PSTG - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Pure Storage Q3 Fiscal 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator turn to now of Danziger, call Relations. Investor the will Matt over VP I

your conference. begin may You

Matt Danziger

Thank good Fiscal XXXX you Storage Earnings Pure and Conference afternoon. Welcome Call. the to QX

CFO, and our of are Charlie our Joining Kixmoeller. VP our me Hatfield; Giancarlo; Products, today our David President, Tim CEO, Matt Riitters;

technology Before obligation growth operations, competitive, uncertainties. we current future statements our margin that subject revenue products; we on which periods. trends; to this business we and of to like industry no These management opportunity; for are make call, various future you including I remind update would and and include our guidance are regarding statements them. as that operating will model; and assumptions and prospects, begin, risks and Any based statements positioning to during make forward-looking strategy, forward-looking today and our undertake

predicted, is broadcast comparable over I'll on property call for GAAP you to be recorded Pure Giancarlo. performance. approximately Our the business from actual days being our refer results SEC results the to Storage’s XX most relating about be the of of of slides. is CEO, discuss on live company's future measures of measures reported for talking Charlie archive with the may that, these public site and indication our this With contained not webcast the differ the we and non-GAAP in we being Also, results IR A our directly is will are An and uncertainties provided available an site to Web Reconciliations will filings Storage. the call Pure and performance. in Relations and our the should risks discussion materially and earnings call, press filings. playback considered This release Investor in during to purposes. Web is turn

Charles Giancarlo

our Pure. our XXX from We’ll Tim the then you, summary begin full thanks at year operating grew and Hat with a positive Matt. will my to observations non-GAAP review was was ago our our who QX after record call. with my cash over million, a earnings of highlights balance customer detailed Revenue negative first joining margin for of million. the while was provide strong end for XX% some guidance. the with a financials. will a turn operating and the XX guidance. Thank finished call quarter results everyone high a a quarter today's XX% I of for finish and flow Non-GAAP We quarter Good above end a X.X%, and up Pure. of beating by cash our high also was gross free margin afternoon

our still ever of transition storage asking to more. been bridging needless our doing In complexity provide we belief model more most that strategic and meet the growth core one artificial speed, information, learning cementing of replace areas. shed three, their next-generation of lead and today’s on the Pure decades storage annual my two, in billion to infrastructure and of the world since analytics; requires workloads focus costly costs vendors with of like and traditional today’s designed to legacy business would as has data will into They big track time Pure driven One, expanding expect you our as large customers; Pure’s for our the Each architectures repeatedly spending I’ve are ahead, is data as these Storage footprint from a migrate in legacy to become data best together Aging rich equipment. need and vendors months data simple, As growth its they first Pure Even imperatives. $X AI. of environments. a infrastructure to our own with and generation for view tomorrow’s analytics, revenue traditional evergreen a environment to profitable in of the look has world’s machine and have me by It They have and the to Pure purchased. to eclipses more customers, joined of their of requires a the three opportunity in every business, more that world of have our applications, our next can’t cloud I simply, time simplicity organizations. stated are applications, with spirit we growing our product the to three existing new will partners These us complex. technology. data discussions that data want quarter. lot is and next-generation workloads, us remain needs strategic competition huge Information fast, and by opportunity solutions. government of strategic deliver machine-learning them roster enterprises areas migrated with intelligence, the see company the for market with they that is largest customers scalable on team customers we vendors imperative represent struggling and meeting addition Pure. generation. with discussing in diving on reaffirm be first and the and Quite spent Pure

has early excited while which FlashBlade had FlashArray to deliver Our continues to strong grow due quarter user our about first in very and product pace, great we it FlashArray//X Hat part on is record remains were FlashBlade its later. to announced last momentum earlier talk introduction of and a the now its it FlashArray Xx conference. full trajectory. will continues a than the launched year year new features somewhat and the growth We did customer strong. this is in off for at results, faster portfolio about

positioned scale. greater to delivering the and value is customers for that that that at in investing business a have growth is We is future

to three look have we set the we future, operating priorities. As

focus customer Every customers on North at group It’s First, take focus. and we first. each our decision will every Star. Pure, action

on will driving to customers. satisfaction And mean at future by and of engagement. customer, every We stage we focus customer both continue current industry-leading

Second, the To and compete strive always highest do best possible we at operational deliver better. our levels the to best in every strive benchmarks The teams will against results excellence. of company. part to

everywhere. innovation Third,

that, our about initial expectations not will on have new to to delight, all perform has be opportunity of for work see deliver about hand organization with to is By And into of We And quarter. same scale. their my and over the like innovations customer model. more us. with I and only focusing portfolio I’d critical better innovation the elements experienced over excited driving value not Every in the Pure in continued could it to with how Hat part technology enthusiastic exceeded we last advantage. data thrilled Pure innovate in also growth. been I at in customer companies that stakeholders. front but and our Pure to every to intelligence in I business highlight all some growth our have of customers successes and our turn overall empower they

David Hatfield

here. competitive prospects the incredibly built evergreen teams is you model business our level. have to and to our we where continue combination excitement unique The data companies’ as is customers, are technology, strong of for a The sales great deliver It’s Charlie. across Thanks, the and customer historical our challenged at partners, superior experience era. landscape in every differentiated being winning cloud legacy approach platform

cloud than to new added over of business. bringing XXX quarter last more continue customers more time same our the total contributions represent customers This from than X,XXX, And our to XX% from we up XX% year.

nicely our experience customers our continues over of at scale. better support XX% profoundly Our business repurchase rates coming are holding from and with existing our

seen technology In our Score addition we’ve Net of us our X% XX.X Xx competitors. and higher of Xx than audited the validation places to to Promoter happy enterprise customers, in top which through

Our continues has institution with with to global dollar and integrators in contributions to The momentum. a a focus a notable, the key large be partners systems in partner win leading resulted services investments financial from continues quarter. ecosystem national build multimillion

We’re integral go-to-market velocity. our of being our preferred and right will and for the it focus confident driver strategy is continue our an partners be that on solution to

most and Our classes new very this productivity largest which pleased our with the sales across morale quarter, highest continue theaters is revenue contributed we hires recent quarter. cohort to initial which our momentum represent XX% three up last our produce teams’ all on were high record. from of XX% Internationally,

analytics. and markets; As on on to driving three cloud, next-generation to be the adoption cloudify enterprises our into the growth workloads data, areas next-generation I’d quarter the like each in their on-premise quarter, and as we of these one of this IT. dive they largest Charlie AI down mentioned, focusing progress continue hyper-focused

a While with we along annual forecasting we design to we differentiated still of across are and with adoption in are AI the capabilities, early seeing in XX% five-year key are perfectly rate advantage this trend. confident growth days, industries our compound wins take positioned for storage analysts

started worldwide. our extended see the and joint QX This our NVIDIA. relationship We and through continue to events teams progress great in co-sponsored customers with sales partner global

enterprise We products. Technologies, also PNY of entered into a with the European distributor formal agreement NVIDIA

to DGX-X suited instrument innovation the ultimately in and emerging most world’s the to analytics storage workloads development. research, Pure for the the for the heart FlashBlade investing time is at deep compute AI organizations enabling NVIDIA many Net-net, AI. is As demanding, time what faster uniquely is of for to environments. the learning and essential these of is NVIDIA shortening

FlashBlade at summit conference. Artificial in the Best AI recent Innovation Additionally, a won award Intelligence

of industries is QX distribution. across Web four automotive I is autonomous of cloud-native added businesses. in service companies SaaS incredibly As an traction multiple of areas mentioned, within provider, notably services, the and accounts management, exciting driving strong a hospitality number the new financial top the most Pure. and This analytics Customers at time and we’ve healthcare, revenue include

our first annual eve in strategy billion delivering and X We’re on platform is the data of working. the revenue

partner Charlie that, globally. model Tim? technology, right fantastic turn on With Tim it customer the enjoying the only we quarter. have just and We right both and the with to transform momentum of started experience and We are Dietz. help I’ll are to getting the provide at to business details and truly time combination customer organizations

Tim Riitters

deliver of we achieved continue Thanks, positive Hat. strong revenue QX for was and growth cash another Pure strong quarter execution to free as flow.

and full site grew as their use note free Web operating our I more non-GAAP into flow OpEx GAAP comparables than period customers XX% margin, points Total the QX purchases to $XXX.X to customer-based as in dive the in are a year XX% million metrics by non-GAAP, more from cash X these numbers make up that Support Reconciliations available above revenue on noted. in quarter. presentation year-on-year revenue will particularly same XX% of grew gross continue new million. usual I was continued results our unless than to to our at Total are margin, year-on-year investor.purestorage.com. specifics, QX otherwise the million, helped with revenue and ago. X,XXX, contracts. well guidance. drive $XXX.X than my Before I'll Momentum to midpoint of year-on-year recognition Product FlashArray revenue product growth the ongoing Repeat grew revenue of reached and driven gain more traction support $XX.X FlashBlade. XX% and we our the solid strong

a Looking an from at all-time and came U.S. our high geographic perspective, revenue the XX% for XX% international, from of QX company. from the

quarter. the in of XX.X% performance regions are our QX. were total all in gross pleased XX.X% this margins with We to of compared very QX

long-term XX% our eight XX.X% Product margins to in drive points between expected. gross last of XX% and of the decreased range We have industry-leading continue as quarter-on-quarter quarters. target operating and gross X.X margins for been

reminder, benefits. handful with our inventory gross one-time and gross last product and our pre-purchased impacted positively customer in including operational by within a of historic benefits expanding logistics line at continued range. a QX outlined As XX% norms operating our improved margins quarter X.X lower-cost long-term results more points we are components one-time from driving and efforts margins of efficiencies. reflecting well our quarter-on-quarter Support base that

Turning to operating margin.

operating march to continue to and long-term and between make our profitability margin achieving of XX% a on target XX%. excellent We progress

to point of negative the or X X.X% X.X% the point revenue in negative negative operating revenue of year-on-year and negative improvement represents a or X our in compared a guidance. quarter. QX loss midpoint of This was million $XX.X from outperformance Our year-ago QX more million $X.X than

year and XXX.X prior, of QX average organizations. largely X,XXX QX $X.XX and respectively. negative This our share. period or over headcount end up million, loss per net Our net X,XXX, Total for end million negative the the up weighted negative XXX.X hiring was over shares quarter share. were was the X,XXX calculations in at million of the over at or and reflecting $X.XX $XX the million of to from a for loss year-ago both used from compares up The per R&D $X.X per-share sales ongoing

sheet of forward Moving balance of October company’s quarter previous look addition cash $XX quarter generation on a quarter flow. to $XXX to in in represents the flow cash We to flow the million cash of and QX cash QX. which the overall million We our with finished another history. free and cash is position generation positive and investments the the first from

Our purchase free negative employee the cash XX% XX revenue includes of was XX.X $X.X negative million stock compared of positive year-ago to This our or X% quarter. impact million or in million of related flow revenue plan. to

quarter. or year-ago negative positive X% XX.X amount, of million revenue this to or in million negative revenue compared flow Excluding have the XX.X XX% free of would cash been

turn to guidance. we’ll our Now

$XXX quarter, the fourth is midpoint quarter This the revenue with strongest in growth XX% million. and momentum represents combined expect the million our between based and seasonally of the $XXX overall business of For at revenues year-on-year on we year.

We and QX XX.X%. gross the range XX.X% between margins expect of non-GAAP in

focus the between of model continue and to of our XX% on long-term operating sweet We spot XX%. within

company, between non-GAAP journey. represents which and public We X% positive positive another margins our first as quarter Pure’s expect operating QX in profitable significant of milestone X% a

details refer presentation as As calculation. shares you drive want fully earnings we fully our profitability, to increase further as we count. our for that last EPS remind our quarter, to average we move weighted diluted we on will profitable turn used mentioned a I share once for Please diluted to to

generation. strong For positive margins another negative for and and X.X% non-GAAP we operating midpoint In was expect $X.XXX billion billion, $X.XXX growth quarter negative year, between between summary, the of strong $X.XXX of and billion; with of of XX.X% and free full margins revenues QX and a X.X%. Pure gross cash between non-GAAP revenue XX.X%;

operating positioned Operator? with upcoming Pure’s first that, the deliver we We the QX. open With of quarter call full profit finish to questions. are greater the than year of well and billion for revenues $X now will in

Operator

Instructions]. [Operator

question is Rakers first Fargo. Aaron Your from from Wells

Aaron Rakers

questions have Thanks I I on the the two questions, for taking congratulations if Actually can. and quick quarter.

of FlashBlade bit commentary. understand a the first like to I’d little better all, So

the You Xx talked trending about a below little FlashArray ramp. bit

us Charles, for you help then Just I’m interested. understand expectation to full relative that XX million And where also, the stand revenue year?

expand, as forward operating look that’s in portfolio kind leverage of investing you your the of get capacity arms I’m thoughts your year? start the to the next in distribution to interested and coverage As sales margin terms around kind you of look model around relative continued into we to fiscal and driving continually to

Charles Giancarlo

You Thanks questions. the for very much bet.

faster this that, very growth be time still with XX first are ballpark. than to its full We the FlashArray year be it probably FlashBlade to and in relative million and the pleased the much will continues about talk the in I last we’re

on out to want I just individual I clear break style, So products to not terms in quarterly make a of prefer that my basis.

multiproduct optimize on push see it. grow FlashBlade and things or introduced more than say we are, anything, faster up than even I or from you Having quarter quarter-to-quarter you per top aside from total on individual now more going a slower we know to we been others. So go will line, that with first in But products company on. not optimistic we’re the if that that pleased and when and down

see to new it. for opportunities continue We

time-to-time we the this We’re product. on feedback couldn’t we about sales we’re of it is. from Tim and model meeting going leverage, our be that’s we’ve the revenue. We about our and talked getting outlined the that Then continue about to level see invest but long-term and and think great marketing is percentage customers more – down at current to way last a from at our model to conference going on our users year, come in what overall optimistic

down. we’ll Now faster, take obviously to slower, a will the that that we the we To it grow grow extent extent higher. be bit

we’re you’re company an somewhat reduction term, long in in the bottom and So will going line you’re see overall to how but an moderated the increase fast to that able marketing; grow to by sales overall. be going see

Aaron Rakers

Fair enough.

Charles Giancarlo

you. Thank

Operator

Your next of Mohan Merrill is question Lynch. Wamsi with Bank America from

Wamsi Mohan

in larger a love you. If guys some step vendors, Would and do with footprint on then revenue base, it and the NetApp it the across something and revenues look that? And got growth the you get Can or you to to around thoughts for base? it follow the just sure has at growing to all-flash then back Is think up. have selling a pricing? I we you installed standouts is Thank pace address are of NetApp. so faster much why

Charles Giancarlo

a Look, remind over base, off they if basis, installed flash we’re had overall to as I greater. I existing you and this market single have there. my great and environment But simply that a faster. obviously George do, at think hats it’s the on is higher going we’re much team to that replacing an But on on total to revenues basis, that produce much And that continue. much a a think much, expect overall entire growing look company I in quarter and storage NetApp growth basis, I’ll point with you an And time. large flash your

companies should looking a I perspective. revenue at from total be think you

Wamsi Mohan

market in from anything that seeing this has surprised in a you Are dynamic past pricing you the quarter?

Charles Giancarlo

market significant standpoint in every I quarter. movement a say course would no that not single of pricing. overall significant from changes deal No. The in competition we’ve this tough pricing seen – any is but

Wamsi Mohan

If I could just ask one. one last

sales you’d hires regionally? like or been course either hires of markets through whichever vertical give some are characterize significant perhaps past in way that the us to just to you being Can where focused your and sales have that quite mentioned of year. this You sense specifically R&D

David Hatfield

the for Thanks Hat. is This question. Wamsi. Hi,

thrilled We them that producing performance on And three the see capacity in our distributing and the there. continuing were with are record. the coming latest theaters globe. and evenly to across we see our very produced we’re also nicely online classes international. nicely levels All cohort highest productivity productivity We’re

we’re to as those as continue continue sales so of metrics, to going we invest long forward-looking marketing. see And kinds to in and

Wamsi Mohan

lot. a Thanks Great.

Operator

The next from Stanley. Huberty with Katy is Morgan question

Katy Huberty

you. allow you out, growth storage, the question you in markets require the factors future those to you. do to expand you to think for Charlie, portfolio product even about or the Good When laid that afternoon. Thank adjacent first product those does perhaps you three that’s versus go you R&D lower in reported the ago? portfolio line current answer quarter context the where of growth the materially and a achieve maybe and goals all that to were in year growing just

Charles Giancarlo

thank the question. Katy, for you much very

I think Katy. answer both, the is really

of that in answer and Tim see continue on And quarter. rate spend an in the the just invest something question – to the we the existing model have all to expand us those that higher all, product see I’ll many do let characterized is But competitors the we’re that that in our market R&D going we that of in future. a do this than expand is believe even to advances allows First constantly as so on R&D it’s line continue to more faster we allow each we differentiated and product markets. us the We focused those spend markets. basis a that anomaly because of technology to lines, really our a to have in of this will by really long-term lot in and on don’t business the

Tim Riitters

R&D there the R&D we to that sort some just growing a the you well. the over leverage at tend And have of the on obviously bit summer Katy, as quarter-on-quarter, spike quarter-on-quarter, programs little natural revenue can leverage. number – basis, Yes, get XX%, is

anything is of to the de-sell So sort I headline. invest going wouldn’t the read we’re continue into q-on-q. to

Katy Huberty

the the just do gross Thanks. what’s to and How outlook you of margin? starts next up then, Okay. year, in pricing follow in characterize you the how SSDs come would the Tim, that to much your January? that for pricing then And down a availability over and you. helps quarter think your And extent

Tim Riitters

Yes.

supply into Katy, for be on next question we the of year continue as your year comfortable the So, about rest first and of well. out our part very the to

know, have time into so As for expect continue well going to calendar to very been this XXXX. very, watching we’ve some quite it you do dynamic and managed through and

I mid that terms talk that’s In is to spot sort means to doing that play it. what would eight look of sweet about say now dynamics, like in. high-XX always gross than think We’ve what it quarters rather and we about cost we margin, to at way I been this of for the

that principle to pocket more may some within as we in own that’s on well. So to it management range us of some stay we long capture may our go as But a what’s put as to markets customers from and pass of important we that perspective.

Katy Huberty

if can revenue profitable normal do Good. Tim, in normal seasonality just more. just we what think may, below quarter? in you your seasonality how could that And about should April the you remain quarter I you think April bring about quick down after of one January profitability if you reported, or the scenario sustainability of think that

Tim Riitters

for guiding perspective. a look at and QX naturally just a next highest year a QX lowest the be that not but profitability would we’re Obviously year to from is in. the the be is from to going I take perspective going profitability we’re Katy, the

way would you’re I that’s the So about look it. at thinking modeling as

a the now at getting take in you rate approximating XX% of Day full is quarters to as right, overall because about really line rates CAGRs, I the the talked on this know we’ve our bottom of the to thing, We a growth was revenue topic ask look top as lot having well. – seasonality. year we you about The want start Analyst last seasonality other you’re stabilization. what line well, stabilizing think both as a a growth our year about sort But and and

year see that the and really You quarters between differences individual if sense. big full shouldn’t makes the

Katy Huberty

you. Thank

Operator

with question Moskowitz is Barclays. from next Mark The

Mark Moskowitz

But question calendar for here really Tim. you 'XX? on about here year as good news think call on calendar now, question’s the basis exhibiting Charlie. enthusiasm for think I 'XX? then profitability is the just Thank question if here. this guys full You leverage that palpable a obviously my about a across second. profitable did how was full about terms some for you are cadence I year but in should for I Clearly afternoon. today we you. apologize already the Good asked; of we be talk the off And more can very C-Suite a other dropped guess

Just terms get in cloud. a want to of sense the

You’ve today? much integration kind XX next of signaled enthusiasm hear actually are Can there. that a Azure over of be could the previously and about AWS give opportunities to that us in you Didn’t terms some when too XX of little investors see the more monetized months cloud? in

Tim Riitters

So, on see full for then Charlie second seasonality the the take over profit next But profitability profitability On aren’t do we I’ll to year turn it first guide number. question naturally in on question. to year. Mark, going and the we the

see You that throughout this year.

that You’ve years seen throughout past.

year. So profitability. And to very I we get as about is much into march next the our would it way same think

year So single we’re kind kind for in negative of now digits, right full the – the digits. low-single

So infer of that you can that we’re in right the from direction. moving kind

David Hatfield

the Hat. I’ll the in Mark, this is winning cloud. take

years by will to to and the in a in the X zettabytes key data next operate their or they’re customers on-prem operate multi-cloud going created fraction it the of that, be zettabytes machines partners. operate that’s going our XX With and need to forecast fundamental few the need need to in over a all to they’re zettabytes edge, to I zettabytes, Internet machine or public the be and total they’re storage to is and the cloud think to call XX going learning that and sensors X.X here capacity statement growth explosive data and AI that premise world. the – future in operate is

And so enable we to the cloud. build our platform

with XX%. So IAS cloud together native SaaS to and businesses contribute and PaaS continue

the in with And really customers. We have scale different cases. integrating of of the and on largest in environments a companies. the as They you’ll see with There’s some go-to-market motion great building we’re They’re and going for lot future. series big optimistic them to of a us continue cloud integrating use work future. on conversations them have

Mark Moskowitz

you. Thank

Operator

The Milunovich UBS. with next from question is Steve

Steven Milunovich

into been Thank can do to room to companies large learnt more, you. that the bit you to dig Charlie, Pure you’ve things that a see you improvement help at where able and you’ve it scale? as company bring for

Charles Giancarlo

call, the Yes, mentioned thanks them which question. some a market. the up We is right, of for in movement

of part grows the of per but that think just more larger so me environment. it not company their modification and customers motion that se progression as forth. motion, parts some more simply the distribution natural And the of is marketing motion, of selling and larger requires I and

that’s So part of it.

now or things that But now goes we’re scale company, simply of level coordinate a that company then given and goes multiproduct to And think things you are through I these across that this the way a are the These either that that company, way none extent. to. science modification coined. people, those the over just some one fact company rocket needs manage newly are things that some we’re of changes through. in multiproduct X,XXX the making we’re communicate every to

and it the jumped have very So for it. on I right something hungry straightforward it was as see and team that’s

Steven Milunovich

to I’m I similarities familiarity could some about between then And and observation you some ask companies? Arista Pure of a with seem sure Maybe two to have Thanks. you, important be you wanted differences. the talk there there’s Arista, your and but also

Charles Giancarlo

technology. of to deep are advancement you – one core the and that technology, if in us really, moment segment. we companies Arista the enterprise-oriented that technologists each really that markets company I differences terms really for are say is computing up similarity and an more trying fighting created whereas other the understand at are is at of both the outperformance more of Pure the will, would The in its deep Absolutely. of cloud-oriented momentum is understand a of more the much with build with

towards starting So headed compass opposite at the the center. but we’re maybe on points

Steven Milunovich

Thank you.

Operator

next The Ader Blair. Jason is William with question from

Jason Ader

see then Thank you. do I an and there? can you investing Hat on like that a your seem you EMC you had well vertical. And against feel a our with Is you’re FlashArray that for to you comment are that? doing and displacements area Dell seeing Can Charlie, what’s business I rates very question on accounts. checks EMC? some suggest of of be big guys first that in for happening win the the more federal winner

David Hatfield

as Yes, for agencies The that organizations public Hat. Charlie large businesses, key it and in And It’s enterprise. hyper-focused healthcare. large sector overall. and as use that Thanks Jason. federal cloud the are we question. are on enterprise well cases local Hi, mentioned in includes next-generation we investing markets state large are the and

talk those us wins more see about you’ll in future. So the

Charles Giancarlo

terms deals. rates, we I’d but win our our stable of are say competing more win for are just In that rates

Jason Ader

Thanks much. Okay. very

Operator

next is Alex Markets. with from KeyBanc The question Capital Kurtz

Steven Enders

Hi, for guys. Thanks talk deals you for Enders about trends on if wondering question. could in seeing Steve in account I XQ Alex. my This heading and was rep is you’re taking guys there any into year? XQ. aren’t to 'XX you speaking yields new affect that And expect may are that of class know beginning I but hires we fiscal could yet, next

David Hatfield

This Steve. Hat. first I’ll the jump maybe will Hi, is part, afterwards. on Tim hit

brought sales most latest continued great productive cohorts. productivity, motion from be seeing cohort capacity classes The continue to in we’ve perspective. a We’re our that outperforming

see capacity great we So sales there.

strategy from there contributor contributing is our data ecosystem the the working nicely. of channel point think I platform is view and is my key

together with will into sales think yields those two future. is selling I portfolio higher the motions, driving motion continued focus on channel continue I creating So that that and think and the our

Tim Riitters

organization, not but been when the guiding the years perspective time best the into historically the sales first in sales it’s has an half notably most year quality invested we’ve Steve, next marketing or next and seasonally year. been that and the of market don’t to on for go get in year get and second people investment obviously any how philosophy now four I for We’ve of them three we that anticipate the to terms we’re stronger half. changes for looking doing trained

Steven Enders

just was guys And Okay. rate changed that’s that that highlighted XXXX. run to Day ask, want billion at in goal your wondering affect anything would X if outlook. you Analyst I

Tim Riitters

term pass continues $X target That all. at we longer absolutely to Not number. after be billion this through the

Steven Enders

Great. Thanks, guys.

Operator

Martinuzzi Lake The is Eric with next from Street. question

Eric Martinuzzi

Yes.

Was there a competitive with was a I’m just if difference off landscape growth international the Your to in growing really wondering more has base. do that smaller standout. internationally?

Charles Giancarlo

is markets this Making we’re what Eric, in the capacity No. online. I is coming investments just times. seeing think takes international –

We brand in so we think of capacity I the theaters nice of maturing. well. it’s Americas coming a online continued execution and as see across our combination So channel growth sales see and awareness, all

So American think to markets. on going anticipate an we our a contribution basis from overall see North we’re that I larger and to contribution larger continue

Eric Martinuzzi

Okay. just Tim. then And item housekeeping a for

was around the weighted but million If the but seen last in it it, a in the missed stock share we’ve shares release, increase count, talked you the about diluted crystal substantial pretty think XXX made I you time I it average press clear price.

wondering So as I for a number was into there’s we that profits. adjusted EPS if cross better

Tim Riitters

various adjustment had this that XXX is stock shows have in for count will profitable, and say up we I’d EPS what the – across will that prices share quarter million table had last purposes that Eric, bit as of options So, more we what There’s deck That would be. creep we a been grant a purposes. awards. little

if that a modeling it perspective. you So about XXX you’re think million in probably how range, million I terms from you’re to safe of XXX think in

Eric Martinuzzi

Got you. Thank you.

Operator

next with The question from Jayson Noland Baird. is

Jayson Noland

you. worth A or play Thank on international. role calling Were GDPR did strength? out Okay. there in big that a deals there any follow up

Charles Giancarlo

global our Yes, was see cloud efforts a our we enterprise, services nothing referenced prepared would significant have have it. a swing penetration in continued I material in that but those remarks, in in win did off paying really the nice in the sector markets. great We that organization in large financial public been all that

of more think it’s same, sustainable. we I the believe So

Jayson Noland

a up. follow then And Okay.

I the to Pure on box future if would a know cloud or or white that really apply, make in not see is only would Software IP the something in it is this sense? don’t but possible and that

Charles Giancarlo

I’m going over Kix. to hand to

Matt Kixmoeller

simplicity Look, and a the and the models, the of keep best part by also is table performance. of software on the ease focused anything’s to our between overall we and we’ll powered possible. both But value-add. delivery over consider we at use deep on solutions integration look for time. software key Obviously and as the to continue are software everything Today, hardware

Jayson Noland

Thanks, Super. guys.

Operator

next from with Leopold is Raymond The question James. Simon

Simon Leopold

of could into calendar a to 'XX couple aspects. a look my little I if bit a terms taking Great. Thanks for see of question. in fiscal of XXXX take wanted we

just that a all, usually review to of want your pronounced you sequential First quarter on if has April pretty decline. seasonality could see your given thoughts

growth. of seasonality. terms could sure leading then all-flash gave full us, on you revisit see you’re I revisit terms the in make thinking could want nice the I you about think commentary growth XX% to want to the same about Just in just and And if how range page growth just the a full for year, we’re somewhere see the how year? to perspective to outlook of we of the if want in to grid FlashBlade

Tim Riitters

then Simon, first I’ll the seasonality year within get quarters. take and the into full question we’ll your

sort of perfectly. On articulated you the full year,

you over If sort I the executing years us of a handful our how to nothing’s we we’re that the Analyst scenarios that we course Day, terms of of different the targets of above XX% that and next business back variety of CAGR talked think on. think get and changed about in about the that think

So I just that at here the like are about we company. thinking think you’re

be looking it quarters, that of at the the it that compare of full in I equal the company, to we’re else and this numbers, should really to a growth basis relates earlier on those made growth similar. being that is a Q&A each phase sort remark now year very As all quarter year-on-year really stable in rates

growth rate should rate. deltas a be QX between growth growth QX a or full rate big You see and It and growth year a rate QX shouldn’t really stable.

Simon Leopold

not year-over-year should you’ve And as you’re XX. January around the XX% think we at when that, rate that above normal? is to which that’s well I guided quarter the we midpoint XX be about suggesting think new assume we growth about should looking

Tim Riitters

we’re Simon, Naturally, year. lapping another No.

$X And billion. obviously to post going year, tougher. We’re those comps every lap you time get a

thinking right. it you’re think I about So

Simon Leopold

one of big And just Great. last picture. kind then

about to expectation. us metrics up, I you what’s opening you. any learning, struggling to we’re but about this? how think artificial us help try think when could you If market frame it’s could Thank the machine intelligence, addressed help understand still TAM early to think know you about a

Matt Kixmoeller

one. I’ll This is Kix. take that

that chunk net say a I think all new. first big is of believe I’d that is we So thing the market

last on from focused really we’ve like everyone, a to the We few can nature it highlighted things think I see The starting been is struggling of in thing every have industries very yourself, to that to be ourselves seeing it’s conversations thought understand something grow look AI because that like breakthrough think will technologies it across so financials. self-driving excited industry. is something of almost classic of great cars having was few that and about and of be. we it example this to the at how over CIOs of innovation And these to range we’re is quarters I think this their big manage conversations to call huge dollars a driver. growth into put some most more types these industries. And wide as going We towards a a

jump opportunity. the out. community And so see more of I there’s in size CAGR, number was think hoping but XX% call to been held a few analyst on also The studies we the we’re the and

Simon Leopold

you. Thank Great.

Operator

Capital The Long next question is from with Markets. BMO Tim

Tim Long

quick I Thank if could. you. ones, Two

of into the bit with And how that revenues different sizes? is about about just deal secondly you growing? verticals growth think talk sounds verticals? First, sizes little a like cloud about a get particularly that seeing? they similar bids could you’re if those some the you. we the Are margin talk between potential you It then that little you’re Thank bit little operating activity should deal rate of bit more for or the in profitability win about shift more talk a customer around base, – as

David Hatfield

This is Tim. Hat. Hi,

So average difference no material sizes. the really on deal

against have win more that every competitive there. We’re rates are our competing out we and at-bats for improving holding, they’re

additional about more it’s So at-bats. getting

larger that becomes and focused of that seeing anticipate rates stability deal the influence time. that more a in But sizes seeing those as opportunities over seeing are on. and right now we’re things. But things contributor, at-bats FlashBlade will the more meaningful and We inside great win we’re could

Charles Giancarlo

about I’ll is And talk the margin a relative cloud. about talk little to Charlie, I’ll – this question bit

mix our a financials have customers and we of cloud all, have of today. today First you

So already you like. of see looks this a what blend

gets expect SG&A cloud if I think margins Obviously I will would versus affect margin. operating affect would – as not amount or see of not to and larger, to line. one stable expense the of the spent amount be it might expect different. on the amount of on cost However, we COGS margin the operating operating But

Tim Long

Okay. Thank you.

Operator

Suppiger with Securities. Erik Your next JMP question from is

Erik Suppiger

question. taking for the Thanks

forward. confidence to some pleased is gives of rate. slow that is said in First it spite that What leverage further? really off, Charlie, marketing and And ability the going you the you’re FlashBlade marketing in see about had ability talked to you the operating front? you very not going slowing you FlashBlade on secondly, with growth sales that Where sales drive your better to do and leverage some

Charles Giancarlo

I FlashArray growing a product you very faster a And any through as in have new ever past to introductions one identify, that the Thank is product. this I’ve was in for and that been of fast fast continue its than as as year it’s seen. question. we the significant and number first

a going products. that to environment products, of one see any variation you’re new field multiple sells in quarter So in especially

The they of What it is more, hear bring are do a environment. and all. doesn’t this pleased substantial spotting looking the product quite their buying are getting the we’re on I there the And So it, from in can most concern product. areas which of me with are very best customers plan them inside to you number see better at own if efficient opportunities now sell what to will and new customers. at

about a optimistic reasons there’s the So product. be good to of lot just

Erik Suppiger

the sales and on marketing And front?

Charles Giancarlo

one remember apparently. a sorry at I time Right, that. about only question can

into it’s makes recognition that not B accounts to and efficient front, marketing somewhat and brand say scale c of in inside becomes channel moving expand larger will is but frankly and more I independent new into sales a. environment it that penetrate Also to midmarket. improving selling as the is the easier economics; environment. really is only more a On existing well that accounts

So really efficiency quite line. marketing overall to I think those a company and all improve natural ours like growing us on in sales the are things to help

Erik Suppiger

Thank Very good. you.

Operator

Group. Maxim with Nehal Chokshi from question is next Your

Nehal Chokshi

that into XX Thanks below typical days you and and five especially days when quarter good very declined DSOs take it account looks levels. year-over-year

much a imply linear does that more quarter. think I So selling

prior all have So true, things that years, say revenue presuming is, had would higher? and fair been been those it my bookings linearity are to question like is correspondingly

Tim Riitters

is Tim. this Nehal,

We a the call. the refer the reaccelerated in and here again inter-quarter way measures and growth on about to in scale Those would back that really are fact haven’t commentary put just I historically our offered at obviously linearity on good we we talk growing billion. any publically to $X XX% quarter.

Nehal Chokshi

Thank you.

Operator

The from next question Edward is with BTIG. Parker

Edward Parker

Thanks.

maybe from terms one feedback, some enterprise least the of data in quick of the own heard FlashBlade maturity structure their have [indiscernible] enterprise think at for other but it sounds product requirements. capabilities some channel in features like a lacks partners I on your us Just and that require

expect Thanks. for So I you happen? that you enterprises guess more to of question add is, do when think what for fair? my capability terms become and in the need And buy to that a of mainstream it might is to to you product

David Hatfield

is Hi, Hat. Edward. This

two So markets for time with getting there’s distinct we’re FlashBlade it. more as stick

differentiated First a in market from is next-gen anything fit the real-time is world. that machine analytic That great in and else and AI, segment. learning completely the

the the product. their area file-based there. NAS a the legacy going is actually second the first is we generation and it is are focused replacement world taking this and is of fight where in the in to haven’t IT after And object stores think really that NetApp I out this

features categories And more it. addressable I’ll to those both out we’re to going years other And hand great that more to any hit success build of Kix to we’re it having so But able commentary you’re have that and going to on of of market. maybe today. for in be

Matt Kixmoeller

When seen we a we the use that existing build to do working. one couple go say, next to we market after go I before which cases. made next legacy game the something had after or decided no was to the after we a use do try really we started to cases. And gen ago, gen years think go choice knew of a feature is we strategy

market. winning add of it time whole features the the broad over build We’re course to we’ll [ph] there to and

Operator

from The next Fox is question Steven Research. with Cross

Steven Fox

Thanks.

questions Just quick on a line. top couple

from sort average? on growth secondly, any to a then growth of NAND do Tim, in pretty how deal on line of much year-over-year growth, how Thanks. new all, rate trued-up see you think environment? you tight qualify given constraints the terms the to maybe there contributing basis because size and on a any First or existing year-over-year is whether customers of guys is is for came acquisitions is the customer XX% versus NAND you And of an top this the way supply

Charles Giancarlo

So, healthy a continue about the new Steve, Deal where existing sizes hold part them. the was to lot on question, they a very customers We we and side your number relative see between of like about talk equation, first will. really your deal customers if you but don’t split on to of each sizes, that same, earlier. has stayed a there question

NAND very that we’re well not about So the supply, as something constraints are visibility. have of something not from we very perspective. line it – to as and to That happy new is supply manage relates And continue around good then us sight concerns that and well.

Steven Fox

Thanks very much.

Operator

now over will Giancarlo Charlie call question. I last was to closing comments. our turn for that the And

Charles Giancarlo

and focused forward build at the thank much and you Pure of us portfolio Thank end look a In future our the a all that’s you of here and strong on data. joining for again finish closing, today. leading strong you for customers you. call. QX. better we across Thank the the with helping information all have We and will we very be a believe really for to very joining technology year. solid remains Momentum us world Thank us driven by are

Operator

conference This concludes call. today’s

You may now disconnect.

Pure Storage (PSTG) 28 Nov 172018 Q3 Earnings call transcript