NetApp, Inc.

Good afternoon, ladies and gentlemen. Welcome to the NetApp Third Quarter Fiscal Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. I would now like to turn the call over to Chris Newton, Vice President, Investor Relations.

Thank you for joining us. With me today are our CEO, George Kurian, and CFO, Mike Berry. This call is being webcast live and will be available for replay on our website at NetApp.com. During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects, such as our guidance for fourth quarter and fiscal year 2022, our expectations regarding future revenue, profitability, and shareholder returns, the value we bring to customers, our ability to drive continued growth in both our hybrid cloud and public cloud segments, and our ability to manage through the current supply chain environment, all of which involve risk and uncertainty. We disclaim any obligation to update our forward-looking statements and projections. Actual results may differ materially for a variety of reasons, including macroeconomic and market conditions, such as the continuing impact and uneven recovery of the COVID-19 pandemic, including the resulting supply chain disruptions and the IT capital spending environment, as well as our ability to gain share in the storage market, grow our cloud business, and generate greater cash flow. Please also refer to the documents we file from time to time with the SEC and available on our website, specifically our most recent forms 10Q and 10K, including in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factor section. During the call, all financial measures presented will be non-GAAP unless otherwise indicated. Reconciliations of gap to non-gap estimates are posted on our website. I'll now turn the call over to George.

Thanks, Chris. Good afternoon and welcome everyone to our Q3 FY22 earnings call. We delivered another outstanding quarter, building on the momentum we've had in recent periods. Demand for our solutions is strong and powered by the alignment of our differentiated technology portfolio with customer priorities. In Q3, our focused execution delivered double digit revenue growth led by the impressive performance of our public cloud services and all FlashArray businesses, record high gross margin dollars, operating income, and earnings per share. NetApp plays a critical role in helping customers achieve their business and cloud transformation goals. I am pleased that our differentiation here continues to receive third-party validation by industry leaders, independent analysts, and existing and new customers. We were recognized by Amazon Web Services for our achievements as an AWS partner. NetApp was named the 2021 AWS Independent Software Vendor Design Partner of the Year US for the jointly engineered and natively integrated Amazon FSx for NetApp ONTAP service. Additionally, GigaOM called out NetApp as the only vendor with a multi-cloud strategy and execution that translates to a continuous data management plane across clouds and locations, a comprehensive enterprise-grade feature set, and flexible deployment options. We were listed as a leader in three GigaOM radar reports, Cloud File Systems, primary storage for large enterprises, and enterprise scale-out file systems. Not only are we a leader in each category, we are the only vendor to lead in all three. This recognition spotlights the value we bring to our customers on their cloud and digital transformation journeys. Customers are also endorsing our value, creating strong demand for solutions in both our hybrid cloud and public cloud segments. Growth in our hybrid cloud segment was driven by continued strength in object storage and all-flash arrays. Our all-flash array business hit another milestone in Q3 with a record high annualized run rate of $3.2 billion, an increase of 23% year-over-year. All-flash array penetration of our install base ticked up another point to 31% of install-based systems, giving us substantial headroom to continue to help existing and new customers modernize their storage environments with cloud-connected flash arrays. We further enhanced our position with the introduction of the AFF A900, which delivers unified support for file, block, and object protocols, built-in data protection with cutting-edge anti-ransomware capabilities, and the high performance and resiliency required to support the most critical business workloads. Public Cloud ARR grew to $469 million, an increase of 98% year-over-year, including the benefit from the Cloud Checker acquisition, which closed early in Q3. public cloud dollar-based net revenue retention rate remains healthy at 169% as customers increase their usage of our public cloud services and adopt new products. The expanded market reach from our cloud partners and the broadening participation of our field sales organization has delivered outstanding performance in our public cloud segments this year, which puts us well ahead of our plan to achieve $1 billion in ARR in fiscal year 25. We uniquely have fully integrated services with all the major public cloud providers. I am pleased with the level of engagement from our cloud partners and with the performance of our cloud storage services. Azure NetApp Files again grew ahead of plan. Cloud volume service for Google Cloud is ramping nicely. And while still very early days, we are seeing lots of proofs of concept and activity with AWS FSX for NetApp on tap. Our differentiated cloud ops portfolio for multi-cloud infrastructure management is also growing well, led by Spot and Cloud Insights. It is expanding our addressable market and opening opportunities with new buyers and existing customers and with new customers. as we help them reduce the cost and complexity of managing their rapidly growing cloud environments. We are delivering innovation at cloud speed and enhancing our solutions to address the needs of cloud natives and born-in-the-cloud applications. We've made cloud backup Kubernetes-aware and broadened Spark Ocean with automated cloud infrastructure and application management for Apache Spark and OceanCD, enabling faster deployment of Kubernetes applications with end-to-end visibility and management. As I mentioned earlier, we closed the CloudChecker acquisition early in Q3. CloudChecker complements the FinOps capabilities of Spot with the multi-cloud reports, analytics, and governance needed to plan, manage, and optimize cloud costs. to ensure organizations get the most out of their cloud investment. We continue the rapid pace of organic and inorganic innovation with today's announcement of the acquisition of Filament. Filament extends our leadership in cloud operations. Adding Filament's cloud automation technology to the Spot platform will make it easy for customers to integrate Spot solutions with their existing tools, processes, and infrastructure code. This will accelerate their ability to take advantage of Spot's suite of capabilities for understanding and optimizing their cloud infrastructure. I'm excited to welcome the filament team to NetApp. As I've said many times, our strategy to help customers deal with the challenges of managing data and applications in hybrid multi-cloud environments is helping us expand our business by winning new customers and displacing the competition. A global third-party logistics company chose FSX for NetApp ONTAP to host data migrated from Nutanix systems in its data centers. They chose NetApp-based cloud services for our resiliency, cost efficiency, and multi-protocol support. This win marks the new logo for us and has already created additional opportunity for cloud manager and cloud insights. Another new customer win came from a multinational energy infrastructure company who chose Cloud Volumes ONTAP in Azure to migrate workloads away from on-premises Dell systems. They are now considering replacing expired Dell systems with on-premises NetApp systems to make it easier to move data across environments in the future. We had a first-time win at an international government agency with SpotEcho to optimize its multimillion-dollar cloud spend. This win becomes a lighthouse reference account for us, which we can leverage to reach into other related agencies. In summary, our strong Q3 results underscore our unique position in solving organizations' most significant challenges in both cloud native and traditional applications, on premises, and in hybrid multi-cloud environments. First, we help customers simplify and modernize existing data centers and deploy traditional applications quickly and confidently. Second, we help customers adopt modern application architectures like Kubernetes and microservices for new workloads and deploy data-rich applications like machine and deep learning. And third, we help customers optimize cost, performance, availability, and security for applications and associated infrastructure across multiple clouds. The complexities created by rapid data growth, multi-cloud management, and the adoption of next-gen technologies creates a sizable opportunity for us. With focused execution, I am confident in our ability to capture that opportunity and deliver continued growth. We're holding an investor day on March 22nd, where we'll talk more about our growth opportunity and our plans to drive shareholder value. You can register at investors.netapp.com. If you have any questions, please reach out to the IR team. Before I turn the call over to Mike to walk you through the numbers, I want to take a moment to welcome Harv Bela to NetApp as our Chief Product Officer. Harv brings with him more than 25 years of experience building industry-defining software categories and cloud services. I also want to thank Brad Anderson for his leadership and wish him well in his retirement. With that, I'll hand it over to Mike. Thank you, George.