NetApp, Inc.

Good afternoon, ladies and gentlemen. Welcome to the NetApp fourth quarter and 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 first quarter and fiscal year 2023, 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 sections. 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.

Thank you, Chris. Thanks, everyone, for joining us this afternoon. Our solid fourth quarter results cap off a strong year. We made sustained progress against our strategic goals, successfully achieving our commitment to grow the business while delivering operating leverage in fiscal 2022. We gained share in enterprise storage with strong growth in all flash array and object storage products. We expanded our public cloud business with robust expansion of customers, ARR, innovation, and routes to market. And most notably, we delivered record levels of gross margin dollars, operating income, and earnings per share. While the demand environment remained strong, Macroeconomic uncertainty, including supply constraints, rising interest rates, inflation, and geopolitical conflict has increased since we last spoke with you at our investor day in March. Navigating this complex and dynamic environment is testing our teams, and we are sharply focused on managing what is in our control. Backlog is elevated due to supply constraints, despite our excellent supply chain management helping us meet as much of the demand as possible. I want to thank our global team for their disciplined execution and agile response to changing conditions. That we achieved all-time highs for gross margin dollars, operating income, and earnings per share in the face of these headwinds demonstrates our disciplined operating management. The turbulent environment also creates challenges for our customers, raising the urgency for data-driven digital and cloud transformations. We sit at the intersection of these megatrends as the complexities created by rapid data growth, multi-cloud management, and the adoption of next-gen technologies such as AI, cloud-native, and modern application and data infrastructures create a sizable opportunity for us. At our investor day, we outlined our objective to deliver long-term value through sustained growth, and that thesis remains unchanged. Our critical role in helping customers achieve their transformation goals underpins our strategy and drives confidence for future growth. Public cloud ARR of 505 million grew 68% year-over-year, and the Q4 dollar-based net revenue retention rate remained strong at 159%. Before I get to the many highlights of the quarter, I want to address the fact that our public cloud ARR came short of our expectations. Demand for our cloud storage solutions was strong in Q4. We also saw a healthy number of new customer additions across both cloud storage and cloud operations services in the quarter. Unfortunately, these tailwinds were not enough to offset the lower than expected growth created by higher churn, lower expansion rates, and Salesforce turnover in our cloud operations portfolio. We understand the root causes of these temporary headwinds. And in FY23, our focus will be on returning these services to the growth trajectory we saw in the first three quarters of the year. We have made organizational changes to increase focus on renewal and expansion motions, and we'll continue to refine our go-to-market activities to better address the cloud operations market. Additionally, we have refreshed the sales organization and strengthened the leadership team. We believe strongly in the sizable opportunity created by our cloud operations portfolio where we bring differentiated enterprise capabilities to cloud infrastructure management built on our long experience supporting a broad range of applications. Our differentiation in this space continues to receive third-party validation bought by NetApp was recognized as a leader and the only outperformer in gigaohms radar for cloud resource optimization. As I noted earlier, our cloud storage services continue to perform well. Azure NetApp Files remains the standout here. Cloud Volume Service for GCP and FSx for NetApp ONTAP also had strong growth in ARR and customer additions, albeit of small bases. We continue to deliver significant innovation to help customers get the most from their cloud storage environments. AWS announced FSx for ONTAP support for single availability zones, lowering storage costs and improving performance, as well as its inclusion in the EC2 launch wizard, streamlining the selection of FSx for ONTAP as file storage for customers, creating a new compute instance. These new capabilities unlock new use cases, expanding the opportunity for FSx for ONTAP. Our cloud storage and data management services are complemented by our cloud operations infrastructure management and optimization functionality. Together, these capabilities deliver an industry-leading portfolio of multi-cloud infrastructure services for stateful and stateless workloads. Now we're enabling customers to deploy applications quickly, easily, and cost-effectively on that multi-cloud infrastructure. For big data applications with Spark on Kubernetes, for managed desktops with Spark PC, and for open source database, data pipeline, and workflow applications with our most recent acquisition, Instacluster. InstaCluster delivers open source data and workflow applications as a fully managed service. InstaCluster will leverage our best-in-class infrastructure services, cloud volume storage optimization, spots compute optimization, and cloud insights monitoring and troubleshooting to make it easier and faster for customers to build, deploy, and operate cloud applications. This will enable us to deliver more value to cloud operations teams and capture more revenue from those same buyers by delivering new services, as well as through the significant synergies with our cloud storage services. I am excited to welcome the InstaCluster team to the NetApp family. Overall, fiscal year 22 was a good year for our cloud business. We doubled public cloud segment revenue from 199 million in fiscal year 21 to 396 million in fiscal year 22. We expanded our cloud partnerships and routes to market, introduced new organic innovations, and we completed a number of acquisitions that position us well for the future. In the coming year, we will prioritize the integration of these services. To underscore our commitment here, we plan to slow the pace of acquisitions and reprioritize our use of cash in FY23 to favor shareholder returns. Mike will provide the details in his commentary. I want to underscore that we remain convinced of the opportunity, the strength of our position, and our ability to achieve $2 billion in ARR exiting fiscal year 26. Now, turning to hybrid cloud. Demand for our hybrid cloud solutions remains high. Despite supply constraints that again impeded our ability to meet all customer demand, we grew product revenue 6% in the fourth quarter and 10% in fiscal year 22. All FlashArray annualized revenue run rate grew 12% year-over-year to $3.2 billion. Thanks to strong unit growth in FAS hybrid arrays, all flash penetration remained flat at 31% of installed systems. In Q4, we further enhanced our position in hybrid cloud with new innovations and recognition. We updated our object storage solution with security and compliance enhancements, Google Cloud integration, and faster performance for analytics workloads. We also announced the next generation of our collaboration with Cisco. FlexPod XCS for hybrid multi-cloud deployments. Additionally, Business Intelligence Group recognized NetApp AI as a winner of its Artificial Intelligence Excellence Award. Looking forward, our priorities are clear. We remain focused on capturing the substantial opportunity ahead as we scale our public cloud services while continuing to drive growth in our hybrid cloud solutions. The long-term thesis we presented at our investor day of delivering value through sustained growth remains intact. The strong fundamentals of our business, including our alignment to customer priorities, strong balance sheet, and prudent operational management, put NetApp in a position of strength. I want to underscore my confidence in our strategy our execution, and the value we bring to all our stakeholders. With that, I'll turn the call over to Mike.