NetApp(NTAP) - 2026 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION This section presents NetApp's unaudited condensed consolidated financial statements and detailed notes for Q1 FY26 Item 1. Condensed Consolidated Financial Statements (Unaudited) This section details NetApp's unaudited condensed consolidated financial statements and accompanying notes for the first fiscal quarter Condensed Consolidated Balance Sheets This section presents NetApp's condensed consolidated balance sheets, detailing assets, liabilities, and equity at quarter-end | ASSETS (in millions) | July 25, 2025 | April 25, 2025 | | :--------------------- | :------------ | :------------- | | Cash and cash equivalents | $2,085 | $2,742 | | Short-term investments | $1,239 | $1,104 | | Accounts receivable | $787 | $1,246 | | Inventories | $133 | $186 | | Other current assets | $443 | $573 | | Total current assets | $4,687 | $5,851 | | Property and equipment, net | $570 | $563 | | Goodwill | $2,734 | $2,723 | | Purchased intangible assets, net | $37 | $43 | | Other non-current assets | $1,651 | $1,643 | | Total assets | $9,679 | $10,823 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in millions) | | | | Accounts payable | $404 | $511 | | Accrued expenses | $895 | $1,122 | | Current portion of long-term debt | $— | $750 | | Short-term deferred revenue and financed unearned services revenue | $2,270 | $2,279 | | Total current liabilities | $3,569 | $4,662 | | Long-term debt | $2,485 | $2,485 | | Other long-term liabilities | $394 | $379 | | Long-term deferred revenue and financed unearned services revenue | $2,256 | $2,257 | | Total liabilities | $8,704 | $9,783 | | Total stockholders' equity | $975 | $1,040 | | Total liabilities and stockholders' equity | $9,679 | $10,823 | - Total assets decreased by $1,144 million (10.57%) from $10,823 million on April 25, 2025, to $9,679 million on July 25, 2025, primarily driven by a decrease in cash and cash equivalents and accounts receivable[14] - Total liabilities decreased by $1,079 million (11.03%) from $9,783 million to $8,704 million, largely due to the repayment of the current portion of long-term debt[16] Condensed Consolidated Statements of Income This section presents NetApp's condensed consolidated statements of income, detailing revenues, costs, and net income | (in millions, except per share amounts) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | Change (YoY) | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Revenues: | | | | | Product | $654 | $669 | (2.24)% | | Services | $905 | $872 | 3.78% | | Net revenues | $1,559 | $1,541 | 1.17% | | Cost of revenues: | | | | | Cost of product | $302 | $269 | 12.27% | | Cost of services | $159 | $174 | (8.62)% | | Total cost of revenues | $461 | $443 | 4.06% | | Gross profit | $1,098 | $1,098 | 0.00% | | Operating expenses: | | | | | Sales and marketing | $461 | $471 | (2.12)% | | Research and development | $242 | $252 | (3.97)% | | General and administrative | $84 | $75 | 12.00% | | Restructuring charges | $2 | $17 | (88.24)% | | Acquisition-related expense | $— | $1 | (100.00)% | | Total operating expenses | $789 | $816 | (3.29)% | | Income from operations | $309 | $282 | 9.57% | | Other (expense) income, net | $(5) | $17 | (129.41)% | | Income before income taxes | $304 | $299 | 1.67% | | Provision for income taxes | $71 | $51 | 39.22% | | Net income | $233 | $248 | (6.05)% | | Net income per share: | | | | | Basic | $1.16 | $1.20 | (3.33)% | | Diluted | $1.15 | $1.17 | (1.71)% | - Net revenues increased by 1% year-over-year to $1,559 million, driven by a 4% increase in services revenues, partially offset by a 2% decrease in product revenues[19][121] - Gross profit remained flat at $1,098 million, while income from operations increased by 10% to $309 million due to a 3% reduction in total operating expenses[19] - Net income decreased by 6% to $233 million, and diluted EPS decreased by 2% to $1.15, primarily due to higher provision for income taxes and a shift from other income to other expense[19] Condensed Consolidated Statements of Comprehensive Income This section presents NetApp's condensed consolidated statements of comprehensive income, including net income and other components | (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net income | $233 | $248 | | Other comprehensive income: | | | | Foreign currency translation adjustments | $26 | $1 | | Unrealized losses on available-for-sale securities | $(1) | $— | | Unrealized losses on cash flow hedges | $(1) | $(1) | | Reclassification adjustments for losses included in net income | $2 | $— | | Other comprehensive income | $26 | $— | | Comprehensive income | $259 | $248 | - Comprehensive income increased to $259 million from $248 million year-over-year, primarily driven by a significant increase in foreign currency translation adjustments, which contributed $26 million in other comprehensive income for the current period[21] Condensed Consolidated Statements of Cash Flows This section presents NetApp's condensed consolidated statements of cash flows, detailing operating, investing, and financing activities | (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $673 | $341 | | Net cash used in investing activities | $(181) | $(51) | | Net cash used in financing activities | $(1,157) | $(548) | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | $7 | $8 | | Net change in cash, cash equivalents and restricted cash | $(658) | $(250) | | Cash, cash equivalents and restricted cash, beginning of period | $2,749 | $1,909 | | Cash, cash equivalents and restricted cash, end of period | $2,091 | $1,659 | - Net cash provided by operating activities significantly increased to $673 million from $341 million year-over-year, primarily due to a $466 million decrease in accounts receivable and a $54 million increase in inventories[24][158] - Net cash used in investing activities increased to $181 million from $51 million, mainly due to higher net purchases of investments ($143 million vs. $10 million) and increased capital expenditures[24][159] - Net cash used in financing activities more than doubled to $1,157 million from $548 million, driven by a $750 million debt repayment and $300 million in common stock repurchases[24][160] Condensed Consolidated Statements of Stockholders' Equity This section presents NetApp's condensed consolidated statements of stockholders' equity, detailing changes in equity components | (in millions, except per share amounts) | Balances, April 25, 2025 | Net Income | Other Comprehensive Income | Issuance of Common Stock (net of taxes) | Repurchase of Common Stock | Stock-Based Compensation | Cash Dividends Declared | Balances, July 25, 2025 | | :-------------------------------------- | :----------------------- | :--------- | :------------------------- | :-------------------------------------- | :------------------------- | :----------------------- | :---------------------- | :---------------------- | | Common Stock and Additional Paid-in Capital | $1,106 | $— | $— | $(3) | $(67) | $83 | $(104) | $1,015 | | Retained Earnings | $— | $233 | $— | $— | $(233) | $— | $— | $— | | Accumulated Other Comprehensive Loss | $(66) | $— | $26 | $— | $— | $— | $— | $(40) | | Total Stockholders' Equity | $1,040 | $233 | $26 | $(3) | $(300) | $83 | $(104) | $975 | - Total stockholders' equity decreased from $1,040 million to $975 million during the three months ended July 25, 2025, primarily due to $300 million in common stock repurchases and $104 million in cash dividends, partially offset by $233 million in net income and $83 million in stock-based compensation[26] Notes to Condensed Consolidated Financial Statements This section provides detailed notes to NetApp's condensed consolidated financial statements, explaining policies and disclosures 1. Description of Business and Significant Accounting Policies This note describes NetApp's business and outlines significant accounting policies used in financial statement preparation - NetApp, Inc. provides enterprise-class software, systems, and services to help customers transform their data infrastructures across various data types, workloads, and environments[28] - The fiscal year is a 52- or 53-week year ending on the last Friday in April; fiscal years 2026 and 2025 are both 52-week years with 13 weeks per quarter[29] - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, reflecting normal recurring adjustments and management's estimates[30][31] 2. Recent Accounting Pronouncements This note discusses recent accounting pronouncements and their potential impact on the company's financial disclosures - The company is evaluating the effect of ASU 2024-03 (effective for fiscal years beginning after December 15, 2026) on disclosures, which requires additional disaggregation of income statement expenses[32] - The company will adopt ASU 2023-09 (effective for fiscal years beginning after December 15, 2026) on a prospective basis in its Form 10-K for the year ending April 24, 2026, which expands income tax disclosures[33] 3. Goodwill and Purchased Intangible Assets, Net This note details the company's goodwill and purchased intangible assets, including segment allocation and amortization | Goodwill by Segment (in millions) | July 25, 2025 | April 25, 2025 | | :-------------------------------- | :------------ | :------------- | | Hybrid Cloud | $1,714 | $1,714 | | Public Cloud | $1,020 | $1,009 | | Total Goodwill | $2,734 | $2,723 | - Total goodwill increased by $11 million to $2,734 million as of July 25, 2025, primarily due to the impact of foreign currency translation on the Public Cloud segment[34] | Purchased Intangible Assets, Net (in millions) | July 25, 2025 | April 25, 2025 | | :--------------------------------------------- | :------------ | :------------- | | Developed technology | $19 | $22 | | Customer contracts/relationships | $18 | $21 | | Other purchased intangibles | $— | $— | | Total purchased intangible assets | $37 | $43 | - Amortization expense for purchased intangible assets decreased from $14 million in Q1 FY25 to $6 million in Q1 FY26[35] 4. Supplemental Financial Information This note provides supplemental financial information on cash, inventories, deferred revenue, and other income/expense items | Cash and Cash Equivalents (in millions) | July 25, 2025 | April 25, 2025 | | :-------------------------------------- | :------------ | :------------- | | Cash and cash equivalents | $2,085 | $2,742 | | Restricted cash | $6 | $7 | | Total cash, cash equivalents and restricted cash | $2,091 | $2,749 | | Inventories (in millions) | July 25, 2025 | April 25, 2025 | | :------------------------ | :------------ | :------------- | | Purchased components | $66 | $81 | | Finished goods | $67 | $105 | | Total Inventories | $133 | $186 | - Other non-current assets include a $93 million equity interest in Lenovo NetApp Technology Limited (LNTL) as of July 25, 2025, which is integral to the company's sales channel strategy and product localization in China[39] | Deferred Revenue and Financed Unearned Services Revenue (in millions) | July 25, 2025 | April 25, 2025 | | :------------------------------------------------------------------ | :------------ | :------------- | | Deferred product revenue | $69 | $66 | | Deferred services revenue | $4,417 | $4,428 | | Financed unearned services revenue | $40 | $42 | | Total | $4,526 | $4,536 | | Short-term | $2,270 | $2,279 | | Long-term | $2,256 | $2,257 | - The company recognized $714 million in revenue during the three months ended July 25, 2025, from deferred revenue balances at the beginning of the period, an increase from $670 million in the prior year[44] - Remaining performance obligations totaled $4.9 billion as of July 25, 2025, with approximately 49% expected to be recognized as revenue in the next 12 months[45] | Other (Expense) Income, Net (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | | Interest income | $36 | $36 | | Interest expense | $(29) | $(16) | | Other, net | $(12) | $(3) | | Total other (expense) income, net | $(5) | $17 | 5. Financial Instruments and Fair Value Measurements This note details the company's financial instruments and fair value measurements, including investment classifications - The company uses a three-level hierarchy for fair value measurements, with Level 1 for quoted prices in active markets, Level 2 for observable inputs other than Level 1, and Level 3 for unobservable inputs[50][51][52] | Investments (in millions) | July 25, 2025 | April 25, 2025 | | :------------------------ | :------------ | :------------- | | U.S. Treasury and government debt securities | $1,239 | $2,025 | | Money market funds | $1,419 | $1,126 | | Certificates of deposit | $33 | $24 | | Mutual funds | $48 | $41 | | Total debt and equity securities | $2,739 | $3,216 | - All debt investments as of July 25, 2025, are due to mature in one year or less[56] - The fair value of long-term debt decreased from $3,143 million on April 25, 2025, to $2,443 million on July 25, 2025, based on observable market prices in a less active market[59] 6. Financing Arrangements This note describes the company's financing arrangements, including long-term debt, credit facilities, and repayment activities | Long-Term Debt (Senior Notes, in millions) | July 25, 2025 | April 25, 2025 | | :----------------------------------------- | :------------ | :------------- | | 1.875% Senior Notes Due June 2025 | $— | $750 | | 2.375% Senior Notes Due June 2027 | $550 | $550 | | 2.70% Senior Notes Due June 2030 | $700 | $700 | | 5.50% Senior Notes Due June 2032 | $625 | $625 | | 5.70% Senior Notes Due June 2035 | $625 | $625 | | Total principal amount | $2,500 | $3,250 | | Less: Unamortized discount and issuance costs | $(15) | $(15) | | Total senior notes | $2,485 | $3,235 | | Less: Current portion of long-term debt | $— | $(750) | | Total long-term debt | $2,485 | $2,485 | - On June 23, 2025, the company repaid the 1.875% Senior Notes due June 2025 for an aggregate of $757 million, including principal and unpaid interest[61] - The company has a $1.0 billion commercial paper program and a $1.0 billion revolving unsecured credit facility, both of which had no outstanding amounts drawn as of July 25, 2025, and the company was in compliance with all covenants[64][65] 7. Leases This note provides information on the company's lease arrangements, including operating lease costs and balance sheet impacts - The company leases real estate, equipment, and automobiles, with real estate leases forming the majority of ROU assets and liabilities, having terms up to 16 years[66] | Operating Lease Costs (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Operating lease cost | $13 | $13 | | Variable lease cost | $4 | $4 | | Total lease cost | $17 | $17 | | Operating Lease Balance Sheet Information (in millions) | July 25, 2025 | April 25, 2025 | | :---------------------------------------------------- | :------------ | :------------- | | Total operating lease ROU assets | $244 | $241 | | Total operating lease liabilities | $260 | $256 | | Weighted Average Remaining Lease Term | 8.2 years | 8.5 years | | Weighted Average Discount Rate | 3.5% | 3.4% | 8. Stockholders' Equity This note details changes in stockholders' equity, including stock-based compensation, share repurchases, and dividends - The company granted 3 million restricted stock units (RSUs), including performance-based RSUs (PBRSUs), with a weighted average grant date fair value of $103.99 per share during the three months ended July 25, 2025[69] - PBRSUs granted to executives cliff-vest after a three-year performance period, with settlement amounts ranging from 0% to 200% based on Total Stockholder Return (TSR) relative to peers and the company's billings result average[70] | Stock-Based Compensation Expense (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | | Cost of product revenues | $1 | $1 | | Cost of hardware support and other services revenues | $6 | $6 | | Sales and marketing | $34 | $35 | | Research and development | $25 | $31 | | General and administrative | $17 | $12 | | Total stock-based compensation expense | $83 | $85 | - The Board of Directors authorized an additional $1.1 billion for common stock repurchases in Q1 FY26, bringing the remaining authorization to $1.2 billion as of July 25, 2025[73][173] | Stock Repurchase Program Activity (in millions, except per share) | Three Months Ended July 25, 2025 | | :---------------------------------------------------------------- | :------------------------------- | | Number of shares repurchased | 3.0 | | Average price per share | $99.76 | | Stock repurchases allocated to additional paid-in capital | $67 | | Stock repurchases allocated to retained earnings | $233 | | Remaining authorization at end of period | $1,152 | - A cash dividend of $0.52 per share was declared for both periods, with $104 million paid in Q1 FY26[75] 9. Derivatives and Hedging Activities This note describes the company's use of derivative instruments for managing foreign currency risk and hedging activities - The company uses derivative instruments, primarily foreign currency exchange forward contracts, to manage foreign currency risk and reduce earnings volatility, not for trading or speculative purposes[76] | Notional Amount of Foreign Currency Exchange Forward Contracts (in millions) | July 25, 2025 | April 25, 2025 | | :------------------------------------------------------------------------- | :------------ | :------------- | | Cash Flow Hedges (Forward contracts purchased) | $119 | $81 | | Balance Sheet Contracts (Forward contracts sold) | $1,533 | $790 | - The gain recognized from derivative instruments not designated as hedging instruments in other (expense) income, net, was $18 million for the three months ended July 25, 2025, compared to $13 million in the prior year[78] 10. Restructuring Charges This note details the company's restructuring charges, including net charges and cash payments related to restructuring activities - Restructuring charges decreased significantly to $2 million in Q1 FY26 from $17 million in Q1 FY25, as activities under the plan approved in Q4 FY25 were substantially completed[79][80] | Restructuring Activities (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Balance at beginning of period | $51 | $10 | | Net charges | $2 | $17 | | Cash payments | $(37) | $(9) | | Balance at end of period | $16 | $18 | 11. Income Taxes This note provides information on the company's income taxes, including effective tax rates and unrecognized tax benefits | Effective Tax Rates | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :------------------ | :------------------------------- | :------------------------------- | | Effective tax rates | 23.4% | 17.1% | - The effective tax rate increased to 23.4% from 17.1% year-over-year, primarily due to a decrease in discrete tax benefits related to stock-based compensation[81][82] - The One Big Beautiful Bill Act (OBBB) signed into law on July 4, 2025, did not have a material impact on the income tax provision for the three months ended July 25, 2025, but the company is still evaluating its full impact[83] - As of July 25, 2025, the company had $69 million of gross unrecognized tax benefits, with $48 million net affecting the income tax provision if recognized[87] 12. Net Income per Share This note details the calculation of basic and diluted net income per share, including employee equity award impact | Net Income per Share Calculation (in millions, except per share amounts) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :-------------------------------------------------------------------- | :------------------------------- | :------------------------------- | | Net income | $233 | $248 | | Shares used in basic computation | 201 | 206 | | Dilutive impact of employee equity award plans | 2 | 6 | | Shares used in diluted computation | 203 | 212 | | Basic Net Income per Share | $1.16 | $1.20 | | Diluted Net Income per Share | $1.15 | $1.17 | - Diluted net income per share decreased to $1.15 from $1.17 year-over-year, reflecting a decrease in net income and a reduction in dilutive shares from employee equity award plans[88] 13. Segment, Geographic, and Significant Customer Information This note provides segment, geographic, and significant customer information, detailing revenues and gross profit by segment - The company operates in two segments: Hybrid Cloud (unified data storage, software, hardware, support) and Public Cloud (as-a-service offerings including cloud storage, data services, and operational services on leading public clouds)[89][90][91] | Segment Revenues and Gross Profit (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | | Net Revenues: | | | | Hybrid Cloud | $1,398 | $1,382 | | Public Cloud | $161 | $159 | | Total Net Revenues | $1,559 | $1,541 | | Segment Gross Profit: | | | | Hybrid Cloud | $979 | $1,000 | | Public Cloud | $129 | $113 | | Total Segment Gross Profit | $1,108 | $1,113 | | Segment Gross Margin: | | | | Hybrid Cloud | 70.0% | 72.4% | | Public Cloud | 80.1% | 71.1% | - Public Cloud revenues increased marginally to $161 million, with gross margin improving significantly to 80.1% from 71.1% due to cost optimization and changes in offering mix after the Spot by NetApp business sale[92][94][129][137] | Geographical Revenues (in millions) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Americas | $791 | $763 | | EMEA | $503 | $513 | | APAC | $265 | $265 | | Net revenues | $1,559 | $1,541 | - Arrow Electronics, Inc. and TD Synnex Corporation remained significant distributors, accounting for 23% and 21% of net revenues, respectively, for the three months ended July 25, 2025[97] 14. Commitments and Contingencies This note outlines the company's commitments and contingencies, including purchase obligations, financing, and legal proceedings - As of July 25, 2025, the company had $0.7 billion in non-cancelable purchase commitments for inventory and $0.6 billion in other purchase obligations[98][99] - The company provides long-term financing to creditworthy customers and enters into recourse leasing arrangements, but has not experienced significant losses to date[100][102] - The company is subject to various legal proceedings, including patent infringement claims, but management believes the ultimate outcome will not materially harm its financial position, and no material accrual has been recorded[106][107] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of NetApp's business, strategic focus, and key capital allocation activities for the quarter Overview This section provides an overview of NetApp's business, strategic focus, and key capital allocation activities for the quarter - NetApp provides enterprise-class software, systems, and services, focusing on intelligent data infrastructure, unified data storage, active data management, and adaptive operations across hybrid and multi-cloud environments, with a strategic emphasis on AI workloads[111][112][113] - The company repurchased 3.0 million shares for $300 million and paid $104 million in cash dividends during the first three months of fiscal 2026[117] - The 1.875% Senior Notes due June 2025 were repaid for $757 million upon maturity[118] Results of Operations This section analyzes NetApp's financial performance, detailing revenue drivers, cost changes, and operating expense trends | (in millions, except percentages) | Three Months Ended July 25, 2025 | Three Months Ended July 26, 2024 | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :------- | | Net revenues | $1,559 | $1,541 | 1% | | Product revenues | $654 | $669 | (2)% | | Services revenues | $905 | $872 | 4% | | Support | $647 | $631 | 3% | | Professional and other services | $97 | $82 | 18% | | Public cloud | $161 | $159 | 1% | - Product revenues decreased by 2% year-over-year, primarily due to lower sales of hybrid systems, partially offset by higher sales of all-flash array systems and favorable foreign exchange rates[124] - Professional and other services revenues increased by 18%, mainly driven by growth in the Keystone storage-as-a-service offering[127] - Cost of product revenues increased by 12% year-over-year, leading to a 6 percentage point decrease in Hybrid Cloud product gross margins due to higher component costs[131][133] - Cost of Public Cloud revenues decreased by 30%, and gross margins increased by nine percentage points, attributed to cost optimization, decreased fixed asset depreciation, and the impact of the Spot by NetApp business sale[134][137] - Total operating expenses (Sales and Marketing, R&D, G&A) decreased by 2 percentage points as a percentage of net revenues, totaling $787 million, primarily due to lower compensation costs and outside services in sales and marketing and R&D[139][143][145] - Interest expense increased by 81% to $29 million due to a higher average outstanding principal amount of Senior Notes with a higher average coupon rate[150] Liquidity, Capital Resources and Cash Requirements This section assesses NetApp's liquidity, capital resources, and cash requirements, including debt management and future capital needs | (in millions) | July 25, 2025 | April 25, 2025 | | :-------------------------------------- | :------------ | :------------- | | Cash, cash equivalents and short-term investments | $3,324 | $3,846 | | Principal amount of debt | $2,500 | $3,250 | - Cash, cash equivalents, and short-term investments decreased by $522 million to $3.3 billion, primarily due to debt repayment ($750 million), stock repurchases ($300 million), and dividends ($104 million), partially offset by $673 million from operating activities[155] - Working capital decreased by $71 million to $1.1 billion as of July 25, 2025[155] - The company expects to satisfy its liquidity requirements for at least the next 12 months and the foreseeable future through existing cash, cash generated from operations, and access to capital markets and credit lines[161] - As of July 25, 2025, $2.8 billion of cash, cash equivalents, and short-term investments were held by foreign subsidiaries, with $514 million available in the U.S[162] - Capital expenditures for the remainder of fiscal 2026 are anticipated to be between $125 million and $175 million[170] - A final transition tax payment of $179 million related to the 2017 Tax Cuts and Jobs Act was outstanding as of July 25, 2025, and was paid in the second quarter of fiscal 2026[171] - Total off-balance sheet purchase commitments, including non-cancelable inventory commitments and other purchase obligations, amounted to $1.3 billion as of July 25, 2025[174] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section reports no material changes to the company's market risk exposures since the Annual Report on Form 10-K for April 25, 2025 - No material changes in market risk exposures were reported for the three months ended July 25, 2025[178] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and reports no material changes in internal control over financial reporting - As of July 25, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[180] - No changes in internal control over financial reporting were identified that materially affected or are reasonably likely to materially affect internal control over financial reporting during the first quarter of fiscal 2026[181] PART II — OTHER INFORMATION This section contains other information, including legal proceedings, risk factors, equity sales, and controls and procedures Item 1. Legal Proceedings This section refers to Note 14 for legal proceedings, indicating no new material information beyond what is already detailed - Legal proceedings are discussed in Note 14 – Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements[184] Item 1A. Risk Factors This section reports no material changes to the company's risk factors since the Annual Report on Form 10-K for April 25, 2025 - No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the year ended April 25, 2025[185] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's common stock repurchase activity, including shares repurchased, average price, and remaining authorization | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | Approximate Dollar Value of Shares That May Yet Be Purchased Under The Repurchase Program (in millions) | | :----------------------------- | :-------------------------------------------- | :--------------------------- | :---------------------------------------------------------------------------------------------------- | | April 26, 2025 - May 23, 2025 | 1,360 | $95.25 | $1,323 | | May 24, 2025 - June 20, 2025 | 1,020 | $102.07 | $1,219 | | June 21, 2025 - July 25, 2025 | 627 | $105.77 | $1,152 | | Total | 3,007 | $99.76 | | - The company repurchased a total of 3.0 million shares of common stock at an average price of $99.76 per share during the three months ended July 25, 2025[186] - As of July 25, 2025, the remaining authorized amount for stock repurchases under the program was $1.2 billion[173][186] Item 3. Defaults upon Senior Securities This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[187] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[188] Item 5. Other Information This section discloses an insider's adoption of a Rule 10b5-1 trading arrangement for company securities sales - On June 26, 2025, Daniel De Lorenzo, VP and Chief Accounting Officer, entered into a 10b5-1 trading arrangement to sell up to 3,308 shares, expiring on September 25, 2026[189] - No other directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the quarter[190] Item 6. Exhibits This section lists all documents filed as exhibits to the report, including agreements, certifications, and XBRL files - The report includes exhibits such as Restricted Stock Unit Agreements, an Offer Letter for Syam Nair, the Amended and Restated Executive Compensation Plan, and certifications from the CEO and CFO[192] SIGNATURE This section contains the signature of the Executive Vice President and CFO, confirming the report's due authorization and filing - The report is signed by Wissam Jabre, Executive Vice President and Chief Financial Officer, on August 27, 2025[195]