10-Q

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 July 30, 2021

or

☐ TRANSITION QUARTERLY 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.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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 August 25, 2021, there were 223,629,424 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 as of July 30, 2021 and April 30, 2021	3
	Condensed Consolidated Statements of Income for the Three Months Ended July 30, 2021 and July 31, 2020	4
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended July 30, 2021 and July 31, 2020	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended July 30, 2021 and July 31, 2020	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended July 30, 2021 and July 31, 2020	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4	Controls and Procedures	40
PART II — OTHER INFORMATION
Item 1	Legal Proceedings	41
Item 1A	Risk Factors	41
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3	Defaults upon Senior Securities	54
Item 4	Mine Safety Disclosures	54
Item 5	Other Information	54
Item 6	Exhibits	55
SIGNATURE		56

TRADEMARKS

^© 2021 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.

2

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

NETAPP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value)

(Unaudited)

	July 30, 2021			April 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	4,492		$	4,529
Short-term investments		55			67
Accounts receivable		655			945
Inventories		108			114
Other current assets		321			346
Total current assets		5,631			6,001
Property and equipment, net		533			525
Goodwill		2,050			2,039
Other intangible assets, net		97			101
Other non-current assets		845			694
Total assets	$	9,156		$	9,360
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	368		$	420
Accrued expenses		747			970
Short-term deferred revenue and financed unearned services revenue		1,988			2,062
Total current liabilities		3,103			3,452
Long-term debt		2,633			2,632
Other long-term liabilities		784			650
Long-term deferred revenue and financed unearned services revenue		1,916			1,941
Total liabilities		8,436			8,675
Commitments and contingencies (Note 15)
Stockholders' equity:
Common stock and additional paid-in capital, $0.001 par value; 224 and 222 shares issued and outstanding as of July 30, 2021 and April 30, 2021, respectively		550			504
Retained earnings		204			211
Accumulated other comprehensive loss		(34	)		(30	)
Total stockholders' equity		720			685
Total liabilities and stockholders' equity	$	9,156		$	9,360

See accompanying notes to condensed consolidated financial statements.

3

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended
	July 30, 2021			July 31, 2020
Net revenues:
Product	$	730		$	627
Services		728			676
Net revenues		1,458			1,303
Cost of revenues:
Cost of product		329			316
Cost of services		130			115
Total cost of revenues		459			431
Gross profit		999			872
Operating expenses:
Sales and marketing		451			429
Research and development		210			233
General and administrative		66			61
Restructuring charges		22			5
Acquisition-related expense		1			8
Total operating expenses		750			736
Income from operations		249			136
Other expense, net		(12	)		(32	)
Income before income taxes		237			104
Provision for income taxes		35			27
Net income	$	202		$	77
Net income per share:
Basic	$	0.91		$	0.35
Diluted	$	0.88		$	0.35
Shares used in net income per share calculations:
Basic		223			221
Diluted		229			222

See accompanying notes to condensed consolidated financial statements.

4

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended
	July 30, 2021			July 31, 2020
Net income	$	202		$	77
Other comprehensive income (loss):
Foreign currency translation adjustments		(4	)		9
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the period		(1	)		2
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) arising during the period		1			(9	)
Reclassification adjustments for losses included in net income		—			1
Other comprehensive income (loss)		(4	)		3
Comprehensive income	$	198		$	80

See accompanying notes to condensed consolidated financial statements.

5

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Three Months Ended
	July 30, 2021			July 31, 2020
Cash flows from operating activities:
Net income	$	202		$	77
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		46			49
Non-cash operating lease cost		13			13
Stock-based compensation		53			54
Deferred income taxes		(15	)		—
Other items, net		4			25
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable		287			391
Inventories		6			9
Other operating assets		29			7
Accounts payable		(51	)		(29	)
Accrued expenses		(242	)		(186	)
Deferred revenue and financed unearned services revenue		(82	)		(158	)
Long-term taxes payable		(8	)		6
Other operating liabilities		—			(18	)
Net cash provided by operating activities		242			240
Cash flows from investing activities:
Purchases of investments		(5	)		(2	)
Maturities, sales and collections of investments		16			87
Purchases of property and equipment		(51	)		(52	)
Proceeds from sale of properties		—			6
Acquisitions of businesses, net of cash acquired		(14	)		(350	)
Net cash used in investing activities		(54	)		(311	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock    award plans		53			48
Payments for taxes related to net share settlement of stock awards		(57	)		(33	)
Repurchase of common stock		(100	)		—
Repayments of commercial paper notes, original maturities     of three months or less, net		—			(370	)
Issuance of debt, net of issuance costs		—			2,057
Repayments and extinguishment of debt		—			(589	)
Dividends paid		(112	)		(107	)
Other financing activities, net		(2	)		(3	)
Net cash (used in) provided by financing activities		(218	)		1,003
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(5	)		43
Net change in cash, cash equivalents and restricted cash		(35	)		975
Cash, cash equivalents and restricted cash:
Beginning of period		4,535			2,666
End of period	$	4,500		$	3,641

See accompanying notes to condensed consolidated financial statements.

6

NETAPP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended July 30, 2021
										Accumulated
	Common Stock and									Other
	Additional Paid-in Capital						Retained			Comprehensive
	Shares			Amount			Earnings			Loss			Total
Balances, April 30, 2021		222		$	504		$	211		$	(30	)	$	685
Net income		—			—			202			—			202
Other comprehensive loss		—			—			—			(4	)		(4	)
Issuance of common stock under employee     stock award plans, net of taxes		3			(4	)		—			—			(4	)
Repurchase of common stock		(1	)		(3	)		(97	)		—			(100	)
Stock-based compensation		—			53			—			—			53
Cash dividends declared ($0.50 per     common share)		—			—			(112	)		—			(112	)
Balances, July 30, 2021		224		$	550		$	204		$	(34	)	$	720

	Three Months Ended July 31, 2020
									Accumulated
	Common Stock and								Other
	Additional Paid-in Capital					Retained			Comprehensive
	Shares		Amount			Earnings			Loss			Total
Balances, April 24, 2020		219	$	284		$	—		$	(42	)	$	242
Net income		—		—			77			—			77
Other comprehensive income		—		—			—			3			3
Issuance of common stock under employee     stock award plans, net of taxes		3		15			—			—			15
Stock-based compensation		—		54			—			—			54
Cash dividends declared ($0.48 per     common share)		—		(30	)		(77	)		—			(107	)
Balances, July 31, 2020		222	$	323		$	—		$	(39	)	$	284

See accompanying notes to condensed consolidated financial statements.

7

NETAPP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business and Significant Accounting Policies

NetApp, Inc. (we, us, or the Company) is a global cloud-led, data-centric software company that provides organizations the ability to manage and share their data across on-premises, private and public clouds. We provide a full range of enterprise-class software, systems and services solutions that customers use to modernize their infrastructures, build next generation data centers and harness the power of hybrid clouds.

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 year 2022, ending on April 29, 2022, is a 52-week year, with 13 weeks in each of its quarters. Fiscal year 2021, ended on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter.

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 30, 2021 contained in our Annual Report on Form 10-K. The results of operations for the three months ended July 30, 2021 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; product warranties; employee compensation and benefit accruals; stock-based compensation; loss contingencies; investment impairments; income taxes and fair value measurements. Actual results could differ materially from those estimates. Management’s estimates include, as applicable, the anticipated impacts of the COVID-19 pandemic.

Segment Change

Effective July 30, 2021, our Chief Operating Decision Maker, who is our Chief Executive Officer, realigned internal reporting and began using financial information for components of our business, organized based on category of product/solution, to evaluate performance and allocate resources. This resulted in the creation of two operating segments and two reportable segments for financial reporting purposes: Public Cloud and Hybrid Cloud.

Public Cloud

NetApp's Public Cloud segment offers a portfolio of products delivered primarily as-a-service, including related support, and made available on the world’s leading clouds. This portfolio includes storage services, cloud automation and optimization services, and cloud infrastructure monitoring services. Public Cloud includes certain reseller arrangements in which the timing of our consideration follows the end user consumption of the reseller services.

Hybrid Cloud

NetApp’s Hybrid Cloud segment offers a portfolio of storage and data management solutions that help customers build and integrate on-premises and private cloud environments. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

2. Recent Accounting Pronouncements

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

8

3. Business Combinations

Data Mechanics Inc. Acquisition

On June 18, 2021, we acquired all the outstanding shares of privately-held Data Mechanics Inc., a provider of managed platforms for big data processing and cloud analytics headquartered in Paris, France, for approximately $15 million in cash.

The preliminary acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

	Amount
Cash	$	1
Developed technology		5
Goodwill		11
Total assets acquired		17
Liabilities assumed		(2	)
Total purchase price	$	15

The results of operations related to this acquisition have been included in our condensed consolidated statements of income from the acquisition date. Pro forma results of operations have not been presented because the impact from the acquisition would not have been material to our consolidated results of operations for each of the three months ended July 30, 2021 and July 31, 2020.

Cloud Jumper Corporation Acquisition

On April 28, 2020, we acquired all the outstanding shares of privately-held Cloud Jumper Corporation (Cloud Jumper), a provider of virtual desktop infrastructure and remote desktop services solutions based in North Carolina, for $34 million in cash.

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

	Amount
Developed technology	$	16
Customer contracts/relationships		6
Goodwill		12
Other assets		1
Total assets acquired		35
Liabilities assumed		(1	)
Total purchase price	$	34

Spot, Inc. Acquisition

On July 9, 2020, we acquired all the outstanding shares of privately-held Spot, Inc. (Spot), a provider of compute management cost optimization services on the public clouds based in Israel, for $340 million in cash. 

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

	Amount
Cash	$	24
Intangible assets		84
Goodwill		249
Other assets		6
Total assets acquired		363
Liabilities assumed		(23	)
Total purchase price	$	340

The components of the Spot intangible assets acquired were as follows (in millions, except useful life):

	Amount		Estimated useful life (years)
Developed technology	$	53	5
Customer contracts/relationships		28	5
Trade name		3	3
Total intangible assets	$	84

9

The acquired assets and assumed liabilities of Spot and Cloud Jumper were recorded at their estimated fair values. We determined the estimated fair values with the assistance of valuations and appraisals performed by third party specialists and estimates made by management. We expect to realize revenue synergies, leverage and expand the existing Spot and Cloud Jumper sales channels and product development resources, and utilize their existing workforces. We also anticipate opportunities for growth through the ability to leverage additional future products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of their identifiable net assets acquired, and as a result, we have recorded goodwill in connection with both of these acquisitions. The goodwill is not deductible for income tax purposes.

The results of operations related to the acquisition of both Spot and Cloud Jumper have been included in our consolidated statements of income from their respective acquisition dates. Pro forma results of operations have not been presented because the impact from these acquisitions would not have been material to our consolidated results of operations for the fiscal quarter ended July 31, 2020.

4. Goodwill and Purchased Intangible Assets, Net

Goodwill activity is summarized as follows (in millions):

	Amount
Balance as of April 30, 2021	$	2,039
Additions		11
Balance as of July 30, 2021	$	2,050

Beginning with the first quarter of fiscal 2022, the Company has two reportable segments: Public Cloud and Hybrid Cloud. As a result, goodwill was allocated to the segments using a relative fair value approach.

Goodwill by reportable segment as of July 30, 2021 is as follows (in millions):

	Amount
Public Cloud	$	336
Hybrid Cloud		1,714
Total goodwill	$	2,050

As a result of the realignment, the Company performed an interim quantitative goodwill impairment test for its reporting units as of July 30, 2021, which did not result in any goodwill impairment charges. The Company will continue to evaluate the recoverability of goodwill on an annual basis in the fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment.

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

	July 30, 2021							April 30, 2021
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Assets		Amortization			Assets		Assets		Amortization			Assets
Developed technology	$	106	$	(40	)	$	66	$	215	$	(147	)	$	68
Customer contracts/relationships		38		(9	)		29		38		(8	)		30
Other purchased intangibles		3		(1	)		2		3		—			3
Total purchased intangible assets	$	147	$	(50	)	$	97	$	256	$	(155	)	$	101

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

	Three Months Ended				Statements of
	July 30, 2021		July 31, 2020		Income Classification
Developed technology	$	7	$	10	Cost of revenues
Customer contracts/relationships		1		—	Operating expenses
Other purchased intangibles		1		—	Operating expenses
Total	$	9	$	10

10

As of July 30, 2021, future amortization expense related to purchased intangible assets is as follows (in millions):

Fiscal Year	Amount
Remainder of 2022	$	29
2023		30
2024		19
2025		16
2026		3
Total	$	97

5. Supplemental Financial Information

Cash, cash equivalents and restricted cash (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:

	July 30, 2021		April 30, 2021
Cash and cash equivalents	$	4,492	$	4,529
Restricted cash		8		6
Cash, cash equivalents and restricted cash	$	4,500	$	4,535

Inventories (in millions):

	July 30, 2021		April 30, 2021
Purchased components	$	36	$	22
Finished goods		72		92
Inventories	$	108	$	114

Property and equipment, net (in millions):

	July 30, 2021			April 30, 2021
Land	$	46		$	46
Buildings and improvements		350			356
Leasehold improvements		78			83
Computer, production, engineering and other equipment		871			869
Computer software		290			305
Furniture and fixtures		77			93
Construction-in-progress		62			46
		1,774			1,798
Accumulated depreciation and amortization		(1,241	)		(1,273	)
Property and equipment, net	$	533		$	525

Other non-current assets (in millions):

	July 30, 2021		April 30, 2021
Deferred tax assets	$	233	$	219
Operating lease ROU assets		259		114
Other assets		353		361
Other non-current assets	$	845	$	694

11

Other non-current assets as of July 30, 2021 and April 30, 2021 include $72 million and $71 million, respectively, for our 49% non-controlling equity interest in Lenovo NetApp Technology Limited, a China-based entity that we formed with Lenovo (Beijing) Information Technology Ltd. in fiscal 2019.

Accrued expenses (in millions):

	July 30, 2021		April 30, 2021
Accrued compensation and benefits	$	282	$	505
Product warranty liabilities		21		21
Operating lease liabilities		53		49
Other current liabilities		391		395
Accrued expenses	$	747	$	970

Product warranty liabilities:

Equipment and software systems sales include a standard product warranty. Estimated future hardware and software warranty costs are recorded as a cost of product revenues at the time of product shipment, based on historical and projected warranty claim rates, historical and projected cost-per-claim and knowledge of specific product failures that are outside our typical experience.

The following tables summarize the activity related to product warranty liabilities and their balances as reported in our condensed consolidated balance sheets (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	32		$	41
Expense accrued during the period		4			1
Warranty costs incurred		(5	)		(5	)
Balance at end of period	$	31		$	37

	July 30, 2021		April 30, 2021
Accrued expenses	$	21	$	21
Other long-term liabilities		10		11
Total warranty liabilities	$	31	$	32

Warranty expense recognized during the period includes amounts accrued for systems at the time of shipment, adjustments for changes in estimated costs for warranties on systems shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods.

Other long-term liabilities (in millions):

	July 30, 2021		April 30, 2021
Liability for uncertain tax positions	$	120	$	127
Income taxes payable		351		351
Product warranty liabilities		10		11
Operating lease liabilities		211		71
Other liabilities		92		90
Other long-term liabilities	$	784	$	650

Deferred revenue and financed unearned services revenue

The following table summarizes the components of our deferred revenue and financed unearned services balance as reported in our condensed consolidated balance sheets (in millions):

12

	July 30, 2021		April 30, 2021
Deferred product revenue	$	47	$	59
Deferred services revenue		3,792		3,873
Financed unearned services revenue		65		71
Total	$	3,904	$	4,003
Reported as:
Short-term	$	1,988	$	2,062
Long-term		1,916		1,941
Total	$	3,904	$	4,003

Deferred product revenue represents unrecognized revenue related to undelivered product commitments and other product deliveries that have not met all revenue recognition criteria. Deferred services revenue represents customer payments made in advance for services, which include software and hardware support contracts and other services. Financed unearned services revenue represents undelivered services for which cash has been received under certain third-party financing arrangements. See Note 15 – Commitments and Contingencies for additional information related to these arrangements.

The following tables summarize the activity related to deferred revenue and financed unearned services revenue (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	4,003		$	3,698
Additions		638			644
Revenue recognized during the period		(737	)		(722	)
Balance at end of period	$	3,904		$	3,620

During the three months ended July 30, 2021 and July 31, 2020, we recognized $617 million and $661 million, respectively, that was included in the deferred revenue and financed unearned services revenue balance at the beginning of the respective periods.

As of July 30, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied was $3,904 million, which is equivalent to our deferred revenue and unearned services revenue balance. 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 51% of our deferred revenue and financed unearned services revenue balance in the next 12 months, approximately 24% in the next 13 to 24 months, and the remainder thereafter.

Deferred commissions

The following tables summarize the activity related to deferred commissions and their balances as reported in our condensed consolidated balance sheets (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	197		$	156
Additions		26			21
Expense recognized during the period		(34	)		(25	)
Balance at end of period	$	189		$	152

	July 30, 2021		April 30, 2021
Other current assets	$	80	$	86
Other non-current assets		109		111
Total deferred commissions	$	189	$	197

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Other expense, net (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Interest income	$	2		$	3
Interest expense		(18	)		(18	)
Other income (expense), net		4			(17	)
Total other expense, net	$	(12	)	$	(32	)

Statements of cash flows additional information (in millions):

Supplemental cash flow information related to our operating leases is included in Note 8 ─ Leases. Non-cash investing activities and other supplemental cash flow information are presented below:

	Three Months Ended
	July 30, 2021		July 31, 2020
Non-cash Investing Activities:
Capital expenditures incurred but not paid	$	15	$	10
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	17	$	136
Interest paid	$	27	$	16

6. 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 for the periods ended July 30, 2021 and April 30, 2021 (in millions):

	July 30, 2021		April 30, 2021
Corporate bonds	$	46	$	58
U.S. Treasury and government debt securities		7		8
Certificates of deposit		55		61
Mutual funds		42		40
Total debt and equity securities	$	150	$	167

 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.

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The following table presents the contractual maturities of our debt investments as of July 30, 2021 (in millions):

	Amortized Cost		Fair Value
Due in one year or less	$	96	$	97
Due after one year through five years		12		13
	$	108	$	110

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.

Fair Value of Financial Instruments

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

	July 30. 2021
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash	$	4,437		$	4,437	$	—
Corporate bonds		47			—		47
U.S. Treasury and government debt securities		8			4		4
Certificates of deposit		55			—		55
Total cash, cash equivalents and short-term investments	$	4,547		$	4,441	$	106
Other items:
Mutual funds (1)	$	7		$	7	$	—
Mutual funds (2)	$	35		$	35	$	—
Foreign currency exchange contracts assets (1)	$	1		$	—	$	1
Foreign currency exchange contracts liabilities (3)	$	(4	)	$	—	$	(4	)

	April 30, 2021
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash	$	4,468		$	4,468	$	—
Corporate bonds		59			—		59
U.S. Treasury and government debt securities		8			4		4
Certificates of deposit		61			—		61
Total cash, cash equivalents and short-term investments	$	4,596		$	4,472	$	124
Other items:
Mutual funds (1)	$	8		$	8	$	—
Mutual funds (2)	$	32		$	32	$	—
Foreign currency exchange contracts assets (1)	$	9		$	—	$	9
Foreign currency exchange contracts liabilities (3)	$	(1	)	$	—	$	(1	)

⁽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

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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 July 30, 2021 and April 30, 2021, we have not made any adjustments to the prices obtained from our third-party pricing providers.

Fair Value of Debt

As of July 30, 2021 and April 30, 2021, the fair value of our long-term debt was approximately $2,782 million and $2,736 million, respectively. The fair value of our long-term debt was based on observable market prices in a less active market. The fair value of our commercial paper notes approximated their carrying value. All of our debt obligations are categorized as Level 2 instruments.

7. 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	July 30, 2021			April 30, 2021
3.25% Senior Notes Due December 2022	3.43%	$	250		$	250
3.30% Senior Notes Due September 2024	3.42%		400			400
1.875% Senior Notes Due June 2025	2.03%		750			750
2.375% Senior Notes Due June 2027	2.51%		550			550
2.70% Senior Notes Due June 2030	2.81%		700			700
Total principal amount			2,650			2,650
Unamortized discount and issuance costs			(17	)		(18	)
Total long-term debt		$	2,633		$	2,632

Senior Notes

Our $750 million aggregate principal amount of 1.875% Senior Notes due 2025, $550 million aggregate principal amount of 2.375% Senior Notes due 2027 and $700 million aggregate principal amount of 2.70% Senior Notes due 2030, were issued in June 2020. Interest on these Senior Notes is payable semi-annually in June and December.

Our 3.30% Senior Notes, with a principal amount of $400 million, were issued in September 2017 with interest paid semi-annually in March and September. Our 3.25% Senior Notes, with a principal amount of $250 million, were issued in December 2012 with interest paid semi-annually in June and December.

Our Senior Notes, which are unsecured, unsubordinated obligations, rank equally in right of payment with any existing and future senior unsecured indebtedness.

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 July 30, 2021, we were in compliance with all covenants associated with the Senior Notes.

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As of July 30, 2021, our aggregate future principal debt maturities are as follows (in millions):

Fiscal Year	Amount
2022	$	—
2023		250
2024		—
2025		400
2026		750
Thereafter		1,250
Total	$	2,650

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. While no commercial paper notes were outstanding as of July 30, 2021, we had commercial paper notes outstanding with an aggregate principal amount of $150 million, a weighted-average interest rate of 1.29%, and maturities primarily less than three months as of July 31, 2020. During the first three months of fiscal 2021, we received proceeds of $75 million from the issuance, and made repayments of $76 million for the settlement, of commercial paper notes with original maturities greater than three months.

In connection with the Program, we have a senior unsecured credit agreement with a syndicated group of lenders. The credit agreement, which was amended on January 22, 2021, 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 January 22, 2026, with an option for us to extend the maturity date for two additional 1-year periods, subject to certain conditions. The proceeds of the loans may be used by us for general corporate purposes and as liquidity support for our existing commercial paper program. As of July 30, 2021, we were compliant with all associated covenants in the agreement.  No amounts were drawn against this credit facility during any of the periods presented.

8. 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 July 30, 2021, have remaining lease terms of up to 15 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 July 30, 2021, have remaining lease terms of up to 4 years. As of July 30, 2021, our automobile leases have remaining lease terms of up to 5 years. All our leases are classified as operating leases except for certain immaterial equipment finance leases.

In June 2020, we entered into a build-to-suit lease agreement for an office building located in Wichita, Kansas, with future undiscounted payments of approximately $67 million. Because the Company does not control the underlying asset during the construction period, the Company is not considered the owner of the asset under construction for accounting purposes. The lease will commence upon completion of the construction of the office building which is expected to be in the third quarter of fiscal 2022. The initial term of the lease is twenty years with options to renew the lease during the lease term. A ROU asset and related lease liability will be measured and recognized in our financial statements in the period the lease commences.

In April 2021, we entered into a lease for our new corporate headquarters located in San Jose, California, which is comprised of approximately three hundred thousand square feet of office space and requires future minimum undiscounted payments of approximately $180 million over the initial 11-year lease term. The lease agreement also provides us two successive renewal options, each for five years. The lease commenced during the first quarter of fiscal 2022.

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Operating lease cost	$	15	$	14
Variable lease cost		4		3
Total lease cost	$	19	$	17

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):

	Three Months Ended
	July 30, 2021		July 31, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	13	$	14
Right-of-use assets obtained in exchange for new operating lease obligations	$	159	$	10

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

	July 30, 2021			April 30, 2021
Other non-current assets	$	259		$	114
Total operating lease ROU assets	$	259		$	114
Accrued expenses	$	53		$	49
Other long-term liabilities		211			71
Total operating lease liabilities	$	264		$	120
Weighted Average Remaining Lease Term	8.0 years			3.4 years
Weighted Average Discount Rate		2.8	%		2.9	%

Future minimum operating lease payments as of July 30, 2021, which exclude the undiscounted payments for the build-to-suit lease located in Wichita, Kansas, expected to commence in the third quarter of fiscal year 2022, are as follows (in millions):

Fiscal Year	Operating Leases
2022 (remainder)	$	46
2023		46
2024		36
2025		27
2026		24
Thereafter		116
Total lease payments		295
Less: Interest		(31	)
Total	$	264

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9. Stockholders’ Equity

Equity Incentive Awards

As of July 30, 2021, we have certain equity incentive awards (awards) outstanding, which include stock options and restricted stock units (RSUs), including time-based RSUs and performance-based RSUs (PBRSUs). Also outstanding are purchase rights under our Employee Stock Purchase Plan (ESPP).

Stock Options

Less than 1 million options were outstanding as of July 30, 2021 and April 30, 2021. 

Information related to our stock options is summarized below (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Intrinsic value of exercises	$	5	$	—
Fair value of options vested	$	1	$	—

Restricted Stock Units

In the three months ended July 30, 2021, we granted PBRSUs to certain of our executives. Each PBRSUs has performance-based vesting criteria, in addition to the service-based vesting criteria, such that the PBRSUs cliff-vest at the end of an approximate one, two or three year performance period, which began on the date specified in the grant agreements and typically ends on the last day of the first, second or third fiscal year, respectively, following the grant date. The number of shares of common stock that will be issued to settle most of these PBRSUs at the end of the performance and service period will range from 0% to 200% of a target number of shares originally granted. For most of the PBRSUs granted in the three months ended July 30, 2021, the number of shares issued will depend upon our Total Stockholder Return (TSR) as compared to the TSR of a specified group of benchmark peer companies (each expressed as a growth rate percentage) calculated as of the end of the performance period. The fair values of these TSR performance-based awards were fixed at grant date using a Monte Carlo simulation model. The aggregate grant date fair value of all PBRSUs granted in the current year was $41 million, which is being recognized to compensation expense over the remaining performance / service periods.

The following table summarizes information related to our RSUs, including PBRSUs, (in millions, except fair value):

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding as of April 30, 2021		9		$	47.75
Granted		4		$	81.15
Vested		(2	)	$	48.37
Forfeited		(1	)	$	53.83
Outstanding as of July 30, 2021		10		$	59.95

We primarily use the net share settlement approach upon vesting, where a portion of the shares are withheld as settlement of employee withholding taxes, which decreases the shares issued to the employee by a corresponding value. The number and value of the shares netted for employee taxes are summarized in the table below (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Shares withheld for taxes		1		1
Fair value of shares withheld	$	57	$	33

 Employee Stock Purchase Plan

The following table summarizes activity related to the purchase rights issued under the ESPP (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Shares issued under the ESPP		1		1
Proceeds from issuance of shares	$	52	$	48

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Stock-Based Compensation Expense

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Cost of product revenues	$	1	$	1
Cost of services revenues		2		3
Sales and marketing		26		25
Research and development		16		19
General and administrative		8		6
Total stock-based compensation expense	$	53	$	54
Income tax benefit for stock-based compensation expense	$	5	$	4

As of July 30, 2021, total unrecognized compensation expense related to our equity awards was $567 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.7 years.

Stock Repurchase Program

As of July 30, 2021, our Board of Directors has authorized the repurchase of up to $14.1 billion of our common stock. 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.

The following table summarized activity related to the stock repurchase program for the three months ended July 30, 2021 (in millions, except for per share amounts):

Number of shares repurchased		1
Average price per share	$	80.08
Stock repurchases allocated to additional paid-in capital	$	3
Stock repurchases allocated to retained earnings	$	97
Remaining authorization at end of period	$	752

Since the May 13, 2003 inception of our stock repurchase program through July 30, 2021, we repurchased a total of 341 million shares of our common stock at an average price of $39.17 per share, for an aggregate purchase price of $13.4 billion.

Dividends

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Dividends per share declared	$	0.50	$	0.48
Dividend payments allocated to additional paid-in capital	$	—	$	30
Dividend payments allocated to retained earnings	$	112	$	77

On August 23, 2021, we declared a cash dividend of $0.50 per share of common stock, payable on October 27, 2021 to holders of record as of the close of business on October 8, 2021. 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.

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Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) (AOCI) by component, net of tax, are summarized below (in millions):

	Foreign Currency Translation Adjustments			Defined Benefit Obligation Adjustments			Unrealized Gains (Losses) on Available- for-Sale Securities			Unrealized Gains (Losses) on Derivative Instruments		Total
Balance as of April 30, 2021	$	(27	)	$	(4	)	$	1		$	—	$	(30	)
Other comprehensive income (loss), net of tax		(4	)		—			(1	)		1		(4	)
Total other comprehensive income (loss)		(4	)		—			(1	)		1		(4	)
Balance as of July 30, 2021	$	(31	)	$	(4	)	$	—		$	1	$	(34	)

The amounts reclassified out of AOCI are as follows (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020		Statements of Income Classification
Realized losses on cash flow hedges		—		1	Net revenues
Total reclassifications	$	—	$	1

10. 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 July 30, 2021 or April 30, 2021. 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):

	July 30, 2021		July 31, 2020
Cash Flow Hedges
Forward contracts sold	$	10	$	—
Forward contracts purchased	$	144	$	123
Balance Sheet Contracts
Forward contracts sold	$	632	$	339
Forward contracts purchased	$	82	$	94

The gain (loss) of cash flow hedges recognized in net revenues is presented in the condensed consolidated statements of comprehensive income and Note 9 – Stockholders’ Equity.

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Foreign currency exchange contracts	$	9	$	24

11. Restructuring Charges

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

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1%. Charges related to the plan consisted primarily of office relocation costs, lease termination fees, and employee severance related costs. Substantially all workforce related activities under the plan have been completed. 

Management has previously approved several restructuring actions, including the August 2020 Plan and May 2020 Plan, under which we reduced our global workforce by approximately 6%. Charges related to these restructuring plans consisted primarily of employee severance-related costs. Substantially all activities under these plans were completed as of the end of fiscal 2021.

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	1		$	1
Net charges		22			5
Cash payments		(17	)		(5	)
Balance at end of period	$	6		$	1

12. Income Taxes

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Effective tax rates		14.8	%		26.0	%

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. Our effective tax rate for the three months ended July 30, 2021 includes the impact of discrete tax benefits for lapses of statute of limitations as well as benefits related to stock-based compensation. The effective tax rate for the three months ended July 31, 2020 reflects the impact of taxes resulting from the integration of acquired companies and smaller benefits for stock-based compensation as compared to the current year.

As of July 30, 2021, we had $214 million of gross unrecognized tax benefits, of which $120 million has been recorded in other long-term liabilities. Inclusive of penalties, interest and certain income tax benefits, $117 million would affect our provision for income taxes if recognized.

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.

In September 2010, the Danish Tax Authorities issued a decision concluding that distributions declared in 2005 and 2006 by our Danish subsidiary were subject to Danish at-source dividend withholding tax. We do not believe that our Danish subsidiary is liable for such withholding tax and filed an appeal with the Danish Tax Tribunal. In December 2011, the Danish Tax Tribunal issued a ruling in favor of NetApp. The Danish tax examination agency appealed this decision at the Danish High Court (DHC) in March 2012. In February 2016, the DHC requested a preliminary ruling from the Court of Justice of the European Union (CJEU). In March 2018, the Advocate General issued an opinion which was largely in favor of NetApp. The CJEU was not bound by the opinion of the Advocate General and issued its preliminary ruling in February 2019. The CJEU ruling did not preclude the Danish Tax Authorities from imposing withholding tax on distributions based on the benefits of certain European Union directives. On May 3, 2021, the DHC reached a decision resulting in NetApp prevailing on the predominate distribution made in 2005. The smaller distribution made in 2006 was ruled in favor of the Danish Tax Authorities. On May 28, 2021, the Danish Tax Authorities appealed the DHC decision to the Danish Supreme Court. We believe it is more likely than not that our distributions were not subject to withholding tax and we will continue to support our position in the appeals process with the Danish Supreme Court.

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.

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13. 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
	July 30, 2021		July 31, 2020
Numerator:
Net income	$	202	$	77
Denominator:
Shares used in basic computation		223		221
Dilutive impact of employee equity award plans		6		1
Shares used in diluted computation		229		222
Net Income per Share:
Basic	$	0.91	$	0.35
Diluted	$	0.88	$	0.35

No potential shares from outstanding employee awards were excluded from the diluted net income per share calculation for the three months ended July 30, 2021. Six million potential shares from outstanding employee equity awards were excluded from the diluted net income per share calculations for the three months ended July 31, 2020, as their inclusion would have been anti-dilutive.

14. Segment, Geographic, and Significant Customer Information

Our operations are now organized into two segments for financial reporting purposes: Public Cloud and Hybrid 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. 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.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support, and made available on the world’s leading clouds. This portfolio includes storage services, cloud automation and optimization services, and cloud infrastructure monitoring services.

Hybrid Cloud offers a portfolio of storage and data management solutions that help customers build and integrate on-premises and private cloud environments. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

Financial information for the prior period has been updated to conform to the current year presentation of two segments.

Segment Revenues and Gross Profit

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

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	Three Months Ended July 30, 2021
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	730		$	—		$	730
Support revenues		578			—			578
Professional and other services revenues		71			—			71
Public cloud revenues		—			79			79
Net revenues		1,379			79			1,458
Cost of product revenues		326			—			326
Cost of support revenues		48			—			48
Cost of professional and other services revenues		51			—			51
Cost of public cloud revenues		—			23			23
Segment cost of revenues		425			23			448
Segment gross profit	$	954		$	56		$	1,010
Segment gross margin		69.2	%		70.9	%		69.3	%
Unallocated cost of revenues1								11
Total gross profit							$	999
Total gross margin								68.5	%
1 Unallocated cost of revenues are composed of $4 million of stock-based compensation expense and $7 million of amortization of intangible assets.

	Three Months Ended July 31, 2020
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	627		$	—		$	627
Support revenues		577			—			577
Professional and other services revenues		68			—			68
Public cloud revenues		—			31			31
Net revenues		1,272			31			1,303
Cost of product revenues		305			—			305
Cost of support revenues		51			—			51
Cost of professional and other services revenues		48			—			48
Cost of public cloud revenues		—			13			13
Segment cost of revenues		404			13			417
Segment gross profit	$	868		$	18		$	886
Segment gross margin		68.2	%		58.1	%		68.0	%
Unallocated cost of revenues1								14
Total gross profit							$	872
Total gross margin								66.9	%
1 Unallocated cost of revenues are composed of $4 million of stock-based compensation expense and $10 million of amortization of intangible assets.

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

	Three Months Ended
	July 30, 2021		July 31, 2020
United States, Canada and Latin America (Americas)	$	786	$	709
Europe, Middle East and Africa (EMEA)		454		383
Asia Pacific (APAC)		218		211
Net revenues	$	1,458	$	1,303

Americas revenues consist of sales to Americas commercial and U.S. public sector markets. Sales to customers inside the U.S. were $696 million and $637 million during the three months ended July 30, 2021 and July 31, 2020, respectively.

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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):

	July 30, 2021		April 30, 2021
U.S.	$	2,136	$	2,098
International		2,411		2,498
Total	$	4,547	$	4,596

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):

	July 30, 2021		April 30, 2021
U.S.	$	343	$	340
International		190		185
Total	$	533	$	525

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Arrow Electronics, Inc.		24	%		23	%
Tech Data Corporation		20	%		20	%

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

	July 30, 2021			April 30, 2021
Arrow Electronics, Inc.		10	%		10	%
Tech Data Corporation		19	%		21	%

15. Commitments and Contingencies

Purchase Orders and Other Commitments

In the ordinary course of business, we make commitments to third-party contract manufacturers to manage lead times and meet product forecasts, and to other parties to purchase various key components used in the manufacturing of our products. A significant portion of our reported purchase commitments arising from these agreements consists of firm, non-cancelable, and unconditional commitments. As of July 30, 2021, we had $614 million 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 July 30, 2021 and April 30, 2021, such liability amounted to $13 million and $15 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 July 30, 2021, we had $340 million 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, and we classify the proceeds from these sales as cash flows from operating activities in our condensed consolidated statements of cash flows. We account for the sales of these receivables as “true sales” as defined in the accounting standards on transfers of financial assets, as we are considered to have surrendered control of these financing receivables. Provided all other revenue recognition criteria have been met, we recognize product revenues for these arrangements, net of any payment discounts from financing transactions, upon product acceptance. We sold $17 million and $13 million of receivables during the three months ended July 30, 2021 and July 31, 2020, respectively.

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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 and we recognize revenue upon delivery to the end-user customer, if all other revenue recognition criteria have been met.

Some of the leasing arrangements described above have been financed on a recourse basis through third-party financing institutions. 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. Where we provide a guarantee for recourse leases and collectability is probable, we account for these transactions as sales type leases. If collectability is not probable, the cash received is recorded as a deposit liability and revenue is deferred until the arrangement is deemed collectible. For leases that we are not a party to, other than providing recourse, we recognize revenue when control is transferred. As of July 30, 2021 and April 30, 2021, the aggregate amount by which such contingencies exceeded the associated liabilities was not significant. To date, we have not experienced significant losses under our lease financing programs or other financing arrangements.

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 July 30, 2021, 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 payments under these arrangements is remote. The portion of the financial arrangement that represents unearned services revenue is included in deferred revenue and financed unearned services revenue in our condensed consolidated balance sheets.

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.

On August 14, 2019, a purported securities class action lawsuit was filed in the United States District Court for the Northern District of California, naming as defendants NetApp and certain of our executive officers. The complaint alleges that the defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5, by making materially false or misleading statements with respect to our financial guidance for fiscal 2020, as provided on May 22, 2019. Members of the alleged class are purchasers of the Company’s stock between May 22, 2019 and August 1, 2019, the date we provided revised financial guidance for fiscal 2020. The complaint alleges unspecified damages based on the decline in the market price of our shares following the issuance of the revised guidance on August 1, 2019. NetApp’s Motion to Dismiss was granted and on February 26, 2021 and the judge entered judgment in favor of NetApp. On March 26, 2021, Plaintiffs filed a notice of appeal. The parties subsequently engaged in settlement discussions, and on July 30, 2021 entered into a Memorandum of Understanding (“MOU”) providing for the settlement of the class action.  Pursuant to the terms of MOU, NetApp has agreed to pay approximately $2.0 million in connection with the settlement, and this amount was accrued during the three months ended July 30, 2021. The parties further agreed to negotiate in good faith to execute definitive stipulations of settlement and related documents to be filed with the court, which will not contain any admission of liability, wrongdoing or responsibility by any of the parties and will provide that upon final approval of the settlement, the class action will be dismissed with prejudice, with mutual releases by all parties. The settlement is subject to court approval.

We are subject to various other legal proceedings and claims that arise in the normal course of business. We may, from time to time, receive claims that we are infringing third parties’ intellectual property rights, including claims for alleged patent infringement brought by non-practicing entities. We are currently involved in patent litigations brought by non-practicing entities and other third parties. We 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, and overall trends. No material accrual has been recorded as of July 30, 2021 related to such matters.

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

This section and other parts of this Form 10-Q contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, 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. (“we,” “us,” 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 discussed in Part II, Item 1A of 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 30, 2021, and the notes thereto, contained in our 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.

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Overview

Our Company

NetApp is a global cloud-led, data-centric software company that gives organizations the freedom to put data to work in the applications that elevate their business. We help our customers get the most out of their data with industry-leading cloud data services, storage systems, and software. Throughout our history, we have kept our focus on one thing – the data, continuously improving how data are managed, stored, analyzed, protected, and moved. Our strategy has been shaped around helping our customers embrace the full potential of new technologies – from the rise of the internet, to helping large enterprise customers in vertical markets, to bringing new systems to market. Today, we are focused on unlocking the best of cloud.

As our products and solutions portfolios evolve, market dynamics change, and management continues to assess our largest opportunities, we periodically change how we manage our business. As of the end of our first quarter of fiscal 2022, our Chief Operating Decision Maker (CODM), who is our Chief Executive Officer, realigned internal reporting and began using financial information for components of our business, organized based on category of product/solution, to evaluate performance and allocate resources. This resulted in the creation of two reportable segments for financial reporting purposes: Public Cloud and Hybrid Cloud. Our CODM measures the performance of each segment based on segment revenue and segment gross profit. 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.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support, and made available on the world’s leading clouds. This portfolio includes storage services, cloud automation and optimization services, and cloud infrastructure monitoring services.

Hybrid Cloud offers a portfolio of storage and data management solutions that help customers build and integrate on-premises and private cloud environments. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

COVID-19

The novel coronavirus, or COVID-19, pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations. We have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers, and the communities in which we operate. Since March 2020, the vast majority of our employees have been working remotely and we have limited business travel.

During the first three months of fiscal 2022, due to the macroeconomic uncertainty caused by COVID-19, we continue to observe certain customers delaying purchases of our products and services, while other customers accelerate or place new orders to address the demands of remote working and digital business. We also experienced certain logistical challenges in delivering our products and services to customers in certain regions, and minor supply chain constraints. Given uncertainties that exist in the broader technology supply chain, we have begun to invest in inventory and certain longer-term commitments to help mitigate the risk of supply shortages. If supply chain challenges continue it could result in an increase in our cost of revenues.

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

The magnitude and duration of the disruption to our business, and impact to our operational and financial performance, caused by COVID-19 pandemic remain uncertain. Refer to Part II, Item 1A. – Risk Factors for the significant risks we have identified as a result of the COVID-19 pandemic.

Stock Repurchase and Dividend Activity

During the first quarter of fiscal 2022, we repurchased 1.2 million shares of our common stock at an average price of $80.08 per share, for an aggregate of $100 million. We also declared aggregate cash dividends of $0.50 per share in that period, for which we paid $112 million.

Acquisition

On June 18, 2021, we acquired all the outstanding shares of privately-held Data Mechanics Inc., a provider of managed platform-for-big-data processing and cloud analytics headquartered in Paris, France, for $15 million in cash.

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Restructuring Event

During the first quarter of fiscal 2022, we executed a restructuring plan and recognized expenses totaling $22 million, consisting primarily of office relocation costs, lease termination fees, and employee severance-related costs.

Results of Operations

Our fiscal year is reported as a 52- or 53-week year that ends on the last Friday in April. Fiscal year 2022, ending on April 29, 2022, is a 52-week year, with 13 weeks in each of its quarters. Fiscal year 2021, which ended on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter. Unless otherwise stated, references to particular years, quarters, months and periods refer to 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
	July 30, 2021			July 31, 2020
Net revenues:
Product		50	%		48	%
Services		50			52
Net revenues		100			100
Cost of revenues:
Cost of product		23			24
Cost of services		9			9
Gross profit		69			67
Operating expenses:
Sales and marketing		31			33
Research and development		14			18
General and administrative		5			5
Restructuring charges		2			—
Acquisition-related expense		—			1
Total operating expenses		51			56
Income from operations		17			10
Other expense, net		(1	)		(2	)
Income before income taxes		16			8
Provision for income taxes		2			2
Net income		14	%		6	%

Percentages may not add due to rounding

Discussion and Analysis of Results of Operations

Net Revenues (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Net revenues	$	1,458	$	1,303		12	%

The increase in net revenues for the first quarter of fiscal 2022 compared to the corresponding period of fiscal 2021 was primarily due to an increase in product revenues and, to a lesser degree, an increase in services revenues. Product revenues as a percentage of net revenues increased by approximately two percentage points in the first quarter of fiscal 2022, compared to the corresponding period of fiscal 2021. 

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Product Revenues (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Product revenues	$	730	$	627		16	%
Hardware (Non-GAAP)		316		316		—	%
Software (Non-GAAP)		414		311		33	%

Hybrid Cloud

Product revenues are derived through the sale of our Hybrid Cloud solutions and consist of sales of configured all-flash array and hybrid systems, which are bundled hardware and software products, as well as add-on flash, disk and/or hybrid storage and related OS, NetApp HCI, StorageGrid, OEM products and add-on optional software.

In order to provide visibility into the value created by our software innovation and R&D investment, we disclose the software and hardware components of our product revenues. Software product revenue includes the OS software and optional add-on software solutions attached to our systems across our entire product set, while hardware product revenues include the non-software component of our systems across the entire set. Because our revenue recognition policy under GAAP defines a configured storage system, inclusive of the operating system software essential to its functionality, as a single performance obligation, the hardware and software components of our product revenues are considered non-GAAP measures. The hardware and software components of our product revenues are derived from an estimated fair value allocation of the transaction price of our contracts with customers, down to the level of the product hardware and software components. This allocation is primarily based on the contractual prices at which NetApp has historically billed customers for such respective components.

Total product revenues increased in the first quarter of fiscal 2022 compared to the corresponding period of the prior year, primarily driven by an increase in sales of all-flash array systems.

Revenues from the hardware component of product revenues represented 43% of product revenues, in the first quarter of fiscal 2022, compared to 50% of product revenues, in the corresponding period of the prior year. The software component of product revenues represented 57% of product revenues in the first quarter of fiscal 2022, compared to 50% of product revenues in the corresponding period of the prior year. The increase in the software component percentage of product revenues in the first quarter of fiscal 2022 is primarily due to the mix of systems sold, including a higher mix of all-flash array systems, which contain a higher proportion of software components than other Hybrid Cloud products.

Services Revenues (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Services revenues	$	728	$	676		8	%
Support		578		577		—	%
Professional and other services		71		68		4	%
Public cloud		79		31		155	%

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 were flat in the first quarter of fiscal 2022, despite an extra week in the first quarter of fiscal 2021 that contributed approximately $40 million of revenues in that period, primarily due to an increase in our installed base and a higher mix of all-flash systems (which carry a higher support dollar content than our other products) in the current year. Professional and other services revenues were relatively consistent in both periods.

Public Cloud

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

The increase in Public Cloud revenues was attributable to strong customer demand for NetApp’s diversified cloud offerings, coupled with overall growth in the cloud market and our acquisition of Spot, Inc. late in the first quarter of fiscal year 2021.

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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 amortization of intangibles, 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
	July 30, 2021		July 31, 2020		% Change
Cost of product revenues	$	329	$	316		4	%
Hybrid Cloud		326		305		7	%
Unallocated		3		11		(73	)%

Hybrid Cloud

Cost of Hybrid Cloud product revenues represented 45% of product revenues for the first quarter of fiscal 2022, compared to 50% for the first quarter of fiscal 2021. Materials costs represented 91% of cost of Hybrid Cloud product revenues for both the first quarter of fiscal 2022, and the corresponding period of fiscal 2021.

Total materials costs increased by approximately $17 million, or 5% in the first quarter of fiscal 2022, compared to the corresponding period of the prior year, which reflects the increase in product revenues and the mix of systems sold.

Hybrid Cloud product gross margins increased by four percentage points in the first quarter of fiscal 2022 compared to the corresponding period of the prior year primarily due to the mix of systems sold, including a higher mix of all-flash array systems which have higher margins than hybrid systems, and, to a lesser extent, a decrease in the average unit materials costs of our all-flash array products due to a slight decrease in the price of certain product components.

Unallocated

Unallocated cost of product revenues decreased in the first quarter of fiscal 2022 compared to the corresponding period of the prior year due to certain intangible assets becoming fully amortized in the second half of fiscal 2021.

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

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Cost of services revenues	$	130	$	115		13	%
Support		48		51		(6	)%
Professional and other services		51		48		6	%
Public cloud		23		13		77	%
Unallocated		8		3		167	%

Hybrid Cloud

Cost of Hybrid Cloud services revenues, which are composed of the costs of support and professional and other services, was relatively flat in the first quarter of fiscal 2022 compared to the corresponding period of fiscal 2021 and represented 15% of Hybrid Cloud services revenues in both quarters. Both support and professional services gross margins were relatively consistent in each period.

Public Cloud

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Cost of Public Cloud revenues increased in the first quarter of fiscal 2022 compared to the corresponding period of fiscal 2021 reflecting the increase in Public Cloud revenues. Public Cloud gross margin increased to 71% in the first quarter of fiscal 2022, compared to 58% in the first quarter of fiscal 2021, reflecting efficiencies from scaling our Public Cloud segment.

Unallocated

Unallocated cost of services revenues increased in the first quarter of fiscal 2022 compared to the corresponding period of the prior year due to our acquisition of Spot, Inc. in the first quarter of fiscal 2021, which resulted in higher amortization expense for certain intangible assets.

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 first quarter of fiscal 2022 totaled $727 million, or 50% of net revenues, reflecting a decrease of five percentage points as compared to 55% of net revenues for the corresponding period of fiscal 2021.

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 operating expenses decreased by $21 million, or 5%, in the first quarter of fiscal 2022 compared to the corresponding period of the prior year, primarily due to lower salaries and incentive compensation expenses reflecting the impact of the additional week in the first quarter of fiscal 2021.

Sales and Marketing (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Sales and marketing expenses	$	451	$	429		5	%

Sales and marketing expenses consist primarily of compensation costs, commissions, outside services, facilities and information technology (IT) costs, advertising and marketing promotional expense and travel and entertainment expense. Changes in sales and marketing expense consisted of the following (in percentage points of the total change):

	Three Months Ended
	Fiscal 2022 to Fiscal 2021
Compensation costs		1
Commissions		1
Advertising and marketing promotional expense		2
Other		1
Total change		5

The increase in compensation costs for the first quarter of fiscal 2022 compared to the corresponding period of the prior year reflected an increase in average headcount of approximately 5%, with this expansion of our sales and marketing teams supporting our ability to execute on key market opportunities, partially offset by lower incentive compensation expense. Compensation costs for the first three months of fiscal 2021 reflected the impact of one additional week in that quarter.

The increase in commissions expense for the first quarter of fiscal 2022 is primarily due to higher performance against sales goals. Advertising and marketing promotional expense increased in the first quarter of fiscal 2022 compared to the corresponding period of the prior year, primarily due to higher spending levels on certain projects.

Research and Development (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Research and development expenses	$	210	$	233		(10	)%

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Research and development expenses consist primarily of compensation costs, facilities and IT costs, depreciation, equipment and software-related costs, prototypes, non-recurring engineering charges and other outside services costs. Changes in research and development expense consisted of the following (in percentage points of the total change):

	Three Months Ended
	Fiscal 2022 to Fiscal 2021
Compensation costs		(11	)
Development projects and outside services		1
Total change		(10	)

The decrease in compensation costs for the first quarter of fiscal 2022 compared to the corresponding period in the prior year was attributable to a decrease in average headcount of 8%, primarily resulting from the restructuring plans we implemented in fiscal 2020 which were completed during the first half of fiscal 2021, and lower incentive compensation expense. Also contributing to the decrease is the impact of the additional week in the first quarter of fiscal 2021. The increase in development projects and outside services were primarily due to the higher spending on certain engineering projects.

General and Administrative (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
General and administrative expenses	$	66	$	61		8	%

General and administrative expenses consist primarily of compensation costs, professional and corporate legal fees, outside services and facilities and IT support costs. Changes in general and administrative expense consisted of the following (in percentage points of the total change):

	Three Months Ended
	Fiscal 2022 to Fiscal 2021
Compensation costs		(1	)
Professional and legal fees and outside services		9
Total change		8

The decrease in compensation costs in the first quarter of fiscal 2022 compared to the corresponding period of the prior year was primarily attributable to lower incentive compensation expense in the current year and the impact of the additional week in the first quarter of fiscal 2021. The increase in professional and legal fees and outside services expense in the first quarter of fiscal 2022 was primarily due to higher spending on business transformation projects and an increase in legal fees. 

Restructuring Charges (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Restructuring charges	$	22	$	5	NM

NM – Not Meaningful

In the first quarter of fiscal 2022, we executed a restructuring plan primarily to reduce the amount of office space we currently occupy as we allow more employees to continue to work remotely. In connection with the plan, we reduced our global workforce by approximately 1%. Charges related to the plan consisted primarily of office relocation costs, lease termination fees, and employee severance related costs. We may incur additional restructuring charges over the remainder of the fiscal year as we continue to assess our real estate footprint and global resource requirements.

Acquisition-related Expense (in millions, except percentages):

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Acquisition-related expense	$	1	$	8	NM

NM – Not Meaningful

In the first quarter of fiscal 2022, we incurred $1 million of acquisition-related costs, primarily legal and consulting fees.

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Other Expense, Net (in millions, except percentages)

The components of other expense, net were as follows:

	Three Months Ended
	July 30, 2021			July 31, 2020			% Change
Interest income	$	2		$	3			(33	)%
Interest expense		(18	)		(18	)		—	%
Other income (expense), net		4			(17	)		(124	)%
Total	$	(12	)	$	(32	)		(63	)%

Interest income decreased in the first quarter of fiscal 2022 compared to the corresponding period of the prior year due to both a reduction in the size of our investment portfolio and lower yields earned on the investments. Interest expense remained flat in the first quarter of fiscal 2022 compared to the corresponding period of fiscal 2021.

The differences in other income (expense), net for the first three months of fiscal 2021 as compared to the corresponding period of the prior year are partially due to foreign exchange gains and losses year-over-year. In the first three months of fiscal 2021, other income (expense), net includes a $14 million loss recognized from the extinguishment of our Senior Notes due June 2021.

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

	Three Months Ended
	July 30, 2021		July 31, 2020		% Change
Provision for income taxes	$	35	$	27		30	%

Our effective tax rate for the first quarter of fiscal 2022 was 14.8% compared to 26.0% for the first quarter of fiscal 2021. Our effective tax rates reflect the impact of a significant amount of our earnings being taxed in foreign jurisdictions at rates below the U.S. statutory tax rate. Our effective tax rate for the first three months of fiscal 2022 decreased compared to the corresponding period of the prior year due to discrete tax benefits for lapses of statute of limitations as well as increased benefits related to stock-based compensation. Additionally, the corresponding period of the prior year included tax charges for the integration of acquired companies.

As of July 30, 2021, we had $214 million of gross unrecognized tax benefits, of which $120 million has been recorded in other long-term liabilities. Inclusive of penalties, interest and certain income tax benefits, $117 million would affect our provision for income taxes if recognized.

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.

Liquidity, Capital Resources and Cash Requirements

(In millions, except percentages)	July 30, 2021		April 30, 2021
Cash, cash equivalents and short-term investments	$	4,547	$	4,596
Principal amount of debt	$	2,650	$	2,650

The following is a summary of our cash flow activities:

	Three Months Ended
(In millions)	July 30, 2021			July 31, 2020
Net cash provided by operating activities	$	242		$	240
Net cash used in investing activities		(54	)		(311	)
Net cash (used in) provided by financing activities		(218	)		1,003
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(5	)		43
Net change in cash, cash equivalents and restricted cash	$	(35	)	$	975

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Cash Flows

As of July 30, 2021, our cash, cash equivalents and short-term investments were $4.5 billion, which represents a decrease of $49 million for the first quarter of fiscal 2022. During the first quarter of fiscal 2022, we generated $242 million of cash from operating activities, offset by $112 million used for the payment of dividends, $100 million used to repurchase shares of our common stock, $51 million in purchases of property and equipment, and $14 million used for the acquisition of a privately-held company, net of cash acquired. Working capital was $2.5 billion as of July 30, 2021, approximately flat when compared to April 30, 2021.

Cash Flows from Operating Activities

During the first three months of fiscal 2022, we generated cash from operating activities of $242 million, reflecting net income of $202 million, adjusted by non-cash depreciation and amortization of $46 million and non-cash stock-based compensation expense of $53 million, compared to $240 million of cash generated from operating activities during the first three months of fiscal 2021.

Significant changes in assets and liabilities in the first three months of fiscal 2022 included the following:

• Accounts receivable decreased $287 million, reflecting more favorable shipping linearity and typical lower billings for the first quarter of fiscal 2022 compared to the fourth quarter of fiscal 2021.

• Accrued expenses decreased by $242 million, primarily due to employee compensation payouts related to fiscal year 2021 commissions and incentive compensation plans.

We expect that cash provided by operating activities may materially fluctuate in future periods due to various factors, including fluctuations in our operating results, shipment linearity, accounts receivable collections performance, inventory and supply chain management, vendor payment initiatives, tax benefits or charges from stock-based compensation, and the timing and amount of compensation and other payments.

Cash Flows from Investing Activities

During the first three months of fiscal 2022, we generated $11 million from maturities of investments, net of purchases, and paid $51 million for capital expenditures. Additionally, during the first three months of fiscal 2022, we paid $14 million, net of cash acquired for a privately-held company. During the same period of fiscal 2021, we paid $350 million, net of cash acquired for two privately-held companies.

Cash Flows from Financing Activities

During the first three months of fiscal 2022, cash flows used in financing activities totaled $218 million and include $100 million for the repurchase of 1.2 million shares of common stock and $112 million for the payment of dividends. During the first three months of fiscal 2021, cash flows provided by financing activities totaled $1.0 billion and were primarily due to net cash proceeds of $2.0 billion from the issuance of Senior Notes, partially offset by the use of $513 million for the extinguishment of Senior Notes due June 2021 and $370 million for the net repayment of commercial paper notes with original maturities of three months or less.

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 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. However, in the event our liquidity is insufficient, we may be required to curtail spending and implement additional cost saving measures and restructuring actions or enter into new financing arrangements. We cannot be certain that we will continue to generate cash flows at or above current levels or that we will be able to obtain additional financing, if necessary, on satisfactory terms, if at all. For further discussion of factors that could affect our cash flows and liquidity requirements, including the impact of the COVID-19 pandemic, see Part II, Item 1A. Risk Factors.

Liquidity

Our principal sources of liquidity as of July 30, 2021 consisted of cash and cash equivalents, short-term investments, cash we expect to generate from operations, and our commercial paper program and related credit facility.

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

	July 30, 2021		April 30, 2021
Cash and cash equivalents	$	4,492	$	4,529
Short-term investments		55		67
Total	$	4,547	$	4,596

As of July 30, 2021 and April 30, 2021, $2.4 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 $2.1 billion was available in the U.S as of each period-end.

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.

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 counter-parties 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 July 30, 2021.

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 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 July 30, 2021 (in millions):

3.25% Senior Notes Due December 2022	$	250
3.30% Senior Notes Due September 2024		400
1.875% Senior Notes Due June 2025		750
2.375% Senior Notes Due June 2027		550
2.70% Senior Notes Due June 2030		700
Total	$	2,650

Interest on the Senior Notes is payable semi-annually. For further information on the underlying terms, see Note 7 – Financing Arrangements of the Notes to Condensed Consolidated Financial Statements.

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 July 30, 2021.

In connection with the Program, we have a senior unsecured credit agreement with a syndicated group of lenders. The credit agreement, which was amended on January 22, 2021, 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 January 22, 2026, with an option for us to extend the maturity date for two additional 1-year periods, subject to certain conditions. The proceeds of the loans may be used by us for general corporate purposes and as liquidity support for our existing commercial paper program. As of July 30, 2021, we were compliant with all associated covenants in the agreement. No amounts were drawn against this credit facility during any of the periods presented.

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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 2022 to be between $150 million and $200 million.

Dividends and Stock Repurchase Program

On August 23, 2021, we declared a cash dividend of $0.50 per share of common stock, payable on October 27, 2021 to holders of record as of the close of business on October 8, 2021.

As of July 30, 2021, our Board of Directors has authorized the repurchase of up to $14.1 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. Since the May 13, 2003 inception of this program through July 30, 2021, we repurchased a total of 341 million shares of our common stock at an average price of $39.17 per share, for an aggregate purchase price of $13.4 billion. As of July 30, 2021, the remaining authorized amount for stock repurchases under this program was $0.8 billion.

Purchase 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. In addition, 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. These off-balance sheet purchase commitments totaled $954 million at July 30, 2021.

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, and we classify the proceeds from these sales as cash flows from operating activities in our condensed consolidated statements of cash flows. We account for the sales of these receivables as “true sales” as defined in the accounting standards on transfers of financial assets, as we are considered to have surrendered control of these financing receivables. We sold $17 million and $13 million of receivables during the first three months of fiscal 2022 and fiscal 2021, 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 July 30, 2021 and April 30, 2021, the aggregate amount by which such contingencies exceeded the associated liabilities was not significant. To date, we have not experienced significant losses under our lease financing programs or other financing arrangements.

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 payments under such arrangements. As of July 30, 2021, 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 payments under these arrangements is remote. The portion of the financial arrangement that represents unearned services revenue is included in deferred revenue and financed unearned services revenue in our condensed consolidated balance sheets.

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 15 – Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.

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Critical Accounting Policies and Estimates

Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, net revenues and expenses, and the disclosure of contingent assets and liabilities. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We believe that the accounting estimates employed and the resulting balances are reasonable; however, actual results may differ from these estimates and such differences may be material. Management’s estimates include, as applicable, the anticipated impacts of the COVID-19 pandemic.

The summary of our significant accounting policies is included under Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our fiscal 2021 Form 10-K. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. There have been no material changes to the critical accounting policies and estimates as filed in such report.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk related to fluctuations in market prices, interest rates, and foreign currency exchange rates. We use certain derivative financial instruments to manage foreign currency exchange risks. We do not use derivative financial instruments for speculative or trading purposes. All financial instruments are used in accordance with management-approved policies.

Interest Rate Risk

Fixed Income Investments — As of July 30, 2021, we had fixed income debt investments of $55 million. Our investment portfolio primarily consists of investments with original maturities greater than three months at the date of purchase, which are classified as available-for-sale investments. These investments, which consist primarily of corporate bonds, U.S. Treasury and government debt securities and certificates of deposit, are subject to interest rate and interest income risk and will decrease in value if market interest rates increase. Conversely, declines in interest rates, including the impact from lower credit spreads, could have a material adverse impact on interest income for our investment portfolio. A hypothetical 100 basis point increase in market interest rates from levels as of July 30, 2021 would have resulted in a decrease in the fair value of our fixed-income securities of less than $1 million. Volatility in market interest rates over time will cause variability in our interest income. We do not use derivative financial instruments in our investment portfolio.

Debt — As of July 30, 2021, we have outstanding $2.7 billion aggregate principal amount of Senior Notes. We carry these instruments at face value less unamortized discount on our condensed consolidated balance sheets. Since these instruments bear interest at fixed rates, we have no financial statement risk associated with changes in interest rates. However, the fair value of these instruments fluctuates when interest rates change. See Note 7 – Financing Arrangements of the Notes to Condensed Consolidated Financial Statements for more information.

Credit Facility — We are exposed to the impact of changes in interest rates in connection with our $1.0 billion five-year revolving credit facility. Borrowings under the facility accrue interest at rates that vary based on certain market rates and our credit rating on our Senior Notes. Consequently, our interest expense would fluctuate with any changes in these market interest rates or in our credit rating if we were to borrow any amounts under the credit facility. As of July 30, 2021, no amounts were outstanding under the credit facility.

Foreign Currency Exchange Rate Risk

We hedge risks associated with certain foreign currency transactions to minimize the impact of changes in foreign currency exchange rates on earnings. We utilize foreign currency exchange forward contracts to hedge against the short-term impact of foreign currency fluctuations on certain foreign currency denominated monetary assets and liabilities. We also use foreign currency exchange forward contracts to hedge foreign currency exposures related to forecasted sales transactions denominated in certain foreign currencies. These derivatives are designated and qualify as cash flow hedges under accounting guidance for derivatives and hedging.

We do not enter into foreign currency exchange contracts for speculative or trading purposes. In entering into foreign currency exchange forward contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of the contracts. We attempt to limit our exposure to credit risk by executing foreign currency exchange contracts with creditworthy multinational commercial banks. All contracts have a maturity of less than 12 months. See Note 10 – Derivatives and Hedging Activities of the Notes to Condensed Consolidated Financial Statements for more information regarding our derivatives and hedging activities.

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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 July 30, 2021, 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 has been no change 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 first quarter of fiscal 2022 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

For a discussion of legal proceedings, see Note 15 – Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.

Item 1A. Risk Factors.

The following descriptions of risk factors includes any material changes to, and supersedes the description of risk factors associated with, the Company’s business previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended April 30, 2021 (the “2021 Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the heading “Risk Factors.” Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly cause our actual results of operations and financial condition to vary materially from the past, or from anticipated future, results of operations and financial condition. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, results of operations and common stock price.

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding any statement in this Form 10-Q or elsewhere. The following information should be read in conjunction with the condensed consolidated financial statements and the related notes in Part I, Item 1 – Financial Statements and Part I, Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q.

The following discussion reflects our current judgment regarding the most significant risks we face. These risks can and will change in the future.

Risks Related to Our Business and Industry

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

Our future growth depends upon the successful development and introduction of new hardware and software products and services. Due to the complexity of storage software, subsystems and appliances and the difficulty in gauging the engineering effort required to produce new products and services, such products and services are subject to significant technical and quality control risks.

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

New or additional product introductions, including new software and cloud offerings, such as Astra by NetApp, Spot by NetApp and new hardware and all-flash storage products, subject us to additional financial and operational risks, including our ability to forecast customer preferences and/or demand, our ability to successfully manage the transition from older products and solutions, our ability to forecast the impact of customers’ demand for new products, services and solutions or the products being replaced, and our ability to manage production capacity to meet the demand for new products and services. In addition, as new or enhanced products and services are introduced, we must avoid excessive levels of older product inventories and related components and ensure that new products and services can be delivered to meet customers’ demands. Further risks inherent in the introduction of new products, services and solutions include the uncertainty of price-performance relative to products of competitors, competitors’ responses to the introductions, delays in sales caused by the desire of customers to evaluate new products for extended periods of time and our partners’ investment in selling our new products and solutions. If these risks are not managed effectively, we could experience material risks to our business, operating results, financial condition and cash flows.

As we enter new or emerging markets, we will likely increase demands on our service and support operations and may be exposed to additional competition. We may not be able to provide products, services and support to effectively compete for these market opportunities.

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

Our industry and the markets in which we compete have historically experienced significant growth due to the increase in the demand for storage and data management solutions by consumers, enterprises and governments around the world, and the purchases of storage and data management solutions to address this demand. However, despite continued data growth, our traditional market, the networked storage hardware market, experienced a decline in each of the last three calendar years due to a combination of customers

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delaying purchases in the face of technology transitions, increasing adoption of cloud environments built on commodity hardware, increased storage efficiency, and changing economic and business environments. While customers are navigating through their information technology (IT) transformations, which leverage modern architectures and hybrid cloud environments, they are also reducing IT budgets, looking for simpler solutions, and changing how they consume IT. This evolution is diverting spending towards transformational projects and architectures like flash, hybrid cloud, IT as a service, converged infrastructure, and software defined storage. We are unable to predict whether the impact of the COVID-19 pandemic will accelerate the decline of our traditional market and increase demand for our cloud offerings. Our business may be adversely impacted if we are unable to keep pace with rapid industry, technological or market changes or if our Data Fabric strategy is not accepted in the marketplace. As a result of these and other factors discussed in this report, our revenue may decline on a year-over-year basis, as it did in fiscal years 2017 and 2020. The future impact of these trends on both short- and long-term growth patterns is uncertain. If the general historical rate of industry growth declines, if the growth rates of the specific markets in which we compete decline, and/or if the consumption model of storage changes and our new and existing products, services and solutions do not receive customer acceptance, our business, operating results, financial condition and cash flows could suffer.

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

Our business and sales models make revenues difficult to forecast. We sell to a variety of customers directly and through various channels, with a corresponding variety of sales cycles. The majority of our sales are made and/or fulfilled indirectly through channel partners, including value-added resellers, systems integrators, distributors, original equipment manufacturers (OEMs) and strategic business partners, which now include public cloud providers. This structure significantly complicates our ability to forecast future revenue, especially within any particular fiscal quarter or year. Moreover, our relationships with our indirect channel partners and strategic business partners are critical to our success. The loss of one or more of our key indirect channel partners in a given geographic area or the failure of our channel or strategic partners to promote our products could harm our operating results. Qualifying and developing new indirect channel partners typically requires a significant investment of time and resources before acceptable levels of productivity are met. If we fail to maintain our relationships with our indirect channel partners and strategic partners, if their financial condition, business or customer relationships were to weaken, if they fail to comply with legal or regulatory requirements, or if we were to cease to do business with them for these or other reasons, our business, operating results, financial condition and cash flows could be harmed.

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

The storage and data management markets are intensely competitive and are characterized by rapidly changing technology and fragmentation. We compete with many companies in the markets we serve, including established public companies, newer public companies with a strong flash focus, and new market entrants addressing the growing opportunity for application data management for Kubernetes. Some offer a broad spectrum of IT products and services (full-stack vendors) and others offer a more limited set of storage and data management products or services. Technology trends, such as the emergence of hosted or public cloud storage, SaaS and flash storage are driving significant changes in storage architectures and solution requirements. Cloud service provider competitors provide customers storage for their data centers on demand, without requiring a capital expenditure, which meets rapidly evolving business needs and has changed the competitive landscape. The impacts of the COVID-19 pandemic, including the increase in the number of employees working remotely, has accelerated customer adoption of competitors’ cloud solutions and contributed to increased competition in the market.

Competitors may develop new technologies or products in advance of us or establish new business models, more flexible contracting models or new technologies disruptive to us. By extending our flash, cloud storage and converged infrastructure offerings, we are competing in new segments with both traditional competitors and new competitors, particularly smaller emerging storage vendors. The longer-term potential and competitiveness of these emerging vendors remains to be determined. In cloud and converged infrastructure, we also compete with large well-established competitors.

It is possible that new competitors or alliances among competitors might emerge and rapidly acquire significant market share or buying power. An increase in industry consolidation might result in stronger competitors that are better able to compete as full-stack vendors for customers and achieve increased economies of scale in the supply chain. In addition, current and potential competitors have established or might establish cooperative relationships among themselves or with third parties, including some of our partners or suppliers. For additional information regarding our competitors, see the section entitled “Competition” contained in Part I, Item 1 – Business of our fiscal 2021 Form 10-K.

Continuing uncertain economic and political conditions restrict our visibility and may harm our business, operating results, including our revenue growth and profitability, financial condition and cash flows.

Continuing global economic uncertainty, political conditions and fiscal challenges in the U.S. and abroad have, among other things, limited our ability to forecast future demand for our products, contributed to increased periodic volatility in the computer, storage and networking industries at large, as well as the IT market, impacted availability of supplies and could constrain future access to capital for our suppliers, customers and partners. The impacts of these circumstances are global and pervasive, and the timing and nature of

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any ultimate resolution of these matters remain highly uncertain. Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs or other barriers to global trade, changes to fiscal and monetary policy and higher interest rates, could materially adversely impact the demand for our products and our operating results. We are also unable to predict whether increased customer spending on our cloud offerings and virtual desktop infrastructure will continue after the COVID-19 pandemic. Consequently, we expect these concerns to challenge our business for the foreseeable future, which could cause harm to our operating results. Such conditions have resulted, and may in the future again result, in failure to meet our forecasted financial expectations and to achieve historical levels of revenue growth.

Transition to consumption-based business models may adversely affect our revenues and profitability in other areas of our business and as a result may harm our business, operating results, financial condition and cash flows.

We offer customers a full range of consumption models, including the deployment of our software through our subscription and cloud-based Software as a Service (SaaS), and utility pricing and managed services offerings for our hardware and software systems. These business models continue to evolve, and we may not be able to compete effectively, generate significant revenues or maintain the profitability of our consumption-based offerings. Additionally, the increasing prevalence of cloud and SaaS delivery models offered by us and our competitors may unfavorably impact the pricing of our on-premise hardware and software offerings and could have a dampening impact on overall demand for our on-premise hardware and software product and service offerings, which could reduce our revenues and profitability, at least in the near term. If we do not successfully execute our consumption model strategy or anticipate the needs of our customers, our revenues and profitability could decline.

As customer demand for our consumption model offerings increases, we will experience differences in the timing of revenue recognition between our traditional hardware and software license arrangements (for which revenue is generally recognized in full at the time of delivery), relative to our consumption model offerings (for which revenue is generally recognized ratably over the term of the arrangement). We incur certain expenses associated with the infrastructure and marketing of our consumption model offerings in advance of our ability to recognize the revenues associated with these offerings.

Due to the global nature of our business, risks inherent in our international operations could materially harm our business.

A significant portion of our operations are located, and a significant portion of our revenues are derived, outside of the U.S. In addition, most of our products are manufactured outside of the U.S., and we have research and development, sales and service centers overseas. Accordingly, our business and future operating results could be adversely impacted by factors affecting our international operations including, among other things, local political or economic conditions, trade protection and export and import requirements, tariffs, local labor conditions, transportation costs, government spending patterns, acts of terrorism, international conflicts and natural disasters in areas with limited infrastructure and adverse public health developments. In particular, the ongoing COVID-19 pandemic, including the rise of the Delta variant globally, and current trade tensions between the U.S. and China could impact our business and operating results. For products we manufacture in Mexico, tensions between the U.S. and Mexico related to trade and border security issues could delay our shipments to customers, or impact pricing or our business and operating results. In addition, due to the global nature of our business, we are subject to complex legal and regulatory requirements in the U.S. and the foreign jurisdictions in which we operate and sell our products, including antitrust and anti-competition laws, rules and regulations, and regulations related to data privacy, data protection, and cybersecurity. We are also subject to the potential loss of proprietary information due to piracy, misappropriation, or laws that may be less protective of our intellectual property rights than U.S. laws. Such factors could have an adverse impact on our business, operating results, financial condition and cash flows.

We face exposure to adverse movements in foreign currency exchange rates as a result of our international operations. These exposures may change over time as business practices evolve, and they could have a material adverse impact on our operating results, financial condition and cash flows. We utilize forward and option contracts in an attempt to reduce the adverse earnings impact from the effect of exchange rate fluctuations on certain assets and liabilities. Our hedging strategies may not be successful, and currency exchange rate fluctuations could have a material adverse effect on our operating results and cash flows. In addition, our foreign currency exposure on assets, liabilities and cash flows that we do not hedge could have a material impact on our financial results in periods when the U.S. dollar significantly fluctuates in relation to foreign currencies.

Moreover, in many foreign countries, particularly in those with developing economies, it is common to engage in business practices that are prohibited by our internal policies and procedures, or U.S. laws and regulations applicable to us, such as the Foreign Corrupt Practices Act. There can be no assurance that all our employees, contractors and agents, as well as those companies to which we outsource certain of our business operations, will comply with these policies, procedures, laws and/or regulations. Any such violation could subject us to fines and other penalties, which could have a material adverse effect on our business, operating results, financial condition and cash flows.

If we are unable to attract and retain qualified personnel, our business, operating results, financial condition and cash flows could be harmed.

Our continued success depends, in part, on our ability to hire and retain qualified personnel and to advance our corporate strategy and preserve the key aspects of our corporate culture. Because our future success is dependent on our ability to continue to enhance

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and introduce new products, we are particularly dependent on our ability to hire and retain qualified engineers, including in emerging areas of technology such as artificial intelligence and machine learning. In addition, to increase revenues, we will be required to increase the productivity of our sales force and support infrastructure to achieve adequate customer coverage. Competition for qualified employees, particularly in Silicon Valley, is intense. We have periodically reduced our workforce, including reductions announced in each of the fiscal years from 2019 through 2022, and these actions may make it more difficult to attract and retain qualified employees. Our inability to hire and retain qualified management and skilled personnel, particularly engineers, salespeople and key executive management, could disrupt our development efforts, sales results, business relationships and/or our ability to execute our business plan and strategy on a timely basis and could materially and adversely affect our operating results, financial condition and cash flows.

Equity grants are a critical component of our current compensation programs. If we reduce, modify or eliminate our equity programs or fail to grant equity competitively, we may have difficulty attracting and retaining critical employees.

In addition, because of the structure of our sales, cash and equity incentive compensation plans, we may be at increased risk of losing employees at certain times. For example, the retention value of our compensation plans decreases after the payment of periodic bonuses or the vesting of equity awards.

Our acquisitions may not achieve expected benefits, and may increase our liabilities, disrupt our existing business and harm our operating results, financial condition and cash flows.

   As part of our strategy, we seek to acquire other businesses and technologies to complement our current products, expand the breadth of our markets, or enhance our technical capabilities. For example, we acquired five privately held companies from fiscal 2020 through the first quarter of fiscal 2022. The benefits we have received, and expect to receive, from these and other acquisitions depend on our ability to successfully conduct due diligence, negotiate the terms of the acquisition and integrate the acquired business into our systems, procedures and organizational structure. Any inaccuracy in our acquisition assumptions or any failure to uncover liabilities or risks associated with the acquisition, such as differing or inadequate cybersecurity and data privacy protection controls, make the acquisition on favorable terms, integrate the acquired business or assets as and when expected or retain key employees of the acquired company may reduce or eliminate the expected benefits of the acquisition to us, increase our costs, disrupt our operations, result in additional liabilities, investigations and litigation, and may also harm our strategy, our business and our operating results. The failure to achieve expected acquisition benefits may also result in impairment charges for goodwill and purchased intangible assets.

We often incur expenses before we receive related benefits, and expenses may be difficult to reduce quickly if demand declines.

We base our expense levels in part on future revenue expectations and a significant percentage of our expenses are fixed. It is difficult to reduce our fixed costs quickly, and if revenue levels are below our expectations, operating results could be adversely impacted. During periods of uneven growth or decline, we may incur costs before we realize the anticipated related benefits, which could also harm our operating results. We have made, and will continue to make, significant investments in engineering, sales, service and support, marketing and other functions to support and grow our business. We are likely to recognize the costs associated with these investments earlier than some of the related anticipated benefits, such as revenue growth, and the return on these investments may be lower, or may develop more slowly, than we expect, which could harm our business, operating results, financial condition and cash flows.

Initiatives intended to make our cost structure, business processes and systems more efficient may not achieve the expected benefits and could inadvertently have an adverse effect on our business, operating results, financial condition and cash flows.

We continuously seek to make our cost structure and business processes more efficient, including by moving our business activities from higher-cost to lower-cost locations, outsourcing certain business processes and functions, and implementing changes to our business information systems. These efforts involve a significant investment of financial and human resources and significant changes to our current operating processes. In addition, as we move operations into lower-cost jurisdictions and outsource certain business processes, we become subject to new regulatory regimes and lose control of certain aspects of our operations and, as a consequence, become more dependent upon the systems and business processes of third-parties. If we are unable to move our operations, outsource business processes and implement new business information systems in a manner that complies with local law and maintains adequate standards, controls and procedures, the quality of our products and services may suffer and we may be subject to increased litigation risk, either of which could have an adverse effect on our business, operating results and financial condition. Additionally, we may not achieve the expected benefits of these and other transformational initiatives, which could harm our business, operating results, financial condition and cash flows.

We are exposed to credit risks and our investment portfolio may experience fluctuations in market value or returns.

We maintain an investment portfolio of various holdings, types, and maturities. Credit ratings and pricing of our investments can be negatively affected by liquidity, credit deterioration, financial results, economic risk, political risk, sovereign risk or other factors. As a result, the value and liquidity of our investments and the returns thereon may fluctuate substantially. A resurgence of COVID-19 or

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other circumstances could result in an economic slowdown and possibly cause a global recession. An economic slowdown or increased regional or global economic uncertainty may lead to failures of counterparties, including financial institutions, governments and insurers, which could result in a material decline in the value of our investment portfolio and substantially reduce our investment returns.

We have implemented a new segment reporting structure, which has been in effect for a limited period of time. There are no assurances that we will be able to successfully implement this change.

Effective at the end of the first quarter of fiscal 2022, we changed our operating and reporting segment structure from one reportable segment to two reportable segments, Public Cloud and Hybrid Cloud. The two segments are designed to reflect the way management and its chief operating decision maker allocate resources and assess the performance of the Company. There is no guarantee that this change will have the desired effect, and in the future we may need to further change our basis of segment reporting. In addition, we may incur additional costs and the risk of additional liabilities, both of which may impact the successful implementation of this change.

Risks Related to Our Customers and Sales

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

Our growth strategy includes developing and maintaining strategic partnerships with major third-party software and hardware vendors to integrate our products into their products and also co-market our products with them. A number of our strategic partners are industry leaders that offer us expanded access to segments of the storage and data management markets. In particular, strategic partnerships with public cloud providers and other cloud service vendors are critical to the success of our cloud-based business. However, there is intense competition for attractive strategic partners, and these relationships may not be exclusive, may not generate significant revenues and may be terminated on short notice. For instance, some of our partners are also partnering with our competitors, which may increase the availability of competing solutions and harm our ability to grow our relationships with those partners. Moreover, some of our partners, particularly large, more diversified technology companies, including major cloud providers, are also competitors, thereby complicating our relationships. If we are unable to establish new partnerships or maintain existing partnerships, if our strategic partners favor their relationships with other vendors in the storage industry or if our strategic partners increasingly compete with us, we could experience lower than expected revenues, suffer delays in product development, or experience other harm to our business, operating results, financial condition and cash flows.

A portion of our revenues is generated by large, recurring purchases from various customers, resellers and distributors. A loss, cancellation or delay in purchases by any of these parties has negatively affected our revenues in the past, and could negatively affect our revenues in the future.

A significant portion of our net revenues is generated through sales to a limited number of customers and distributors. We generally do not enter into binding purchase commitments with our customers, resellers and distributors for extended periods of time, and thus there is no guarantee we will continue to receive large, recurring orders from these customers, resellers or distributors. For example, our reseller agreements generally do not require minimum purchases, and our customers, resellers and distributors can stop purchasing and marketing our products at any time. In addition, unfavorable economic conditions may negatively impact the solvency of our customers, resellers and distributors or the ability of such customers, resellers and distributors to obtain credit to finance purchases of our products. If any of our key customers, resellers or distributors changes its pricing practices, reduces the size or frequency of its orders for our products, or stops purchasing our products altogether, our operating results, financial condition and cash flows could be materially adversely impacted.

Our success depends upon our ability to effectively plan and manage our resources and restructure our business in response to changing market conditions and market demand for our products, and such actions may have an adverse effect on our business, operating results, financial condition and cash flows.

Our ability to successfully offer our products and services in a rapidly evolving market requires an effective planning, forecasting, and management process to enable us to effectively scale and adjust our business in response to fluctuating market opportunities and conditions.

We recently reorganized our sales resources, which included changes and additions to our sales leadership team, to gain operational efficiencies and improve the alignment of our resources with customer and market opportunities. We expect to continue developing our sales organization and go-to-market model towards these goals throughout fiscal 2022. The reorganization of our sales resources, and ongoing evolution of our go-to-market model, could result in short or long-term disruption of our sales cycles, may not produce the efficiencies and benefits desired, and could harm our operating results, financial condition and cash flows.

In response to changes in market conditions and market demand for our products, we have in the past undertaken cost savings initiatives. For example, in each of the fiscal years 2019 through 2022 we executed restructuring events designed to streamline our business, reduce our cost structure and focus our resources on key strategic opportunities. As a result, we have recognized substantial restructuring charges. In fiscal 2020, we further reorganized our go-to-market organization to streamline operations and improve

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alignment with customer and market opportunities. In the first quarter of fiscal 2021, we realigned resources to optimize our business and fund our biggest opportunities. We may in the future undertake initiatives that could include reorganizing our workforce, restructuring, disposing of, and/or otherwise discontinuing certain products, or a combination of these actions. Rapid changes in the size, alignment or organization of our workforce, including our business unit structure and sales account coverage, could adversely affect our ability to develop, sell and deliver products and services as planned or impair our ability to realize our current or future business and financial objectives. Any decision to take these actions may result in charges to earnings associated with, among other things, inventory or other fixed, intangible or goodwill asset reductions (including, without limitation, impairment charges), workforce and facility reductions and penalties and claims from third-party resellers or users of discontinued products. Charges associated with these activities could harm our operating results. In addition to the costs associated with these activities, we may not realize any of the anticipated benefits of the underlying restructuring activities.

Reduced U.S. government demand could materially harm our business, operating results, financial condition and cash flows. In addition, we could be harmed by claims that we have or a channel partner has failed to comply with regulatory and contractual requirements applicable to sales to the U.S. government.

The U.S. government is an important customer for us. However, government demand is uncertain, as it is subject to political and budgetary fluctuations and constraints. Events such as the U.S. federal government shutdown from December 2018 to January 2019 and continued uncertainty regarding the U.S. budget and debt levels have increased demand uncertainty for our products. In addition, like other customers, the U.S. government may evaluate competing products and delay purchasing in the face of the technology transitions taking place in the storage industry. If the U.S. government or an individual agency or multiple agencies within the U.S. government continue to reduce or shift their IT spending patterns, our operating results, including revenues may be harmed.

Selling our products to the U.S. government, whether directly or through channel partners, also subjects us to certain regulatory and contractual requirements. Failure to comply with these requirements by either us or our channel partners could subject us to investigations, fines, and other penalties, which could materially harm our operating results and financial condition. As an example, the United States Department of Justice (DOJ) and the General Services Administration (GSA) have in the past pursued claims against and financial settlements with IT vendors, including us and several of our competitors and channel partners, under the False Claims Act and other statutes related to pricing and discount practices and compliance with certain provisions of GSA contracts for sales to the federal government. Although the DOJ and GSA currently have no claims pending against us, we could face claims in the future. Violations of certain regulatory and contractual requirements, including with respect to data security, could also result in us being suspended or debarred from future government contracting. Any of these outcomes could have a material adverse effect on our business, operating results, financial condition and cash flows.

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

We derive a majority of our revenues in any given quarter from orders booked in the same quarter. Orders typically follow intra-quarter seasonality patterns weighted toward the back end of the quarter. If we do not achieve the level, timing and mix of orders consistent with our quarterly targets and historical patterns, or if we experience cancellations of significant orders, our operating results, financial condition and cash flows could be harmed.

Our gross margins may vary.

Our gross margins reflect a variety of factors, including competitive pricing, component and product design, and the volume and relative mix of revenues from product, software support, hardware support and other services offerings. Increased component costs, increased pricing and discounting pressures, the relative and varying rates of increases or decreases in component costs and product prices, or changes in the mix of revenue or decreased volume from product, software support, hardware support and other services offerings could harm our revenues, gross margins or earnings. Our gross margins are also impacted by the cost of any materials that are of poor quality and our sales and distribution activities, including, without limitation, pricing actions, rebates, sales initiatives and discount levels, and the timing of service contract renewals.

The costs of third-party components comprise a significant portion of our product costs. While we generally have been able to manage our component and product design costs, we may have difficulty managing these costs if supplies of certain components become limited or component prices increase. Any such limitation could result in an increase in our product costs. An increase in component or design costs relative to our product prices could harm our gross margins and earnings.

We are exposed to the credit and non-payment risk of our customers, resellers and distributors, especially during times of economic uncertainty and tight credit markets, which could result in material losses.

Most of our sales to customers are on an open credit basis, with typical payment terms of 30 days. We may experience increased losses as potentially more customers are unable to pay all or a portion of their obligations to us, particularly in the current environment when access to sources of liquidity may be limited as a result of the global COVID-19 pandemic. Beyond our open credit arrangements, some of our customers have entered into recourse and non-recourse financing leasing arrangements using third-party

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leasing companies. 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. During periods of economic uncertainty, our exposure to credit risks from our customers increases. In addition, our exposure to credit risks of our customers may increase further if our customers and their customers or their lease financing sources are adversely affected by global economic conditions.

Risks Related to Our Products and Services

Any disruption to our supply chain could materially harm our business, operating results, financial condition and cash flows.

We do not manufacture our products or their components. Instead, we rely on third parties to manufacture our products and critical components, such as disk drives, as well as for associated logistics. Our lack of direct responsibility for, and control over, these elements of our business, as well as the diverse international geographic locations of our manufacturing partners and suppliers, creates significant risks for us, including, among other things:

•Impacts on our supply chain from adverse public health developments, including outbreaks of contagious diseases such as the ongoing COVID-19 pandemic;

•Limited number of suppliers for certain components;

•No guarantees of supply and limited ability to control the quality, quantity and cost of our products or of their components;

•The potential for binding price or purchase commitments with our suppliers at higher than market rates;

•Limited ability to adjust production volumes in response to our customers’ demand fluctuations;

•Labor and political unrest at facilities we do not operate or own;

•Geopolitical disputes disrupting our supply chain;

•Business, legal compliance, litigation and financial concerns affecting our suppliers or their ability to manufacture and ship our products in the quantities, quality and manner we require; and

•Disruptions due to floods, earthquakes, storms and other natural disasters, particularly in countries with limited infrastructure and disaster recovery resources.

Such risks have subjected us, and could in the future subject us, to supply constraints, price increases and minimum purchase requirements and our business, operating results, financial condition and cash flows could be harmed. For example, the current global shortage of semiconductors could reduce our flexibility to react to product mix changes and un-forecasted orders. The risks associated with our outsourced manufacturing model are particularly acute when we transition products to new facilities or manufacturers, introduce and increase volumes of new products or qualify new contract manufacturers or suppliers, at which times our ability to manage the relationships among us, our manufacturing partners and our component suppliers, becomes critical. New manufacturers, products, components or facilities create increased costs and risk that we will fail to deliver high quality products in the required volumes to our customers. Any failure of a manufacturer or component supplier to meet our quality, quantity or delivery requirements in a cost-effective manner will harm our business, including customer relationships and as a result could harm our operating results, financial condition and cash flows.

We rely on a limited number of suppliers for critical product components.

We rely on a limited number of suppliers for drives and other components utilized in the assembly of our products, including certain single source suppliers, which has subjected us, and could in the future subject us, to price rigidity, periodic supply constraints, and the inability to produce our products with the quality and in the quantities demanded. Consolidation among suppliers, particularly within the semiconductor and disk drive industries, has contributed to price rigidity and supply constraints. When industry supply is constrained, our suppliers may allocate volumes away from us and to our competitors, all of which rely on many of the same suppliers as we do. Accordingly, our business, operating results, financial condition and cash flows may be harmed.

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If a cybersecurity or other security breach occurs on our systems, within our supply chain, or on our end-user customer systems, or if stored data is improperly accessed, customers may reduce or cease using our solutions, our reputation may be harmed and we may incur significant liabilities.

We store and transmit, and sell products and services that store and transmit, personal, sensitive and proprietary data related to our products, our employees, customers, clients and partners (including third-party vendors such as data centers and providers of SaaS, cloud computing, and internet infrastructure and bandwidth), and their respective customers, including intellectual property, books of record and personal information. It is critical to our business strategy that our infrastructure, products and services remain secure and are perceived by customers, clients and partners to be secure. There are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, state-sponsored intrusions, industrial espionage, human error and technological vulnerabilities. Cybersecurity incidents or other security breaches could result in (1) unauthorized access to, or loss or unauthorized use, alteration, or disclosure of, such information; (2) litigation, indemnity obligations, government investigations and proceedings, and other possible liabilities; (3) negative publicity; and (4) disruptions to our internal and external operations. Any of these could damage our reputation and public perception of the security and reliability of our products, as well as harm our business and cause us to incur significant liabilities. In addition, a cybersecurity incident or loss of personal information, or other security breach could result in other negative consequences, including remediation costs, disruption of internal operations, increased cybersecurity protection costs and lost revenues.

Our clients and customers use our platforms for the transmission and storage of sensitive data. We do not review the information or content that our clients and their customers upload and store, and, therefore, we have no direct control over the substance of the information or content stored within our platforms. If our employees, or our clients, partners or their respective customers use our platforms for the transmission or storage of personal or other sensitive information or our supply chain cybersecurity is compromised and our security measures are breached as a result of third-party action, employee 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.

High-profile cyberattacks and security breaches have increased in recent years, with the potential for such acts heightened as a result of the number of employees working remotely due to COVID-19. Security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting IT products and businesses. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. As we continue to increase our client base and expand our brand, we may become more of a target for third parties seeking to compromise our security systems and we anticipate that hacking attempts and cyberattacks will increase in the future. We cannot give assurance that we will always be successful in preventing or repelling unauthorized access to our systems. We also may face delays in our ability to identify or otherwise respond to any cybersecurity incident or any other breach. Additionally, we use third-party service providers to provide some services to us that involve the storage or transmission of data, such as SaaS, cloud computing, and internet infrastructure and bandwidth, and they face various cybersecurity threats and also may suffer cybersecurity incidents or other security breaches.

Many jurisdictions have enacted or are enacting laws requiring companies to notify regulators or individuals of data security incidents involving certain types of personal data. These mandatory disclosures regarding security incidents often lead to widespread negative publicity. Moreover, the risk of reputational harm may be magnified and/or distorted through the rapid dissemination of information over the internet, including through news articles, blogs, social media, and other online communication forums and services. Any security incident, loss of data, or other security breach, whether actual or perceived, or whether impacting us or our third-party service providers, could harm our reputation, erode customer confidence in the effectiveness of our data security measures, negatively impact our ability to attract new customers, cause existing customers to elect not to renew their support contracts or their SaaS subscriptions, or subject us to third-party lawsuits, regulatory fines or other action or liability, which could materially and adversely affect our business and operating results.

There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. Our existing general liability insurance coverage and coverage for errors and omissions may not continue to be available on acceptable terms or may not be available in sufficient amounts to cover one or more large claims, or our insurers may deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, operating results, financial condition and cash flows.

If a data center or other third-party who relies on our products experiences a disruption in service or a loss of data, such disruption could be attributed to the quality of our products, thereby causing financial or reputational harm to our business.

Our clients, including data centers, SaaS, cloud computing and internet infrastructure and bandwidth providers, rely on our products for their data storage needs. Our clients may authorize third-party technology providers to access their data on our systems. Because we do not control the transmissions between our clients, their customers, and third-party technology providers, or the processing of such data by third-party technology providers, we cannot ensure the complete integrity or security of such transmissions

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or processing. Errors or wrongdoing by clients, their customers, or third-party technology providers resulting in actual or perceived security breaches may result in such actual or perceived breaches being attributed to us.

A failure or inability to meet our clients’ expectations with respect to security and confidentiality through a disruption in the services provided by these third-party vendors, or the loss or alteration of data stored by such vendors, could result in financial or reputational harm to our business to the extent that such disruption or loss is caused by, or perceived by our customers to have been caused by, defects in our products. Moreover, the risk of reputational harm may be magnified and/or distorted through the rapid dissemination of information over the internet, including through news articles, blogs, social media, and other online communication forums and services. This may affect our ability to retain clients and attract new business.

Failure to comply with new and existing laws and regulations relating to privacy, data protection, and information security could cause harm to our reputation, result in liability and adversely impact our business.

Our business is subject to increasing regulation by various federal, state and international governmental agencies responsible for enacting and enforcing laws and regulations relating to privacy, data protection, and information security. The rapidly evolving regulatory framework in this area is likely to remain uncertain for the foreseeable future.  In addition, changes in the interpretation and enforcement of existing laws and regulations could impact our business operations and those of our partners, vendors and customers. Customers, privacy advocates and industry groups also may propose new and different self-regulatory standards or standards of care that may legally or contractually apply to us, and these standards may be subject to change. These factors create uncertainty and we cannot yet determine the impact such future laws, regulations and standards, or changes to such laws, regulations, or standards, or to their interpretation or enforcement, may have on our business or the businesses of our partners, vendors and customers. In addition, changes in the interpretation of existing laws and regulations could impact our business operations and those of our partners, vendors and customers.

Because the interpretation and application of many laws and regulations relating to privacy, data protection and information security, along with industry standards, are uncertain, it is possible that relevant laws, regulations, or standards may be interpreted and applied in manners that are, or are alleged to be, inconsistent with our data management practices or the features of our products. Any failure, or perceived failure, by us or our business partners to comply with federal, state or international laws and regulations relating to privacy, data protection, and information security, commitments relating to privacy, data protection, and information security contained in our contracts, self-regulatory standards that apply to us or that third parties assert are applicable to us, or our policies or notices we post or make available could subject us to claims, investigations, sanctions, enforcement actions and other proceedings, disgorgement of profits, fines, damages, civil and criminal liability, penalties or injunctions.

Additionally, as a technology provider, our customers expect that we can demonstrate compliance with laws and regulations relating to privacy, data protection, and information security, and our inability or perceived inability to do so may adversely impact sales of our products and services, particularly to customers in highly-regulated industries. We have invested company resources in complying with new laws, regulations, and other obligations relating to privacy, data protection, and information security, and we may be required to make additional, significant changes in our business operations, all of which may adversely affect our revenue and our business overall. As a result of any inability to comply with such laws and regulations, our reputation and brand may be harmed, we could incur significant costs, and financial and operating results could be materially adversely affected, and we could be required to modify or change our products or our business practices, any of which could have an adverse effect on our business. Our business could be subject to stricter obligations, greater fines and private causes of action under the enactment of new laws and regulations relating to privacy, data protection, and information security, including but not limited to, the European Union General Data Protection Regulation, which provides for penalties of up to 20 million Euros or four percent of our annual global revenues, the California Consumer Privacy Act and the California Privacy Rights Act.

If our products or services are defective, or are perceived to be defective as a result of improper use or maintenance, our operating results, including gross margins, and customer relationships may be harmed.

Our products and services are complex. We have experienced in the past, and expect to experience in the future, quality issues impacting certain products, and in the future, we could experience reliability issues with services we provide. Such quality and reliability issues may be due to, for example, our own designs or processes, the designs or processes of our suppliers, and/or flaws in third-party software used in our products. These types of risks are most acute when we are introducing new products. Quality or reliability issues have and could again in the future cause customers to experience outages or disruptions in service, data loss or data corruption. If we fail to remedy a product defect or flaw, we may experience a failure of a product line, temporary or permanent withdrawal from a product or market, damage to our reputation, loss of revenue, inventory costs or product reengineering expenses and higher ongoing warranty and service costs, and these occurrences could have a material impact on our gross margins, business and operating results. In addition, we exercise little control over how our customers use or maintain our products and services, and in some cases improper usage or maintenance could impair the performance of our products and services, which could lead to a perception of a quality or reliability issue. Customers may experience losses that may result from or are alleged to result from defects or flaws in our products and services, which could subject us to claims for damages, including consequential damages.

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Changes in regulations relating to our products or their components, or the manufacture, sourcing, distribution or use thereof, may harm our business, operating results financial condition and cash flows.

The laws and regulations governing the manufacturing, sourcing, distribution and use of our products have become more complex and stringent over time. For example, in addition to various environmental laws relating to carbon emissions, the use and discharge of hazardous materials and the use of certain minerals originating from identified conflict zones, many governments, including the U.S., the United Kingdom and Australia, have adopted regulations concerning the risk of human trafficking in supply chains which govern how workers are recruited and managed. We incur costs to comply with the requirements of such laws. Further, since our supply chain is complex, we may face reputational harm if our customers or other stakeholders conclude that we are unable to verify sufficiently the origins of the minerals used in the products we sell or the actions of our suppliers with respect to workers. As the laws and regulations governing our products continue to expand and change, our costs are likely to rise, and the failure to comply with any such laws and regulations could subject us to business interruptions, litigation risks and reputational harm.

Some of our products are subject to U.S. export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered, and any violation of these laws could have a material and adverse effect on our business, operating results, financial condition and cash flows.

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 and Security (BIS) and the trade and economic sanctions regulations administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). The U.S., through the BIS and OFAC, places restrictions on the sale or export of certain products and services to certain countries and persons. The BIS and OFAC have also placed restrictions on dealing with certain "blocked” entities, such as Russia’s federal security service (FSB), including the Company’s filing of notifications to the FSB for exporting certain products to Russia. Violators of these export control and sanctions laws may be subject to significant penalties, which may include significant monetary fines, criminal proceedings against them and their officers and employees, a denial of export privileges, and suspension or debarment from selling products to the federal government. Our products could be shipped to those targets by third parties, including potentially our channel partners, despite our precautions.

If we were ever found to have violated U.S. export control laws, we may be subject to various penalties available under the laws, any of which could have a material and adverse impact on our business, operating results and financial condition. Even if we were not found to have violated such laws, the political and media scrutiny surrounding any governmental investigation of us could cause us significant expense and reputational harm. Such collateral consequences could have a material adverse impact on our business, operating results, financial condition and cash flows.

Our failure to protect our intellectual property could harm our business, operating results, financial condition and cash flows.

Our success depends significantly upon developing, maintaining and protecting our proprietary technology. We rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality procedures and contractual provisions with employees, resellers, strategic partners and customers, to protect our proprietary rights. We currently have multiple U.S. and international patent applications pending and multiple U.S. and international patents issued. The pending applications may not be approved, and our existing and future patents may be challenged. If such challenges are brought, the patents may be invalidated. We may not be able to develop proprietary products or technologies that are patentable, and patents issued to us may not provide us with any competitive advantages and may be challenged by third parties. Further, the patents of others may materially and adversely affect our ability to do business. In addition, a failure to obtain and defend our trademark registrations may impede our marketing and branding efforts and competitive condition. Litigation may be necessary to protect our proprietary technology. Any such litigation may be time-consuming and costly. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary. In addition, the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the U.S. Our means of protecting our proprietary rights may not be adequate or our competitors may independently develop similar technology, duplicate our products, or design around patents issued to us or other intellectual property rights of ours. In addition, while we train employees in confidentiality practices and include terms in our employee and consultant agreements to protect our intellectual property, there is persistent risk that some individuals will improperly take our intellectual property after terminating their employment or other engagements with us, which could lead to intellectual property leakage to competitors and a loss of our competitive advantages.

We may be found to infringe on intellectual property rights of others.

We compete in markets in which intellectual property infringement claims arise in the normal course of business. Third parties have, from time to time, asserted intellectual property-related claims against us, including claims for alleged patent infringement brought by non-practicing entities. Such claims may be made against our products and services, our customers’ use of our products and services, or a combination of our products and third-party products. We also may be subject to claims and indemnification obligations from customers and resellers with respect to third-party intellectual property rights pursuant to our agreements with them. If we refuse to indemnify or defend such claims, even in situations in which the third-party’s allegations are meritless, then customers and resellers may refuse to do business with us.  

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Patent litigation is particularly common in our industry. We have been, and continue to be, in active patent litigations with non-practicing entities. While we vigorously defend our ability to compete in the marketplace, there is no guarantee that, in patent or other types of intellectual property litigation, we will prevail at trial or be able to settle at a reasonable cost.  If a judge or jury were to find that our products infringe, we could be required to pay significant monetary damages and be subject to an injunction that could cause product shipment delays, require us to redesign our products, affect our ability to supply or service our customers, and/or require us to enter into compulsory royalty or licensing agreements.  

We expect that companies in the network storage and data management markets will increasingly be subject to infringement claims as the number of products and competitors in our industry segment grows and the functionality of products in different industry segments overlaps. Any such claims, and any such infringement claims discussed above, could be time consuming, result in costly litigation, cause suspension of product shipments or product shipment delays, require us to redesign our products, or require us to enter into royalty or licensing agreements, any of which could materially and adversely affect our operating results, financial condition and cash flows. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all.

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

Many of our products are designed to include software licensed from third parties. Such third-party software includes software licensed from commercial suppliers and software licensed under public open source licenses. We have internal processes to manage our use of such third-party software. However, if we fail to adequately manage our use of third-party software, then we may be subject to copyright infringement or other third-party claims. If we are non-compliant with a license for commercial software, then we may be required to pay penalties or undergo costly audits pursuant to the license agreement. In the case of open-source software licensed under certain “copyleft” licenses, the license itself may require, or a court-imposed remedy for non-compliant use of the open source software may require, that proprietary portions of our own software be publicly disclosed or licensed. This could result in a loss of intellectual property rights, increased costs, damage to our reputation and/or a loss of revenue.

Our failure to adjust to emerging standards in the storage and data management industry may harm our business.

Emerging standards in the storage and data management markets may adversely affect the UNIX^®, Windows^® and World Wide Web server markets upon which we depend. For example, we provide our open access data retention solutions to customers within the financial services, healthcare, pharmaceutical and government market segments, industries that are subject to various evolving governmental regulations with respect to data access, reliability and permanence in the U.S. and in the other countries in which we operate. If our products do not meet and continue to comply with these evolving governmental regulations in this regard, customers in these market and geographical segments will not purchase our products, and we may not be able to expand our product offerings in these market and geographical segments at the rates which we have forecasted.

Risks Related to Our Securities

Our stock price is subject to volatility.

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 issuance of additional debt, changes in our credit ratings, our ability to pay dividends and to continue to execute our stock repurchase program as planned and market trends unrelated to our performance.

Our ability to pay quarterly dividends and to continue to execute our stock repurchase program as planned will be subject to, among other things, our financial condition and operating results, available cash and cash flows in the U.S., capital requirements, and other factors. Future dividends are subject to declaration by our Board of Directors, and our stock repurchase program does not obligate us to acquire any specific number of shares. However, if we fail to meet any investor expectations related to dividends and/or stock repurchases, the market price of our stock could decline significantly, and could have a material adverse impact on investor confidence. Additionally, price volatility of our stock over a given period may cause the average price at which we repurchase our own stock to exceed the stock’s market price at a given point in time.

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. These factors, as well as general economic and political conditions and the timing of announcements in the public market regarding new products or services, product enhancements or technological advances by our competitors or us, and any announcements by us of acquisitions, major transactions, or management changes may adversely affect our stock price.

Our quarterly operating results may fluctuate materially, which could harm our common stock price.

Our operating results have fluctuated in the past and will continue to do so, sometimes materially. All of the matters discussed in this Risk Factors section could impact our operating results in any fiscal quarter or year. In addition to those matters, we face the following issues, which could impact our quarterly results:

51

• Seasonality, such as our historical seasonal decline in revenues in the first quarter of our fiscal year and seasonal increase in revenues in the second quarter of our fiscal year, with the latter due in part to the impact of the U.S. federal government’s September 30 fiscal year end on the timing of its orders;

• Linearity, such as our historical intra-quarter customer orders and revenue pattern in which a disproportionate percentage of each quarter’s total orders and related revenue occur in the last month of the quarter; and

• Unpredictability associated with larger scale enterprise software license agreements which generally take longer to negotiate and occur less consistently than other types of contracts, and for which revenue attributable to the software license component is typically recognized in full upon delivery.

If our operating results fall below our forecasts and the expectations of public market analysts and investors, the trading price of our common stock may decline.

There are risks associated with our outstanding and future indebtedness.

As of July 30, 2021, we had $2.7 billion aggregate principal amount of outstanding indebtedness for our senior notes that mature at specific dates in calendar years 2022, 2024, 2025, 2027 and 2030. We may incur additional indebtedness in the future under existing credit facilities and/or enter into new financing arrangements. We may fail to pay these or additional future obligations, as and when required. Specifically, if we are unable to generate sufficient cash flows from operations or to borrow sufficient funds in the future to service or refinance our debt, our business, operating results, financial condition and cash flows will be harmed. Any downgrades from credit rating agencies such as Moody’s Investors Service or Standard & Poor’s Rating Services may adversely impact our ability to obtain additional financing or the terms of such financing and reduce the market capacity for our commercial paper. Furthermore, if prevailing interest rates or other factors result in higher interest rates upon any potential future financing, then interest expense related to the refinance indebtedness would increase.

In addition, all our debt and credit facility arrangements subject us to continued compliance with restrictive and financial covenants. If we do not comply with these covenants or otherwise default under the arrangements, we may be required to repay any outstanding amounts borrowed under these agreements. Moreover, compliance with these covenants may restrict our strategic or operational flexibility in the future, which could harm our business, operating results, financial condition and cash flows.

General Risks

We are unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business, operating results, financial condition, and cash flows.

The COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations. While we are currently considered an essential business in many of the key regions in which we operate, including in the United States (U.S.), there is no guarantee that we will continue to be classified as such. We have taken precautionary measures intended to minimize the risk of the virus to our employees, our customers, and the communities in which we operate such as India, including office closures and working remotely for the vast majority of employees, all of which could negatively impact our business. The magnitude and duration of the disruption and resulting decline in business activity is uncertain and has limited our ability to forecast future demand for our products and services. The COVID-19 pandemic and its uneven recovery have adversely affected, and we expect may continue to adversely affect, our business in a variety of ways, including by negatively impacting the demand for our products and services, and our ability to build and convert our sales pipeline (including delayed and deferred purchases); restricting our sales, marketing and distribution efforts; disrupting our supply chain and our ability to deliver product to customers; and constraining business operations, research and development capabilities, engineering, design and manufacturing processes and other important business activities, including in India. In addition, the COVID-19 pandemic has disrupted the operations of our suppliers, customers and partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns and limited access to capital markets, all of which have and may continue to negatively impact our business and results of operations, including cash flows. Accordingly, we expect the COVID-19 pandemic to have a negative impact on our future sales and results of operations, the magnitude and duration of which we are unable to predict. Additionally, concerns over the economic impact of COVID-19 pandemic have caused extreme volatility in financial and other capital markets, which volatility has and may continue to adversely impact our stock price and could impact our ability to access capital markets. More generally, the COVID-19 pandemic has adversely affected economies and financial markets globally, potentially leading to a prolonged economic downturn, which could decrease technology spending and adversely affect demand for our offerings and harm our business and results of operations for an extended period of time. To the extent that the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section and those incorporated by reference herein, such as those relating to our products and services, financial performance, credit rating and debt obligations.

52

Our business could be materially and adversely affected as a result of natural disasters, terrorist acts or other catastrophic events.

We depend on the ability of our personnel, inventories, equipment and products to move reasonably unimpeded around the world. Any political, military, terrorism, global trade, world health or other issue that hinders this movement or restricts the import or export of materials could lead to significant business disruptions. For example, the ongoing COVID-19 pandemic is impeding the mobility of our personnel, inventories, equipment and products and disrupting our business operations. Furthermore, any economic failure or other material disruption caused by natural disasters, including fires, floods, hurricanes, earthquakes, and volcanoes; power loss or shortages; environmental disasters; telecommunications or business information systems failures or break-ins and similar events could also adversely affect our ability to conduct business. If such disruptions result in cancellations of customer orders or 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, our operating results and financial condition could be materially adversely affected. Our headquarters is located in Northern California, an area susceptible to earthquakes and wildfires. If any significant disaster were to occur there, our ability to operate our business and our operating results, financial condition and cash flows could be adversely impacted.

We could be subject to additional income tax liabilities.

Our effective tax rate is influenced by a variety of factors, many of which are outside of our control. These factors include among other things, fluctuations in our earnings and financial results in the various countries and states in which we do business, changes to the tax laws in such jurisdictions and the outcome of income tax audits. Changes to any of these factors could materially impact our operating results, financial condition and cash flows.

We receive significant tax benefits from sales to our non-U.S. customers. These benefits are contingent upon existing tax laws and regulations in the U.S. and in the countries in which our international operations are located. Future changes in domestic or international tax laws and regulations or a change in how we manage our international operations could adversely affect our ability to continue realizing these tax benefits.

Many countries around the world are beginning to implement legislation and other guidance to align their international tax rules with the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting recommendations and related action plans that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer-pricing documentation rules and nexus-based tax incentive practices. As a result, many of these changes, if enacted, could increase our worldwide effective tax rate and harm our operating result, 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 equivalent balances we currently maintain. Additionally, our effective tax rate could also be adversely affected if there is a change in international operations, our tax structure and how our operations are managed and structured, and as a result, we could experience harm to our operating results and financial condition. Evolving or revised tax laws and regulations globally, including the 2017 Tax Cuts and Jobs Act deferral on tax deductions for certain research and development expenses could change the amount or accounting treatment of the expense we occur in the future. President Biden has detailed his Made in America Tax Plan which includes proposed increases to tax rates on both domestic and foreign income. If these proposals are ultimately enacted into legislation, they could materially impact our operations and financial results.

We are routinely subject to income tax audits in the U.S. and several foreign tax jurisdictions. If the ultimate determination of income taxes or at-source withholding taxes assessed under these audits results in amounts in excess of the tax provision we have recorded or reserved for, our operating results, financial condition and cash flows could be adversely affected.

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 July 30, 2021:

					Total Number of Shares		Approximate Dollar Value
	Total Number		Average		Purchased as Part of		of Shares That May Yet
	of Shares		Price Paid		Publicly Announced		Be Purchased Under The
Period	Purchased		per Share		Program		Repurchase Program
	(Shares in thousands)				(Shares in thousands)		(Dollars in millions)
May 1, 2021 - May 28, 2021		212	$	77.34		340,358	$	836
May 29, 2021 - June 25, 2021		517	$	81.24		340,875	$	794
June 25, 2021 - July 30, 2021		520	$	80.05		341,395	$	752
Total		1,249	$	80.08

53

In May 2003, our Board of Directors approved a stock repurchase program. As of July 30, 2021, our Board of Directors has authorized the repurchase of up to $14.1 billion of our common stock. Since inception of the program through July 30, 2021, we repurchased a total of 341 million shares of our common stock for an aggregate purchase price of $13.4 billion. 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, and it was suspended for the first half of fiscal 2021 due to the economic impact of the COVID-19 pandemic. We reinitiated our stock repurchase program in the third quarter of fiscal 2021.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

54

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
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 Document	—	—	—	—
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document	—	—	—	—
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	—	—	—	—
101.LAB	Inline XBRL Taxonomy Label Linkbase Document	—	—	—	—
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	—	—	—	—
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)	—	—	—	—

55

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/ MICHAEL J. BERRY

Michael J. Berry

Executive Vice President and

Chief Financial Officer

Date: September 2, 2021

56

EX-31.1

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: September 2, 2021

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302(a)

OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Berry, 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/ MICHAEL J. BERRY

Michael J. Berry

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: September 2, 2021

EX-32.1

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 July 30, 2021 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: September 2, 2021

EX-32.2

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, Michael J. Berry, 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 July 30, 2021 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/ MICHAEL J. BERRY

Michael J. Berry

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Date: September 2, 2021

XML

Document and Entity Information - shares	3 Months Ended
	Jul. 30, 2021	Aug. 25, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 30, 2021
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Trading Symbol	NTAP
Entity Registrant Name	NetApp, Inc.
Entity Central Index Key	0001002047
Current Fiscal Year End Date	--04-29
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		223,629,424
Entity File Number	000-27130
Entity Tax Identification Number	77-0307520
Entity Address, Address Line One	3060 Olsen Drive
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95128
City Area Code	408
Local Phone Number	822-6000
Document Quarterly Report	true
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Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Security Exchange Name	NASDAQ
Title of 12(b) Security	Common Stock, $0.001 Par Value

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Current assets:
Cash and cash equivalents	$ 4,492	$ 4,529
Short-term investments	55	67
Accounts receivable	655	945
Inventories	108	114
Other current assets	321	346
Total current assets	5,631	6,001
Property and equipment, net	533	525
Goodwill	2,050	2,039
Other intangible assets, net	97	101
Other non-current assets	845	694
Total assets	9,156	9,360
Current liabilities:
Accounts payable	368	420
Accrued expenses	747	970
Short-term deferred revenue and financed unearned services revenue	1,988	2,062
Total current liabilities	3,103	3,452
Long-term debt	2,633	2,632
Other long-term liabilities	784	650
Long-term deferred revenue and financed unearned services revenue	1,916	1,941
Total liabilities	8,436	8,675
Commitments and contingencies (Note 15)	0	0
Stockholders' equity:
Common stock and additional paid-in capital, $0.001 par value; 224 and 222 shares issued and outstanding as of July 30, 2021 and April 30, 2021, respectively	550	504
Retained earnings	204	211
Accumulated other comprehensive loss	(34)	(30)
Total stockholders' equity	720	685
Total liabilities and stockholders' equity	$ 9,156	$ 9,360

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares shares in Millions	Jul. 30, 2021	Apr. 30, 2021
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	224	222
Common stock, shares outstanding	224	222

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Net revenues:
Net revenues	$ 1,458	$ 1,303
Cost of revenues:
Total cost of revenues	459	431
Gross profit	999	872
Operating expenses:
Sales and marketing	451	429
Research and development	210	233
General and administrative	66	61
Restructuring charges	22	5
Acquisition-related expense	1	8
Total operating expenses	750	736
Income from operations	249	136
Other expense, net	(12)	(32)
Income before income taxes	237	104
Provision for income taxes	35	27
Net income	$ 202	$ 77
Net income per share:
Basic	$ 0.91	$ 0.35
Diluted	$ 0.88	$ 0.35
Shares used in net income per share calculations:
Basic	223	221
Diluted	229	222
Product [Member]
Net revenues:
Net revenues	$ 730	$ 627
Cost of revenues:
Total cost of revenues	329	316
Service
Net revenues:
Net revenues	728	676
Cost of revenues:
Total cost of revenues	$ 130	$ 115

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 202	$ 77
Other comprehensive income (loss):
Foreign currency translation adjustments	(4)	9
Unrealized gains (losses) on available-for-sale securities:
Unrealized holding gains (losses) arising during the period	(1)	2
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) arising during the period	1	(9)
Reclassification adjustments for losses included in net income	0	1
Other comprehensive income (loss)	(4)	3
Comprehensive income	$ 198	$ 80

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Cash flows from operating activities:
Net income	$ 202	$ 77
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	46	49
Non-cash operating lease cost	13	13
Stock-based compensation	53	54
Deferred income taxes	(15)	0
Other items, net	4	25
Changes in assets and liabilities, net of acquisitions of businesses:
Accounts receivable	287	391
Inventories	6	9
Other operating assets	29	7
Accounts payable	(51)	(29)
Accrued expenses	(242)	(186)
Deferred revenue and financed unearned services revenue	(82)	(158)
Long-term taxes payable	(8)	6
Other operating liabilities	0	(18)
Net cash provided by operating activities	242	240
Cash flows from investing activities:
Purchases of investments	(5)	(2)
Maturities, sales and collections of investments	16	87
Purchases of property and equipment	(51)	(52)
Proceeds from sale of properties	0	6
Acquisitions of businesses, net of cash acquired	(14)	(350)
Net cash used in investing activities	(54)	(311)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock award plans	53	48
Payments for taxes related to net share settlement of stock awards	(57)	(33)
Repurchase of common stock	(100)	0
Repayments of commercial paper notes, original maturities of three months or less, net	0	(370)
Issuance of debt, net of issuance costs	0	2,057
Repayments and extinguishment of debt	0	(589)
Dividends paid	(112)	(107)
Other financing activities, net	(2)	(3)
Net cash (used in) provided by financing activities	(218)	1,003
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5)	43
Net change in cash, cash equivalents and restricted cash	(35)	975
Cash, cash equivalents and restricted cash:
Beginning of period	4,535	2,666
End of period	$ 4,500	$ 3,641

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common Stock and Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Retained Earnings
Balances at Apr. 24, 2020	$ 242	$ 284	$ (42)
Balances (in shares) at Apr. 24, 2020		219
Net income	77			$ 77
Other comprehensive income (loss)	3		3
Issuance of common stock under employee stock award plans, net of taxes	15	$ 15
Issuance of common stock under employee stock award plans, net of taxes (in shares)		3
Stock-based compensation	54	$ 54
Cash dividends declared ($0.50 and $0.48 per common share)	(107)	(30)		(77)
Balances at Jul. 31, 2020	284	$ 323	(39)
Balances (in shares) at Jul. 31, 2020		222
Balances at Apr. 30, 2021	$ 685	$ 504	(30)	211
Balances (in shares) at Apr. 30, 2021	222	222
Net income	$ 202			202
Other comprehensive income (loss)	(4)		(4)
Issuance of common stock under employee stock award plans, net of taxes	(4)	$ (4)
Issuance of common stock under employee stock award plans, net of taxes (in shares)		3
Repurchase of common stock	$ (100)	$ (3)		(97)
Repurchase of common stock, shares	(1)	(1)
Stock-based compensation	$ 53	$ 53
Cash dividends declared ($0.50 and $0.48 per common share)	(112)			(112)
Balances at Jul. 30, 2021	$ 720	$ 550	$ (34)	$ 204
Balances (in shares) at Jul. 30, 2021	224	224

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Statement Of Stockholders Equity [Abstract]
Cash dividends declared, per common share	$ 0.50	$ 0.48

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Description of Business and Significant Accounting Policies

3 Months Ended

Jul. 30, 2021

Accounting Policies [Abstract]

Description of Business and Significant Accounting Policies

1. Description of Business and Significant Accounting Policies

NetApp, Inc. (we, us, or the Company) is a global cloud-led, data-centric software company that provides organizations the ability to manage and share their data across on-premises, private and public clouds. We provide a full range of enterprise-class software, systems and services solutions that customers use to modernize their infrastructures, build next generation data centers and harness the power of hybrid clouds.

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 year 2022, ending on April 29, 2022, is a 52-week year, with 13 weeks in each of its quarters. Fiscal year 2021, ended on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter.

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 30, 2021 contained in our Annual Report on Form 10-K. The results of operations for the three months ended July 30, 2021 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; product warranties; employee compensation and benefit accruals; stock-based compensation; loss contingencies; investment impairments; income taxes and fair value measurements. Actual results could differ materially from those estimates. Management’s estimates include, as applicable, the anticipated impacts of the COVID-19 pandemic.

Segment Change

Effective July 30, 2021, our Chief Operating Decision Maker, who is our Chief Executive Officer, realigned internal reporting and began using financial information for components of our business, organized based on category of product/solution, to evaluate performance and allocate resources. This resulted in the creation of two operating segments and two reportable segments for financial reporting purposes: Public Cloud and Hybrid Cloud.

Public Cloud

NetApp's Public Cloud segment offers a portfolio of products delivered primarily as-a-service, including related support, and made available on the world’s leading clouds. This portfolio includes storage services, cloud automation and optimization services, and cloud infrastructure monitoring services. Public Cloud includes certain reseller arrangements in which the timing of our consideration follows the end user consumption of the reseller services.

Hybrid Cloud

NetApp’s Hybrid Cloud segment offers a portfolio of storage and data management solutions that help customers build and integrate on-premises and private cloud environments. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

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Recent Accounting Pronouncements

3 Months Ended

Jul. 30, 2021

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

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

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Business Combinations

3 Months Ended

Jul. 30, 2021

Business Combinations [Abstract]

Business Combinations

3. Business Combinations

Data Mechanics Inc. Acquisition

On June 18, 2021, we acquired all the outstanding shares of privately-held Data Mechanics Inc., a provider of managed platforms for big data processing and cloud analytics headquartered in Paris, France, for approximately $15 million in cash.

The preliminary acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

	Amount
Cash	$	1
Developed technology		5
Goodwill		11
Total assets acquired		17
Liabilities assumed		(2	)
Total purchase price	$	15

The results of operations related to this acquisition have been included in our condensed consolidated statements of income from the acquisition date. Pro forma results of operations have not been presented because the impact from the acquisition would not have been material to our consolidated results of operations for each of the three months ended July 30, 2021 and July 31, 2020.

Cloud Jumper Corporation Acquisition

On April 28, 2020, we acquired all the outstanding shares of privately-held Cloud Jumper Corporation (Cloud Jumper), a provider of virtual desktop infrastructure and remote desktop services solutions based in North Carolina, for $34 million in cash.

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

	Amount
Developed technology	$	16
Customer contracts/relationships		6
Goodwill		12
Other assets		1
Total assets acquired		35
Liabilities assumed		(1	)
Total purchase price	$	34

Spot, Inc. Acquisition

On July 9, 2020, we acquired all the outstanding shares of privately-held Spot, Inc. (Spot), a provider of compute management cost optimization services on the public clouds based in Israel, for $340 million in cash. 

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

	Amount
Cash	$	24
Intangible assets		84
Goodwill		249
Other assets		6
Total assets acquired		363
Liabilities assumed		(23	)
Total purchase price	$	340

The components of the Spot intangible assets acquired were as follows (in millions, except useful life):

	Amount		Estimated useful life (years)
Developed technology	$	53	5
Customer contracts/relationships		28	5
Trade name		3	3
Total intangible assets	$	84

The acquired assets and assumed liabilities of Spot and Cloud Jumper were recorded at their estimated fair values. We determined the estimated fair values with the assistance of valuations and appraisals performed by third party specialists and estimates made by management. We expect to realize revenue synergies, leverage and expand the existing Spot and Cloud Jumper sales channels and product development resources, and utilize their existing workforces. We also anticipate opportunities for growth through the ability to leverage additional future products and capabilities. These factors, among others, contributed to a purchase price in excess of the estimated fair value of their identifiable net assets acquired, and as a result, we have recorded goodwill in connection with both of these acquisitions. The goodwill is not deductible for income tax purposes.

The results of operations related to the acquisition of both Spot and Cloud Jumper have been included in our consolidated statements of income from their respective acquisition dates. Pro forma results of operations have not been presented because the impact from these acquisitions would not have been material to our consolidated results of operations for the fiscal quarter ended July 31, 2020.

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Goodwill and Purchased Intangible Assets, Net

3 Months Ended

Jul. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Purchased Intangible Assets, Net

4. Goodwill and Purchased Intangible Assets, Net

Goodwill activity is summarized as follows (in millions):

	Amount
Balance as of April 30, 2021	$	2,039
Additions		11
Balance as of July 30, 2021	$	2,050

Beginning with the first quarter of fiscal 2022, the Company has two reportable segments: Public Cloud and Hybrid Cloud. As a result, goodwill was allocated to the segments using a relative fair value approach.

Goodwill by reportable segment as of July 30, 2021 is as follows (in millions):

	Amount
Public Cloud	$	336
Hybrid Cloud		1,714
Total goodwill	$	2,050

As a result of the realignment, the Company performed an interim quantitative goodwill impairment test for its reporting units as of July 30, 2021, which did not result in any goodwill impairment charges. The Company will continue to evaluate the recoverability of goodwill on an annual basis in the fourth fiscal quarter and whenever events or changes in circumstances indicate there may be a potential impairment.

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

	July 30, 2021							April 30, 2021
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Assets		Amortization			Assets		Assets		Amortization			Assets
Developed technology	$	106	$	(40	)	$	66	$	215	$	(147	)	$	68
Customer contracts/relationships		38		(9	)		29		38		(8	)		30
Other purchased intangibles		3		(1	)		2		3		—			3
Total purchased intangible assets	$	147	$	(50	)	$	97	$	256	$	(155	)	$	101

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

	Three Months Ended				Statements of
	July 30, 2021		July 31, 2020		Income Classification
Developed technology	$	7	$	10	Cost of revenues
Customer contracts/relationships		1		—	Operating expenses
Other purchased intangibles		1		—	Operating expenses
Total	$	9	$	10

As of July 30, 2021, future amortization expense related to purchased intangible assets is as follows (in millions):

Fiscal Year	Amount
Remainder of 2022	$	29
2023		30
2024		19
2025		16
2026		3
Total	$	97

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Supplemental Financial Information

3 Months Ended

Jul. 30, 2021

Supplemental Financial Information [Abstract]

Supplemental Financial Information

5. Supplemental Financial Information

Cash, cash equivalents and restricted cash (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:

	July 30, 2021		April 30, 2021
Cash and cash equivalents	$	4,492	$	4,529
Restricted cash		8		6
Cash, cash equivalents and restricted cash	$	4,500	$	4,535

Inventories (in millions):

	July 30, 2021		April 30, 2021
Purchased components	$	36	$	22
Finished goods		72		92
Inventories	$	108	$	114

Property and equipment, net (in millions):

	July 30, 2021			April 30, 2021
Land	$	46		$	46
Buildings and improvements		350			356
Leasehold improvements		78			83
Computer, production, engineering and other equipment		871			869
Computer software		290			305
Furniture and fixtures		77			93
Construction-in-progress		62			46
		1,774			1,798
Accumulated depreciation and amortization		(1,241	)		(1,273	)
Property and equipment, net	$	533		$	525

Other non-current assets (in millions):

	July 30, 2021		April 30, 2021
Deferred tax assets	$	233	$	219
Operating lease ROU assets		259		114
Other assets		353		361
Other non-current assets	$	845	$	694

Other non-current assets as of July 30, 2021 and April 30, 2021 include $72 million and $71 million, respectively, for our 49% non-controlling equity interest in Lenovo NetApp Technology Limited, a China-based entity that we formed with Lenovo (Beijing) Information Technology Ltd. in fiscal 2019.

Accrued expenses (in millions):

	July 30, 2021		April 30, 2021
Accrued compensation and benefits	$	282	$	505
Product warranty liabilities		21		21
Operating lease liabilities		53		49
Other current liabilities		391		395
Accrued expenses	$	747	$	970

Product warranty liabilities:

Equipment and software systems sales include a standard product warranty. Estimated future hardware and software warranty costs are recorded as a cost of product revenues at the time of product shipment, based on historical and projected warranty claim rates, historical and projected cost-per-claim and knowledge of specific product failures that are outside our typical experience.

The following tables summarize the activity related to product warranty liabilities and their balances as reported in our condensed consolidated balance sheets (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	32		$	41
Expense accrued during the period		4			1
Warranty costs incurred		(5	)		(5	)
Balance at end of period	$	31		$	37

	July 30, 2021		April 30, 2021
Accrued expenses	$	21	$	21
Other long-term liabilities		10		11
Total warranty liabilities	$	31	$	32

Warranty expense recognized during the period includes amounts accrued for systems at the time of shipment, adjustments for changes in estimated costs for warranties on systems shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods.

Other long-term liabilities (in millions):

	July 30, 2021		April 30, 2021
Liability for uncertain tax positions	$	120	$	127
Income taxes payable		351		351
Product warranty liabilities		10		11
Operating lease liabilities		211		71
Other liabilities		92		90
Other long-term liabilities	$	784	$	650

Deferred revenue and financed unearned services revenue

The following table summarizes the components of our deferred revenue and financed unearned services balance as reported in our condensed consolidated balance sheets (in millions):

	July 30, 2021		April 30, 2021
Deferred product revenue	$	47	$	59
Deferred services revenue		3,792		3,873
Financed unearned services revenue		65		71
Total	$	3,904	$	4,003
Reported as:
Short-term	$	1,988	$	2,062
Long-term		1,916		1,941
Total	$	3,904	$	4,003

Deferred product revenue represents unrecognized revenue related to undelivered product commitments and other product deliveries that have not met all revenue recognition criteria. Deferred services revenue represents customer payments made in advance for services, which include software and hardware support contracts and other services. Financed unearned services revenue represents undelivered services for which cash has been received under certain third-party financing arrangements. See Note 15 – Commitments and Contingencies for additional information related to these arrangements.

The following tables summarize the activity related to deferred revenue and financed unearned services revenue (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	4,003		$	3,698
Additions		638			644
Revenue recognized during the period		(737	)		(722	)
Balance at end of period	$	3,904		$	3,620

During the three months ended July 30, 2021 and July 31, 2020, we recognized $617 million and $661 million, respectively, that was included in the deferred revenue and financed unearned services revenue balance at the beginning of the respective periods.

As of July 30, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied was $3,904 million, which is equivalent to our deferred revenue and unearned services revenue balance. 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 51% of our deferred revenue and financed unearned services revenue balance in the next 12 months, approximately 24% in the next 13 to 24 months, and the remainder thereafter.

Deferred commissions

The following tables summarize the activity related to deferred commissions and their balances as reported in our condensed consolidated balance sheets (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	197		$	156
Additions		26			21
Expense recognized during the period		(34	)		(25	)
Balance at end of period	$	189		$	152

	July 30, 2021		April 30, 2021
Other current assets	$	80	$	86
Other non-current assets		109		111
Total deferred commissions	$	189	$	197

Other expense, net (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Interest income	$	2		$	3
Interest expense		(18	)		(18	)
Other income (expense), net		4			(17	)
Total other expense, net	$	(12	)	$	(32	)

Statements of cash flows additional information (in millions):

Supplemental cash flow information related to our operating leases is included in Note 8 ─ Leases. Non-cash investing activities and other supplemental cash flow information are presented below:

	Three Months Ended
	July 30, 2021		July 31, 2020
Non-cash Investing Activities:
Capital expenditures incurred but not paid	$	15	$	10
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	17	$	136
Interest paid	$	27	$	16

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Financial Instruments and Fair Value Measurements

3 Months Ended

Jul. 30, 2021

Investments Debt And Equity Securities [Abstract]

Financial Instruments and Fair Value Measurements

6. 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 for the periods ended July 30, 2021 and April 30, 2021 (in millions):

	July 30, 2021		April 30, 2021
Corporate bonds	$	46	$	58
U.S. Treasury and government debt securities		7		8
Certificates of deposit		55		61
Mutual funds		42		40
Total debt and equity securities	$	150	$	167

 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.

The following table presents the contractual maturities of our debt investments as of July 30, 2021 (in millions):

	Amortized Cost		Fair Value
Due in one year or less	$	96	$	97
Due after one year through five years		12		13
	$	108	$	110

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.

Fair Value of Financial Instruments

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

	July 30. 2021
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash	$	4,437		$	4,437	$	—
Corporate bonds		47			—		47
U.S. Treasury and government debt securities		8			4		4
Certificates of deposit		55			—		55
Total cash, cash equivalents and short-term investments	$	4,547		$	4,441	$	106
Other items:
Mutual funds (1)	$	7		$	7	$	—
Mutual funds (2)	$	35		$	35	$	—
Foreign currency exchange contracts assets (1)	$	1		$	—	$	1
Foreign currency exchange contracts liabilities (3)	$	(4	)	$	—	$	(4	)

	April 30, 2021
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash	$	4,468		$	4,468	$	—
Corporate bonds		59			—		59
U.S. Treasury and government debt securities		8			4		4
Certificates of deposit		61			—		61
Total cash, cash equivalents and short-term investments	$	4,596		$	4,472	$	124
Other items:
Mutual funds (1)	$	8		$	8	$	—
Mutual funds (2)	$	32		$	32	$	—
Foreign currency exchange contracts assets (1)	$	9		$	—	$	9
Foreign currency exchange contracts liabilities (3)	$	(1	)	$	—	$	(1	)

⁽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 July 30, 2021 and April 30, 2021, we have not made any adjustments to the prices obtained from our third-party pricing providers.

Fair Value of Debt

As of July 30, 2021 and April 30, 2021, the fair value of our long-term debt was approximately $2,782 million and $2,736 million, respectively. The fair value of our long-term debt was based on observable market prices in a less active market. The fair value of our commercial paper notes approximated their carrying value. All of our debt obligations are categorized as Level 2 instruments.

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Financing Arrangements

3 Months Ended

Jul. 30, 2021

Debt Disclosure [Abstract]

Financing Arrangements

7. 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	July 30, 2021			April 30, 2021
3.25% Senior Notes Due December 2022	3.43%	$	250		$	250
3.30% Senior Notes Due September 2024	3.42%		400			400
1.875% Senior Notes Due June 2025	2.03%		750			750
2.375% Senior Notes Due June 2027	2.51%		550			550
2.70% Senior Notes Due June 2030	2.81%		700			700
Total principal amount			2,650			2,650
Unamortized discount and issuance costs			(17	)		(18	)
Total long-term debt		$	2,633		$	2,632

Senior Notes

Our $750 million aggregate principal amount of 1.875% Senior Notes due 2025, $550 million aggregate principal amount of 2.375% Senior Notes due 2027 and $700 million aggregate principal amount of 2.70% Senior Notes due 2030, were issued in June 2020. Interest on these Senior Notes is payable semi-annually in June and December.

Our 3.30% Senior Notes, with a principal amount of $400 million, were issued in September 2017 with interest paid semi-annually in March and September. Our 3.25% Senior Notes, with a principal amount of $250 million, were issued in December 2012 with interest paid semi-annually in June and December.

Our Senior Notes, which are unsecured, unsubordinated obligations, rank equally in right of payment with any existing and future senior unsecured indebtedness.

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 July 30, 2021, we were in compliance with all covenants associated with the Senior Notes.

As of July 30, 2021, our aggregate future principal debt maturities are as follows (in millions):

Fiscal Year	Amount
2022	$	—
2023		250
2024		—
2025		400
2026		750
Thereafter		1,250
Total	$	2,650

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. While no commercial paper notes were outstanding as of July 30, 2021, we had commercial paper notes outstanding with an aggregate principal amount of $150 million, a weighted-average interest rate of 1.29%, and maturities primarily less than three months as of July 31, 2020. During the first three months of fiscal 2021, we received proceeds of $75 million from the issuance, and made repayments of $76 million for the settlement, of commercial paper notes with original maturities greater than three months.

In connection with the Program, we have a senior unsecured credit agreement with a syndicated group of lenders. The credit agreement, which was amended on January 22, 2021, 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 January 22, 2026, with an option for us to extend the maturity date for two additional 1-year periods, subject to certain conditions. The proceeds of the loans may be used by us for general corporate purposes and as liquidity support for our existing commercial paper program. As of July 30, 2021, we were compliant with all associated covenants in the agreement.  No amounts were drawn against this credit facility during any of the periods presented.

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Leases

3 Months Ended

Jul. 30, 2021

Leases [Abstract]

Leases

8. 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 July 30, 2021, have remaining lease terms of up to 15 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 July 30, 2021, have remaining lease terms of up to 4 years. As of July 30, 2021, our automobile leases have remaining lease terms of up to 5 years. All our leases are classified as operating leases except for certain immaterial equipment finance leases.

In June 2020, we entered into a build-to-suit lease agreement for an office building located in Wichita, Kansas, with future undiscounted payments of approximately $67 million. Because the Company does not control the underlying asset during the construction period, the Company is not considered the owner of the asset under construction for accounting purposes. The lease will commence upon completion of the construction of the office building which is expected to be in the third quarter of fiscal 2022. The initial term of the lease is twenty years with options to renew the lease during the lease term. A ROU asset and related lease liability will be measured and recognized in our financial statements in the period the lease commences.

In April 2021, we entered into a lease for our new corporate headquarters located in San Jose, California, which is comprised of approximately three hundred thousand square feet of office space and requires future minimum undiscounted payments of approximately $180 million over the initial 11-year lease term. The lease agreement also provides us two successive renewal options, each for five years. The lease commenced during the first quarter of fiscal 2022.

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Operating lease cost	$	15	$	14
Variable lease cost		4		3
Total lease cost	$	19	$	17

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):

	Three Months Ended
	July 30, 2021		July 31, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	13	$	14
Right-of-use assets obtained in exchange for new operating lease obligations	$	159	$	10

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

	July 30, 2021			April 30, 2021
Other non-current assets	$	259		$	114
Total operating lease ROU assets	$	259		$	114
Accrued expenses	$	53		$	49
Other long-term liabilities		211			71
Total operating lease liabilities	$	264		$	120
Weighted Average Remaining Lease Term	8.0 years			3.4 years
Weighted Average Discount Rate		2.8	%		2.9	%

Future minimum operating lease payments as of July 30, 2021, which exclude the undiscounted payments for the build-to-suit lease located in Wichita, Kansas, expected to commence in the third quarter of fiscal year 2022, are as follows (in millions):

Fiscal Year	Operating Leases
2022 (remainder)	$	46
2023		46
2024		36
2025		27
2026		24
Thereafter		116
Total lease payments		295
Less: Interest		(31	)
Total	$	264

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Stockholders' Equity

3 Months Ended

Jul. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Equity Incentive Awards

As of July 30, 2021, we have certain equity incentive awards (awards) outstanding, which include stock options and restricted stock units (RSUs), including time-based RSUs and performance-based RSUs (PBRSUs). Also outstanding are purchase rights under our Employee Stock Purchase Plan (ESPP).

Stock Options

Less than 1 million options were outstanding as of July 30, 2021 and April 30, 2021. 

Information related to our stock options is summarized below (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Intrinsic value of exercises	$	5	$	—
Fair value of options vested	$	1	$	—

Restricted Stock Units

In the three months ended July 30, 2021, we granted PBRSUs to certain of our executives. Each PBRSUs has performance-based vesting criteria, in addition to the service-based vesting criteria, such that the PBRSUs cliff-vest at the end of an approximate one, two or three year performance period, which began on the date specified in the grant agreements and typically ends on the last day of the first, second or third fiscal year, respectively, following the grant date. The number of shares of common stock that will be issued to settle most of these PBRSUs at the end of the performance and service period will range from 0% to 200% of a target number of shares originally granted. For most of the PBRSUs granted in the three months ended July 30, 2021, the number of shares issued will depend upon our Total Stockholder Return (TSR) as compared to the TSR of a specified group of benchmark peer companies (each expressed as a growth rate percentage) calculated as of the end of the performance period. The fair values of these TSR performance-based awards were fixed at grant date using a Monte Carlo simulation model. The aggregate grant date fair value of all PBRSUs granted in the current year was $41 million, which is being recognized to compensation expense over the remaining performance / service periods.

The following table summarizes information related to our RSUs, including PBRSUs, (in millions, except fair value):

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding as of April 30, 2021		9		$	47.75
Granted		4		$	81.15
Vested		(2	)	$	48.37
Forfeited		(1	)	$	53.83
Outstanding as of July 30, 2021		10		$	59.95

We primarily use the net share settlement approach upon vesting, where a portion of the shares are withheld as settlement of employee withholding taxes, which decreases the shares issued to the employee by a corresponding value. The number and value of the shares netted for employee taxes are summarized in the table below (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Shares withheld for taxes		1		1
Fair value of shares withheld	$	57	$	33

 Employee Stock Purchase Plan

The following table summarizes activity related to the purchase rights issued under the ESPP (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Shares issued under the ESPP		1		1
Proceeds from issuance of shares	$	52	$	48

Stock-Based Compensation Expense

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Cost of product revenues	$	1	$	1
Cost of services revenues		2		3
Sales and marketing		26		25
Research and development		16		19
General and administrative		8		6
Total stock-based compensation expense	$	53	$	54
Income tax benefit for stock-based compensation expense	$	5	$	4

As of July 30, 2021, total unrecognized compensation expense related to our equity awards was $567 million, which is expected to be recognized on a straight-line basis over a weighted-average remaining service period of 2.7 years.

Stock Repurchase Program

As of July 30, 2021, our Board of Directors has authorized the repurchase of up to $14.1 billion of our common stock. 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.

The following table summarized activity related to the stock repurchase program for the three months ended July 30, 2021 (in millions, except for per share amounts):

Number of shares repurchased		1
Average price per share	$	80.08
Stock repurchases allocated to additional paid-in capital	$	3
Stock repurchases allocated to retained earnings	$	97
Remaining authorization at end of period	$	752

Since the May 13, 2003 inception of our stock repurchase program through July 30, 2021, we repurchased a total of 341 million shares of our common stock at an average price of $39.17 per share, for an aggregate purchase price of $13.4 billion.

Dividends

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Dividends per share declared	$	0.50	$	0.48
Dividend payments allocated to additional paid-in capital	$	—	$	30
Dividend payments allocated to retained earnings	$	112	$	77

On August 23, 2021, we declared a cash dividend of $0.50 per share of common stock, payable on October 27, 2021 to holders of record as of the close of business on October 8, 2021. 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.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) (AOCI) by component, net of tax, are summarized below (in millions):

	Foreign Currency Translation Adjustments			Defined Benefit Obligation Adjustments			Unrealized Gains (Losses) on Available- for-Sale Securities			Unrealized Gains (Losses) on Derivative Instruments		Total
Balance as of April 30, 2021	$	(27	)	$	(4	)	$	1		$	—	$	(30	)
Other comprehensive income (loss), net of tax		(4	)		—			(1	)		1		(4	)
Total other comprehensive income (loss)		(4	)		—			(1	)		1		(4	)
Balance as of July 30, 2021	$	(31	)	$	(4	)	$	—		$	1	$	(34	)

The amounts reclassified out of AOCI are as follows (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020		Statements of Income Classification
Realized losses on cash flow hedges		—		1	Net revenues
Total reclassifications	$	—	$	1

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Derivatives and Hedging Activities

3 Months Ended

Jul. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

10. 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 July 30, 2021 or April 30, 2021. 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):

	July 30, 2021		July 31, 2020
Cash Flow Hedges
Forward contracts sold	$	10	$	—
Forward contracts purchased	$	144	$	123
Balance Sheet Contracts
Forward contracts sold	$	632	$	339
Forward contracts purchased	$	82	$	94

The gain (loss) of cash flow hedges recognized in net revenues is presented in the condensed consolidated statements of comprehensive income and Note 9 – Stockholders’ Equity.

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Foreign currency exchange contracts	$	9	$	24

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Restructuring Charges

3 Months Ended

Jul. 30, 2021

Restructuring And Related Activities [Abstract]

Restructuring Charges

11. Restructuring Charges

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

1%. Charges related to the plan consisted primarily of office relocation costs, lease termination fees, and employee severance related costs. Substantially all workforce related activities under the plan have been completed. 

Management has previously approved several restructuring actions, including the August 2020 Plan and May 2020 Plan, under which we reduced our global workforce by approximately 6%. Charges related to these restructuring plans consisted primarily of employee severance-related costs. Substantially all activities under these plans were completed as of the end of fiscal 2021.

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	1		$	1
Net charges		22			5
Cash payments		(17	)		(5	)
Balance at end of period	$	6		$	1

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Income Taxes

3 Months Ended

Jul. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Effective tax rates		14.8	%		26.0	%

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. Our effective tax rate for the three months ended July 30, 2021 includes the impact of discrete tax benefits for lapses of statute of limitations as well as benefits related to stock-based compensation. The effective tax rate for the three months ended July 31, 2020 reflects the impact of taxes resulting from the integration of acquired companies and smaller benefits for stock-based compensation as compared to the current year.

As of July 30, 2021, we had $214 million of gross unrecognized tax benefits, of which $120 million has been recorded in other long-term liabilities. Inclusive of penalties, interest and certain income tax benefits, $117 million would affect our provision for income taxes if recognized.

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.

In September 2010, the Danish Tax Authorities issued a decision concluding that distributions declared in 2005 and 2006 by our Danish subsidiary were subject to Danish at-source dividend withholding tax. We do not believe that our Danish subsidiary is liable for such withholding tax and filed an appeal with the Danish Tax Tribunal. In December 2011, the Danish Tax Tribunal issued a ruling in favor of NetApp. The Danish tax examination agency appealed this decision at the Danish High Court (DHC) in March 2012. In February 2016, the DHC requested a preliminary ruling from the Court of Justice of the European Union (CJEU). In March 2018, the Advocate General issued an opinion which was largely in favor of NetApp. The CJEU was not bound by the opinion of the Advocate General and issued its preliminary ruling in February 2019. The CJEU ruling did not preclude the Danish Tax Authorities from imposing withholding tax on distributions based on the benefits of certain European Union directives. On May 3, 2021, the DHC reached a decision resulting in NetApp prevailing on the predominate distribution made in 2005. The smaller distribution made in 2006 was ruled in favor of the Danish Tax Authorities. On May 28, 2021, the Danish Tax Authorities appealed the DHC decision to the Danish Supreme Court. We believe it is more likely than not that our distributions were not subject to withholding tax and we will continue to support our position in the appeals process with the Danish Supreme Court.

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.

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Net Income per Share

3 Months Ended

Jul. 30, 2021

Earnings Per Share [Abstract]

Net Income per Share

13. 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
	July 30, 2021		July 31, 2020
Numerator:
Net income	$	202	$	77
Denominator:
Shares used in basic computation		223		221
Dilutive impact of employee equity award plans		6		1
Shares used in diluted computation		229		222
Net Income per Share:
Basic	$	0.91	$	0.35
Diluted	$	0.88	$	0.35

No potential shares from outstanding employee awards were excluded from the diluted net income per share calculation for the three months ended July 30, 2021. Six million potential shares from outstanding employee equity awards were excluded from the diluted net income per share calculations for the three months ended July 31, 2020, as their inclusion would have been anti-dilutive.

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Segment, Geographic, and Significant Customer Information

3 Months Ended

Jul. 30, 2021

Segment Reporting [Abstract]

Segment, Geographic, and Significant Customer Information

14. Segment, Geographic, and Significant Customer Information

Our operations are now organized into two segments for financial reporting purposes: Public Cloud and Hybrid 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. 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.

Public Cloud offers a portfolio of products delivered primarily as-a-service, including related support, and made available on the world’s leading clouds. This portfolio includes storage services, cloud automation and optimization services, and cloud infrastructure monitoring services.

Hybrid Cloud offers a portfolio of storage and data management solutions that help customers build and integrate on-premises and private cloud environments. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

Financial information for the prior period has been updated to conform to the current year presentation of two segments.

Segment Revenues and Gross Profit

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

	Three Months Ended July 30, 2021
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	730		$	—		$	730
Support revenues		578			—			578
Professional and other services revenues		71			—			71
Public cloud revenues		—			79			79
Net revenues		1,379			79			1,458
Cost of product revenues		326			—			326
Cost of support revenues		48			—			48
Cost of professional and other services revenues		51			—			51
Cost of public cloud revenues		—			23			23
Segment cost of revenues		425			23			448
Segment gross profit	$	954		$	56		$	1,010
Segment gross margin		69.2	%		70.9	%		69.3	%
Unallocated cost of revenues1								11
Total gross profit							$	999
Total gross margin								68.5	%
1 Unallocated cost of revenues are composed of $4 million of stock-based compensation expense and $7 million of amortization of intangible assets.

	Three Months Ended July 31, 2020
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	627		$	—		$	627
Support revenues		577			—			577
Professional and other services revenues		68			—			68
Public cloud revenues		—			31			31
Net revenues		1,272			31			1,303
Cost of product revenues		305			—			305
Cost of support revenues		51			—			51
Cost of professional and other services revenues		48			—			48
Cost of public cloud revenues		—			13			13
Segment cost of revenues		404			13			417
Segment gross profit	$	868		$	18		$	886
Segment gross margin		68.2	%		58.1	%		68.0	%
Unallocated cost of revenues1								14
Total gross profit							$	872
Total gross margin								66.9	%
1 Unallocated cost of revenues are composed of $4 million of stock-based compensation expense and $10 million of amortization of intangible assets.

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

	Three Months Ended
	July 30, 2021		July 31, 2020
United States, Canada and Latin America (Americas)	$	786	$	709
Europe, Middle East and Africa (EMEA)		454		383
Asia Pacific (APAC)		218		211
Net revenues	$	1,458	$	1,303

Americas revenues consist of sales to Americas commercial and U.S. public sector markets. Sales to customers inside the U.S. were $696 million and $637 million during the three months ended July 30, 2021 and July 31, 2020, 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):

	July 30, 2021		April 30, 2021
U.S.	$	2,136	$	2,098
International		2,411		2,498
Total	$	4,547	$	4,596

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):

	July 30, 2021		April 30, 2021
U.S.	$	343	$	340
International		190		185
Total	$	533	$	525

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Arrow Electronics, Inc.		24	%		23	%
Tech Data Corporation		20	%		20	%

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

	July 30, 2021			April 30, 2021
Arrow Electronics, Inc.		10	%		10	%
Tech Data Corporation		19	%		21	%

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Commitments and Contingencies

3 Months Ended

Jul. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Purchase Orders and Other Commitments

In the ordinary course of business, we make commitments to third-party contract manufacturers to manage lead times and meet product forecasts, and to other parties to purchase various key components used in the manufacturing of our products. A significant portion of our reported purchase commitments arising from these agreements consists of firm, non-cancelable, and unconditional commitments. As of July 30, 2021, we had $614 million 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 July 30, 2021 and April 30, 2021, such liability amounted to $13 million and $15 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 July 30, 2021, we had $340 million 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, and we classify the proceeds from these sales as cash flows from operating activities in our condensed consolidated statements of cash flows. We account for the sales of these receivables as “true sales” as defined in the accounting standards on transfers of financial assets, as we are considered to have surrendered control of these financing receivables. Provided all other revenue recognition criteria have been met, we recognize product revenues for these arrangements, net of any payment discounts from financing transactions, upon product acceptance. We sold $17 million and $13 million of receivables during the three months ended July 30, 2021 and July 31, 2020, 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 and we recognize revenue upon delivery to the end-user customer, if all other revenue recognition criteria have been met.

Some of the leasing arrangements described above have been financed on a recourse basis through third-party financing institutions. 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. Where we provide a guarantee for recourse leases and collectability is probable, we account for these transactions as sales type leases. If collectability is not probable, the cash received is recorded as a deposit liability and revenue is deferred until the arrangement is deemed collectible. For leases that we are not a party to, other than providing recourse, we recognize revenue when control is transferred. As of July 30, 2021 and April 30, 2021, the aggregate amount by which such contingencies exceeded the associated liabilities was not significant. To date, we have not experienced significant losses under our lease financing programs or other financing arrangements.

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 July 30, 2021, 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 payments under these arrangements is remote. The portion of the financial arrangement that represents unearned services revenue is included in deferred revenue and financed unearned services revenue in our condensed consolidated balance sheets.

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.

On August 14, 2019, a purported securities class action lawsuit was filed in the United States District Court for the Northern District of California, naming as defendants NetApp and certain of our executive officers. The complaint alleges that the defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5, by making materially false or misleading statements with respect to our financial guidance for fiscal 2020, as provided on May 22, 2019. Members of the alleged class are purchasers of the Company’s stock between May 22, 2019 and August 1, 2019, the date we provided revised financial guidance for fiscal 2020. The complaint alleges unspecified damages based on the decline in the market price of our shares following the issuance of the revised guidance on August 1, 2019. NetApp’s Motion to Dismiss was granted and on February 26, 2021 and the judge entered judgment in favor of NetApp. On March 26, 2021, Plaintiffs filed a notice of appeal. The parties subsequently engaged in settlement discussions, and on July 30, 2021 entered into a Memorandum of Understanding (“MOU”) providing for the settlement of the class action.  Pursuant to the terms of MOU, NetApp has agreed to pay approximately $2.0 million in connection with the settlement, and this amount was accrued during the three months ended July 30, 2021. The parties further agreed to negotiate in good faith to execute definitive stipulations of settlement and related documents to be filed with the court, which will not contain any admission of liability, wrongdoing or responsibility by any of the parties and will provide that upon final approval of the settlement, the class action will be dismissed with prejudice, with mutual releases by all parties. The settlement is subject to court approval.

We are subject to various other legal proceedings and claims that arise in the normal course of business. We may, from time to time, receive claims that we are infringing third parties’ intellectual property rights, including claims for alleged patent infringement brought by non-practicing entities. We are currently involved in patent litigations brought by non-practicing entities and other third parties. We 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, and overall trends. No material accrual has been recorded as of July 30, 2021 related to such matters.

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Description of Business and Significant Accounting Policies (Policies)

3 Months Ended

Jul. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation and Preparation

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 year 2022, ending on April 29, 2022, is a 52-week year, with 13 weeks in each of its quarters. Fiscal year 2021, ended on April 30, 2021 was a 53-week year, with 14 weeks included in its first quarter and 13 weeks in each subsequent quarter.

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 30, 2021 contained in our Annual Report on Form 10-K. The results of operations for the three months ended July 30, 2021 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; product warranties; employee compensation and benefit accruals; stock-based compensation; loss contingencies; investment impairments; income taxes and fair value measurements. Actual results could differ materially from those estimates. Management’s estimates include, as applicable, the anticipated impacts of the COVID-19 pandemic.

Segment Change

Segment Change

Effective July 30, 2021, our Chief Operating Decision Maker, who is our Chief Executive Officer, realigned internal reporting and began using financial information for components of our business, organized based on category of product/solution, to evaluate performance and allocate resources. This resulted in the creation of two operating segments and two reportable segments for financial reporting purposes: Public Cloud and Hybrid Cloud.

Public Cloud

NetApp's Public Cloud segment offers a portfolio of products delivered primarily as-a-service, including related support, and made available on the world’s leading clouds. This portfolio includes storage services, cloud automation and optimization services, and cloud infrastructure monitoring services. Public Cloud includes certain reseller arrangements in which the timing of our consideration follows the end user consumption of the reseller services.

Hybrid Cloud

NetApp’s Hybrid Cloud segment offers a portfolio of storage and data management solutions that help customers build and integrate on-premises and private cloud environments. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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

Accounting Standards on Transfers of Financial Assets

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, and we classify the proceeds from these sales as cash flows from operating activities in our condensed consolidated statements of cash flows. We account for the sales of these receivables as “true sales” as defined in the accounting standards on transfers of financial assets, as we are considered to have surrendered control of these financing receivables. Provided all other revenue recognition criteria have been met, we recognize product revenues for these arrangements, net of any payment discounts from financing transactions, upon product acceptance. We sold $17 million and $13 million of receivables during the three months ended July 30, 2021 and July 31, 2020, respectively.

Debt

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 July 30, 2021, 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 payments under these arrangements is remote. The portion of the financial arrangement that represents unearned services revenue is included in deferred revenue and financed unearned services revenue in our condensed consolidated balance sheets.

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Business Combinations (Tables)

3 Months Ended

Jul. 30, 2021

Data Mechanics Inc

Business Acquisition [Line Items]

Summary of Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed

The preliminary acquisition date fair values of the assets acquired and liabilities assumed are as follows (in millions):

	Amount
Cash	$	1
Developed technology		5
Goodwill		11
Total assets acquired		17
Liabilities assumed		(2	)
Total purchase price	$	15

Cloud Jumper Corporation

Business Acquisition [Line Items]

Summary of Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed

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

	Amount
Developed technology	$	16
Customer contracts/relationships		6
Goodwill		12
Other assets		1
Total assets acquired		35
Liabilities assumed		(1	)
Total purchase price	$	34

Spot, Inc.

Business Acquisition [Line Items]

Summary of Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed

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

	Amount
Cash	$	24
Intangible assets		84
Goodwill		249
Other assets		6
Total assets acquired		363
Liabilities assumed		(23	)
Total purchase price	$	340

Schedule of Components of Intangible Assets Acquired

The components of the Spot intangible assets acquired were as follows (in millions, except useful life):

	Amount		Estimated useful life (years)
Developed technology	$	53	5
Customer contracts/relationships		28	5
Trade name		3	3
Total intangible assets	$	84

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Goodwill and Purchased Intangible Assets, Net (Tables)

3 Months Ended

Jul. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Goodwill Activity and Classification of Goodwill by Reportable Segment

Goodwill activity is summarized as follows (in millions):

	Amount
Balance as of April 30, 2021	$	2,039
Additions		11
Balance as of July 30, 2021	$	2,050

Goodwill by reportable segment as of July 30, 2021 is as follows (in millions):

	Amount
Public Cloud	$	336
Hybrid Cloud		1,714
Total goodwill	$	2,050

Purchased Intangible Assets, Net

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

	July 30, 2021							April 30, 2021
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Assets		Amortization			Assets		Assets		Amortization			Assets
Developed technology	$	106	$	(40	)	$	66	$	215	$	(147	)	$	68
Customer contracts/relationships		38		(9	)		29		38		(8	)		30
Other purchased intangibles		3		(1	)		2		3		—			3
Total purchased intangible assets	$	147	$	(50	)	$	97	$	256	$	(155	)	$	101

Amortization Expense for Purchased Intangible Assets

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

	Three Months Ended				Statements of
	July 30, 2021		July 31, 2020		Income Classification
Developed technology	$	7	$	10	Cost of revenues
Customer contracts/relationships		1		—	Operating expenses
Other purchased intangibles		1		—	Operating expenses
Total	$	9	$	10

Future Amortization Expense Related to Purchased Intangible Assets

As of July 30, 2021, future amortization expense related to purchased intangible assets is as follows (in millions):

Fiscal Year	Amount
Remainder of 2022	$	29
2023		30
2024		19
2025		16
2026		3
Total	$	97

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Supplemental Financial Information (Tables)

3 Months Ended

Jul. 30, 2021

Supplemental Financial Information [Abstract]

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash (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:

	July 30, 2021		April 30, 2021
Cash and cash equivalents	$	4,492	$	4,529
Restricted cash		8		6
Cash, cash equivalents and restricted cash	$	4,500	$	4,535

Inventories

Inventories (in millions):

	July 30, 2021		April 30, 2021
Purchased components	$	36	$	22
Finished goods		72		92
Inventories	$	108	$	114

Property and Equipment, Net

Property and equipment, net (in millions):

	July 30, 2021			April 30, 2021
Land	$	46		$	46
Buildings and improvements		350			356
Leasehold improvements		78			83
Computer, production, engineering and other equipment		871			869
Computer software		290			305
Furniture and fixtures		77			93
Construction-in-progress		62			46
		1,774			1,798
Accumulated depreciation and amortization		(1,241	)		(1,273	)
Property and equipment, net	$	533		$	525

Other Non-Current Assets

Other non-current assets (in millions):

	July 30, 2021		April 30, 2021
Deferred tax assets	$	233	$	219
Operating lease ROU assets		259		114
Other assets		353		361
Other non-current assets	$	845	$	694

Accrued Expenses

Accrued expenses (in millions):

	July 30, 2021		April 30, 2021
Accrued compensation and benefits	$	282	$	505
Product warranty liabilities		21		21
Operating lease liabilities		53		49
Other current liabilities		391		395
Accrued expenses	$	747	$	970

Product Warranty Liabilities

The following tables summarize the activity related to product warranty liabilities and their balances as reported in our condensed consolidated balance sheets (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	32		$	41
Expense accrued during the period		4			1
Warranty costs incurred		(5	)		(5	)
Balance at end of period	$	31		$	37

	July 30, 2021		April 30, 2021
Accrued expenses	$	21	$	21
Other long-term liabilities		10		11
Total warranty liabilities	$	31	$	32

Other Long-term Liabilities

Other long-term liabilities (in millions):

	July 30, 2021		April 30, 2021
Liability for uncertain tax positions	$	120	$	127
Income taxes payable		351		351
Product warranty liabilities		10		11
Operating lease liabilities		211		71
Other liabilities		92		90
Other long-term liabilities	$	784	$	650

Deferred Revenue and Financed Unearned Services Revenue

The following table summarizes the components of our deferred revenue and financed unearned services balance as reported in our condensed consolidated balance sheets (in millions):

	July 30, 2021		April 30, 2021
Deferred product revenue	$	47	$	59
Deferred services revenue		3,792		3,873
Financed unearned services revenue		65		71
Total	$	3,904	$	4,003
Reported as:
Short-term	$	1,988	$	2,062
Long-term		1,916		1,941
Total	$	3,904	$	4,003

The following tables summarize the activity related to deferred revenue and financed unearned services revenue (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	4,003		$	3,698
Additions		638			644
Revenue recognized during the period		(737	)		(722	)
Balance at end of period	$	3,904		$	3,620

Summary of Activity Related to Deferred Commissions and their Balances in Condensed Consolidated Balance Sheets

The following tables summarize the activity related to deferred commissions and their balances as reported in our condensed consolidated balance sheets (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	197		$	156
Additions		26			21
Expense recognized during the period		(34	)		(25	)
Balance at end of period	$	189		$	152

	July 30, 2021		April 30, 2021
Other current assets	$	80	$	86
Other non-current assets		109		111
Total deferred commissions	$	189	$	197

Other Expense, Net

Other expense, net (in millions):

	Three Months Ended
	July 30, 2021			July 31, 2020
Interest income	$	2		$	3
Interest expense		(18	)		(18	)
Other income (expense), net		4			(17	)
Total other expense, net	$	(12	)	$	(32	)

Statements of Cash Flows Additional Information

Supplemental cash flow information related to our operating leases is included in Note 8 ─ Leases. Non-cash investing activities and other supplemental cash flow information are presented below:

	Three Months Ended
	July 30, 2021		July 31, 2020
Non-cash Investing Activities:
Capital expenditures incurred but not paid	$	15	$	10
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	17	$	136
Interest paid	$	27	$	16

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Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Jul. 30, 2021

Investments Debt And Equity Securities [Abstract]

Summary of Investments at Cost or Amortized Cost

The following is a summary of our investments at their cost or amortized cost for the periods ended July 30, 2021 and April 30, 2021 (in millions):

	July 30, 2021		April 30, 2021
Corporate bonds	$	46	$	58
U.S. Treasury and government debt securities		7		8
Certificates of deposit		55		61
Mutual funds		42		40
Total debt and equity securities	$	150	$	167

Contractual Maturities of Debt Investments

The following table presents the contractual maturities of our debt investments as of July 30, 2021 (in millions):

	Amortized Cost		Fair Value
Due in one year or less	$	96	$	97
Due after one year through five years		12		13
	$	108	$	110

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

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

	July 30. 2021
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash	$	4,437		$	4,437	$	—
Corporate bonds		47			—		47
U.S. Treasury and government debt securities		8			4		4
Certificates of deposit		55			—		55
Total cash, cash equivalents and short-term investments	$	4,547		$	4,441	$	106
Other items:
Mutual funds (1)	$	7		$	7	$	—
Mutual funds (2)	$	35		$	35	$	—
Foreign currency exchange contracts assets (1)	$	1		$	—	$	1
Foreign currency exchange contracts liabilities (3)	$	(4	)	$	—	$	(4	)

	April 30, 2021
				Fair Value Measurements at Reporting Date Using
	Total			Level 1		Level 2
Cash	$	4,468		$	4,468	$	—
Corporate bonds		59			—		59
U.S. Treasury and government debt securities		8			4		4
Certificates of deposit		61			—		61
Total cash, cash equivalents and short-term investments	$	4,596		$	4,472	$	124
Other items:
Mutual funds (1)	$	8		$	8	$	—
Mutual funds (2)	$	32		$	32	$	—
Foreign currency exchange contracts assets (1)	$	9		$	—	$	9
Foreign currency exchange contracts liabilities (3)	$	(1	)	$	—	$	(1	)

⁽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

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Financing Arrangements (Tables)

3 Months Ended

Jul. 30, 2021

Debt Disclosure [Abstract]

Carrying Value of 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	July 30, 2021			April 30, 2021
3.25% Senior Notes Due December 2022	3.43%	$	250		$	250
3.30% Senior Notes Due September 2024	3.42%		400			400
1.875% Senior Notes Due June 2025	2.03%		750			750
2.375% Senior Notes Due June 2027	2.51%		550			550
2.70% Senior Notes Due June 2030	2.81%		700			700
Total principal amount			2,650			2,650
Unamortized discount and issuance costs			(17	)		(18	)
Total long-term debt		$	2,633		$	2,632

Future Principal Debt Maturities

As of July 30, 2021, our aggregate future principal debt maturities are as follows (in millions):

Fiscal Year	Amount
2022	$	—
2023		250
2024		—
2025		400
2026		750
Thereafter		1,250
Total	$	2,650

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Leases (Tables)

3 Months Ended

Jul. 30, 2021

Leases [Abstract]

Components of Lease Cost Related to Operating Leases

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Operating lease cost	$	15	$	14
Variable lease cost		4		3
Total lease cost	$	19	$	17

Supplemental Cash Flow Information Related to Operating Leases

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Cash paid for amounts included in the measurement of operating lease liabilities	$	13	$	14
Right-of-use assets obtained in exchange for new operating lease obligations	$	159	$	10

Supplemental Balance Sheet Information Related to Operating Leases

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

	July 30, 2021			April 30, 2021
Other non-current assets	$	259		$	114
Total operating lease ROU assets	$	259		$	114
Accrued expenses	$	53		$	49
Other long-term liabilities		211			71
Total operating lease liabilities	$	264		$	120
Weighted Average Remaining Lease Term	8.0 years			3.4 years
Weighted Average Discount Rate		2.8	%		2.9	%

Future Minimum Operating Lease Payments

Future minimum operating lease payments as of July 30, 2021, which exclude the undiscounted payments for the build-to-suit lease located in Wichita, Kansas, expected to commence in the third quarter of fiscal year 2022, are as follows (in millions):

Fiscal Year	Operating Leases
2022 (remainder)	$	46
2023		46
2024		36
2025		27
2026		24
Thereafter		116
Total lease payments		295
Less: Interest		(31	)
Total	$	264

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Stockholders' Equity (Tables)

3 Months Ended

Jul. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Information Related to Stock Options

Information related to our stock options is summarized below (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Intrinsic value of exercises	$	5	$	—
Fair value of options vested	$	1	$	—

Activity Related to Restricted Stock Units Including Performance-Based Restricted Stock Units

The following table summarizes information related to our RSUs, including PBRSUs, (in millions, except fair value):

	Number of Shares			Weighted- Average Grant Date Fair Value
Outstanding as of April 30, 2021		9		$	47.75
Granted		4		$	81.15
Vested		(2	)	$	48.37
Forfeited		(1	)	$	53.83
Outstanding as of July 30, 2021		10		$	59.95

Number and Value of Shares Netted for Employee Taxes

The number and value of the shares netted for employee taxes are summarized in the table below (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Shares withheld for taxes		1		1
Fair value of shares withheld	$	57	$	33

Schedule of Employee Stock Purchase Plan (ESPP)

The following table summarizes activity related to the purchase rights issued under the ESPP (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020
Shares issued under the ESPP		1		1
Proceeds from issuance of shares	$	52	$	48

Stock-Based Compensation Expense

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Cost of product revenues	$	1	$	1
Cost of services revenues		2		3
Sales and marketing		26		25
Research and development		16		19
General and administrative		8		6
Total stock-based compensation expense	$	53	$	54
Income tax benefit for stock-based compensation expense	$	5	$	4

Summary of Activities Related to Stock Repurchase Program

The following table summarized activity related to the stock repurchase program for the three months ended July 30, 2021 (in millions, except for per share amounts):

Number of shares repurchased		1
Average price per share	$	80.08
Stock repurchases allocated to additional paid-in capital	$	3
Stock repurchases allocated to retained earnings	$	97
Remaining authorization at end of period	$	752

Summary of Activities Related to Dividends on Common Stock

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Dividends per share declared	$	0.50	$	0.48
Dividend payments allocated to additional paid-in capital	$	—	$	30
Dividend payments allocated to retained earnings	$	112	$	77

Accumulated Other Comprehensive Income (Loss) by Component Net of Tax

Changes in accumulated other comprehensive income (loss) (AOCI) by component, net of tax, are summarized below (in millions):

	Foreign Currency Translation Adjustments			Defined Benefit Obligation Adjustments			Unrealized Gains (Losses) on Available- for-Sale Securities			Unrealized Gains (Losses) on Derivative Instruments		Total
Balance as of April 30, 2021	$	(27	)	$	(4	)	$	1		$	—	$	(30	)
Other comprehensive income (loss), net of tax		(4	)		—			(1	)		1		(4	)
Total other comprehensive income (loss)		(4	)		—			(1	)		1		(4	)
Balance as of July 30, 2021	$	(31	)	$	(4	)	$	—		$	1	$	(34	)

Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss)

The amounts reclassified out of AOCI are as follows (in millions):

	Three Months Ended
	July 30, 2021		July 31, 2020		Statements of Income Classification
Realized losses on cash flow hedges		—		1	Net revenues
Total reclassifications	$	—	$	1

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Derivatives and Hedging Activities (Tables)

3 Months Ended

Jul. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Notional Value of Outstanding Foreign Currency Exchange Forward Contracts

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

	July 30, 2021		July 31, 2020
Cash Flow Hedges
Forward contracts sold	$	10	$	—
Forward contracts purchased	$	144	$	123
Balance Sheet Contracts
Forward contracts sold	$	632	$	339
Forward contracts purchased	$	82	$	94

Schedule of Derivative Instruments Not Designated as Hedging Instruments

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

	Three Months Ended
	July 30, 2021		July 31, 2020
Foreign currency exchange contracts	$	9	$	24

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Restructuring Charges (Tables)

3 Months Ended

Jul. 30, 2021

Restructuring And Related Activities [Abstract]

Activities Related to Restructuring Reserves

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Balance at beginning of period	$	1		$	1
Net charges		22			5
Cash payments		(17	)		(5	)
Balance at end of period	$	6		$	1

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Income Taxes (Tables)

3 Months Ended

Jul. 30, 2021

Income Tax Disclosure [Abstract]

Effective Tax Rates

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Effective tax rates		14.8	%		26.0	%

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Net Income per Share (Tables)

3 Months Ended

Jul. 30, 2021

Earnings Per Share [Abstract]

Computation of Basic and Diluted 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
	July 30, 2021		July 31, 2020
Numerator:
Net income	$	202	$	77
Denominator:
Shares used in basic computation		223		221
Dilutive impact of employee equity award plans		6		1
Shares used in diluted computation		229		222
Net Income per Share:
Basic	$	0.91	$	0.35
Diluted	$	0.88	$	0.35

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Segment, Geographic, and Significant Customer Information (Tables)

3 Months Ended

Jul. 30, 2021

Segment Reporting [Abstract]

Schedule of Financial Information by Segment

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

	Three Months Ended July 30, 2021
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	730		$	—		$	730
Support revenues		578			—			578
Professional and other services revenues		71			—			71
Public cloud revenues		—			79			79
Net revenues		1,379			79			1,458
Cost of product revenues		326			—			326
Cost of support revenues		48			—			48
Cost of professional and other services revenues		51			—			51
Cost of public cloud revenues		—			23			23
Segment cost of revenues		425			23			448
Segment gross profit	$	954		$	56		$	1,010
Segment gross margin		69.2	%		70.9	%		69.3	%
Unallocated cost of revenues1								11
Total gross profit							$	999
Total gross margin								68.5	%
1 Unallocated cost of revenues are composed of $4 million of stock-based compensation expense and $7 million of amortization of intangible assets.

	Three Months Ended July 31, 2020
	Hybrid Cloud			Public Cloud			Consolidated
Product revenues	$	627		$	—		$	627
Support revenues		577			—			577
Professional and other services revenues		68			—			68
Public cloud revenues		—			31			31
Net revenues		1,272			31			1,303
Cost of product revenues		305			—			305
Cost of support revenues		51			—			51
Cost of professional and other services revenues		48			—			48
Cost of public cloud revenues		—			13			13
Segment cost of revenues		404			13			417
Segment gross profit	$	868		$	18		$	886
Segment gross margin		68.2	%		58.1	%		68.0	%
Unallocated cost of revenues1								14
Total gross profit							$	872
Total gross margin								66.9	%
1 Unallocated cost of revenues are composed of $4 million of stock-based compensation expense and $10 million of amortization of intangible assets.

Schedule of Revenues by Geographic Region

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

	Three Months Ended
	July 30, 2021		July 31, 2020
United States, Canada and Latin America (Americas)	$	786	$	709
Europe, Middle East and Africa (EMEA)		454		383
Asia Pacific (APAC)		218		211
Net revenues	$	1,458	$	1,303

Schedule of Cash, Cash Equivalents and Short-Term Investments

The following table presents cash, cash equivalents and short-term investments held in the U.S. and internationally in various foreign subsidiaries (in millions):

	July 30, 2021		April 30, 2021
U.S.	$	2,136	$	2,098
International		2,411		2,498
Total	$	4,547	$	4,596

Schedule of Property and Equipment, Net by Geographic Areas

The following table presents property and equipment information for geographic areas based on the physical location of the assets (in millions):

	July 30, 2021		April 30, 2021
U.S.	$	343	$	340
International		190		185
Total	$	533	$	525

Schedule of Revenues from Significant Customers

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

	Three Months Ended
	July 30, 2021			July 31, 2020
Arrow Electronics, Inc.		24	%		23	%
Tech Data Corporation		20	%		20	%

Schedule of Net Accounts Receivable from Significant Customers

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

	July 30, 2021			April 30, 2021
Arrow Electronics, Inc.		10	%		10	%
Tech Data Corporation		19	%		21	%

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Description of Business and Significant Accounting Policies - Additional Information (Detail)	3 Months Ended
	Jul. 30, 2021 Segment
Accounting Policies [Abstract]
Number of operating segments	2
Number of reportable segments	2

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Business Combinations - Additional Information (Detail) - USD ($) $ in Millions	Jun. 18, 2021	Jul. 09, 2020	Apr. 28, 2020
Data Mechanics Inc
Business Acquisition [Line Items]
Business acquisition cash paid	$ 15
Cloud Jumper Corporation
Business Acquisition [Line Items]
Business acquisition cash paid			$ 34
Spot, Inc.
Business Acquisition [Line Items]
Business acquisition cash paid		$ 340

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Business Combinations - Summary of Acquisition Date Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Jun. 18, 2021	Apr. 30, 2021	Jul. 09, 2020	Apr. 28, 2020
Business Acquisition [Line Items]
Goodwill	$ 2,050		$ 2,039
Data Mechanics Inc
Business Acquisition [Line Items]
Cash		$ 1
Goodwill		11
Total assets acquired		17
Liabilities assumed		(2)
Total purchase price		15
Data Mechanics Inc | Developed Technology
Business Acquisition [Line Items]
Intangible assets		$ 5
Cloud Jumper Corporation
Business Acquisition [Line Items]
Goodwill					$ 12
Other assets					1
Total assets acquired					35
Liabilities assumed					(1)
Total purchase price					34
Cloud Jumper Corporation | Developed Technology
Business Acquisition [Line Items]
Intangible assets					16
Cloud Jumper Corporation | Customer Contracts/Relationships
Business Acquisition [Line Items]
Intangible assets					$ 6
Spot, Inc.
Business Acquisition [Line Items]
Cash				$ 24
Intangible assets				84
Goodwill				249
Other assets				6
Total assets acquired				363
Liabilities assumed				(23)
Total purchase price				340
Spot, Inc. | Developed Technology
Business Acquisition [Line Items]
Intangible assets				53
Spot, Inc. | Customer Contracts/Relationships
Business Acquisition [Line Items]
Intangible assets				$ 28

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Business Combinations - Schedule of Components of Intangible Assets Acquired (Detail) - Spot, Inc. $ in Millions	Jul. 09, 2020 USD ($)
Business Acquisition [Line Items]
Intangible assets	$ 84
Developed Technology
Business Acquisition [Line Items]
Intangible assets	$ 53
Estimated useful life (years)	5 years
Customer Contracts/Relationships
Business Acquisition [Line Items]
Intangible assets	$ 28
Estimated useful life (years)	5 years
Trade Name
Business Acquisition [Line Items]
Intangible assets	$ 3
Estimated useful life (years)	3 years

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Goodwill and Purchased Intangible Assets, Net - Schedule of Goodwill Activity (Detail) $ in Millions	3 Months Ended
	Jul. 30, 2021 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 2,039
Additions	11
Ending balance	$ 2,050

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Goodwill and Purchased Intangible Assets, Net - Additional Information (Detail)	3 Months Ended
	Jul. 30, 2021 USD ($) Segment
Goodwill And Intangible Assets Disclosure [Abstract]
Number of reportable segments | Segment	2
Goodwill impairment charges | $	$ 0

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Goodwill and Purchased Intangible Assets, Net - Summary of Goodwill by Reportable Segment (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Goodwill [Line Items]
Total goodwill	$ 2,050	$ 2,039
Public Cloud
Goodwill [Line Items]
Total goodwill	336
Hybrid Cloud
Goodwill [Line Items]
Total goodwill	$ 1,714

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Goodwill and Purchased Intangible Assets, Net - Purchased Intangible Assets, Net (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Acquired Finite Lived Intangible Assets [Line Items]
Gross Assets	$ 147	$ 256
Accumulated Amortization	(50)	(155)
Net Assets	97	101
Developed Technology
Acquired Finite Lived Intangible Assets [Line Items]
Gross Assets	106	215
Accumulated Amortization	(40)	(147)
Net Assets	66	68
Customer Contracts/Relationships
Acquired Finite Lived Intangible Assets [Line Items]
Gross Assets	38	38
Accumulated Amortization	(9)	(8)
Net Assets	29	30
Other Purchased Intangibles
Acquired Finite Lived Intangible Assets [Line Items]
Gross Assets	3	3
Accumulated Amortization	(1)	0
Net Assets	$ 2	$ 3

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Goodwill and Purchased Intangible Assets, Net - Amortization Expense for Purchased Intangible Assets (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Acquired Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 9	$ 10
Cost of revenues | Developed Technology
Acquired Finite Lived Intangible Assets [Line Items]
Amortization expense	7	10
Operating expenses | Customer Contracts/Relationships
Acquired Finite Lived Intangible Assets [Line Items]
Amortization expense	1	0
Operating expenses | Other Purchased Intangibles
Acquired Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 1	$ 0

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Goodwill and Purchased Intangible Assets, Net - Future Amortization Expense Related to Purchased Intangible Assets (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Acquired Finite Lived Intangible Assets [Line Items]
Net Assets	$ 97	$ 101
Intangible Assets Subject to Amortization
Acquired Finite Lived Intangible Assets [Line Items]
Remainder of 2022	29
2023	30
2024	19
2025	16
2026	3
Net Assets	$ 97

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Supplemental Financial Information - Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021	Jul. 31, 2020	Apr. 30, 2020
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 4,492	$ 4,529
Restricted cash	8	6
Cash, cash equivalents and restricted cash	$ 4,500	$ 4,535	$ 3,641	$ 2,666

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Supplemental Financial Information - Inventories (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Inventory Disclosure [Abstract]
Purchased components	$ 36	$ 22
Finished goods	72	92
Inventories	$ 108	$ 114

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Supplemental Financial Information - Property and Equipment Net (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 1,774	$ 1,798
Accumulated depreciation and amortization	(1,241)	(1,273)
Property and equipment, net	533	525
Land
Property Plant And Equipment [Line Items]
Property and equipment, gross	46	46
Buildings and improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	350	356
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	78	83
Computer, production, engineering and other equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	871	869
Computer software
Property Plant And Equipment [Line Items]
Property and equipment, gross	290	305
Furniture and fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	77	93
Construction-in-progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 62	$ 46

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Supplemental Financial Information - Other Non-Current Assets (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Deferred tax assets	$ 233	$ 219
Operating lease ROU assets	259	114
Other assets	353	361
Other non-current assets	$ 845	$ 694

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Supplemental Financial Information - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020	Apr. 30, 2021
Property Plant And Equipment [Line Items]
Revenue recognized	$ 617	$ 661
Transaction price allocated to remaining performance obligations	$ 3,904
Lenovo NetApp Technology Limited (“LNTL”)
Property Plant And Equipment [Line Items]
Non-controlling equity interest, ownership percentage	49.00%
Other non current assets	$ 72		$ 71

XML

Supplemental Financial Information - Accrued expenses (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Payables And Accruals [Abstract]
Accrued compensation and benefits	$ 282	$ 505
Product warranty liabilities	21	21
Operating lease liabilities	53	49
Other current liabilities	391	395
Accrued expenses	$ 747	$ 970

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Supplemental Financial Information - Product Warranty Liabilities (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020	Apr. 30, 2021
Movement In Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 32	$ 41
Expense accrued during the period	4	1
Warranty costs incurred	(5)	(5)
Balance at end of period	31	37
Standard Product Warranty Accrual, Balance Sheet Classification [Abstract]
Accrued expenses	21		$ 21
Other long-term liabilities	10		11
Total warranty liabilities	$ 31	$ 37	$ 32

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Supplemental Financial Information - Other Long-term Liabilities (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Liabilities Other Than Long Term Debt Noncurrent [Abstract]
Liability for uncertain tax positions	$ 120	$ 127
Income taxes payable	351	351
Product warranty liabilities	10	11
Operating lease liabilities	211	71
Other liabilities	92	90
Other long-term liabilities	$ 784	$ 650

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Supplemental Financial Information - Summary of Components of Deferred Revenue and Financed Unearned Services Revenue (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021	Jul. 31, 2020	Apr. 24, 2020
Contract With Customer Liability [Line Items]
Deferred revenue and financed unearned services revenue	$ 3,904	$ 4,003	$ 3,620	$ 3,698
Short-term	1,988	2,062
Long-term	1,916	1,941
Deferred product revenue
Contract With Customer Liability [Line Items]
Deferred revenue and financed unearned services revenue	47	59
Deferred services revenue
Contract With Customer Liability [Line Items]
Deferred revenue and financed unearned services revenue	3,792	3,873
Financed unearned services revenue
Contract With Customer Liability [Line Items]
Deferred revenue and financed unearned services revenue	$ 65	$ 71

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Supplemental Financial Information - Summary of Activity Related to Deferred Revenue and Financed Unearned Services Revenue (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Contract With Customer Liability [Abstract]
Balance at beginning of period	$ 4,003	$ 3,698
Additions	638	644
Revenue recognized during the period	(737)	(722)
Balance at end of period	$ 3,904	$ 3,620

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Supplemental Financial Information - Additional Information (Detail1)	Jul. 30, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-07-31
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue expected to be recognized	51.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-07-30
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Revenue expected to be recognized	24.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months

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Supplemental Financial Information - Summary of Activity Related to Deferred Commissions (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Deferred Revenue Disclosure [Abstract]
Balance at beginning of period	$ 197	$ 156
Additions	26	21
Expense recognized during the period	(34)	(25)
Balance at end of period	$ 189	$ 152

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Supplemental Financial Information - Summary of Activity Related to the Balances in Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021	Jul. 31, 2020	Apr. 24, 2020
Deferred Revenue Disclosure [Abstract]
Other current assets	$ 80	$ 86
Other non-current assets	109	111
Total deferred commissions	$ 189	$ 197	$ 152	$ 156

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Supplemental Financial Information - Other Income (expense), Net (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Nonoperating Income Expense [Abstract]
Interest income	$ 2	$ 3
Interest expense	(18)	(18)
Other income (expense), net	4	(17)
Total other expense, net	$ (12)	$ (32)

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Supplemental Financial Information - Supplemental Cash Flows, Non-Cash Investing Activities (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Non-cash Investing Activities:
Capital expenditures incurred but not paid	$ 15	$ 10
Supplemental Cash Flow Information:
Income taxes paid, net of refunds	17	136
Interest paid	$ 27	$ 16

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Financial Instruments and Fair Value Measurements - Summary of Investments at Cost or Amortized Cost (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	$ 150	$ 167
Corporate Bonds
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	46	58
U.S. Treasury and Government Debt Securities
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	7	8
Certificates of Deposit
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	55	61
Mutual Funds
Schedule of Available-for-sale Securities [Line Items]
Cost or amortized cost	$ 42	$ 40

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Financial Instruments and Fair Value Measurements - Contractual Maturities of Debt Investments (Detail) $ in Millions	Jul. 30, 2021 USD ($)
Investments Debt And Equity Securities [Abstract]
Due in one year or less, Amortized Cost	$ 96
Due after one year through five years, Amortized Cost	12
Total, Amortized Cost	108
Due in one year or less, Estimated Fair Value	97
Due after one year through five years, Estimated Fair Value	13
Total, Estimated Fair Value	$ 110

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Financial Instruments and Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions		Jul. 30, 2021	Apr. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		$ 4,547	$ 4,596
Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange contracts assets	[1]	1	9
Accrued Expenses
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange contracts liabilities	[2]	(4)	(1)
Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		47	59
U.S. Treasury and Government Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		8	8
Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		55	61
Mutual Funds | Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[1]	7	8
Mutual Funds | Other Noncurrent Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[3]	35	32
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		4,441	4,472
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange contracts assets	[1]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Accrued Expenses
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange contracts liabilities	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury and Government Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		4	4
Quoted Prices in Active Markets for Identical Assets (Level 1) | Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual Funds | Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[1]	7	8
Quoted Prices in Active Markets for Identical Assets (Level 1) | Mutual Funds | Other Noncurrent Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[3]	35	32
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		106	124
Significant Other Observable Inputs (Level 2) | Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange contracts assets	[1]	1	9
Significant Other Observable Inputs (Level 2) | Accrued Expenses
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency exchange contracts liabilities	[2]	(4)	(1)
Significant Other Observable Inputs (Level 2) | Corporate Bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		47	59
Significant Other Observable Inputs (Level 2) | U.S. Treasury and Government Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		4	4
Significant Other Observable Inputs (Level 2) | Certificates of Deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		55	61
Significant Other Observable Inputs (Level 2) | Mutual Funds | Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[1]	0	0
Significant Other Observable Inputs (Level 2) | Mutual Funds | Other Noncurrent Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[3]	0	0
Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		4,437	4,468
Cash | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		4,437	4,468
Cash | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		$ 0	$ 0

[1] Reported as other current assets in the condensed consolidated balance sheets

[2] Reported as accrued expenses in the condensed consolidated balance sheets

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

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Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt Instrument, Fair Value Disclosure	$ 2,782	$ 2,736

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Financing Arrangements - Carrying Value of Long-Term Debt (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021	Jun. 30, 2020
Debt Instrument [Line Items]
Total long-term debt	$ 2,633	$ 2,632
Senior Notes
Debt Instrument [Line Items]
Total principal amount	2,650	2,650
Unamortized discount and issuance costs	(17)	(18)
Senior Notes | Due December 2022
Debt Instrument [Line Items]
Total principal amount	$ 250	$ 250
Debt Instrument, Effective Interest Rate	3.43%	3.43%
Senior Notes | Due September 2024
Debt Instrument [Line Items]
Total principal amount	$ 400	$ 400
Debt Instrument, Effective Interest Rate	3.42%	3.42%
Senior Notes | Due June 2025
Debt Instrument [Line Items]
Total principal amount	$ 750	$ 750	$ 750
Debt Instrument, Effective Interest Rate	2.03%	2.03%
Senior Notes | Due June 2027
Debt Instrument [Line Items]
Total principal amount	$ 550	$ 550	550
Debt Instrument, Effective Interest Rate	2.51%	2.51%
Senior Notes | Due June 2030
Debt Instrument [Line Items]
Total principal amount	$ 700	$ 700	$ 700
Debt Instrument, Effective Interest Rate	2.81%	2.81%

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Financing Arrangements - Additional Information (Detail)		1 Months Ended	3 Months Ended
	Jan. 22, 2021 USD ($) Extension	Jul. 28, 2017 USD ($)	Jul. 30, 2021 USD ($)	Jul. 31, 2020 USD ($)	Jul. 31, 2020 USD ($)	Apr. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Issuance of debt, net of issuance costs			$ 0		$ 2,057,000,000
Commercial paper notes			0
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, amount	$ 1,000,000,000.0
Credit facility, maturity	Jan. 22, 2026
Credit facility, number of extensions | Extension	2
Credit facility, extensions period	1 year
Credit facility, amounts drawn	$ 0
Revolving Credit Facility | Letter Of Credit Sub Facility
Debt Instrument [Line Items]
Credit facility, amount	$ 50,000,000
Commercial Paper
Debt Instrument [Line Items]
Notes issued, principal amount				$ 150,000,000	$ 150,000,000
Weighted-average interest rate				1.29%	1.29%
Issuance of debt, net of issuance costs			75,000,000
Proceeds from repayments of debt			76,000,000
Commercial Paper | Maximum
Debt Instrument [Line Items]
Notes issued, principal amount		$ 1,000,000,000.0
Debt instrument maturity period		397 days		3 months
Senior Notes
Debt Instrument [Line Items]
Notes issued, principal amount			2,650,000,000			$ 2,650,000,000
Senior Notes | Due June 2027
Debt Instrument [Line Items]
Notes issued, principal amount			550,000,000			550,000,000	$ 550,000,000
Notes issued, interest rate							2.375%
Senior Notes | Due June 2025
Debt Instrument [Line Items]
Notes issued, principal amount			750,000,000			750,000,000	$ 750,000,000
Notes issued, interest rate							1.875%
Senior Notes | Due June 2030
Debt Instrument [Line Items]
Notes issued, principal amount			700,000,000			700,000,000	$ 700,000,000
Notes issued, interest rate							2.70%
Senior Notes | Due September 2024
Debt Instrument [Line Items]
Notes issued, principal amount			$ 400,000,000			400,000,000
Notes issued, interest rate			3.30%
Senior Notes | Due December 2022
Debt Instrument [Line Items]
Notes issued, principal amount			$ 250,000,000			$ 250,000,000
Notes issued, interest rate			3.25%

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Financing Arrangements - Future Principal Debt Maturities (Detail) - Senior Notes - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Debt Instrument [Line Items]
2022	$ 0
2023	250
2024	0
2025	400
2026	750
Thereafter	1,250
Total	$ 2,650	$ 2,650

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Leases - Additional Information (Detail) $ in Millions	1 Months Ended
	Apr. 30, 2021 USD ($) ft² RenewalOption	Jun. 30, 2020 USD ($)	Jul. 30, 2021 USD ($)
Leases [Line Items]
Future undiscounted payments			$ 295
Build-to-suit Office Building
Leases [Line Items]
Operating remaining lease term		20 years
Future undiscounted payments		$ 67
Operating lease, existence of option to extend		true
Corporate Headquarters Leases
Leases [Line Items]
Operating remaining lease term	11 years
Future undiscounted payments	$ 180
Operating lease, existence of option to extend	true
Number of renewal option | RenewalOption	2
Operating Lease, renewal term	5 years
Office space | ft²	300,000
Maximum | Real Estate
Leases [Line Items]
Operating remaining lease term			15 years
Maximum | Equipment
Leases [Line Items]
Operating remaining lease term			4 years
Maximum | Automobiles
Leases [Line Items]
Operating remaining lease term			5 years

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Leases - Components of Lease Cost Related to Operating Leases (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Leases [Abstract]
Operating lease cost	$ 15	$ 14
Variable lease cost	4	3
Total lease cost	$ 19	$ 17

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Leases - Supplemental Cash Flow Information Related to Operating Leases (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 13	$ 14
Right-of-use assets obtained in exchange for new operating lease obligations	$ 159	$ 10

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Leases - Supplemental Balance Sheet Information Related to Operating Leases (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Leases [Abstract]
Other non-current assets	$ 259	$ 114
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other non-current assets	Other non-current assets
Accrued expenses	$ 53	$ 49
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses	Accrued expenses
Other long-term liabilities	$ 211	$ 71
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other long-term liabilities	Other long-term liabilities
Total operating lease liabilities	$ 264	$ 120
Weighted Average Remaining Lease Term	8 years	3 years 4 months 24 days
Weighted Average Discount Rate	2.80%	2.90%

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Leases - Future Minimum Operating Lease Payments (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Leases [Abstract]
2022 (remainder)	$ 46
2023	46
2024	36
2025	27
2026	24
Thereafter	116
Total lease payments	295
Less: Interest	(31)
Total	$ 264	$ 120

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Stockholders' Equity - Additional Information (Detail) - USD ($)		3 Months Ended			219 Months Ended
	Aug. 23, 2021	Jul. 30, 2021	Jul. 31, 2020	Jul. 31, 2020	Jul. 30, 2021	Apr. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense related to equity awards		$ 567,000,000			$ 567,000,000
Unrecognized compensation expense will be amortized on a straight-line basis over a weighted-average remaining period, in years		2 years 8 months 12 days
Stock repurchase program, authorized amount		$ 14,100,000,000			$ 14,100,000,000
Repurchase of common stock, shares		1,000,000			341,000,000
Average price of common stock repurchased under repurchase program		$ 80.08			$ 39.17
Aggregate purchase price of common stock authorized under repurchase program		$ 100,000,000		$ 0	$ 13,400,000,000
Cash dividends declared, per common share		$ 0.50	$ 0.48
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash dividends declared, per common share	$ 0.50
Cash dividend payable date	Oct. 27, 2021
Cash dividend record date	Oct. 08, 2021
Performance Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs grant date fair value		$ 41,000,000			$ 41,000,000
Performance Based Restricted Stock Unit | PBRSU One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		1 year
Performance Based Restricted Stock Unit | PBRSU Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		2 years
Performance Based Restricted Stock Unit | PBRSU Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of Common stock issued to settle PBRSUs of target shares granted		0.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding		1,000,000			1,000,000	1,000,000
Percentage of Common stock issued to settle PBRSUs of target shares granted		200.00%

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Stockholders' Equity - Information Related to Stock Options (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Intrinsic value of exercises	$ 5	$ 0
Fair value of options vested	$ 1	$ 0

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Stockholders' Equity - Activity Related to Restricted Stock Units Including Performance-Based Restricted Stock Units (Detail) - Restricted Stock Units shares in Millions	3 Months Ended
	Jul. 30, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, Number of Shares | shares	9
RSUs granted, Number of Shares | shares	4
RSUs vested, Number of Shares | shares	(2)
RSUs forfeited, Number of Shares | shares	(1)
Ending Balance, Number of Shares | shares	10
Beginning Balance, Weighted-Average Grant Date Fair Value | $ / shares	$ 47.75
RSUs granted, Weighted-Average Grant Date Fair Value | $ / shares	81.15
RSUs vested, Weighted-Average Grant Date Fair Value | $ / shares	48.37
RSUs forfeited, Weighted-Average Grant Date Fair Value | $ / shares	53.83
Ending Balance, Weighted-Average Grant Date Fair Value | $ / shares	$ 59.95

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Stockholders' Equity - Number and Value of Shares Netted for Employee Taxes (Detail) - Restricted Stock Units - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares withheld for taxes	1	1
Fair value of shares withheld	$ 57	$ 33

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Stockholders' Equity - Schedule of Employee Stock Purchase Plan (ESPP) (Detail) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under the ESPP	1	1
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from issuance of shares	$ 52	$ 48

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Stockholders' Equity - Stock-Based Compensation Expense (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 53	$ 54
Income tax benefit for stock-based compensation expense	5	4
Cost of Product Revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	1	1
Cost of Services Revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2	3
Sales and Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	26	25
Research and Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	16	19
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 8	$ 6

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Stockholders' Equity - Summary of Activities Related to Stock Repurchase Program (Detail) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended	219 Months Ended
	Jul. 30, 2021 USD ($) $ / shares shares	Jul. 30, 2021 USD ($) $ / shares shares
Equity Class Of Treasury Stock [Line Items]
Number of shares repurchased | shares	1	341
Average price per share | $ / shares	$ 80.08	$ 39.17
Stock repurchases allocated	$ 100
Remaining authorization at end of period	752	$ 752
Additional Paid-in Capital
Equity Class Of Treasury Stock [Line Items]
Stock repurchases allocated	3
Retained Earnings
Equity Class Of Treasury Stock [Line Items]
Stock repurchases allocated	$ 97

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Stockholders' Equity - Summary of Activities Related to Dividends on Common Stock (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020	Jul. 31, 2020
Dividends, Common Stock [Abstract]
Dividends per share declared	$ 0.50	$ 0.48
Dividend payments	$ 112		$ 107
Additional Paid-in Capital
Dividends, Common Stock [Abstract]
Dividend payments	0	$ 30
Retained Earnings
Dividends, Common Stock [Abstract]
Dividend payments	$ 112	$ 77

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Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) by Component Net of Tax (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	$ 685	$ 242
Other comprehensive income (loss), net of tax	(4)
Other comprehensive income (loss)	(4)	3
Balances	720	284
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(27)
Other comprehensive income (loss), net of tax	(4)
Other comprehensive income (loss)	(4)
Balances	(31)
Defined Benefit Obligation Adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(4)
Other comprehensive income (loss), net of tax	0
Other comprehensive income (loss)	0
Balances	(4)
Unrealized Gains (Losses) on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	1
Other comprehensive income (loss), net of tax	(1)
Other comprehensive income (loss)	(1)
Balances	0
Unrealized Gains (Losses) on Derivative Instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	0
Other comprehensive income (loss), net of tax	1
Other comprehensive income (loss)	1
Balances	1
AOCI Attributable to Parent
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances	(30)	(42)
Other comprehensive income (loss)	(4)	3
Balances	$ (34)	$ (39)

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Stockholders' Equity - Amounts Reclassified Out of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net revenues	$ 1,458	$ 1,303
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications	0	1
Reclassification out of Accumulated Other Comprehensive Income | Realized Losses on Cash Flow Hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net revenues	$ 0	$ 1

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Derivatives and Hedging Activities - Schedule of Notional Value of Outstanding Foreign Currency Forward Contracts (Detail) - Foreign Exchange Forward Contracts - USD ($) $ in Millions	Jul. 30, 2021	Jul. 31, 2020
Short | Cash Flow Hedges
Derivative [Line Items]
Forward contracts, Notional Amount	$ 10	$ 0
Long | Cash Flow Hedges
Derivative [Line Items]
Forward contracts, Notional Amount	144	123
Non Designated | Short | Balance Sheet Contracts
Derivative [Line Items]
Forward contracts, Notional Amount	632	339
Non Designated | Long | Balance Sheet Contracts
Derivative [Line Items]
Forward contracts, Notional Amount	$ 82	$ 94

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Derivatives and Hedging Activities - Schedule of Derivative Instruments Not Designated as Cash Flow Hedges (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Foreign Exchange Forward Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Foreign currency exchange contracts	$ 9	$ 24

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Restructuring Charges - Additional Information (Detail)	Jul. 30, 2021	Apr. 30, 2021
Restructuring Cost and Reserve [Line Items]
Reduction of global work force	1.00%
August 2020 and May 2020 Restructuring
Restructuring Cost and Reserve [Line Items]
Reduction of global work force		6.00%

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Restructuring Charges - Activities Related to Restructuring Reserves (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020	Jul. 31, 2020
Restructuring And Related Activities [Abstract]
Balance at beginning of period	$ 1		$ 1
Net charges	22	$ 5	5
Cash payments	(17)		(5)
Balance at end of period	$ 6	$ 1	$ 1

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Income Taxes - Effective Tax Rates (Detail)	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Income Tax Disclosure [Abstract]
Effective tax rates	14.80%	26.00%

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Income Tax Disclosure [Abstract]
Gross unrecognized tax benefits	$ 214
Gross unrecognized tax benefits included in other long-term liabilities	120	$ 127
Unrecognized tax benefits that would affect provision for income taxes	$ 117

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Net Income per Share - Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020	Jul. 31, 2020
Net income per share:
Net income	$ 202	$ 77	$ 77
Shares used in basic computation	223	221
Dilutive impact of employee equity award plans	6	1
Shares used in diluted computation	229	222
Basic	$ 0.91	$ 0.35
Diluted	$ 0.88	$ 0.35

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Net Income per Share - Additional Information (Detail) - shares	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Earnings Per Share [Abstract]
Outstanding employee equity awards excluded from diluted net income per share calculations	0	6,000,000

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Segment Geographic and Significant Customer Information - Additional Information (Detail) $ in Millions	3 Months Ended
	Jul. 30, 2021 USD ($) Segment	Jul. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of industry segment | Segment	2
Net revenues	$ 1,458	$ 1,303
U.S.
Segment Reporting Information [Line Items]
Net revenues	$ 696	$ 637

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Segment Geographic and Significant Customer Information - Schedule of Financial Information by Segment (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Segment Reporting Information [Line Items]
Net revenues	$ 1,458	$ 1,303
Segment cost of revenues	448	417
Segment gross profit	$ 1,010	$ 886
Segment gross margin	69.30%	68.00%
Unallocated cost of revenues	$ 11	$ 14
Gross profit	$ 999	$ 872
Total gross margin	68.50%	66.90%
Operating Segments | Hybrid Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	$ 1,379	$ 1,272
Segment cost of revenues	425	404
Segment gross profit	$ 954	$ 868
Segment gross margin	69.20%	68.20%
Operating Segments | Public Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	$ 79	$ 31
Segment cost of revenues	23	13
Segment gross profit	$ 56	$ 18
Segment gross margin	70.90%	58.10%
Product [Member]
Segment Reporting Information [Line Items]
Net revenues	$ 730	$ 627
Segment cost of revenues	326	305
Product [Member] | Operating Segments | Hybrid Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	730	627
Segment cost of revenues	326	305
Product [Member] | Operating Segments | Public Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	0	0
Segment cost of revenues	0	0
Public Cloud
Segment Reporting Information [Line Items]
Net revenues	79	31
Segment cost of revenues	23	13
Public Cloud | Operating Segments | Hybrid Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	0	0
Segment cost of revenues	0	0
Public Cloud | Operating Segments | Public Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	79	31
Segment cost of revenues	23	13
Support
Segment Reporting Information [Line Items]
Net revenues	578	577
Segment cost of revenues	48	51
Support | Operating Segments | Hybrid Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	578	577
Segment cost of revenues	48	51
Support | Operating Segments | Public Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	0	0
Segment cost of revenues	0	0
Professional and Other Services
Segment Reporting Information [Line Items]
Net revenues	71	68
Segment cost of revenues	51	48
Professional and Other Services | Operating Segments | Hybrid Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	71	68
Segment cost of revenues	51	48
Professional and Other Services | Operating Segments | Public Cloud Segment
Segment Reporting Information [Line Items]
Net revenues	0	0
Segment cost of revenues	$ 0	$ 0

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Segment Geographic and Significant Customer Information - Schedule of Financial Information by Segment (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Segment Reporting [Abstract]
Unallocated cost of revenue stock-based compensation expense	$ 4	$ 4
Unallocated cost of revenue amortization of intangible assets	$ 7	$ 10

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Segment Geographic and Significant Customer Information - Schedule of Revenues by Geographic Region (Detail) - USD ($) $ in Millions	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Segment Reporting Information [Line Items]
Net revenues	$ 1,458	$ 1,303
United States, Canada And Latin America (Americas)
Segment Reporting Information [Line Items]
Net revenues	786	709
Europe, Middle East And Africa (EMEA)
Segment Reporting Information [Line Items]
Net revenues	454	383
Asia Pacific (APAC)
Segment Reporting Information [Line Items]
Net revenues	$ 218	$ 211

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Segment Geographic and Significant Customer Information - Schedule of Cash, Cash Equivalents and Short-Term Investments (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Segment Reporting Information [Line Items]
Cash, cash equivalents and short-term investments	$ 4,547	$ 4,596
U.S.
Segment Reporting Information [Line Items]
Cash, cash equivalents and short-term investments	2,136	2,098
International
Segment Reporting Information [Line Items]
Cash, cash equivalents and short-term investments	$ 2,411	$ 2,498

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Segment Geographic and Significant Customer Information - Schedule of Property and Equipment Net by Geographic Areas (Detail) - USD ($) $ in Millions	Jul. 30, 2021	Apr. 30, 2021
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment	$ 533	$ 525
U.S.
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment	343	340
International
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment	$ 190	$ 185

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Segment Geographic and Significant Customer Information - Significant Customers (Detail) - Net Revenue - Customer Concentration Risk	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020
Arrow Electronics, Inc.
Segment Reporting Information [Line Items]
Percentage of net revenues	24.00%	23.00%
Tech Data Corporation
Segment Reporting Information [Line Items]
Percentage of net revenues	20.00%	20.00%

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Segment Geographic and Significant Customer Information - Schedule of Net Accounts Receivable from Significant Customers (Detail) - Accounts Receivable - Credit Concentration Risk	3 Months Ended	12 Months Ended
	Jul. 30, 2021	Apr. 30, 2021
Arrow Electronics, Inc.
Segment Reporting Information [Line Items]
Percentage of net accounts receivable	10.00%	10.00%
Tech Data Corporation
Segment Reporting Information [Line Items]
Percentage of net accounts receivable	19.00%	21.00%

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Commitments and Contingencies - Additional Information (Detail) - USD ($)	3 Months Ended
	Jul. 30, 2021	Jul. 31, 2020	Apr. 30, 2021
Commitments and Contingencies Disclosure [Line Items]
Accrued purchase commitments with contract manufacturers	$ 13,000,000		$ 15,000,000
Sale of finance receivables	17,000,000	$ 13,000,000
Accrued settlement amount	$ 0
Management estimation of loss contingency	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, and overall trends.
Purported Securities Class Action Lawsuit
Commitments and Contingencies Disclosure [Line Items]
Lawsuit commencement date	August 14, 2019
Lawsuit action domicile	United States District Court for the Northern District of California
Name of defendant	NetApp and certain of our executive officers
Loss contingency, laws affected	The complaint alleges that the defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5, by making materially false or misleading statements with respect to our financial guidance for fiscal 2020, as provided on May 22, 2019.
Accrued settlement amount	$ 2,000,000.0
Maximum
Commitments and Contingencies Disclosure [Line Items]
Terms of recourse leases	3 years
Inventory
Commitments and Contingencies Disclosure [Line Items]
Purchase orders and other commitments	$ 614,000,000
Other
Commitments and Contingencies Disclosure [Line Items]
Purchase orders and other commitments	$ 340,000,000