Everyone, thank you for joining us here on day one of BofA's Global Technology Conference. Delighted you could all join us here today. I'm Wamsi Mohan. I cover the IT hardware and supply chain space here for Bank of America. Thank you all for coming. I'm delighted to welcome Wissam Jabre, who's the CFO of NetApp. I have to be careful because I've known him in other roles prior to that. Well welcome, Wissam. Pleasure to have you over here, and excited to hear for the next 30 minutes that we've got, which is a short amount of time, about your outlook on NetApp's story. Thanks so much, Wamsi, and happy to be here. Excited to share more. Yeah. We have Jeriel from IR as well. Sure. We'll make sure that. Do you want to go ahead and cover the disclosure? Or I can do it, too, if you'd like me to. That's fine. Okay. I'll go ahead and do it. Hey, today's discussion may include forward-looking statements regarding NetApp's future performance, which are subject to risk and uncertainty. Actual results may differ materially from the statements made today for a variety of reasons described in NetApp's most recent 10-K and 10-Q filed with the SEC and available on our website at netapp.com. NetApp disclaims any obligation to update information in any forward-looking statement for any reason. Excellent. Okay. With that out of the way, maybe I just want to point out Jeriel from IR is here, too, if you have any follow-up questions afterwards. What an exciting time to be in hardware, right? I know you spend a lot of time on software resources within NetApp, and that's a differentiating viewpoint. For infrastructure, maybe is the right word to use as opposed to hardware. It is an exciting time to be in infrastructure. Maybe you can talk to our audience here a little bit about how is NetApp participating in this growth in infrastructure that is driven by AI. Look, we've been sort of looking at and tracking our AI wins for quite some time. As we disclosed most recently for Q4, we had around 500 of them. What matters here is really the trend that this has followed. It's more than doubled year-over-year and continues to grow on a sequential basis. It is a sign that there's more and more activity that is increasing in the enterprise AI space. For us, this is very exciting because obviously it does in some ways lead to some of the improvement in IT or enterprise IT spending. As we look at the infrastructure or the offerings that we have, we do have basically high-performance all-flash solutions where we could participate on the AI side. We also have our new offering, AFX, which is our disaggregated architecture, in combination with AIde that could also be a good offering for the AI space. Maybe to step back for a second, right? You're involved in the domain of data storage, data protection, making sure that the infrastructure runs seamlessly based off all this data growth that's happening around. We were talking earlier with some companies where we're talking about data growth that's maybe 25%-30%, off of very large numbers. Now we're talking about some big deployments. As you think about the market and your opportunity for growth, what should investors think about in terms of the incremental, maybe, growth from baseline growth that's provided by AI? Where are we within a more general replacement cycle for storage assets? It feels like a lot of the hardware assets have been sweated for some time, and now it feels like they're ripe for a refresh. Would love to get your thoughts on that. Look, we've been on that journey of moving towards the all-flash upgrades, if you like, from the 10K hard disk drive for quite some time. We've seen our install base basically almost churning approximately around 1% a quarter. We're now at around 48%. That gave us a nice growth factor over the last few years. Now, when you look at where AI comes in is I think we should expect to see that all-flash transition continue, even though now with the current prices on all-flash and the dynamics, that could have a little bit of an impact given the increase in prices. We have a very broad portfolio where we could offer our customers many alternatives as well. In addition to that transition, we think that all-flash Sorry. AI or adoption of AI in an enterprise, especially in the inferencing space and the data preparation, data lake modernization space, could provide some nice tailwind in addition to what the industry has been experiencing so far. Okay. As we think about this memory pricing, right? This has been front and central for a lot of customers and organizations to deal with. How are you tackling the memory pricing issue? For us, it's an input cost, and what we've done is we've basically adjusted our prices. We increased our prices in the past quarter to pass the commodity costs, as is customary in our space, to our customers. We look at it from a portfolio perspective, and we adjust our prices depending on the various impact from an input cost. Okay. What has been the receptivity to that sort of price increases from your customer base? Are you seeing any change in the customer behavior in terms of maybe trying to accelerate some purchases, maybe pulling forward anything? What are you seeing in the behavior of your customer base as you're pushing together some fairly significant price increases, multiple price increases through the course of a quarter? Yeah. In the past quarter, I would say we haven't necessarily seen much demand elasticity. When you look at the way customers budget, they do budget in terms of dollars. Yes. They do spend their budgets based on dollars. Having said that, anytime you have price movements or larger price movements, you'd expect some different behaviors in terms of some accelerated purchasing, for instance, and so on. For us, in Q4, we really saw a minimal impact to our P&L from any of that accelerated demand. When you think of it, not all customers have the financial flexibility to do that. Yeah. No, that's fair. In your last earnings, you noted that some large deals came through. I think you press released a relationship with Google that basically was multi-year. How should we think about that relationship, and what is the way in which it flows into your P&L over a longer period of time? We did note the agreement with Google, which is on the Google Distributed Cloud side that gave us a bit of benefit in product revenue and product gross margin in the fourth quarter. That was really an expansion of an agreement in place that has been with Google since October 2024. The way to think of it does basically serve the Google Distributed Clouds in its sovereign and secure type of environments. In Q4, we had some revenue associated with it. As we think through, it's a four-and-a-half-year agreement. Over the next four and a half years, we would be recognizing some support revenue, as we typically do in those types of engagements. Also, we would be recognizing product revenue when we ship a product associated with it. It is included in our hybrid cloud segment. Yeah. Can't wait to see Google raising $80 billion overnight to put in AI infrastructure. That's kind of nice. Maybe, Wissam, just to now talk about product gross margins, right? I think you guys spoke about this on the call that Q1, you see the lowest product gross margins that you expect for your next fiscal year, and then it should improve from there. Can you talk about why that will be the case, and what are some of the things that give you the confidence that that trajectory is the right trajectory? Yeah. Look, at this time, this is what we see. We see Q1 being the trough, we expect gradual improvements for the rest of the year. Again, I'm not expecting necessarily a step function improvements. I think gradual improvement. That's because as we progress through the quarter and as we get into the next quarter and beyond, we start seeing more and more of the effect of the price increases that we implemented in the past quarter take effect and flow through our P&L. It does take a bit of time back typically. Historically, it's taken sometimes up to three quarters, we've tightened a little bit our contracts to start seeing the effect a little bit earlier. Okay. There's been some of these memory suppliers, basically every memory supplier is talking about longer term agreements and the potential to sort of fix some level of both pricing and capacity out in time. Is that something that NetApp would be interested in undertaking? I know typically this is more hyperscale domain, to do larger deals that look out over a longer period of time. Is that something that you would entertain? How are you thinking about supply, your ability to get capacity as you need it? Yeah. We're in continuous discussions with our partners and suppliers to be able to secure the various parts of the components that go into our products. There's no doubt we're in a constrained supply environment. Over the last couple of quarters, sometimes we experience shortages in some areas, but also lead times are also extending. We work very closely with our suppliers. We engage with them depending on the different needs that we have, the horizon that we have, and our volumes, as well as the costs. We're open to various arrangements as long as it helps us secure the supply we need for our products. Now, when you look at where we are today at this time, we believe we can secure the adequate supply we need for the outlook we have for this fiscal year. As you think about this fiscal year, you have sort of an extra week dynamic in your fiscal 1Q, and you have pricing flowing through as well, at maybe a higher pace than what you already realized. As you think about both of those and think about the seasonality of how this year plays out, how should investors calibrate to that? When you look at our guide for Q1 and the guide for the fiscal year, yes, as you noted, Q1 has an extra week, which we've quantified to approximately $65 million. When you factor that out, and you look at the seasonality with respect to first half versus second half, we are anticipating a typical historical pattern with respect to seasonality for first half versus second half. When you look at our Q2 to Q4, taking into account the midpoint of the FY2027 guide, you compare Q2 to Q4 FY2027 to the same period in FY2026. That basically implies around mid-single-digit% growth. That captures what we see today with respect to how FY2027 and Q1 will shape up. Okay, that's helpful. Maybe conversely, why should that be the right seasonality, especially as you're driving pricing increases? What's your underlying assumption about pricing as you go through the course of the year? Is there incremental price increases that are baked into that guide, or is it something that you're only thinking about Q1, where those pricing impacts are taking place, and then as the market evolves, you will decide? How should we think about that? Within the fourth quarter, we saw some really good broad-based strength in demand. We did obviously talk about our price increases, but we also have seen some nice uptick in enterprise IT spending, part of it driven by added increased activity in the enterprise AI space. When we look at the fiscal year 2027 guide, it does comprehend all of these various pieces that I just mentioned. In addition, the way to think of it is if we continue to see commodity costs increase, obviously, we won't hesitate to take pricing actions to mitigate the impact to our P&L and protect our profitability. All of this basically is how we think of the fiscal 2027. Okay. Just to be clear, as you think about the environment, would you say that we're still expecting an inflationary environment for the rest of your fiscal year in terms of commodity pricing? Are there things? I know six months ago you were in a favorable inventory position, for example. Is there any opportunity for that at all? Are you leveraging your balance sheet in any way to take advantage of any maybe circumstances that might show up? As I mentioned, we work very closely with various parts of our supply chain and our suppliers, and if there's a need for us to do things like that, we won't hesitate. At the end of the day, in terms of priorities, our first priority is to secure our supply. Of course, we work on balancing supply with cost and other types of activities as we think of our business. We won't hesitate if we need to. When you think about, you mentioned earlier, the breadth of the portfolio, and you have the opportunity to maybe shape demand a little bit with what are the configurations where you put people with an all-flash versus what you're putting in hybrid versus what you're putting in cloud. What are customers doing with respect to each of these at the moment, given that flash pricing has increased so much? Are they making other choices? Are they making adjustments? What are your salespeople telling your customers to do here? Thanks for talking about our broad portfolio. It is really exciting to see the various options that we can offer our customers in this environment. In addition to all-flash, we have hybrid flash, which is based on basically hard disk drive as a media. In addition, we have Keystone Storage as a Service and our public cloud business that has done really great also over the last few years. When you look at Q4, we did see some nice increase in our all-flash business. We also saw an uptick in the hybrid flash business, which is based on other types of media, like the hard disk drive, which is interesting because in the prior several quarters, we had seen more or less a steady decline. That could be potentially driven by what the all-flash prices have done. It's a little bit too early to tell. What's important, though, is our ability to serve our customers wherever they need to be. If they want to upgrade their hybrid flash data infrastructure, we're happy to help there. If they don't want to do a big upfront CapEx investment and prefer to do more of a consumption-based approach, we can offer Keystone Storage as a Service. In some cases, if they also want to use ONTAP in the multi-cloud, hybrid cloud, and public cloud environment, we can offer our public cloud solutions. You've seen real strong growth on the public cloud side. I know the reported numbers were impacted by the Spot divestiture for some period of time. We have lapped that now. Your growth looks very solid. The incremental profitability looks extremely strong. You've been moving up your profit targets, gross margin targets on the public cloud side. Can you just talk to us a little bit about, what is the right growth trajectory to think about in this kind of a constrained environment? Should we be expecting some kind of acceleration that can come in public cloud? Secondarily, what is enabling such high gross margins and continued increases in those gross margin rates? Yeah. The public cloud business has done really great. When you look at fiscal 2026, it grew 17%, 18% when you account for the Spot divestiture. Yes on a year-over-year basis. Within that, the first party and marketplace, which is really the core growth of that business, grew at around 30%. It's growing at a really fast pace. It did deliver, in the last couple of quarters, slightly more than 85% gross margin. Our target gross margin for that business is 80%-85%. It's operating at that high end of the target range and a little bit exceeding it. The outlook going forward is a similar set of growth. The growth is still healthy. We expect it to continue to grow, especially in the first party and marketplace. When you look at that, it should help provide also a nice tailwind to the corporate gross margin, given that obviously it is operating at a much higher gross margin than the corporate gross margin. With respect to what's driving some of the dynamics in the margin itself, there's really a couple of things. We had a bit of depreciation from the initial hardware that was installed over time. Also, there's more software content as we continue to improve on the offering and make it more and more competitive. Obviously, basically, there's more software content with that. Basically, that type of dynamic should continue in the future. Okay. Just on the public cloud side, your implementation across the various public clouds is slightly different. I think you originally started off with NetApp Files, which was a fairly large part of that public cloud business. As you think about maybe how much have we diversified today in terms of the various public clouds, and what is your expectation of which public cloud might be able to contribute the most to NetApp's growth if you look over the next, call it two years? Look, all three are doing great. We have partnerships with all the top three hyperscalers where they offer our ONTAP software as a native storage software solution. We see good traction in all three of them. The size, I would say, also depends on obviously when the business started, but we see good growth in all three of them. In terms of profitability, I mentioned earlier, this business has been operating at really the upper end of the long-term target range for quite some time. Yeah. You guys have had a now very consistent history of managing your OpEx really well. In times where your revenue starts to accelerate, you really get a lot of leverage in the model. As you look over the next couple of years based on your top-line growth expectations, and maybe there's more upside with pricing, how should we think about the margin flow-through? How should we think about OpEx rates in general relative to the revenue growth rates? Look, we've made a concerted effort to maintain that operating leverage in our business. You can see as we project revenue growth, we typically grow our OpEx at less than half of the revenue growth rate. Having said that, obviously within that, we continue to invest in our sales capacity. We did add sales capacity in fiscal 2026. We plan to do more in fiscal 2027 as we see good momentum in the business. We continue to invest in our research and development. Obviously, we're investing in AI data solutions. As we do this, we also de-emphasize some areas. We look at focusing on the higher return areas and de-emphasizing lower return areas or areas we're not necessarily as focused on. Overall, when you look at how we think and how we execute our investments from an OpEx perspective, it still keeps a certain leverage in the model where basically every dollar of revenue should add a little bit more to the bottom line. Yeah. Obviously NetApp's had a fairly long history now as a public company. When you talk about incremental sales resources, what are the areas that you're targeting for incremental sales opportunities that were maybe not already exploited by the company? As you said, we have quite a bit of presence globally in the various markets, but there's always need for us to rebalance resources sometimes. There's areas, for instance, where we're seeing faster growth where we sort of want to put more. For example, in the AI front, we're putting a little bit more AI specialists that will help push that and become much more focused on growing that side of the business. We continue to invest in areas like our public cloud, for example, to continue to drive that nice growth that's very highly profitable for the company. We balance different geographic areas as well, depending on the needs. These are some of the few examples. Okay. That's helpful. Maybe just talking a little bit about cash generation, right? You guys have done an amazing job with free cash flow and free cash flow margins. As you think about the potential growth here, especially with enterprises potentially having to do a big storage refresh down the road with AI, you could have much better economics flowing through to cash. How are you thinking about potentially deploying that cash? How much focus, if any, is needed on M&A? How are you thinking about overall shareholder returns? Yeah. We've had really a great free cash flow generation in fiscal 2026. We anticipate similar type of trends into fiscal 2027. As you noted, if the refresh really happens, that should give us a very nice tailwind from a top-line perspective. The way we look at our capital allocation is very much consistent with last year, where we want to return up to 100% of our free cash flow to our shareholders through dividends plus share buybacks. We're also a technology company, we focus on making sure that we have a competitive portfolio, if there's a need for us to do any tuck-ins or basically enhance our portfolio, that's a good use of our capital. We also look at these types of opportunities. Okay. Well, we're coming up on time. We've only got a couple of minutes left, maybe, Wissam, just to wrap, what do you think investors should be most focused on with respect to NetApp? Why do you think this might be a good time to invest in the company? We're seeing really broad-based strength and demand. We obviously recognize and acknowledge the potential risk of some of the accelerated orders. Essentially, we're seeing an underlying broad-based demand in our business, driven by increased enterprise IT spending and partly driven by increased activity on the enterprise AI front. As we obviously progress throughout the year, we'll be updating more based on what we see. Excellent. Well, thank you so much for being here. Really appreciate it, Wissam, and thank you all for joining us here today. Thanks for having me. Thank you. excited to be here. Thank you. Thank you.