws and regulations.

with our data management practices or product features.

Our business is increasingly subject to regulation by various federal, state and international governmental agencies responsible for enacting and enforcing laws and regulations relating to privacy, data protection, an…

Additionally, our operations and select cloud services rely on third-party cloud providers, and interruptions due to technical failures such as hardware or software issues or connectivity problems, security incidents,…

A failure to meet our customers’ and partners’ expectations regarding security and confidentiality, due to disruptions in services provided by third-party vendors or the loss or alteration of data stored by such vendo…

Our customers and their customers use our solutions to transmit and store sensitive data.

There are numerous and evolving cybersecurity and privacy risks, including criminal hacking (eCrime), state-sponsored intrusions, industrial espionage, hacktivism, insider threats, inadvertent disclosure, ransomware a…

These risks have subjected us, and could in the future subject us, to supply constraints, price increases, and minimum purchase requirements, which could harm our business, operating results, financial condition, and…

We rely on third parties to manufacture the components used in our products and handle associated logistics.

Selling our products to the U.S.

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

We have publicly announced, and may continue to establish and announce, initiatives regarding sustainability and corporate responsibility matters, as well as other related matters in our Impact Report, on our website…

We continuously strive to make our cost structure and business processes more efficient, which includes relocating our business activities from higher-cost to lower-cost locations, outsourcing certain business process…

As part of our strategy, we may seek to acquire other businesses and technologies to complement our current products and services, expand our market reach, or enhance our technical capabilities.

Competition for qualified employees, particularly in the technology industry, is intense.

Our success depends on our ability to hire and retain qualified personnel to advance our corporate strategy and maintain key aspects of our corporate culture.

Competitors may develop new technologies, products, or services ahead of us or establish new business models, more flexible purchase models, or disruptive technologies.

Our markets are highly competitive, fragmented, and characterized by rapidly changing technology.

We may be unsuccessful in identifying or resolving ethical and legal issues presented by the use of AI before they arise.

We are increasingly building and/or deploying AI technology in certain products, services, and business operations, and our research and development in this area is ongoing.

We have experienced, and may continue to experience, negative impacts on our gross margins due to rising component costs, logistics costs, tariffs and other trade barriers, and inflationary pressures.

Additionally, our gross margins are affected by our sales and distribution activities, including pricing actions, rebates, sales initiatives, discount levels, and the timing of service contract renewals.

Our gross margins are influenced by a variety of factors, including macroeconomic volatility, competitive pricing, customer price sensitivity, component and product design costs, inflation, foreign exchange currency f…

Our relationships with our indirect channel partners and strategic business partners are crucial to our success.

We participate in dynamic markets and employ diverse business and sales models, which complicate revenue forecasting.

Moreover, in many foreign countries, particularly in those with developing economies, it is a common business practice to engage in activities that are prohibited by NetApp's internal policies and procedures, or laws…

Additionally, ongoing trade tensions between the U.S.

Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we source and/or manufacture products, including the i…

A significant portion of our operations are located and revenues are derived from outside of the U.S., and most of our products are sourced and manufactured outside of the U.S.

The growth in our industry and the markets we compete in is driven by the increasing demand for data, which in turn drives the need for storage and data management solutions.

Any of these factors above, as well as other adverse macroeconomic conditions, can significantly reduce demand for our products and negatively affect our operating results.

As a global company, our business is influenced by worldwide economic and market conditions, including, among others, rising inflation, slower growth, economic downturns or recessions, changes in fiscal and monetary p…

Global economic and geopolitical conditions may adversely affect our industry, business operations, and financial performance, including our revenue growth, profitability, financial condition and cash flows.

Our effective tax rate could also be adversely affected by changes in tax laws and regulations and interpretations of such laws and regulations, which in turn would negatively impact our earnings and cash and cash equ…

We receive significant tax benefits from sales to our non-U.S.

the tax laws in such jurisdictions and the outcome of income tax audits.

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

We expect that companies in the enterprise storage and data management, and cloud storage, operational and workload services markets will increasingly be subject to infringement claims as the number of products and co…

Due to the global nature of our business, we are subject to import and export restrictions and regulations, including the Export Administration Regulations administered by the Commerce Department’s Bureau of Industry…

the United Kingdom, and Australia, have adopted regulations to address the risk of human trafficking in supply chains, which govern how workers are recruited and managed.

As NetApp provides technology services to EU financial institutions, the Digital Operational Resilience Act (DORA) imposes financial and legal risks.

Our business is increasingly subject to regulation by various federal, state and international governmental agencies responsible for enacting and enforcing laws and regulations relating to privacy, data protection, an…

Security industry experts and U.S.

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

These outcomes could damage our reputation, harm our business, and lead to significant liabilities.

Our exposure to credit risks from our customers increases during economic uncertainty or volatility.

Most of our sales to customers are on an open credit basis, with typical payment terms of 30 days.

We derive a significant amount of our revenues in any given quarter from orders booked in the same quarter.

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

industry.

The U.S.

Additionally, if our customers or partners experience liquidity issues due to financial institution defaults or non-performance where they hold cash assets, their ability to pay us may be impaired.

vendor payments, pay employees, fulfill contractual obligations, report financial results, maintain effective internal controls, or operate our business effectively.

Furthermore, the structure of our sales, cash, and equity incentive compensation plans may increase the risk of losing employees at certain times, such as after the payment of periodic bonuses or the vesting of equity…

Equity grants are a crucial part of our compensation programs, supporting talent attraction and engagement and aligning employee interests with stockholders.

If we fail to maintain strong relationships with our indirect channel partners and strategic partners, including public cloud providers, if our partners seek to renegotiate or terminate existing contracts or agreement…

Our relationships with our indirect channel partners and strategic business partners are crucial to our success.

policies, treaties or laws, local labor conditions, transportation costs, government spending patterns, geopolitical tensions and uncertainties, acts of terrorism, international conflicts, natural disasters, and adver…

We receive significant tax benefits from sales to our non-U.S.

contribute to a general decrease in economic activity or corporate spending on IT, or directly impact our marketing, manufacturing, financial and logistics functions, or impair our ability to meet our customer demands…

ratings, our ability to pay dividends and to continue to execute our stock repurchase program as planned and market trends and economic volatility unrelated to our performance.

same extent as the U.S.

Due to the global nature of our business, we are subject to customs and export restrictions and regulations, including the Export Administration Regulations administered by the Commerce Department’s Bureau of Industry…

maintenance could impair the performance of our products and services, which could lead to a perception of a quality or reliability issue.

As we provide technology services to EU financial institutions, the Digital Operational Resilience Act (DORA) imposes financial and legal risks.

The interpretation and application of many privacy, data protection, and information security laws and regulations, along with industry standards, are uncertain.

Many jurisdictions require companies to notify regulators or individuals of data security incidents involving certain types of personal data.

cybersecurity threats and also may suffer cybersecurity incidents or other security breaches.

Cyber-attacks and security breaches continue to increase, and of particular concern are supply-chain attacks against software development and breaches of technology service providers.

Most of our sales to customers are on an open credit basis, with typical payment terms of 30 days.

In response to evolving and increasing security threats, the U.S.

Additionally, we have faced, and may in the future face, a prolonged U.S.

The U.S.

A competitive broad-based equity compensation program is essential to compete for talent in both the hardware and software industries, where competitors offer significant equity compensation.

Customer demand continues to be influenced by cloud adoption, digital transformation initiatives, cybersecurity requirements, and increasing use of artificial intelligence and data-driven applications, driving signifi…

that may increase our risk exposure.

AI technologies increasingly require seamless data management across hybrid and multi-cloud environments.

The rapid emergence of generative artificial intelligence (GenAI), including agentic AI, is reshaping demand patterns for storage and data management infrastructure in ways that are still evolving.