PSTG - Earnings call transcript Q1 2025

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Operator

Good day. Welcome to the Pure Storage First Quarter Fiscal 2025 Financial Results Conference Call. Today's conference is being recorded. [Operator Instructions] At this time, I'd like to turn the call over to Paul Ziots. Vice President of Investor Relations. ahead. go Please

Paul Ziots

afternoon, Fiscal Good welcome Pure's to Thank XXXX everyone, Earnings Quarter Year Conference First you. and Call.

Technology and On the Kevan Lee, Officer; Officer; Chief Giancarlo, Chief Rob call, we Krysler, have Chief Charlie Officer. Executive Financial

Following Charlie's will remarks, take questions. Kevan's and prepared we

release that post market forward-looking was investor.purestorage.com. regarding can downloaded accompany to our this and are posted update of and facts simultaneously being and its product and On after statements subject obligation that trends. outlook call today, to uncertainties. and financial are today, and and which based on and at make this webcast statements, where offerings is issued we our statements in today economic this webcast. our strategy, press is new make as current on risks no Our website The will include our operations, them. call assumptions slides be various Any technology undertake industry we competitive forward-looking advantages, These we

actual of and not an reported as the be considered may results indication results forecasted, differ Our performance. should materially future from results

to A SEC contained business we public with in filings and some the the those you relating is to our refer filings. of discussion uncertainties of our and risks

financial this remaining measures other performance growth During than all metrics investments. rates call, revenue, cash and obligations, associated and are and non-GAAP or RPO,

is will GAAP of on provided website is of our IR recorded in Relations Pure be webcast comparable are playback being earnings and measures Storage directly property and live broadcast the An being call for Storage. most on slides. is available archive website release the This to the the the Reconciliations and purposes. Investor press Pure

close Friday, XXXX begins at XX, of second quarter XXXX. quiet period Our business, fiscal July the

I'll turn Charlie. that, it With to over

Charles Giancarlo

QX Thank Good welcome us for you everyone, joining you, our XXXX today. to afternoon, Call. fiscal Earnings Thank and Paul.

performance, returning revenue our with growth to the quarter. We are double-digit pleased QX for

recent and customers. advances up opened demonstrate in true multiple platform in Our Pure rings opportunities to The have highly strategy segments. continues for with success differentiated AI market several

financial data to been second the enterprise GPU or interest specialized high-performance farms. has RAG analysts large media the providing or Of engine is environments. market for greatest storage opportunity and inference public or A private storage

opportunity, believe the in third long the for which a is access storage and as be all eliminating to access cloud, enterprise data easier perform The enabling we simplifying to largest silos, and AI. upgrading term, storage management data data

are Pure different we is different Purity with AI-based seeing them customers' operating early we require AI all opportunities, unified success can inevitably do software these our not system to of vendors, calls other Unlike all address in needs. address three and platform. storage their real-time attention managed of their data to fragmented individually by caused which widely data state with are inference platforms systems, data siloed to stored disparate and different to AI operating infrastructure, data on management and the storage feed engines. diverse unable

storage across the a universal data provides seamless pure delivery unified data data and across and strategy integrated cloud and platform centers facilitates It policies and customers' The various management access and simplified environments. with management. data storage system

Partner new significant Customer next strategy this advances announcing be at to Accelerate our Conference. will We and platform month

Our role platform this deals strategic crucial vision quarter. played in securing a several enterprise

accelerated specializing led quarter. this and infrastructure notable a interest financial solutions Enterprise to saving segments of their and platform and a of large environmental high-performance delivers reduced notable in top-tier The computing. provider service in use AI managed power for services, both ease our sciences with training impact strong win and models last a and energy were international customers. and life for environment market Their language inferencing

with enabler AI hyperscalers. including our a workloads. and discussions also growth key in was Our in record E Family continues had its FlashBlade strong a QX,

performance customers. highest backup spectrum existing We such AI including the price sustained incredibly applications both is required geographies, performance FlashBlade's to as across from seeing broader and the prospects compelling. adoption to span are for ability low-cost

have area storage penetrating make in a this include considerably on to in in online the quality of past environments. discussions based nearline with SSDs, continue our levels quarter. advanced quantity broad hyperscalers of both data progress range enterprise and tape-based with have of off-line cloud. our lower-cost DirectFlash HDD-based storage. significant multiple Hyperscalers the of the storage We high-performance and storage These and storage every purity technology, and

technology We to the and for up a which purity near their line storage performance in both are high position our provide purchases. their make majority DirectFlash unique and environments, their of

commercial engagements testing include advanced both discussions. now most and Our

continue Pure will we in see infrastructure. this such, second either Data or power first centers. and win design brings a in multiple consumption we is advantages to hyperscaler to As data space year. believe technology Storage storage

First, purity requirements space power for storage by data the or and of DirectFlash and factor more. hyperscale a reduces ten cooling

need of hard sophisticated reduces the make the cashing and hyperscalers low relatively performance for Second, drives. that Pure up for use other technologies to

delivery. server data finally, improves Third, of both accelerating the reliability significantly thereby And significantly costs. improves technology reducing technology by Pure's storage, the performance longevity and Pure's their

a This bringing reduce power important usage for cooling XX%, AI in for introducing and as Pure Increased of even and enterprise centers both data centers power workloads. is of power existing and data the major cooling. issue storage ever upwards can and in amounts AI to by more energy cost is greater promises hyperscalers use significant dramatically data consume centers.

pure interested reason Another in why technology. hyperscalers are

cloud agreements, whenever in complete and entirely want and to able reliability based customers opening store storage In to allows model. storage whether of centers our opportunities clouds and Enterprises momentum theirs. cloud, the storage, their way and a operate want virtualized we continued delivering as level with their automate they cloud as to enterprise, located data service model, should our a consume on-prem guaranteed cloud with companies data the wherever as operating same guaranteed operating performance. them Evergreen operate on manage service or the seeing new One are be enabling to Customers

entirely management portal. where customers they it, storage provides with managed our PureX services It hands-free need through and when

solves hybrid and private their the become about has arrays the fleet features. design data enterprises. of It's into performance storage entire IT same complexity They center policy can for standard arrays Fusion developers. infrastructure. and are storage Managers now now only from by both the practice by agility price of by joining manage expect Additionally, no to storage self-service, up Pure their storage and longer virtual and cloud services IT of traditional experience and custom pools. able set cloud flexibility

at cloud enterprise agility about more scalability Fusion event. storage month's Pure Accelerate combines as such with access stores applications Fusion enables Pure Hear for easier model, and operating data and to AI. real-time cloud a next Pure

market the to as a on whole. Moving

significant to seen overall We buy. a the or have environment not in macro change customers' intentions

pressure a our While we this IT economy on see but enthusiasm on have to for We storage other great in parts budgets. that AI IT of yet market will well the may have AI, put major believe spending fare in opportunities relatively inflection.

well we believe of will markets. to that we the continue all we across Overall, positioned gain compete our in, are in and share segments we

leadership is our strategy demonstrated our competitors further clearly Our messages. now by and increased position our to mimic

very We commoditized the high-technology longer data storage are and on much no also run our in but of storage, storage secular that believe data favor. trends rather expectation based systems on for long-term

at upcoming more analyst in discuss We trends financial our at these session detail long-term Accelerate. will

With that, over Kevan. turn it I'll to

Kevan Krysler

grew across record our QX Thank strong of healthy resulted new million both you, an as QX. a Charlie. profitability. outperformed Revenue XX% and We financial in operating year high performance $XXX to revenue a in saw our start a profit and for

our customers drivers E. growth existing we of entire QX. for double-digit enterprise strong data pleased revenue two, growth sales that customer one, our and FlashBlade were: across our revenue we were Two storage in to Specifically, and very including strong key returned platform; this quarter solutions, to demand FlashBlade new

or subscription $X.X billion. XX% annual revenue, recurring was ARR, healthy, growing to services In QX, over

$X.X noncancelable we both year-over-year As services subscription QX subscription has which the date QX to orders billion. previously, Total the not service noncancelable services XX% at services in grew includes service end contracts effective subscription started. ARR has excludes grew and ARR contracts not Evergreen RPO, subscription where effective date XX%. of mentioned started, subscription the product where Including

QX include FY orders RPO QX solely 'XX financial Evergreen end telco subscription was year. that XX%. our affected offerings reminder, XXX opportunities large within order the noncancelable of with a RPO QX One product growth orders by and subscription several grew year-over-year a of 'XX. a at closed As last Fortune associated services service QX RPO in relating during to FY in company QX

One to Although larger opportunities close we during opportunities year, large no as closed the expect QX. through Evergreen progress we

and during our for offerings a including Total Evergreen our as sales. contract for saw achieving $XXX offerings during international XX% as our in were expect We we million, a TCV, Storage offerings, Storage million and Service was original including was pipeline, sales One of building $XX 'XX U.S. FY our Service Evergreen million. $XXX Service with Storage forecast, as revenue TCV $XXX revenue demand QX for large million. and QX opportunities Consistent or growth Flex, QX. a value,

performance and grew Our total strength new strong gross services by XX.X% of and margin positively serve customer reflecting gross XX.X%, XX.X%, Fortune investing. disciplined contributed and gross profit tiers QX subscription we of customers and strong both of margin storage winning Product margins, and during gross was FlashArray and solutions Product subscription our gross Operating customers services while XXX and aggressively in e overachievement, C. strength revenue XXX. competing were XX% was margin by now the secondary to gross acquisition margin family strong margins lower QX. impacted are with we and margin XX.X%

revenue. strong, billion new Pure's infrastructure capital our investments our from in supporting slightly a at million, as decreased teams end new representing of balance quarter. continued employees the headquarters of our quarter service sales. to Factors supporting engineering count the Evergreen test the cash X,XXX equipment approximately during innovations, head very flow $X.X One Cash liquidity QX. X% capital the and million including to approximately and were $XXX sheet was Storage operations and expenditures for Our at and of contributing expenditures build-out remains included $XX of end

offsetting stock repurchases repurchase in will also equity share dilution June, withholding we did by due during awards Beginning Our not we because trading of which taxes net on also dilution. of remains. share share Though using fund reduce restrictions. QX, employee will objective of withholding partially shares

our approximately authorization. repurchase $XXX million have on existing We

guidance. our to turning Now

XX.X%. be operating For of QX, and we expect million that $XXX will of or margin revenue operating expect million profit $XXX

our for annual to guidance FY 'XX. Turning

'XX are reiterating and margin guidance. operating revenue FY our We

We of remaining strong for both the while outperforming. AI we is demand macro same believe operating the storage are data accelerates. are top line to its stages, early with environment. we in Also, for are also spending still time, well start mindful year with we the profit as and At the positioned spending storage pleased that

in the customer look participate vast This majority opportunities, in substantial and strong and Pure with storage. product as of data June are all forward storage Las the at at you the seeing our time are of workloads, including of with or unprecedented positioned to closing, start to We for for pleased AI we In our by flash Accelerate XX. year. pursuit on to growth Financial we driven many Meeting sustained Analyst replacing is Vegas whether technology-focused bulk Pure well hyperscalers an

will With that, to I Q&A. turn for Paul back it

Paul Ziots

Kevan. Thanks,

Q&A I'll begin question, get the as one people one to as we we Before to can so you consisting possible. yourself many ask part limit session, of to please

and questions, those we let's additional Operator, questions we'll additional you that queue, allows. please the started. have you take time be to kindly happy as get rejoin If ask

Operator

from Our Daryanani question Amit comes first Instructions] from [Operator Evercore.

Amit Daryanani

opportunity bit a going hoping guess talk I just more forward. cloud about could the you

can I for some think think this you be in the bigger is in new other at using opportunity. not the wide Just but more market [indiscernible] some Meta [indiscernible]? the recently, opportunity a don't any here. then AI about had provider cloud at you side would the it's And on point win. Do But a talked option cloud has win versus helpful. specific [indiscernible]

Charles Giancarlo

Amit. you, Thank Sure.

have And clear them, of a everyone, be refer AI, to I'll try how be in we disciplined. cloud each quite terms of segments. to different and I discipline to call when we we want these, we So about what one to hyperscaler. three speak

win, AI call a AI. or that hyperscaler to an go storage cloud that's and in for win standard hyperscaler, about So own a a GPU their an storage the cloud their use we'll customers' enterprise compute that when have a design getting their in or that been both hyperscaler, we've even in speaks whether to environments. storage we speaking When on that specifically for they

achieve, speak if that on or we the Portworx Block cloud, to to And when customers capabilities enterprise, in speak like of we as also operate about cloud you multi-cloud about our allow but top the software our Store data. hyperscalers that our will, of such a Cloud operates like

into way, we about And -- in that our sold we GPU But speak we have and we'll about to Meta when Meta. by in of are speak AI So you majority AI. wins, environment, environments, of we're contribute AI the we've AI the environments multiple they the that their that as aware mentioned that, yes, will wins. when

design When Cloud well Cloud we Block our a cloud, as talking And wins. cloud as as we speak we're win of to Block to getting about centers as Store speak their arrays refer hyperscaler, across on data the storage. customer about when the and hyperscaler, our does platform a operate well speak the we really as when Store in even about a standard multiple Portworx as into we that that

everyone but want aware to those words. elongate sorry that back to the use of going we way So sure and your is to it, make question I

that machine to entire learning, opportunity that will an that not that that's longer a customers believe focus their a of believe cloud us our storage their we platform rather big I And it in we opportunity and somewhat think for only allowed drive believe capabilities, their on play represents data individual storage as very operate immediate but arrays. upgrading storage, AI with in to an but we opportunity also to presents as than the term. upgrade

opportunity, that for own to that about. storage their very into Their their excited We our and believe also very environment we're the environment customer represents opportunity a environment. big traditional storage hyperscalers sell one

Robert Lee

is this Rob. and Amit, Yes,

that. on to it. you to To Just some think scale just context and help about behind size, jump

sitting said, today, the that general of the environments. And that's But well. consist purpose extent, really about the environments, build-outs. opportunity are some being environments speaking as are lot well to as think believe on are bulk opportunity to their a serve we to that deployed particular, there's that in hyperscalers. disc been disk storage the build-outs the the we Charlie of we XX% hyperscaler going of on As focus even to attention and deployments And in see we to refer general purpose yes, Charlie paid these storage of, as of AI and do we larger total XX% one AI

presenting placed real I to is going the power focus on in build-out, AI think there's these when space. thing environments challenge much on other hyperscaler being comes because that's that's so a it and

so in advancing And with our firms. discussions that's these hyperscaler really

becoming that clear operational securing with. becoming the and be them go disc power they go challenge and very and for It's footprint to limitations have availability, help today to to just real one able is we're hopeful maintain the storage a them on that

Paul Ziots

you, Thank Amit.

please. question, Next

Operator

Morgan next Our comes Stanley. Meta from from Marshall question

Meta Marshall

impact this thinking how could just margin, expected you increase wanted I any any are NAND calendar no over the Great. provide on commentary on just to as prices you guys about get gross year. but impact just clearly, quarter,

Charles Giancarlo

Thanks, Meta.

competitive in episodically That negotiate, is they in do, to say dynamic buy customers dynamic will, a price storage that negotiate in such, we competitive a when storage tend pricing ASPs, to with underlying on to want basis environment you they tend pricing to is per players general cost-plus we recall, if on gigabyte against operate environment. -- As a in And a environment. fluctuate a who the you commodity. as

much line as as prices with So margin of as NAND the gross our a generally net-net whole. affect all of as the don't that market -- top market do they the

customers And -- somewhat a set tailwind general, prices budget. be a of generally should have rising, in I so with that's of something think a although tail

industry's or that gross blender, it put affect significantly. all margins So our a that -- the shouldn't in all

Kevan Krysler

look, to QX. margin Charlie's point, way. Yes, with gross pleased in really did declined strong. we're performance our meaningful remaining And in gross following margins We product though just see slightly on a sequentially,

winning the storage customers same time, and our tiers Family we and at While are FlashArray solutions E and competing aggressively lower secondary with C.

DirectFlash our software TLC Purity flash we and against pricing But of majority advantage, flash flash differentiated the QLC cost sustained highlights meaningful the as providing the advantages really represents a And today, volatility, flash. of a commercial both consume technology. reminder, and using flash the again, SSDs QLC just

Operator

Securities. next from Howard comes Guggenheim Our from question Ma

Howard Ma

demand driven on And And inferencing I guess now? fiscal or you starting I demand, relative to see are say, in AI an or that behind you to uptick Kevan, relative AI how or to a you're demand the pipeline? guess, at one months few you year than would quick spending specifically environment in for follow-up material say enough Charlie last all IT for necessarily? guys ago, of characterize just a of optimizations starting uptick least largely are would then to us see not inferencing

not pipeline I numbers early? the is to call too it's in in that to you Or still know have out?

Charles Giancarlo

Howard, if part, back of one we're if second take going to to we're there's question because one. one the question but going we'll first it get your can, we time,

it So we've I last did I major I prepared certainly, over year, my a improvement think is remarks an say that seen it's yet. that inflection can't -- but in say

year. inflection pick So but their from changed do it's to last QX. I up has customers I caused can't they're point. starting spending it's be say I going AI to haven't second recovery to modest as how much year, overall, say this look a around But since I'd seen money to take a think big QX. a

Operator

Comes Pinjalim from from JPMorgan. Bora

Unknown Analyst

is Pinjalim. on This Noah for

Can win You so talked a about understand you at help a just evolved the have hyperscaler how far. by us potential year-end. design discussions

and of past have your the in with prepared discussions hyperscales mentioned quantity You this quality quarter. that remarks considerably advanced

be color there provide would can you any So other helpful.

Charles Giancarlo

go talk about hyperscalers. with hyperscalers. top -- we that we're about the hyperscalers really I with remark you and multiple to some quarters, we meant having are ten that maybe this is back speaking What When convey conversations

other et will, FANGs, clouds, the public the So in it the three goes cetera, to beyond -- you if just this.

quantity, those of the not experiencing the environments, we we that those just testing of to So but discussions well as we're that as the conversations quality of have speak meaning well. now players number those some Mentioned improved. some and commercial in

that design So that positive if win those us believe you a signs, year. are to will, all lead this

Operator

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

Unknown Analyst

This is I you implications on your for the Nadi saw that capacity that case? head declined the on the why slightly. on how be in And is sales like moving any Could count forward? Wamsi. there quarter, is will explain

Charles Giancarlo

that sales I in number. say thing only opportunities fluctuate is invest to the we tend I on been in what increasingly number, a higher to that things consistently continue we would quarter-to-quarter -- Well, against front us, capacity, the which would given the Yes. been focused of on we see have work does two

is on of secondly, new putting on that we're focus, the expansions quality that you And will, in overall adds. past working more existing if And customer in on accounts. than

read the half, somewhere customers We're now. into XX:X too wouldn't that over I ] acquisition. count it. I XX,XXX what I'm is, current the XX,XXX not in if customer So of and will, much expect you do sure [ with but between back

see those we should you to if moderating, of start so numbers. And will,

Kevan Krysler

Yes.

a we the customer the Look, our to acquisition new what point of as XXX with count we quality Fortune QX. also year pleased continue And too. the to Charlie's consistent was increase acquired quick customers. ago penetration to we're Just customers on that, follow-on of in a saw

Operator

Our from from question Mike next Needham. comes Cikos

Michael Cikos

on growth. I in just Flex circle wanted one to up

is how new quarter in primarily way are versus the would or temperature, Flex of about to existing it's And expectations? Anything be adoption from one which there or there customers a whether but lands. internal in growth coming track adopting, beneficial. any logo then think Just customers get to did your

Kevan Krysler

first you view Charlie, comparability. the on why adoption, your take adoption hit on don't I'll

Charles Giancarlo

I have had both adoption bit call and QX quarters, mixture deals. One, And that all what the Well, seasonality mid-market number. that last large quarter, lot of might adopted commercial of a Pure from in much a typically, the standpoint. perhaps and we each commercial interestingly, of Evergreen commercial, first the enterprises say the lower But certainly large enterprises. year, as average as would well through than pretty the was we a all, drove by expected by of a is in Yes, we equally

characterized and Evergreen that not last large was a quarter. by having in with quarter deal a This quite few particularly that in compared having year One, as

being think as we yes, of just aberration. So it an

One expecting As year. this we speaking, million, Evergreen roughly mentioned, still we're $XXX for

Kevan Krysler

annual as on strong our little Yes. year our I'll And which we And really help alluded as as slower really were against provide growth storage offerings a our began terms bit. and we quarterly infrastructure, to the be last TCV to. In view in that for very bit storage $XX annual just expectations following start terms One, a that sales of insights sales for sales an providing our a against to than very revenue of to TCV continues of a million, million Evergreen a progress strong to deployment $XXX But reminder, updates on our a double-click that providing service would QX, is utilization expectations to annual monitor liked. service in a the TCV year in offerings Charlie of of have year.

and saw provide we we demand build, quarterly as for the expect as year. service offerings growth we'll through with opportunities pipeline 'XX progress updates including to forecast, as storage as our throughout and FY offerings, storage consistent service to XX% continue we a original a our progress QX, continue However, we of and large strong

Operator

Merchant question . comes from Asiya Citigroup. Our next from

Asiya Merchant

provided results. Great 'XX -- think the you guys I provided If versus services. I when may, about how at last to quarter, some you guide, I fiscal think the you think the Great. subscription about product talked

lower. can a on should product you that, subscription bit little maybe was we that than came what I were stronger in If double down think They kind modeling revenues. how slightly versus about of

just should about understand the you be that too, those how help trajectory if would maybe think we of can So us great.

Charles Giancarlo

it, individual CapEx other. In it on but with of about there'll you Sure. higher annual one of course, And a basis. revenue case transaction, or much associated but will Well, generally in the of it's a any smaller. be a transaction, transaction, think component there's subscription immediate an it, to the transaction, Evergreen if subscription an amount One no case of be the a

to our whichever to customer buy want don't that that wants standpoint, they lose on CapEx while so the to a sales in want have subscription, for -- incentives to provide prefer, those customer certainly deal some we And basis. force with the a services for sell from the we we a one of

so And all in in we'll being we see, greater deal the we're equal, see win a CapEx, else assuming on we if slower rate, Evergreen see we on subscription, if we'll One, somewhat uptake same see overachievement at still uptake the the the immediate on whereas winning line the revenue term,

effect lower term. a in see revenue immediate We'll the on

value the a would So a deal number, We've think CapEx that's a go to if deal right but of out deal. were about way It's number the a subscription sorry, to of -- a before. CapEx a CapEx about it. XX% rough given it of

Kevan Krysler

Yes.

would a and to assuming think we in achieve changed. from -- bridging look I the service, we thesis growth, revenue bridging, this is that fiscal step the at as and better what taking total mid-teens of million standpoint the sales that year, of for last TCV from has not subscription a revenue think back put in just I around we quarter kick off it a $XXX the our terms be discussed total expectations to

growth perspective. rate would at are we revenue, what QX tell . product start you looking revenue product I you with quite from when we pleased specifically think saw a that I in

Operator

from comes Chokshi question Nehal Northland Markets. from Capital Next

Nehal Chokshi

the results congratulations. strong changing you top above guidance for given but results, you line? on Not not bottom And why strong fiscal covered if this, your and sure the or year guidance both are average results

Kevan Krysler

an include annual Thanks profit outperforming, revenue top you for also are believe have year, year. on discussed, And in revenue for with offerings Yes. quarter the as previously operating we remainder also, the our expectations performance, our overall, we slowest with out guide confidence increasing margin stage, as but factors, think we about including want and our the for that strength. profit, to expectations, see out, sales QX a performance you a from strong annual definitely us reiterating from lens, impact the both driven lens, also that seasonally was QX and our gross provides as guide with we'll is by of how generally point to about year. But the a is When it key question. start the service plays operating we think appropriate. as And the storage few it TCV considerations revenue When this strength an pleased well. line at yes,

our also while some adjustments a is last benefit year. hiring QX And as seeing financial we're some during strong, alignment workforce of of result

While investments reiterating increase engineering see areas planning purity go-to-market high-performance their both specific to hyperscalers, and DirectFlash in our opportunity technology operating key we margin also with annual we're in guide, our to and some for and the bulk and specific AI providing storage environments.

Operator

from comes question Next Simon Leopold from James. Raymond

Simon Leopold

the like or wonder now? backward-looking prior customer the year a I the XX% me what's over that makes fiscal concentration question. so? do evolve you how for think disclosure And next year to such customer might how concentration essentially ask don't want But about your

Kevan Krysler

XX% we remains we customer. customer XX-K Yes, we concentration did Mix in of year of did relatively a this terms that not a Yes. Thanks for the in question. had we terms and that last have in revenue filed concentration XX% consistent quarter. disclose our

Simon Leopold

And your outlook?

Kevan Krysler

We don't provide on outlook concentration.

Operator

Our David next from UBS. question Vogt comes from

David Vogt

demand to of timing for trying Obviously, fiscal bit storage and flow is healthier the into acceleration as an a as about you million year. And is we to latter expectation starts can the how Kevan TCV into of the a just half that business sort gets 'XX your calendar there the disclosed of 'XX? number $XX there of think talk business trajectory of this about market sort prepared Giancarlo. you or rest as remarks. And early through subscription is move the that sort of I'm into in of this of maybe we the expect just ratable this the the you Maybe both year? move this

Charles Giancarlo

I separate ambiguous. a the to your -- question was want because Well, out bit

are $XXX we to and it million $XXX TCV, more associated year, We at the least terms timing issue think forecasting new pick expecting go think we're $XX we we're full with We to of up. TCV In the for year, QX. that. the really and as sticking there's million related million or through will

But on an overall the actual revenue year. for component

do in Now and Flex XX%. increase we Cloud Forever, XXs our Portworx as into as as in Evergreen we XXs, One, expect well Store, have we Evergreen the that above It's year which That's we Block subscriptions, approaching this total go whole. include XX% and it a is year. next expect approaching beyond, products as And to XX%. Evergreen the see

of through seasonal increase. we said, services go We're continue business to revenue So year. proportion But to of course, year. the and a sales through subscription I the as expect product as of both we're increase to we the the expecting

Kevan Krysler

And meaningful offering. we're about sales quick we're -- associated is When thinking thinking sales. around And a yes, clarification. had we've storage with those change then duration a TCV TCV We've about as service for when years disclosed. just any we haven't talked contract what X

Operator

comes from Our Rakers next Fargo. from Wells question Aaron

Aaron Rakers

any just pull see for just kind demand point for apologize inflection whether kind AI higher There or I'm AI if an earlier, things map these us training, for points? higher you're curious about give a and of inflection be the to seems on maybe flash of and and curious updated acceleration thoughts infrastructure, on just road discussion. some this jumped capacity vectoring you DFM FSPs I can demand few missed I I'm a to storage. this if lot not starting of around or for here. capacity increased your I driving the AI like of

Charles Giancarlo

You bet.

for talk me the training AI Let start demand about for environments.

of environments, what paid training average, I training As the that AI like. XX% is good see and an range. think looks dollar broad environment attached training what is the at a the have you forth, and to understanding after the environment we and the GPUs the if we we now X% you've and to for will, pretty networking look and And so in racks

for or of of market confident than range. the bit total might the anticipating, themselves. that, training in at by expense near the that now a GPUs fairly term, reason XX% Part perhaps right least So attach, we're the is X% that to way, be the storage AI is in the less the just but

overall. sort bit XX Again, that in that months, expect. spent probably was training to be about is billion That people our think it less very of $X data in So we I on than think might But AI specifically past that storage that said, the a being environments. puts perspective good. tied on very,

order going on So I'm magnitude. status Rob current current you going to sorry? technology. the sense of pass of to of that yes, gives I'm I'm pass our to a

Robert Lee

most your what question hey, about this the is the for I -- think and environments, capacity either large-scale specific demand are training built Certainly, the high-performance these or the whether provided particular, environments, larger are environment what us or SSDs. vendors residing of the in we the Rob. by to generally And customer other training of so Aaron, SSDs are by asking build-outs, terms part they're first on the in Yes, other seeing of SSDs.

all capacity right, these struggling frankly, long-term these of up GPUs SSDs larger the that very Most of environments, larger of environments, the well, of SSDs, some that I efficiencies is our to exist these being are and limitations specific and specifically that seeing the being sucking build-outs think strategy. drives out great amount built We power that are point of in some for the a the power out -- larger are validation in deployed enable something it's because capacity efficiencies customers these -- the there. power are

is of direct that flip SSDs this, large side can't power these with efficiency terms allows Now provide commodity and software, Without of software. the the DirectFlash these the capacity us benefits on in performance, what commensurate the simply of benefits. SSDs is our savings large flip provide side that all to of this

a as with which they're inherently very result, so come only being and use, to And is they're less very, them very specific environments. difficult deployed we in They efficient. see why trade-offs significant

Paul Ziots

like in Aaron, love to queue. follow-up, if we'd have you'd do to a get you back

today. we I to able think be get it might to

you. thank So

Operator

from from Mehdi International Susquehanna comes question Hosseini Group. next Our

Mehdi Hosseini

of should higher with gross services, QX year? some for year 'XX your for product growth revenue. mind with fiscal fiscal especially frame given And it right by performance, your services that margin that and seems the year, gross primarily expansion. should Given the associated that and fiscal margin be revenue to revenue help mix me Is the driven with flat the

Kevan Krysler

Yes, I that, think about directionally, you're thinking right?

Operator

Street. Eric from from comes Lake Martinuzzi question next Our

Eric Martinuzzi

four increase of Fortune Fortune note customers. Take incremental customers, the there in your Yes. XXX XXX new

in your any know you to commonality are your curious across So new growth, seeing customer why these larger at up new cases for the use are customers showing door?

Charles Giancarlo

a is, managed the block we're able by solution a -- cases variety and operating more with that's it's space and and so are that do that's more able cooling. that use product reliable of power consistent them we across the and of that system, a file less management object all, first wide and to to they takes same environment simpler, have, common Honestly, single fact Yes. a and provide the

value those So to you pretty beat. together, things it's add proposition. a good That's hard

Eric Martinuzzi

door anything like the AI opened was wasn't that? training like or there that environment the something thing But

Charles Giancarlo

environment want AI environment put is is AI array the I'd to to brand-new be think because your storage a And being which say array might a the entrances. the in interested. gets sometimes you are new it it of the data helps building that But way that use your AI be is of company the you satisfy copy all environment to range, broad to for really to multiple customer of there AI a on yes, make honestly, able positioning it and might the one connected to of environment.

make that more the less. that and we're at strategy and same a strategy It's What doing arrays a available environment. that them data accessible access don't application and It's that is to upgrade inference have your costs bother time, its environment. their enables to that in strategy the you simplifies place AI real-time proposing

you're might out think total be I or I the this. in no the the there's again, proposition. entrance of So value door environment. by say would big customer's it's right, And different a theme But window in up opened

Operator

Sankar Our Cowen. next question from TB from comes Krish

Okay.

to question. the go Let's next

Barclays. Long comes from Tim question from next Our

Timothy Long

Meta. and different can at question the little profile margin look But one rev each like recognition opportunities, that I on effect Just in a them a guys had hyperscale bit you understand talk It about the bit a back Charlie, differently. AI thinking with seems to it. had kind little you of the

you hyperscaler at So ], start do side, just model what look new [ looking these model, curious, you have there? opportunities, when the financial for replacing any in the particularly sense dip Pure like will

just going to much I different than enterprises. it's be imagine selling into dynamic arrays a

know about but of would these talk much kind So currently than with anything is you with business days, of different larger you're How level play current customers model how framework can what high into Pure? I that it dealing early seeing? the

Charles Giancarlo

Thanks. Yes.

So I'm going to take hyperscaler. two separately. AI the and

the gross as we've internally now case the changes AI, company flow company normal to made So much where to of pretty of They but going bit at lower, a affect be may that will largely in the margins whole. the of the overall, margins a the company. not

at can't provide the buy I would we'll the say certainly all the we we they won't still really we hyperscaler with to until we they can different. understand possible earliest how exactly want do, be point ways date. say And that evaluating and same where on different provide, these with working get they'll how front, you that now, a to we have model and of we're hyperscalers, -- the be once actually right but we

Paul Ziots

Tim. you, more looks question. like one Thank It there's

question. is very back thank you for Asiya, much follow-up getting in This your queue.

Operator

Merchant from Citigroup. question Our from comes Asiya next

Asiya Merchant

you just and in how been just quarters. unpack in the the we outer on Okay. both, if gross asked, Great. it margin upside think about you should that I if but can apologize the on Clearly, how think and quarters. increase to from XQ outer well expecting is well, product gross here gross soft, margins should as the as seasonally subscription in margin we you're revenues about just as

Kevan Krysler

we've with overall, and that would solutions, whether we price or continue about we product meaningful changes commented on our gross year. the as When or wouldn't FlashArray we'll way meaningful we that. other. say the think Kevan. performance do any expect margins, on Yes. strength that subscription, being I we through Family and progress that E one expecting that's significant aggressive not both in or to This C, would the pricing seeing But be our do I we're think is changes

Paul Ziots

some has Charlie think I conclude, concluding remarks. we Before

Charles Giancarlo

all for joining Yes. on Thank again today's earnings you us call.

strategy to cloud enabling I of embrace with versatile, unified as by the continues platform of to we've that with AI look to lead environments think at and really this them discussed, single a a change energy-efficient allows as their transformation data our storage. platform industry's cloud businesses centers

on all more you'll partners you industry Pure Accelerate investors innovation and Vegas in with the next do Las customers be going about some the the our I conference look more learn throughout be to to we're And our forward the we're meeting Storage at globe, lead also and that annual about month. making hear to to roadshows to able in investments well, platform. continue and with

next So joining you month. talk I later. all hope to see much you and for so Thank to you

Operator

the you participation. Call. Pure Storage Conference XXXX concludes Quarter for That Thank Financial your Results First Fiscal

now your may disconnect lines. You

Pure Storage (PSTG) 29 May 242025 Q1 Earnings call transcript