Management approved a restructuring plan in Q3 2024 to redirect resources to highest return activities and reduce costs. This plan includes a global workforce reduction of approximately 1%.

Public Cloud revenues increased by 1% to $151 million in Q3 2024, driven by customer demand for NetApp's diversified cloud offerings and overall growth in the cloud market.

The company discloses the software and hardware components of its product revenues to provide visibility into the value created by its software innovation and R&D investment.

Sales and marketing, research and development, and general and administrative expenses for the third quarter of fiscal 2024 totaled $769 million, or 48% of net revenues, relatively consistent with the corresponding period of fiscal 2023.

Materials costs decreased by approximately $94 million in the third quarter of fiscal 2024 compared to the corresponding period of the prior year, reflecting lower component and freight costs as a result of supply chain improvements.

The effective tax rate for the three months ended January 26, 2024 includes a benefit for increased fiscal 2024 foreign tax credits, partially offset by an increase in stock compensation for which no tax benefit is recorded.

Continuing global economic uncertainty, political conditions and fiscal challenges in the U.S. and abroad have resulted and may continue to result in adverse macroeconomic conditions, including inflation, rising interest rates, foreign exchange volatility, slower growth and possibly a recession.

The company is subject to various legal proceedings and claims that arise in the normal course of business. Unfavorable rulings or other events could occur, including significant monetary damages.

The company is exposed to market risk related to fluctuations in interest rates and foreign currency exchange rates. The company uses certain derivative financial instruments to manage foreign currency exchange risks.

The company engages in periodic reviews of opportunities to invest in or acquire companies or units in companies to expand its total addressable market, leverage technological synergies and establish new streams of revenue, particularly in its Public Cloud segment.

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.

Supply chain constraints, which substantially began to impact us in the first half of fiscal 2023, led to elevated product component and freight costs during the first nine months of fiscal 2023. Comparatively, in the first nine months of fiscal 2024, the supply chain substantially improved, resulting in lower costs.

In each of the first and third quarters of fiscal 2024, management approved a restructuring plan to redirect resources to highest return activities and reduce costs.

Materials costs decreased by approximately $94 million and $386 million in the third quarter and first nine months of fiscal 2024 compared to the corresponding periods of the prior year, reflecting lower component and freight costs as a result of supply chain improvements.

Total compensation costs included in sales and marketing, research and development and general and administrative expenses increased by $32 million, or 7%, and $83 million, or 6%, in the third quarter and first nine months of fiscal 2024, respectively, compared to the corresponding periods of the prior year, primarily due to an increase in incentive compensation expense. This increase was partially offset by lower salaries expense, reflecting average headcount decreases of 11% and 8%, respectively.

The company discloses the software and hardware components of its product revenues to provide visibility into the value created by its software innovation and R&D investment.

The company engages in periodic reviews of opportunities to invest in or acquire companies or units in companies to expand its total addressable market, leverage technological synergies and establish new streams of revenue, particularly in its Public Cloud segment.

Supply chain constraints, which substantially began to impact us in the first half of fiscal 2023, led to elevated product component and freight costs during the first nine months of fiscal 2023. Comparatively, in the first nine months of fiscal 2024, the supply chain substantially improved, resulting in lower costs.

During the first nine months of fiscal 2024, the company repurchased approximately 11 million shares of its common stock at an average price of $76.03 per share, for an aggregate of $800 million.

The company declared aggregate cash dividends of $1.50 per share in that period, for which the company paid $312 million.

We anticipate capital expenditures for the remainder of fiscal 2024 to be between $25 million and $75 million.

The plan initiated during the first quarter also included optimization of our global office space for our hybrid work model. In connection with that plan, we terminated certain real estate leases in various countries during the first nine months of fiscal 2024, resulting in restructuring charges primarily comprised of lease termination charges.

Continuing global economic uncertainty, political conditions and fiscal challenges in the U.S. and abroad have resulted and may continue to result in adverse macroeconomic conditions, including inflation, rising interest rates, foreign exchange volatility, slower growth and possibly a recession.

The company engages in periodic reviews of opportunities to invest in or acquire companies or units in companies to expand its total addressable market, leverage technological synergies and establish new streams of revenue, particularly in its Public Cloud segment.

Supply chain constraints, which substantially began to impact us in the first half of fiscal 2023, led to elevated product component and freight costs during the first nine months of fiscal 2023. Comparatively, in the first nine months of fiscal 2024, the supply chain substantially improved, resulting in lower costs.