NetApp (NTAP) risk factors, FY2026 10-K

NetApp's FY2026 10-K, filed Jun 05, 2026, lists 40 risk factors in 5 groups. Against the prior year's 45: 2 new, 7 dropped, 27 substantially reworded.

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Risk factors listed
405 groups
New this year
2vs 45 last year
Dropped
7since the prior 10-K
Substantially reworded
27of those kept
Section length
13k wordsItem 1A

What the changes say

  • NetApp added specific AI compliance and stock repurchase risks while expanding disclosures on ERP system implementation, tax changes, and supply chain regulations.

What changed since the prior 10-K

New

  • NewRisks Related to Our Business and Industry

    that may increase our risk exposure. We face significant competition in the market and from other companies regarding AI technologies

    We face intense AI competition and legal risks from data privacy, intellectual property issues, or inadvertent disclosure of confidential information into training models.

  • NewRisks Related to Our Securities

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

    Failure to meet investor expectations regarding dividends, stock repurchases, or general market volatility can significantly depress our stock price.

Dropped

  • DroppedRisks Related to Our Business and Industry

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

  • DroppedRisks Related to Our Business and Industry

    customer relationships weaken, if they fail to comply with legal or regulatory requirements, or if we cease to do business with them for these or other reasons, our business, operating results, financial condition and cash flows could be adversely affected

  • DroppedRisks Related to Our Operations

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

  • DroppedRisks Related to Our Customers and Sales

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

    Trade restrictions, tariffs, or taxes on foreign-sourced imports.

  • DroppedRisks Related to Our Products and Services

    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

  • DroppedRisks Related to Our Products and Services

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

    Difficulties in developing new products and managing transitions from older ones.

  • DroppedGeneral Risks

    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

Reworded

  • 94% rewrittenRisks Related to Our Securities

    We could be subject to additional income tax liabilities

    Added a specific reference to the enactment of the One Big Beautiful Bill Act in July 2025 impacting U.S. taxes.

  • 91% rewrittenRisks Related to Our Business and Industry

    The global nature of our business exposes us to risks that could materially harm our operations, revenues, and financial results

    Added climate change regulations and sustainability marketing claims to the list of international factors affecting operations.

  • 84% rewrittenRisks Related to Our Operations

    Initiatives to improve our cost structure, business processes, and systems may not achieve the expected benefits and could negatively impact our reputation, business, operating results, financial condition and cash flows

    Updated to state that the final phase of a new ERP system was implemented in the third quarter of fiscal 2026.

  • 83% rewrittenRisks Related to Our Securities

    Our stock price is subject to volatility

    Split stock price volatility details into a separate risk section.

  • 76% rewrittenRisks Related to Our Business and Industry

    The dynamic markets in which we operate and our sales and distribution structure make it challenging to forecast revenues, and any disruption to our partner relationships could harm our business, operating results, financial condition, and cash flows

    Added that historical revenue seasonality and quarterly linearity may be affected by pricing changes or macroeconomic conditions.

    Was: The dynamic markets in which we operate and our sales and distribution structure make it challenging to forecast revenues, and any disruption could harm our business, operating results, financial condition, and cash flows

  • 72% rewrittenRisks Related to Our Products and Services

    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

    Combined human trafficking supply chain regulations and conflict mineral sourcing concerns into a single compliance risk.

  • 72% rewrittenRisks Related to Our Products and Services

    If a material cybersecurity or other security breach impacts our services, systems, supply chain, or end-user customer systems, or if stored data is improperly accessed, our business could suffer significant harm

    Removed references to 'clients' when describing data security protections for partners and customers.

  • 59% rewrittenRisks Related to Our Business and Industry

    Issues related to the development and use of artificial intelligence (AI), could lead to legal or regulatory action, damage our reputation, or otherwise materially harm our business

    Minor phrasing adjustments regarding non-compliance with emerging AI regulations.

    Was: Issues related to the development and use of artificial intelligence (AI), including GenAI, could lead to legal or regulatory action, damage our reputation, or otherwise materially harm our business

  • 58% rewrittenRisks Related to Our Products and Services

    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

  • 54% rewrittenRisks Related to Our Products and Services

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

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

  • 52% rewrittenRisks Related to Our Business and Industry

    Our gross margins may fluctuate

  • 52% rewrittenRisks Related to Our Customers and Sales

    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

  • 49% rewrittenRisks Related to Our Products and Services

    Failure to comply with new and existing laws and regulations related to privacy, data protection, AI and information security could cause harm to our reputation, result in liability (including regulatory penalties and litigation), and adversely impact our business

  • 49% rewrittenRisks Related to Our Business and Industry

    Our business may be negatively impacted by technological trends in our market or our inability to keep pace with rapid industry, technological, and market changes

  • 48% rewrittenRisks Related to Our Business and Industry

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

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

  • 48% rewrittenRisks Related to Our Products and Services

    Disruptions due to floods, earthquakes, storms, fires and other natural disasters, especially those caused by climate change, and particularly in countries with limited infrastructure and disaster recovery resources

  • 46% rewrittenRisks Related to Our Business and Industry

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

    Was: Global economic and geopolitical conditions have adversely affected and may in the future continue to adversely affect our industry, business operations, and financial performance, including our revenue growth, profitability, financial condition and cash flows

  • 43% rewrittenRisks Related to Our Customers and Sales

    Reduced U.S. government demand could materially harm our business, operating results, financial condition and cash flows

  • 41% rewrittenRisks Related to Our Securities

    There are risks associated with our outstanding and future indebtedness

  • 37% rewrittenRisks Related to Our Business and Industry

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

  • 36% rewrittenRisks Related to Our Products and Services

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

  • 29% rewrittenRisks Related to Our Securities

    We may not be able to maintain appropriate internal financial reporting controls and procedures

  • 24% rewrittenRisks Related to Our Customers and Sales

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

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

  • 23% rewrittenRisks Related to Our Products and Services

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

    Was: 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

  • 23% rewrittenRisks Related to Our Products and Services

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

  • 21% rewrittenRisks Related to Our Business and Industry

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

  • 20% rewrittenRisks Related to Our Operations

    We are exposed to credit risks, fluctuations in the market value of our investment portfolio, and potential adverse effects on our cash and cash equivalents if the financial institutions holding them fail

All 40 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business and Industry

  1. 01Global economic and geopolitical conditions may adversely affect our industry, business operations, and financial performance, including our revenue growth, profitability, financial condition and cash flows46% rewritten
  2. 02Our business may be negatively impacted by technological trends in our market or our inability to keep pace with rapid industry, technological, and market changes49% rewritten
  3. 03The global nature of our business exposes us to risks that could materially harm our operations, revenues, and financial results91% rewritten
  4. 04The dynamic markets in which we operate and our sales and distribution structure make it challenging to forecast revenues, and any disruption to our partner relationships could harm our business, operating results, financial condition, and cash flows76% rewritten
  5. 05Our gross margins may fluctuate52% rewritten
  6. 06Issues related to the development and use of artificial intelligence (AI), could lead to legal or regulatory action, damage our reputation, or otherwise materially harm our business59% rewritten
  7. 07that may increase our risk exposure. We face significant competition in the market and from other companies regarding AI technologiesNew
  8. 08Increasing competition or industry consolidation could harm our business, operating results, financial condition and cash flows48% rewritten
  9. 09Transition to consumption-based business models may adversely affect our revenues and profitability in other areas of our business, potentially harming our business, operating results, financial condition and cash flows
  10. 10If we are unable to attract and retain qualified personnel, our business, operating results, financial condition and cash flows could be harmed37% rewritten
  11. 11Our acquisitions or divestitures may not achieve the expected benefits and could increase our liabilities, disrupt our existing business, and harm our operating results, financial condition and cash flows21% rewritten

Risks Related to Our Operations

  1. 12We often incur expenses before receiving related benefits, and it may be difficult to reduce expenses quickly if demand declines
  2. 13Initiatives to improve our cost structure, business processes, and systems may not achieve the expected benefits and could negatively impact our reputation, business, operating results, financial condition and cash flows84% rewritten
  3. 14We are exposed to credit risks, fluctuations in the market value of our investment portfolio, and potential adverse effects on our cash and cash equivalents if the financial institutions holding them fail20% rewritten
  4. 15Our initiatives and disclosures related to sustainability and corporate responsibility matters expose us to risks that could adversely affect our reputation and performance

Risks Related to Our Customers and Sales

  1. 16A portion of our revenues is generated by large, recurring purchases from various customers, resellers and distributors
  2. 17If we are unable to maintain and develop relationships with strategic partners, our ability to innovate may be diminished and our revenues may be harmed24% rewritten
  3. 18To successfully offer our products and services in a rapidly evolving market, we need effective planning, forecasting, and management processes that allow us to scale and adjust our business in response to changing market opportunities and conditions
  4. 19Reduced U.S. government demand could materially harm our business, operating results, financial condition and cash flows43% rewritten
  5. 20We 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 losses52% rewritten

Risks Related to Our Products and Services

  1. 21Any disruption to our supply chain could materially harm our business, operating results, financial condition and cash flows
  2. 22Disruptions due to floods, earthquakes, storms, fires and other natural disasters, especially those caused by climate change, and particularly in countries with limited infrastructure and disaster recovery resources48% rewritten
  3. 23We rely on a limited number of suppliers for critical product components
  4. 24If a material cybersecurity or other security breach impacts our services, systems, supply chain, or end-user customer systems, or if stored data is improperly accessed, our business could suffer significant harm72% rewritten
  5. 25If 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 products58% rewritten
  6. 26Failure to comply with new and existing laws and regulations related to privacy, data protection, AI and information security could cause harm to our reputation, result in liability (including regulatory penalties and litigation), and adversely impact our business49% rewritten
  7. 27If our products or services are defective, or are perceived to be defective, including as a result of improper use or maintenance, our operating results and customer relationships may be harmed23% rewritten
  8. 28Changes 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 flows72% rewritten
  9. 29Any violation of U.S. or international customs or export control laws and other laws affecting the countries in which our products and services may be sold, distributed, or delivered could have a material adverse effect on our business, operating results, financial condition and cash flows54% rewritten
  10. 30Our failure to protect our intellectual property could harm our business, operating results, financial condition and cash flows
  11. 31We may be found to infringe on intellectual property rights of others36% rewritten
  12. 32We rely on software from third parties and open-source software, and a failure to properly manage our use of such software could result in increased costs or loss of revenue23% rewritten
  13. 33Our failure to adjust to emerging standards may harm our business

Risks Related to Our Securities

  1. 34Our stock price is subject to volatility83% rewritten
  2. 35ratings, our ability to pay dividends and to continue to execute our stock repurchase program as planned and market trends and economic volatility unrelated to our performanceNew
  3. 36Our quarterly operating results may fluctuate and differ materially from our forecasts, which could harm our stock price
  4. 37There are risks associated with our outstanding and future indebtedness41% rewritten
  5. 38Our business could be materially and adversely affected as a result of natural disasters, terrorist acts or other catastrophic events
  6. 39We could be subject to additional income tax liabilities94% rewritten
  7. 40We may not be able to maintain appropriate internal financial reporting controls and procedures29% rewritten

Other NetApp 10-Ks

  • FY2025 10-K risk factors
    45 risks

    NetApp faces intense global competition in data storage and cloud services, with significant reliance on third-party supply chains and component manufacturers. Evolving regulations regarding artificial intelligence, data privacy, and international trade pose substantial operational and compliance risks. The company's financial results remain vulnerable to customer concentration and unpredictable U.S. government spending.

    Filed Jun 09, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.