What NetApp, Inc. told the SEC could break it.

U.S. BIS/OFAC export controls have forced NetApp to stop selling/servicing certain restricted entities/regions; expanding China/semiconductor controls, the Outbound Investment Security Program and China-Taiwan tensions add compliance and market-access risk.

“In addition, the U.S. has continued to expand and refine export controls, in particular with respect to China, as well as related to semiconductors and other critical technologies. ... Additionally, ongoing trade tensions between the U.S. and China and recent investment restrictions, such as the U.S. Outbound Investment Security Program, could impact our business and operating results.”

NetApp's outsourced manufacturing (Mexico, Taiwan, Hungary, Netherlands, Singapore, US) is exposed to a fluid U.S. tariff regime and potential USMCA modification, with suppliers/CMs likely to pass through additional costs.

“The U.S. government continues to enact changes to U.S. trade policy and has signaled plans for possible additional changes, including future withdrawal from or material modification of certain international trade agreements such as the United States-Mexico-Canada Agreement, imposing tariffs on certain products, as well as imposing tariffs on goods originating in certain countries. The U.S. government's tariffs policy remains fluid, and additional tariffs or restrictive policies could have a significant impact on our business and results of operations.”

Sales to two (unnamed) major customers accounted for 43% of NetApp's net revenue in fiscal 2026 — significant channel concentration (typically large distributors).

“Sales to two of our major customers accounted for 43% of our net revenues in fiscal 2026.”

NetApp depends on a limited number of suppliers — including single-source suppliers — for drives and other components used to assemble its products, exposing it to price rigidity, supply constraints and quality/quantity challenges.

“We rely on a limited number of suppliers for critical product components. We depend on a limited number of suppliers for drives and other components used in assembling our products, including some single-source suppliers. This reliance has subjected us, and could in the future subject us, to price rigidity, periodic supply constraints, and challenges in producing our products with the required quality and quantities.”