PSTG - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Pure Storage Q2 Fiscal 2021 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Nicole Noutsios, Investor Relations. Thank you. Please go ahead.

Nicole Noutsios

afternoon. good and you Thank Welcome to call. fiscal earnings second Pure Storage quarter XXXX the My at Investor Noutsios, name Nicole is Relations Pure.

Kixmoeller. VP Joining me CFO, Strategy, our our Giancarlo Charlie Matt of today are Kevan our Krysler CEO, and and

during prospects, Before we begin, strategy risks are management related would COVID-XX like and which our competitive uncertainties. make statements in to statements disruptions, this regarding pandemic you forward-looking the to will subject call, remind and I that sales various These growth include product today and our facts advantages, our and industry Any to future trends, and as that and on its current and no obligation are update offerings operations. of technology undertake and assumptions based business them. and we we forward-looking statements make

from performance. filings in A uncertainties of risks refer filings. you results forecasted be related business to differ results these to not public should the contained SEC actual and discussion future as our results may an of our with we and considered the materially the and some of indication reported Our is

With available Storage. Investor the Pure IR Charlie. recorded is archive is over I for be property and in in earnings we to being directly the GAAP measures webcast reconciliations provided the Relations call of discuss which non-GAAP to the This slides. comparable being will on about is broadcast CEO, the website of website Storage call, live are playback performance will During purposes. the company’s release will most the press call our An the turn Pure talking measures and and that, our on

Charlie Giancarlo

today’s everyone. Thank afternoon, you Good on joining us earnings call. for

I all current you, wishes extending by us has occasion. colleagues friends sincere all, am to challenge well. environment The proud Let of but Pure staying the risen and and how me that to your healthy family, continues start my are

Pure of subscription of support, management strength customers. dramatically advantages be I them and in supported this execution and a during security Pure’s our is of differentiators will of arrays, our are of customers only position taking our technology, is more across am in confident for of appreciated a businesses, their many put I transformation availability applications most them time. never has ease, in the a long-term any exit was couldn’t our coming in ecological digital technology and brought perspective, of economic been we hold. Across in our our customers, needs services of critical flexible important customers cloud customer crisis. portfolio, of and to needs. to year. of pandemic. their unmatched of data this make crisis the storage automated, to during leadership, crisis the on landscape Companies paused downturn modern are the environmental floor Evergreen and put innovate ownership on-demand cloud-based important necessary decision, continue to experience: navigate a the face. The core helping that new responsive in and organizations at customers. contrast, vision the an innovative flexibility economic expand on keep reality of when are a are that reassess and that was foundation contributing difficult simplicity quarter this essential provides with we performance customers’ our and with of also in that tenets us of pleased fully model aligned to this We the or ultimate accelerate time. high their consumption the the is In storage, the QX, with driving our immediate to a operation, and infrastructure by vision reliability quarter efficiency data These and The aligning and right total by as-a-service and dynamic this cost was technology cloud-like to of QX, product experience the their space needs and to especially of model In employee were entirely thousands and tens per and consider product urgent pleased saw with nines legacy previously seconds cooling time by the very of this equivalent future during managing power, we up on installed their a of to of our more a reduce FlashArray re-planning become and PureX plans Pure’s demands. announce full To new industry. time a many of all that which we demands wave renowned that acutely just modern by QX savings seven hold our surpassed replace application. the including is new seven upgrade aware freeing at direction market. times cycles, with base lowest vision am And is delivering total characteristic that It infrastructure This the simplicity downtime unprecedented reliability in nines of I X minds in it our is with dominated our and even organizations. core

when The Although our decline. half return believe strength we our the created early, we the from even COVID-XX demands but business international transformation. crisis the positive in digital see saw and provides second of to levels of year will growth quarter remains an indication fluid, and accelerate by for the solutions businesses situation increased

am in for momentum onto purpose user solution. all first industry a their capacity-oriented last quarter, their on consolidate for their unified and available on to file systems set to cost to all-QLC flash to a our able and alongside of portfolio and allows the FlashArray//C Late workloads announcements, density, VMs, with are FlashArray//C, customers same general hybrid file needs with partnerships innovation. excited and FlashArray to Store portfolio databases enables services Today, With platform. workloads, further FlashArray//C, several of costs our providing performance-centric the obsolete only of broad applications Services combination the technology and platform. the expanded subscription on and I hybrid The performance FlashArray//C run simplify dramatically storage offering and announced File still cloud, support disk industry’s platform. subscription, outpace like And generation file in at a storage and lower share consolidate VDI consolidate general-purpose which unified and shares continue effectively We under customers of we we expanded you. FlashArray//X customers workloads renders arrays. single This introduction by and the Cloud file Block legacy effectively our than second block-based reliability

what see FlashBlade We multiple a this in in that modernize and drive into additional redefine file continues delivered across object replication rapidly with software file customers so can particular to The a FlashBlade FlashBlade earlier cutting-edge consolidation, single data, unparalleled use high-performance and array needs possible in to continue and workloads. both analytics, mainstream cases. product our for are wide strength object scientific we real-time AI object year helping platform. features enterprise high introduce platform. workloads is they single for expanding and addressing file is of performance and FlashBlade

to environments a this quarter and customer selected media object Restore ElasticSearch a and Splunk, Rapid consolidate file single FlashBlade and entertainment onto unified platform. their example, large For fast

QX to been we an also Customer that the used trying strong machine-learning it in excited streamlined while This of restores against to ransomware and weeks enhance rapid help solution support applications only an program Pure’s most for event replicated Cloud in is Children their solution ago, rapid the and continues requirements. continue for quarter, services to results. which market gratifying reduces FlashBlade against Subscription and Missing child announced performance and and These attack, complexity, partnership first and our selected under fully Pure’s delivered it integrated Center are rapidly all-flash to Pure its great on-prem expand Services the times, both on This the integrated and Store and Pure. analysis file very meet protect fight to recovery FlashRecover. Cohesity exploitation. is in our Evergreen used unified consumption online National capacity single in being deliver the these solutions even ways our has those petabyte-level to recovery Exploited data demand through scaling see in not to with to high technology for Block grow. subscription, our include FlashBlade’s but recovery yield performance In a we storage a delivers need. adoption introduce with power to Two is which experience. the

new customers and from unified it enterprise These the and to Desktop true is class on-premise including our ultimate that a enterprise unified move Arrow saw a both public continued software with the unified offer subscription growth private utility It on-prem for both subscription BidFX strong cost Dizzion to efficiencies both with clouds consumption. Telstra, experience Cloud as-a-Service data and existing enterprises unified of subscription, are of Managed customers challenges The part flexibility solves cloud Tier for of unified storage ability time cloud-like the Our cloud any at Store, one provides biggest bridge the because choosing delivers as-a-Service, in compelling both our and Energy. in actual performance X and high subscription Pure today, aligns cloud. effectively to for applications. and and consumption. cost and how spend Block is which segments,

a platforms, that environment of build the with for enables Orchestrator on-prem. us Pure potential market strategy We subscription adoption hybrid seen creating of apps create have truly services continue and strong our Store developers which the FlashArray storage, quarters all Block enable also container software, combined container unique and Orchestrator, vision, unified and Service our Service modern unlocks coming more customer to believe modern hybrid driven our and a and Cloud in strategy, automated, container grow cloud-native stateful Pure We take will container even data FlashBlade share cloud Kubernetes. to by years. to experience

reaccelerate while our exiting in discipline. upon to continuing am I focus crisis, forward, strategy, ability our long-term on growth global Looking the all confident our operating opportunity, and to

to current love. one I providing and and for community truly diligence that will entire to customers you, of thankful the our are change With customers, due to this driving adapt the the partners Pure that, industry, in environment. overcome company am We over the turn it In tenacity, I flexibility challenges Kevan. $XX unrivaled an their simply closing, billion employees, and to experience

Kevan Krysler

Thank you, Charlie afternoon and good everyone.

results financial reflect COVID-XX. the of QX Our solid by the caused headwinds macro environment during execution

million, pleased challenging of to year-over-year X% and QX. includes while our saw $XXX.X subscription services of our by We our continued the following in growth are business business total QX We Total XX% COVID-XX. which revenue QX million. to declined revenue, Cloud as revenue Subscription with total from international in approximately was grew X% of grew during and in headwinds revenue Product Total the during subscriptions and the Store. revenue Pure XX% as-a-Service Block revenue also revenues services strength includes a during total year-over-year year-over-year, our million States our during XX% United and continues the momentum XX% revenue States year-over-year QX. United year-over-year revenue year-over-year. subscription, international X% subscription created services Evergreen while up QX, and $XXX from grew international significant represented unified $XXX of growth declining facing

of during macroeconomic the color around persists performance. sales I will year continue first to we United provide percentage a of our and sourced Given States. sales, in sales year-over-year year-over-year months bookings, X.X% growing additional Global continued during uncertainty total headwinds to faced Total our QX, sales. the grew X.X% X channel represent that or the and the due to declined meaningful the ongoing

are very of the channel. close partnership with pleased We global our

for customers choosing QX, choose to year-over-year $XX XX.X% approximately points. $X year. non-GAAP of for to compared portfolio, average QX QX our customers slight new compared X.X customers Total Sales the X.X was represent customers during year. and we points during subscription FlashBlade continuing QX product operating approximately over non-GAAP product Non-GAAP XX.X%, sales. total the new acquired generally gross New size over services full customers QX prior a XXX during to margins Non-GAAP to grew XXX of Pure. increase profit year-over-year subscription our customers and gross Pure new are Across QX in and services year-over-year. deal XX% prior of non-GAAP solution of Both over margin was million was consistent representing XX.X%. million operating loss of to during year-over-year during a margin increased new

at of operating QX prior million compared investments the cash QX $X.XX cash of net at cash and the net the during was the XXX end income income for shares compared of million compared Non-GAAP in focus was of and non-GAAP income QX and in QX flows shares prior earnings remain $X year. deferred to QX XXX the $XXX prior million for while year. strong of Total income $XX year Non-GAAP used healthy prior $XX continue QX discipline free net non-GAAP million We flows the was million net non-GAAP per in very We average share and end prior million of on $XX to $XX $X.XX. QX shares $XXX Weighted million Total million positive of investing million generated was year for $X.XX. $XX the net QX operating billion. at was and revenue thoughtfully. the at per $XXX in per share million to end million calculation share and in year. the to was

Our remaining the the committed end which obligations, at is $X of non-cancelable RPO, million QX QX year. compares $XXX end $XXX This future for or the and of and performance our million QX at $XXX billion of includes to prior at nearing million. revenue

QX million end shareholders authorization. employees During the X,XXX to the year. shares. repurchase at to compared million QX was share returned $XX of share of and X,XXX the X.XX quarter we million of employees at approximately prior through headcount for the end the repurchases end $XX our Approximately X,XXX approximately Total employees of QX, of at remains

we by our fundamentals our focus half strong the significant and the have first the of on operating based growth to is COVID-XX. achieved being caused on year guidance, during the moving discipline the Now of core economic despite contraction business

QX, COVID it quarter, significant As provide last to we our though growth to we show subscription remains. still expect due believe recurring continue of to formal revenue services we unified and not guidance. Evergreen to will look sales strong uncertainty to is Similar prudent and

that pleased for the our to for We QX saw we total compared are total increased meaningfully opportunity pipeline opportunity has pipeline QX.

in pipeline guidance, not the be view opportunities internal total will However, are of And is proportion compared our a considered stages that although QX. formal earlier flat greater our QX to revenues current then approximately sequentially. at

capacity of we investments, which solid the during invest continue year. increased first exercise operating organization, Moving throughout to to in to enabled discipline half has us the innovation the and sales

during year resource be that to navigate be slightly expect We we incremental unprecedented continuing negative X%. during With second including will breakeven, Evergreen business views our continued current the subscription innovation. the will near net summarize, contraction, below additions services. our successfully unified QX in growth concentrated slow and will we half and of the and of on revenue, are estimate strong innovate operating an To economic margin

and for we now and in Our call broad commitment channel our that, recurring for positions customer will partnership to open questions. us strong revenues, strong our growth. With the base, growth long-term

Operator

from comes [Operator JPMorgan. Instructions] Bora from question Pinjalim first Your

Pinjalim Bora

taking Could my how click maybe Could performance how terms do, the do, the you of bookings I across the sector? did segments? just on how about the for Thanks the double question. in public can different enterprise guys. market cloud growth, Hey, talk and you – did

Charlie Giancarlo

economies bet. recover Hi, you in You corona had what after And an it quarter. prepared reflects your to I Charlie. happens lockdown. it’s hear voice. – international Good remarks excellent Pinjalim, when the think as really We a heard

logos, but in And unified much FlashBlade our So, like subscription overall generally it both doing depressed say commercial revenues. are that that we and that growth, down overall net especially we course, across strong was that be commercial On were basis, strong of that generally, right reduction again, a of But We the revenues, the wouldn’t new in world, about of see the centered very down it but in positive and well. area, – that course in across strong enterprise also very it to just the subscription new see that, commercial on given U.S. kind was with and balance the cloud was portfolio products relative of to was it the outside I we and a that. overall. the really of being any sales products particular especially felt had FlashBlade, Europe there. the stronger, U.S. very did overall area

we balance expect, is U.S. what So, pretty lackluster but much would the did we see

Pinjalim Bora

mentioned? the anything Understood. And of Kevan, on you right, composition pipeline call my that decline about a Is that math from the guidance, out? there the it subscription on seems the transition, like just X%, factor a mainly of to headwind if is is of

Kevan Krysler

really the we for It’s No, done. that would us, headwind I sequential land has that’s pipeline fact on then focus pipeline come for the improvement the revenue. I for signal actually call views early And some with see for the we really we quite hadn’t fact factor of a QX to some see that for build, did but subscription, some are pleased us on where seen actually wouldn’t in which in us earlier informal time. would what out pipeline in an had it we just stage the

Operator

Your Leopold comes next question from James. Raymond from Simon

Simon Leopold

taking Great, question. very for much thank the you

is little if First, how I see you much of in and Is the on-prem of that business your split the something terms you unpack of offer? wanted subscription helping the to bit much trends is a understand us in could and cloud? subscription can maybe how business

Charlie Giancarlo

say – it, very since the the way are The which Store the ratable customer the we is fact as-a-Service, a in a to a build as Pure operates of course, I a revenue. lot Yes, remains new revenue, of with both you has the portion in on-prem, is to has pleased which and that vast Evergreen new course really build adoption really unleashed of cloud time build of subscription – will with whereas us it the on-prem, sales. but our a cloud the cloud subscription And of storage to been includes opportunity way lot that absolutely. relatively and lot majority combined of of of Block driven business, because And actually a that sale service-oriented revenue of takes sales – has Cloud the is inception. for

that want ratable very jump, them cloud there that also are planning are But that but move and made are that that pleased of make to purchases with sure subscription, we certainly customers they yet the time. make but both that. is are for transparent cloud So haven’t lot to to the the at any allows

Simon Leopold

Thanks. just what I as to little or then Thank you could And the wanted the and July if follow-up, May, bit in the talk versus linearity a historically. seen patterns you saw see you. June of about have months a you

Kevan Krysler

quarter, Yes, as it little saw. we a was nothing the worse, we as later of it we in view tailwinds but out QX, I QX, normalized in linearity, what linearity. some terms great And bit we driven for in of terms in needs. with norms mission-critical that more by would as of of Obviously and a probably saw saw events tailwind dissipating companies that throughout purchasing result QX, really saw the

Operator

comes from from question next Oppenheimer. Your Ittai Kidron

Ittai Kidron

that a to this side, in the be they thesis this harvest the not to periods. on guys. of buy? kind harvested the drill quarter to guess, previous with on to I execution last that now you perhaps the I correlate already for new there with guidance need looks the guess what pipeline I versus or a attention point left are enough as way squeezed sell Charlie, cycle perhaps last flip early have Is now it Hey, is of there just and customers customers quality much base, the to pay right and of like two getting side? into want didn’t and you the made over been installed into

Charlie Giancarlo

I Ittai, thesis don’t direct. have Yes. believe first that to so. that I That’s time the be heard

we Kevan had but force that Also, expect selling of did years everybody mentioned, perspective, understand May tailwinds occur, in that, to for QX. way and is through We kind potentially you a they the that is be from sales Our did now view as from them been that we continue of to has selling go everyone to sales. where to inside that not seen, have clear.

customers prepared very buying. you are a it’s to I also So both for I transformation of in But remarks, a environment, the way selling a what’s majority their now or way and new new you was whenever the re-planning, and think living re-consideration a but new of completely some customers, change said completely and in majority, digital the economically, stasis. important reconsidering of and have this my them have

in a we would country the hope are of the Unfortunately would buying the in almost going reopen QX. see And the out purse in when And recessionary then certainly come You in to and expect recovery state. I The we that think the that as tremendous seen quarter it out delayed countries the and out I is that’s they have they environment Europe, and a pandemic. in and come – see U.S. out by we environment, news an that saw what’s their the interruption exactly of in have repeatedly start we by place state it’s patterns, think kind strings good pandemic it’s soon. come taken we when lockdown, same Europe. country to of of I they that and

Ittai Kidron

which me wouldn’t in it’s a lot in saw comments. the happened why the the hard for quarter How properties, I see you of quarter where reconcile that May-June U.S. all mean has we you the opening the timeframe. what if expanding? – ones not that’s second already saw why third kind any Well, existing of to in of why for international that much guide in ones be not – in feel quarter from why a that a flat, of comes should don’t customers how really activity contribute versus an number case, in-quarter. given higher? new again, of new I It’s like your much much existing business lot

Charlie Giancarlo

over infection we the mean, taken re-closing today last is you very and it let and then a couple seen Well, – seen the And me if Yes. consider Europe. actually, than I not there the have months. little just you U.S. U.S. it’s the a amount of lockdown in bit. the in place, have challenge – of in rates reopening that’s is we different picture just

But seeing And will a so we the second are effects of let U.S. the I part currently. that handle still Kevan muted of response economic question.

Kevan Krysler

points sure. of new quick us. generated quite for Charlie’s from remarks, And we is said as of For and this QX, he has on and And a even extent pleased recovery get net in results XX%, upside through bookings logos that U.S. I well. But amount considered in not the there terms we prepared see as on actually and it which our the our quite point, my for views, that Charlie’s was a in really quarter, over the were customers, we see timing QX is of follow-on significant out been would to substantial with. recovery. on the that come And formal uncertainty laid just as in net to U.S. new logos any if that we in

Operator

Rakers Wells next question from Aaron Fargo. comes Your from

Aaron Rakers

for well. I taking thanks two question. the Yes, as have

above The up year-over-year, actually results line. disclosed the first look the in the think balance. the time are balance deferred I me seeing the – first that $XXX XX% have And about it’s actually I at is million, you just out question RPO stands what at to when that reported expansion you I

what being should forward? not the of over that’s how us sits in you that just translating kind that XX%, balance RPO help unpack in so revenue can we exactly deferred? about up think going to And And

Kevan Krysler

subscription throughout to momentum from business, unified Yes, think may that. absolutely. several And that’s seeing integrated of by the deferred driven sequential that expansion the really really of that driver as being we subscription over really last that’s of part over that’s be that we but especially before solutions see quarters the due that have unbilled revenue, are quarters balance When we momentum. the not the be increases some that last about primary a RPO are the several unified sequentially the would would deferred, we sales in then

Aaron Rakers

just as then is bit second product And that lot was having I the believe that launched, a natural helpful. question, second discussion for the QLC C of that’s opportunity now guys. talked market, with expansion Series just little you there about about of you the a when that in being Okay, generation of a a

the bit starting how So, Series about seeing and of in leverage are to TAM what terms and a see? seeing are acquisitions can expansion that traditional C product the little you actually FlashArray you are you talk to or systems relative you your

Charlie Giancarlo

You bet.

to So is second And had. expensive product the ever because we continues launches fastest have be XXX% that. one the FlashArray//C of generation now but not of QLC, even less

believe less actually expensive And so we it’s hybrid arrays. than

price array get hybrid you all-flash lower performance now So a arrays. with at an all-flash than

come up which a up competitive product, no So not vendors generation with with product – really and vendor come competitive announcement, months being in quite the it’s the a unique in the other of remarkable. after is market only first has X other no market a

Operator

next from Long Tim Your from Barclays. question comes

Tim Long

you. Thank

about could but if down any gross just one I last little first from bit the product Just margin, still bit quarter. impacts obviously there competition little talk strong gross margins, pretty a a

little kind So, it’s of It bit around talk staying about And a in the that. just guidance, a like then these seems follow-up. I levels? have

Charlie Giancarlo

Yes. Thanks, handle competition Kevan the – around going start margin gross and with the let Tim. part of the on the to I am question first side.

we like more, same. see have pretty where see. course, but we rates always of That’s like stayed about like the would win where much to – about to would we Our

period. have So that perhaps – the in customers competition, I say been the a is prior would think I I bit COVID the will or competition, would sorry say generally quarters. demanding more consistent with

that, am the going we So to little gross are the question. on seeing a I Kevan margin of but – let bit handle

Kevan Krysler

and just compared And Charlie. been to what solid even to indicated, consistent win Charlie Thanks, rates Yes. pre-COVID. reiterate our have

during for in great performance, I competitive is gross we attribute best margins is be growth kind was our suggested our continue Gross of there us quarter was relatively So international to follow-on really sales to with little very consistent. gross terms larger line international opportunities from we really product lower view saw two and movement as from this margins really and product the sequentially, are in factor you as as are a in signal where bit some higher do investment commits a was look this pleased it a these purchases at some excited proportion in made which These and to pricing. that a Back was opportunities landscape. Tim. that an with we margins, business our margins we quarter, opportunities, industry. margin about and did traditionally where that We business including also see long-term gross has factors, representing one we would of our our customers. were of the year-over-year and long-term of gross

Tim Long

kind the little great. accounts being commercial And more Okay, then follow-up, just about you small bit challenging. Thanks. mix talked of vertical with

a talk maybe directive economic bit might more accounts? there how Just discuss little larger of with and a the push the little is this that enterprise. has further move company enterprise been Pure you accelerate think the situation Thank Can you. I a larger to where into bit penetrating

Charlie Giancarlo

new continuing very they first the it’s of but us their into only both and large have up the very enterprise. large reassuring right not We with been winning is hand, beginning the further It’s question enterprise existing has it even that to enterprises the Yes, in brought enterprises into No, did time in stronger period on in been your see us results at sales on. infrastructure, accounts. obviously the where large one – been COVID

well think in that course, managing and with time commercial large believe more environment into harder we the sales amount – all a are COVID time now with of shift the known more many choice focus being, I attention commercial us throughout that that’s support. But sellers struggling have causing is, I how commercial and industry we enterprise, resources larger and IT as for appropriate of to the teams the enterprise. the accounts having of our even is become with for putting a So safe ways, in shifting

Operator

Your next Ackerman question from Cowen. comes Karl from

Karl Ackerman

wildfire of may. and you smoke healthy Bay surrounding the hope I avoiding And questions, plume afternoon. Area. good are Two the if Hey, I

competitive a this Department OceanStore was asked your, You hoping But the EMC competitor think I I could guess, restricted whether become Array, have introduced did bids internationally introduced while Commerce very and Huawei severely primary the company’s that we competitive. access of address but recently you also expected, more U.S. I environment because well I is has that has arrays. silicon. Midrange what quarter to

could if be and in forward, to going So the share Asia ability you your that perhaps gain helpful? address takes in puts would

Charlie Giancarlo

Sure.

but are win As Huawei China rates a strength. little portion of – see frankly even its And relatively lot our have sales Europe. – Western tends a that India years, to them. do be don’t small strong majority be our know up bit the you America of with crept Dell them be sales, of With overall. Dell. they where more – amount is our Huawei, We We – continues to our against very may the with over to and we relatively small we our in overall but see has see continue in South and and don’t still greatest engagement a engagement

often I discount. a asked brought see when I often – honestly, account much new as Honestly, us more was more them have. much than by often last more were in losing their see on to see PowerStore PowerMax and we You much about PowerStore, gasp the they to expect we Dell than we PowerStore, have would PowerMax extra did or expect

great actually is a the forklift think, said in we upgrade time continues Dell another to now X.X be is. four to and products introducing opportunity replace to And of product, end need It’s good PowerStore, have it them. by effectively we whenever for which has because field, them. not the what – a it’s us we So to running bet up against sale is a products, customer is other claim safe we a the those be can are for be of four

years over seven know a ago, with have never been which they six will first six customers introduced forklift with So our we again Evergreen our and generations. that’s upgrade do proven to or product

So, confident – but of against feel competitor, them. positioning in is our they are just our biggest Dell terms we very

Karl Ackerman

helpful. very That’s

and for the object-based guess, offering? how your strategic with software growth your in evolving computing I hardware storage architectures how that FlashBlade if development. storage and should follow-up, Pure been computing around particularly do As the edge years, influence planning your of over offerings role you software much object-based opportunity next from Thank may, my has with storage discussion distributed in as-a-Service significant evolves few does augmenting I How on you. For edge drive your see software? there

Charlie Giancarlo

of coming and really that’s that’s it’s one important. area, and up a very Yes, interesting an course –

believe be set container strong we a to of and changes going into the are First do that to we new and believe in going all, the implementations very entire environment. that’s virtualization of be going world

be that to and are a developed with very high-performance, well operate the FlashBlade environment, of feel even to subscription make very of to our their we needy applications to existing respect them more to we placed more application hundreds containerized It so storage directly and to and particular. container And in But Of customers with for use Unified portable, place addition Service their many on allows our of object those Block again, we be to our one on resilient. that, it containers that from our course, Cloud products – them their able enables is which in create are existing Orchestrator are environment to there get like And forth. be environments applications with to those environments. customers. container environment able have they now top going want then there them in support with Store high-speed with it to any customers of that with existing Pure being will over in to transition

innovating it’s new going feel be containers. customers to we – feel are we obviously are path like our we space, but like developing in a those we are increasingly So very are – like for we the right that

Matt Kixmoeller

storage. centralized And on years ago now, the X to Yes, Kix. When all-flash unified plus will been use store? the what’s low-cost at and platform. the modern created are business we file add commonly But that this the an And object and at bet And expect that great people have question a FlashBlade I your for see of What’s deployments very but reason and of object looked then there object, case. it. as so storage edge we FlashBlade analytics time, low-end, really the of cloud-native store part you for for and part people ability the just make – increasingly object architectures, in has to applications a an using object mean, key on-prem we protocol developed of data it specific been the I one for object growing. to reason primary as the data is on that’s just their IoT-type object. keep brought fast we use growth centralized our and low-performance, said, has edge, and an that made analytics frankly a really at will usually a is

Charlie Giancarlo

the put support the where give And by the – you are actually far we Service just a Pure in latest of out are, a just to how CSI, had version release to first we sense Storage Orchestrator of Interface recent Kubernetes. more Container advanced

closely. area are for very and tracking containers focus are core So this of a object Both us. we

Operator

comes question Bank from next from Wamsi Mohan of America. Your

Unidentified Analyst

my What It’s just in was basis in if fiscal and expected sequential [indiscernible] It are taking bridge like points operating wondering Hi, a I decline. margins XQ you between about XXX takes questions. and looks help – there? thanks the filling Wamsi us for it’s XQ. can for puts decline the today. sequential

color there helpful. would be any So

Charlie Giancarlo

you. Thank

are will – our the say continue show is that an to profit it first operating invest we of will well, the that We all, and our expectation company intention year. – for I

to as one have thing beginning we it’s most time, in to continue what we think to our is operating products we intend we crisis, believe you out invest all in downturn. that once they know stated about I be and support to believe on. is to which our very the be it. recession so respond invest that at of particularly going those are focus come vendors the in we that, position customers, able technology-led are in to the And to capability that’s At of end. exit going reaccelerate innovation our respect this the all said and a we Alan that the customers our once during and will that the And because And recessions and continue we Greenspan same

Unidentified Analyst

in that X.X on, has thanks for comment for quarter? bookings has reception my mean, currently Thanks. for that, quarter Charlie. if helped And get how are FlashBlade. can customers? the last Okay, And I just just you incremental you follow-up, Purity launched third the how trending been, you

Charlie Giancarlo

Yes.

So deployed hundreds I arrays. of it’s will already start on with is really the FlashBlade This literally X.X. –

have for they uptake and they it’s the done and fast sites. public excuse very both number So file between a cases, a been notable have it’s the many been recovery, me, fast And on-prem X.X use disaster of and – how it data object customers cloud really it data and protection, different have deployed done replication. of

we hour have what just additional is to illustrative also think with to a we product respect designed an ransomware and features can attack. such I within protect with rapidly, system not and our but ransomware to after capabilities them, ransomware with recover customers and themselves – the so against additional very So it, but really that detect added did Cohesity. We security as add have only a

of FlashBlade both past, new design, features, said strength, the X.X our so file data for have we especially is release analytics, the and cases increasingly, geophysical and the modeling. with in chip machine but especially – that course, with analytics, the big big genomics, it as the object use learning, what of fast are So is log unified

by product. scale it same customers well as and scale all at do ransomware and the at for rapid of used some And – the other use In words, might recovery what – you being increasingly it for high-performance protection, imagine just cases will be the the be lastly, file in which time. and of I mixed-use the it’s all So something time as cases, than the is large repositories analytics could different performance because will past. mention can that just then as very it used is and the of same the

Kevan Krysler

have from the any into to also we’re increasing we what saw pipeline But and that informal in specific shared of what have current we how QX were internal early in terms part sequentially of in our – remarks terms then pipeline that And we QX views of at views, in on days and prepared terms how of really seeing QX. looking our we plays build in views what of the in guide. are seen

Operator

Northland. Your next Nehal comes from question Chokshi from

Nehal Chokshi

you. Thank Yes.

had see you all about those to like as-a-Service. is bookings the two with growth how associated sense in to Can Pure it good out that as million the $XX continue Store So, bookings give Block think traction splits between a us you Cloud you so looks with the and and overall contract I unbilled though?

Kevan Krysler

time our sense the that, subscription, it at accelerated been that a an Unified to selling We of as motion utilizing out the categories, there given at really about of growing rate, and do But our and a we our really and sell talk that’s when a as we public are nor other still breakout go doesn’t look we have lot is at services customers for at both we how and has in us. subscription, – because our it, and make on-prem don’t cloud, category, to one standpoint, subscription the market how Evergreen, look you Unified major from Nehal, one a track subscription. Unified really how is that’s two we which for some being so it

Nehal Chokshi

a prove providing you when to have on-premise to you a and And am the come over surprise view your companies on further look year a okay. going that guess to that’s here. Right, significant thank hardware then growth And think that product at current step for in to a Do little there – basically year revenue. have as in view, at unique, look going down – doesn’t, implies that at it if to be bottoms you I I a going you various least, be of me, but out view push pretty of hardware their is element, terms year-over-year I bit trajectory?

Charlie Giancarlo

improves, you see we – the this to hard as I way. but say, will another economy – do it’s that think phrase me let

some application that an vendors, economic be for vendors as performance, is to decision a full very hybrid, is really clear well negotiate and and in. to with cloud think that and where the dominant create both on-prem and it’s able is services that now unify future of to do what cloud, they want our economic as environment well more it I combination as that them to possibly is possible and with of can is that as their view get about than can position is best technologies, the where in they that on-prem to choice be that the they enterprise

So of we’re hybrid the seeing a strong idea. very uptake cloud

is So, what about – really spending that recover. it’s really says really question your start to to goes IT those when

up to when and it, equipment we will up, – the expect out you that start the we a lot bottoming of pandemic the when start depends economy and recover, to our to see we that a as start spending IT trajectory spend. I it that think pick phrase would a U.S. the in see of see upon free I and on-prem recovery is GDP the

Operator

JMP from Erik Suppiger from comes question Securities. next Your

Erik Suppiger

taking question. Yes, thanks the for

versus FlashArray//C. if curious you cycles, opportunity accounts? had say, of I’d your you the know you number how First of you know kind are unified you the for look products, different have market how I size to then see And you how remind they just soft. to the secondly, accounts X a commercial for off, do out product size noted the Can commercial us but Xyears? those from commercial and have much size you how very the services contribution opportunity new you of be

Charlie Giancarlo

always the company Well, of course, grow new the Yes. one products to faster expects overall. than

it. FlashArray//C a to As start had we mentioned, huge has

we that’s very our last an because week to billion protection market on file market. if large standard in is market release, in that no just haven’t stores time, We getting dollar we started expect its didn’t quarter, If $X that released our in file FlashRecover, or is look a part multibillion we and participated is part just FlashArray//C, services one an large is the – purpose because before. which that. to continue that a which market at to has it for market some in that extends all participated we look a into data of at And again last a you we then new general of and at are

we X-year products X think in X as of more. years So, that to over $X in talking close individually to or the are had and kind well FlashBlade we we success the $X to same we look I over if forward have billion period, billion X those

great the great So, it’s portfolio upside – overall. we see in a just

Matt Kixmoeller

all sold add, we obviously data still other still at are of there cases. of disc there and out sold a where I flash end. lot eroded in the One back than of of enterprise and is are the Yes. look on point storage the overall and high-end zone market, has of more a is But hybrid might a the are that lot flash you disc that use arrays just little bit flash if come in a

expensive of FlashArray//C, neighborhood when arrays, cheaper. it’s got we to believe hybrid kind than One with of talked of substantially things unique it, deploy we how about less the FlashArray//C about it in the first we array, a now now hybrid launched XX%

now franchises the look just our used at it’s and look flash to final Tier X no-brainer so arrays to happen. to to the have larger hybrid enterprise transition we scale X Tier becoming a to And that to really talk customers, have not as beyond their

Charlie Giancarlo

on a – new Bookings are that’s customers for way in and sector have share XX% about good as we total is And a and about And think good think then And I SLED. with customer, to from base of way to would that. you generally be FED that, still our look your would those at what question XXX. then answer total a about north obviously, talked commercial to just total enterprise a it. customer Fortune and enterprise of public

Kevan Krysler

sure actually just no confusion, XX% are make of Fortune about to we XXX. And there is in

Charlie Giancarlo

That’s right.

Kevan Krysler

good then north it to way bookings, of a but of rather of as share XX%. about Yes, it’s a think – than percentage it’s

Matt Kixmoeller

three whole. market we thing the the market Maybe are from in areas recovery we asked we about that flash backup one have the still they a talked us flash. storage the as is And all-flash us early days and is often key in in market, has I One define define and think and is no, how look, you substantial I now have will businesses in in ask big that’s enterprise where I most disk, in when X really built people Pure one final say, think storage, Tier said the mention, object would now applications. don’t market

I flash broad really we previously. are that into people assumed proving of that market part we was disk so push the And the really can market the think

Erik Suppiger

good. you. Very Thank

Operator

Your next Susquehanna. from question comes from Mehdi Hosseini

Mehdi Hosseini

you of storage for statement. have thanks I follow-up global to think then FlashArray of to my very is that are context, actually this backup with displacing be a going about half I in you question. When hybrid is last announced half question to have Cohesity, or in is about economy my follow-up. is or less, opportunity? year X% business, external improvement taking a the at back and expecting an hybrid, storage third slow the is a that the when of death? market. then to And a Yes, are look And going external two hybrid, is a I is a and do the to if matter with billion that at or a the to recovery your the how $X of storage market external of get or recovery incremental And aimed backup you you quickly we agreement

Charlie Giancarlo

with sizes. then market it over Kix the partnership specific Yes, let me on the I on discussion start the to will turn Cohesity and

pre-configured, other out, attacks, install in on it it them So, that up, perhaps really the being the we solution we a etcetera. task are view to partners where that would it’s it solutions in we and against attack that from one – for rapid any what designs, as appliance integrated appliance, to We data the future channel perhaps this as we of of recovery in set them Cohesity easy than our hours in offered see the an different with our a less case, putting other and and particular call customers a as simplify outage think ransomware and of Pure-validated environments Pure protect can customers, provides variety – this ransomware of solution. as by immediately as – provided product the of application but in couple storage as with an first a an is enabling

Matt Kixmoeller

around numbers about then that, software $X because to not is agree with some there. goes and and And recovery and The market am the I about out just one that overall I to you billion half half sure solutions. put down hardware threw backup

side, that like was Data just On basic the Domain. historically backup hardware traditionally appliances

the whole present modernize market and to are this opportunity the things. modernize backup recovery We going with can partnership really we side after the of and entire to that an spend software really because hardware

who just And all-flash. believe complexity that not historically market hybrid you overhead are it’s interested reliability the of scale – the own. they when FlashArray//C the That’s only large franchises, enterprises and in financial market the to is their for them there. large go clear to for all anymore. the disk go after recovery, that’s latter for question hybrid a from we storage enterprises to enterprise, disk operational people $XX,XXX, kind really it’s and down mass way sweet their your drive large-scale particularly and think and for pain run we is array just who look, around a as who arrays introduces, arrays issues and very overall, to it’s so time faster regards the X too backup spend increasingly after. in believe used recovery for And the there $X,XXX, environment hybrid pretty deploy Tier you spot it’s part the expensive look hybrid a broad at But just Tier we the to we’re And $XX,XXX opportunity going and X platform,

Mehdi Hosseini

it. just you the and April Got of regarding highlighted And quarter recognized million for attached surprise, you share revenue clarification. Thanks you quarter. last Anything can to quarter? follow-up, in July with FlashBlade you actually, a us a quick $XX my

Kevan Krysler

connection that we very in terms but No, were sizing what little a that sales, is a haven’t bit FlashBlade performance. sizing. different which and last with was provided updated actually quarter pleased than But we with we of we total saw revenue, in

Operator

comes Martinuzzi Street. from from Eric Lake question next Your

Eric Martinuzzi

flat gross on given QX assumption, roughly sequentially revs. the explicitly I address Yes, to the margin wanted

long-term about have am margin in and range growth XX%, up but international finished XX% continued why QX, QX a talked would You where between different strength subscription. guys in we I given be gross wondering from substantially and

Kevan Krysler

formal did views around or informal give And so we margin. not any views gross

as I views gross our in pleased, think about margin of as operating I gross are with QX might did be on are our see that wouldn’t our performance you what QX. performance mentioned, anything margin. margin We I talk you to. unusual for about and referring

Eric Martinuzzi

the increase to about was the answered. – of Yes, you my side was got to I was between EBIT said trying you OpEx of and talk saw the I employees but the delta get XXXX I between explicitly roughly back question just The QX, the kind on the GM you bulk going full the heads to or in quarter to a that do the end in be QX? XXX add OpEx you and of headcount impact is of plan there, QX additional

Kevan Krysler

Yes, in in of half really will than be terms of net-net focused looking And our of and we front the so total in of half, to less the of headcount. on second then in I terms come through think for how of – hiring terms hires, be there terms what some have incremental in will costs the increase innovation QX. a hiring those in mix total first hiring still saw

Operator

next Morgan Stanley. from Katy comes from Huberty Your question

Katy Huberty

Good you. Yes, thank afternoon.

the has there you late. of I this is pull would growth for more were I bit great below-the-normal you Sorry, demand of a little double-click market. calendar been that typically forward of asked feel in some quarter? revenue for times, specifically less and drier seasonality secular than a effect would into jumped the to bit but trend sort exposure from the so lagged And is it you which we bit that customers, like Do couple pipeline there much mature, on than significant the economic know seasonal be? on calendar the that October a have playing on a October. Just weaker of from those are outlook little factors declines Is customers a second with of the think some love a saw XQ cloud to you quarter.

Charlie Giancarlo

cloud more item the U.S. just mentioned Much being large I had from have you. of quarters. a which might we Thank that reflected acceleration don’t of enterprise whatever effect think, delayed QX, it then performance it’s by is affecting Actually, second numbers. the that actual you from a QX a nature lowered really in of in was of across Katy. Yes, board, the substantial in that such lot feel we kind QX

Katy Huberty

thank secondly, about demand verticals trend you. particular XX% you where you to Is growth? customer or adopters? truly in is set? a early there the really regions? is Like can seeing that of Okay, the then it size are is just customer are strong the talk certain that broad-based terms skewed are of the subscription just And driving customers it – makeup there any across there Are

Charlie Giancarlo

trend the more very much that revenue a now a it dominated deal. actually to it two And balanced started dominating pass broad-based. all quarter or we larger much them. numbers out would by with large being across is dollar one customers is It the million Well, plus going quarter, get customers of just customers, that in a is but

And obviously, and – size. larger very so broad-based customer to see that’s good more that going to was average

Kevan Krysler

interest I would which Evergreen, continued are split Evergreen. broad-based huge we between for the Charlie, getting out it interest Yes, and actually both in

then are broad-based of lot rates renewal That’s new net also contributing is our we that. And to broad-based. on seeing are so And with logos. what definitely the strong a on Unified subscription increase

Charlie Giancarlo

Yes, yes.

Operator

from Fox Advisors. next comes Steven from Your question Fox

Steven Fox

afternoon. Hi, good Thanks question. for my taking

after or grow understand with in on some is one we much. that to how – the aware just macro Slide that Is of? there only quick am you related the versus question incremental there number, XX trying other X. the discrepancy very is top-XX I $X which be on purchases trends first should months. like customers between Just Thank overall your

Kevan Krysler

No, and past, highlight have we this that has with so been in what new showed pretty on the nothing consistent to front.

Steven Fox

could And I Okay, then just thank was, squeeze I since one that guess, pretty obvious. if another you.

that on or you. up, how is picked deals overall? either closing vendor Thank deals vendor financing have Just price how impacting and to you discounting that’s

Charlie Giancarlo

Yes.

well they may need more pay-as-you-go don’t expensive because As provide our customers is that pay for use for consumption they Pure most we purchase only it. what which option vendor instead know, financing, or a cases resilient purchasing you we in use capability provides ourselves they and to provide as-a-service less when model,

competitors have competitive you our why rarely many in financing be we so, our services anything see on able superior of gear. And to come do to be with but up their of consumption similar. And limitations found ways offering to very own type many and products, they to it’s the attempting are their to vendor that able a own, given – of of

Operator

question. that the time, back closing turn Charlie to call our At was And over remarks. will last I this Giancarlo for

Charlie Giancarlo

how us but cases and packing prayers fires suppliers not and of to thank at ready focused want their whom companies, time all of least up my upcoming and employees. customers of bull’s to on the very in West experience in like to our eye of in and many to suffering can the or do to them of I are West and send in And join for that I eye send my of but all we employees, our are frankly, our we’re to many are everybody improve Coast flee out the sympathies Coast many all that out Pure, just place, want the taking fires thoughts today. to our from I also and homes want you sheltered the some from the on smoke. hurricanes.

believe – allow by country, we that going do start in channels that our the truly global the accelerate for difficult country be our this we when we is growth and continue our make investments to us to to to there recover. products and We continue our believe customers, extremely in we you. So period economies,

to stay socially but we and me with Thank let ask you stay speaking all that, you. with quarter. So safe, distant, connected, you look next physically forward to

Operator

this for gentlemen, concludes you Thank Ladies and today’s conference call. participating.

You may now disconnect.

Pure Storage (PSTG) 26 Aug 202021 Q2 Earnings call transcript