Risks Related to Our Operating Results or Financial Condition

We have experienced growth in prior periods, and we may not be able to sustain future growth effectively or at all.

We have significantly expanded our overall business, customer base, headcount, channel partner relationships and operations in prior periods, and we anticipate that we will continue to expand and experience growth in future periods. For example, we delivered year-over-year revenue growth of ~~12%~~23% for the ~~first~~second quarter of fiscal 2022 compared to the ~~first~~second quarter of fiscal 2021, and our headcount increased from over ~~3,500~~3,700 at the end of the ~~first~~second quarter of fiscal 2021 to over ~~3,800~~3,900 employees at the end of the ~~first~~second quarter of fiscal 2022. Our future operating results will depend to a large extent on our ability to successfully sustain our growth and manage our continued expansion. To sustain and manage our growth successfully, we believe that we must, among other things, effectively allocate resources and operate our business across a wide range of priorities.

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We expect that our future growth will continue to place strain on our managerial, administrative, operational, financial and other resources. We will incur costs associated with this future growth prior to realizing the anticipated benefits, and the return on these investments may be lower, may develop more slowly than we expect or may never materialize. Investors should not consider our revenue growth in prior quarterly or annual periods as indicative of our future performance. In future periods, we may not achieve similar percentage revenue growth rates as we have achieved in some past periods. If we are unable to maintain adequate revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability. If we are unable to manage our growth successfully, we may not be able to take advantage of market opportunities or release new products or enhancements in a timely manner, and we may fail to satisfy customers’ expectations, maintain product quality, execute on our business plan or adequately respond to competitive pressures, each of which could adversely impact our growth and affect our business and operating results.

We intend to continue focusing on revenue growth and increasing our market penetration and international presence by investing heavily in our business, which may put pressure on near-term profitability.

We have not achieved profitability for any year since our inception. We incurred a net loss of $282.1 million for fiscal 2021, and ~~$84.2~~$129.5 million for the first ~~quarter~~two quarters of fiscal 2022, and we had an accumulated deficit of $1,565.0 million at the end of fiscal 2021 and ~~$1,649.2~~$1,694.5 million at the end of the ~~first~~second quarter of fiscal 2022. Our operating expenses largely are based on anticipated revenue, and a high percentage of our expenses are, and will continue to be, fixed in the short term. If we fail to adequately increase revenue and manage costs, we may not achieve or maintain profitability in the future. As a result, our business could be harmed, and our operating results could suffer.

Our strategy is to continue investing in marketing, sales, support and research and development. We believe continuing to invest heavily in our business is critical to our future success and meeting our growth objectives. We anticipate that our operating costs and expenses will continue to increase in absolute terms. Even if we achieve or maintain significant revenue growth, we may continue to experience losses, forgoing near-term profitability on a U.S. GAAP basis.

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Our gross margins are impacted by a variety of factors and vary from period to period, making them difficult to predict with certainty.

Our gross margins fluctuate from period to period due primarily to product costs, customer mix and product mix. A variety of factors may cause our gross margins to fluctuate and make them difficult to predict, including, but not limited to:

•sales and marketing initiatives, discount levels, rebates and competitive pricing;

•changes in customer, geographic or product mix, including mix of product configurations;

•the cost of components, including flash and DRAM, and freight;

•new product introductions and enhancements with higher product costs;

•excess inventory levels or purchase obligations as a result of changes in demand forecasts or product transitions;

•an increase in product returns, order rescheduling and cancellations;

•the timing of technical support service contracts and contract renewals;

•inventory stocking requirements to mitigate supply chain constraints, accommodate unforeseen demand or support new product introductions; and

•inflation and other adverse economic pressures.

If we are unable to manage these factors effectively, our gross margins may decline, and fluctuations in gross margins may make it difficult to manage our business and achieve or maintain profitability, which could materially harm our business, operating results and financial condition.

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Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below expectations.

Our operating results may fluctuate due to a variety of factors, a portion of which are outside of our control. As a result, comparing our results on a period-to-period basis may not be meaningful.

Factors that are difficult to predict and that could cause our operating results to fluctuate include:

•the timing and magnitude of orders, shipments and acceptance of our products in any quarter, including product returns, order rescheduling and cancellations by our customers;

•the impact on timing and amount of revenue recognized resulting from the cancellation of unfulfilled orders by our customers;

•fluctuations or seasonality in demand and prices for our products;

•our ability to control the costs of the components we use or to timely adopt subsequent generations of components;

•disruption in our supply chains, component availability and related procurement costs;

•reductions in customers’ budgets for IT purchases;

•changes in industry standards in the data storage industry;

•our ability to develop, introduce and ship new products and product enhancements that meet customer requirements and to effectively manage product transitions;

•changes in the competitive dynamics of our markets, including new entrants or discounting of product prices;

•our ability to control costs, including our operating expenses;

•the impact of inflation or other adverse economic conditions and the impact of public health epidemics or pandemics, such as the COVID-19 pandemic; and

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•future accounting pronouncements and changes in accounting policies.

The occurrence of any one of these factors could negatively affect our operating results in any particular quarter.

The sales prices of our products and services may fluctuate or decline, which may reduce our gross profits, revenue growth, and adversely impact our financial results.

The sales prices of our products and services may fluctuate or decline for a variety of reasons, including competitive pricing pressures, discounts, the introduction of competing products or services or promotional programs, a change in our mix of products and services, cost of components, supply chain constraints and inflation and other adverse economic conditions. Competition continues to increase in the markets in which we participate, and we expect competition to further increase in the future, thereby leading to increased pricing pressures. Larger competitors may reduce the price of products or services that compete with ours or may bundle them with other products and services. Additionally, although we price our products and services predominantly in U.S. dollars, currency fluctuations in certain countries and regions may negatively impact actual prices that partners and customers are willing to pay in those countries and regions. Furthermore, we anticipate that the prices for our products will decrease over product life cycles. If we are required to decrease our prices to be competitive and are not able to offset this decrease by increases in the volume of sales or the sales of new products with higher margins, our gross margins and operating results could be adversely affected.

We derive the majority of our revenue from our FlashArray products, and a decline in demand for these products would cause our revenue to grow more slowly or to decline.

Our FlashArray products have historically accounted for the majority of our revenue and will continue to comprise a significant portion of our revenue for the foreseeable future, including through our subscription offerings. As a result, our revenue could be reduced by any decline or fluctuation in demand for these products, regardless of the reason. If demand for our core products slows or declines, we may not be able to increase our revenue or achieve and maintain profitability.

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If we are unable to sell renewals of our subscription services to our customers, our future revenue and operating results will be harmed.

Existing customers may not renew their subscription services agreements after the initial period and, given changing customer purchasing preferences, we may not be able to accurately predict our renewal rates. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their available budget and the level of their satisfaction with our products, customer support and pricing compared to that offered by our competitors. If our customers renew their contracts, they may renew on terms that are less economically beneficial to us. If our customers do not renew their agreements or renew on less favorable terms, our revenue may grow more slowly than expected, if at all.

We expect that revenue from subscription services will increase as a percentage of total revenue over time, and because we recognize this revenue over the term of the relevant contract period, downturns or upturns in sales of subscription services are not immediately reflected in full in our results of operations.

Our revenue from subscription services has been increasing as a percentage of total revenue over time. We are also increasing the number of our subscription-based offerings, such as Pure as-a-Service, though it is more difficult to predict the rate at which customers will adopt, and the rate at which our revenue will grow from these new offerings. We recognize subscription services revenue ratably over the term of the relevant period. As a result, much of the subscription services revenue we report each quarter is derived from agreements that we sold in prior quarters. Consequently, a decline in new or renewed subscription services agreements in any one quarter will not be fully reflected in revenue in that quarter but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in sales of subscription services is not reflected in full in our results of operations until future periods. It is also difficult for us to rapidly increase our subscription services revenue through additional sales in any period, as revenue from renewals must be recognized ratably over the applicable service period.

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We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all.

We intend to continue to make investments to support our business growth and may require additional funds to support business initiatives, including the need to develop new products or enhance our existing products, enhance our operating infrastructure and acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we undertake in the future could involve additional restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to support our business growth and to respond to business challenges could be significantly limited and our prospects and financial condition could be harmed.

We are exposed to the credit risk of some of our customers, which could harm our business, operating results and financial condition.

Most of our sales are made on an open credit basis. We monitor individual customer payment capability when we grant open credit arrangements and may limit these open credit arrangements based on perceived creditworthiness. We also maintain allowances we believe are adequate to cover exposure for doubtful accounts. Although we have programs in place that are designed to monitor and mitigate these risks, we cannot assure investors these programs will be effective in managing our credit risks, especially as we expand our business internationally. If we are unable to adequately control these risks, our business, operating results and financial condition could be harmed.

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Risks Related to Our Operations

If we are unable to attract, motivate and retain sales, engineering and other key personnel, including our management team, we may not be able to increase our revenue and our business, operating results and financial condition could be harmed.

Our ability to increase our revenue depends on our ability to attract, motivate, and retain qualified sales, engineering and other key employees, including our management. These positions may require candidates with specific backgrounds in software and the storage industry, and competition for employees with such expertise is intense. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. To the extent that we are successful in hiring to fill these positions, we may need a significant amount of time to train new employees before they are effective and efficient in performing their jobs. Further, the COVID-19 pandemic has introduced new challenges regarding workforce planning, employee expectations regarding the ability to work from home or remotely and maintaining employee productivity. If we are unable to adequately address these challenges, our ability to recruit and retain employees and to ensure employee productivity could be negatively affected. From time to time, there may be changes in our management team, which could create short term uncertainty. All of our employees, including members of our management team and executive officers, are generally employed on an at-will basis, which means that they could terminate their employment with us at any time. If we are unable to attract, motivate and retain qualified sales, engineering and other key employees, including our management or if they are unable to work effectively or at all due to the COVID-19 pandemic, our business and operating results could suffer.

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If we fail to adequately expand and optimize our sales force, our growth will be impeded.

We need to continue to expand and optimize our sales organization in order to grow our customer base and our business. We plan to continue to expand and train our sales force, both domestically and internationally. We must design and implement effective sales incentive programs, and it can take time before new sales representatives are fully trained and productive. We must adapt our sales processes for new sales and marketing approaches, including those required by our shift to subscription services and the changes resulting from the pandemic. If we are unable to hire, develop and retain qualified sales personnel or if new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the expected benefits of these investments or increase our revenue and our business and operating results could suffer.

Our company culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.

We believe that our company culture has been a critical contributor to our success. Our culture fosters innovation, creativity, teamwork, passion for customers and focus on execution, and facilitates critical knowledge transfer and knowledge sharing. In particular, we believe that the difference between our sales, support and engineering cultures and those of incumbent vendors, is a key competitive advantage and differentiator for our customers and partners. As we grow and change or are required to adapt to changes in business operations as a result of the COVID-19 pandemic, we may find it difficult to maintain these important aspects of our company culture, which could limit our ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability to retain and recruit personnel, continue to perform at current levels or execute on our business strategy.

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Our long-term success depends, in part, on sales outside of the United States, which subjects us to costs and risks associated with international operations.

We maintain operations outside of the United States, which we have been expanding and intend to continue to expand in the future. As a company headquartered in the United States, conducting and expanding international operations subjects us to costs and risks that we may not generally face in the United States, including:

•exposure to foreign currency exchange rate risk;

•difficulties in collecting payments internationally;

•managing and staffing international operations;

•public health pandemics or epidemics, such as the COVID-19 pandemic;

•establishing relationships with channel partners in international locations;

•increased travel, infrastructure and legal compliance costs associated with international locations;

•requirements to comply with a wide variety of laws and regulations associated with international operations, including taxes and customs;

•significant fines, penalties and collateral consequences if we or our partners fail to comply with anti-bribery laws;

•heightened risk of improper, unfair or corrupt business practices in certain geographies;

•potentially adverse tax consequences, including repatriation of earnings;

•increased financial accounting and reporting burdens and complexities;

•political, social and economic instability abroad, terrorist attacks and security concerns in general; and

•reduced or varied protection for intellectual property rights in some countries.

The occurrence of any one of these risks could negatively affect our international operations and, consequently, our business, operating results and financial condition generally.

Our international operations, as well as U.S. tax reform, could expose us to potentially adverse tax consequences.

~~The U.S. Tax law~~Changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results. Due to expansion of our international business activities, any changes ~~enacted through the Tax Cuts and Jobs Act (the Tax Act)~~ in ~~December 2017 and The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020, are subject to further interpretations from~~ the U.S. ~~federal~~taxation of such activities may increase our worldwide effective tax rate and ~~state governments~~adversely affect our financial condition and ~~regulatory organizations. Such interpretations could have a material adverse effect on our cash tax liabilities, results of operations, and financial condition.~~

operating results. We generally conduct our international operations through wholly owned subsidiaries and report our taxable income in various jurisdictions worldwide based upon our business operations in those jurisdictions. Given ~~the passage of the Tax Act~~proposed tax legislation and other global tax developments, we continue to evaluate our corporate structure and intercompany relationships. Future changes to U.S. and global tax laws may adversely impact our effective tax rate.

Our intercompany relationships are, and after the implementation of any changes to our corporate structure will continue to be, subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. The relevant taxing authorities may disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations.

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Third-party claims that we infringe their intellectual property rights could be costly and harm our business.

There is a substantial amount of intellectual property litigation in the data storage industry, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding our intellectual property rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. We have been, and may in the future be, subject to claims that we infringe upon the intellectual property rights of other intellectual property holders, particularly as we grow and face increasing competition.

Any intellectual property rights claim against us or our customers, suppliers, and channel partners, with or without merit, could be time-consuming and expensive to litigate or settle, could divert management’s resources and attention from operating our business and could force us to acquire intellectual property rights and licenses, which may involve substantial royalty payments. Further, a party making such a claim, if successful, could secure a judgment that requires us to pay substantial damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. An adverse determination also could invalidate our intellectual property rights, prevent us from manufacturing and selling our products and may require that we procure or develop substitute products that do not infringe, which could require significant effort and expense.

We may not be able to re-engineer our products to avoid infringement, and we may have to seek a license for the infringed technology, which may not be available on reasonable terms or at all, may significantly increase our operating expenses or may require us to restrict our business activities in one or more respects. Even if we were able to obtain a license, it could be non-exclusive, which may give our competitors access to the same technologies licensed to us. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. Any of these events could harm our business and financial condition.

We currently have a number of agreements in effect with our customers, suppliers and channel partners pursuant to which we have agreed to defend, indemnify and hold them harmless from damages and costs which may arise from claims of infringement by our products of third-party patents, trademarks or other proprietary rights. The scope of these indemnity obligations varies but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. Our insurance may not cover intellectual property infringement claims. A claim that our products infringe a third party’s intellectual property rights could harm our relationships with our customers, deter future customers from purchasing our products and expose us to costly litigation and settlement expenses. Even if we are not a party to any litigation between a customer and a third party relating to infringement claims by our products, an adverse outcome in any such litigation could make it more difficult for us to defend our products against intellectual property infringement claims in any subsequent litigation in which we are a named party. Any of these results could harm our brand, business and financial condition.

The success of our business depends in part on our ability to protect and enforce our intellectual property rights.

We rely on a combination of patent, copyright, service mark, trademark and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights, all of which provide only limited protection. We have over 2,000 issued patents and patent applications in the United States and foreign countries. We cannot assure investors that future patents issued to us, if any, will give us the protection that we seek, if at all, or that any patents issued to us will not be challenged, invalidated, circumvented or held to be unenforceable. Our issued and future patents may not provide sufficiently broad protection or may not be enforceable. Further, the laws of certain foreign countries do not provide the same level of protection of corporate proprietary information and assets such as intellectual property, trademarks, trade secrets, know-how and records, as the laws of the United States. For instance, the legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection. As a result, we may encounter significant problems in protecting and defending our intellectual property or proprietary rights abroad.

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Changes to the intellectual property law in the United States and other jurisdictions could also diminish the value of our patents and patent applications or narrow the scope of our patent protection, among other intellectual property rights. We cannot be certain that the steps we have taken will prevent theft, unauthorized use or the reverse engineering of our proprietary information and other intellectual property, including technical data, manufacturing processes, data sets or other sensitive information. Moreover, others may independently develop technologies that are competitive to ours or that infringe our intellectual property. Furthermore, any of our trademarks may be challenged by others or invalidated through administrative process or litigation.

Protecting against the unauthorized use of our intellectual property, products and other proprietary rights is expensive and difficult. Litigation may be necessary in the future to enforce or defend our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Any such litigation could result in substantial costs and diversion of management’s resources and attention, either of which could harm our business, operating results and financial condition. Further, many of our current and potential competitors have the ability to dedicate substantially greater resources than us to defend intellectual property infringement claims and enforce their intellectual property rights. Accordingly, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property. Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which our products are available. An inability to adequately protect and enforce our intellectual property and other proprietary rights could harm our business and financial condition.

Our use of open source software could impose limitations on our ability to commercialize our products.

We use open source software in our products and expect to continue to use open source software in the future. Although we monitor our use of open source software, the terms of many open source licenses have not been interpreted by U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market our products. From time to time, we may face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we have developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make our software source code freely available, seek licenses from third parties in order to continue offering our products for certain uses or cease offering the implicated solutions unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources, and we may be required to discontinue providing some of our software if re-engineering cannot be accomplished on a timely basis, any of which could harm our business, operating results and financial condition.

Failure to comply with governmental laws and regulations could harm our business.

Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in the United States. For example, the European Union has adopted certain directives to facilitate the recycling of electrical and electronic equipment sold in the European Union, including the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment directive and the Waste Electrical and Electronic Equipment directive.

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Changes in applicable laws, regulations and standards could harm our business, operating results and financial condition. For example, we have been subject to the EU General Data Protection Regulation, or GDPR, since May 2018 and to the California Consumer Privacy Act (CCPA) since January 2020. These and potentially other future privacy regulations may require us to make further changes to our policies and procedures in the future beyond what we have already done. Our business could be impacted, to some extent, by the United Kingdom's exit from the European Union and related changes in law and regulation. We made changes to our data protection compliance program in relation to data privacy regulations and will continue to monitor the implementation and evolution of global data protection regulations, but if we are not compliant with such privacy regulations, we may be subject to significant fines and our business may be harmed. In addition, the CCPA places additional requirements on the handling of personal data and is currently subject to a revision and update process. The potential effects of this legislation are far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses. Customers may choose to implement technological solutions to comply with such regulations that impact the performance and competitiveness of our products and solutions.

Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results and financial condition could be harmed. Even the perception of privacy concerns, whether or not valid, may harm our reputation and inhibit competitiveness and adoption of our products by current and future customers. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results and financial condition.

Governmental regulations affecting the import or export of products could negatively affect our revenue.

The U.S. and various foreign governments have imposed controls, export license requirements and restrictions on the import or export of some technologies, especially encryption technology. From time to time, governmental agencies have proposed additional regulation of encryption technology, such as requiring the escrow of imports or exports. If we fail to obtain required import or export approval for our products or its various components, our international and domestic sales could be harmed and our revenue may be adversely affected. In many cases, we rely on vendors and channel partners to handle logistics associated with the import and export of our products, so our visibility and control over these matters may be limited. In addition, failure to comply with such regulations could result in penalties, costs and restrictions on export privileges, which could harm our business, operating results and financial condition.

If weour security measures, or those maintained on our behalf, are compromised now, or in the future, or the security, confidentiality, integrity or availability of our information technology, software, services, networks, products, ~~suffer~~communications or data is compromised, limited, or fails, our business could experience a ~~cybersecurity~~material adverse impact, including without limitation, a material interruption to our operations, harm to our reputation, a loss of customers, significant fines, penalties and liabilities, or breach or triggering of data protection laws, privacy policies or other ~~security breach, we may lose customers and incur significant liabilities.~~obligations.

In the ordinary course of our business, we collect, store, transit and otherwise process proprietary, confidential and sensitive data, onincluding by using our internal systems, networks and servers, which may include intellectual property, our proprietary business information and that of our customers, suppliers and business partners and sales data, which may, on occasion, include personally identifiable information. Additionally, we design and sell products that allow our customers to store their data. The security of our own networks and the intrusion protection features of our products are both critical to our operations and business strategy.

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Cyberattacks, malicious internet-based activity and online and offline fraud are prevalent and continue to increase. These threats are becoming increasingly difficult to detect. The threats to information systems and information may include: traditional computer “hackers,” social engineering schemes (for example, attempts to induce fraudulent invoice payments or divert money to us), software bugs, malicious code (such as viruses and worms), personnel misconduct or error, faulty password management, theft, denial-of-service attacks (such as credential stuffing), advanced persistent threat intrusions, as well as attacks from nation-state and nation-state supported actors. We may also be the subject of phishing attacks, viruses, malware installation, server malfunction, software or hardware failures, loss of data or other computer assets, adware and other similar issues. Additionally, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruptions in our services, loss of data, loss of income, significant extra expense to restore data or systems, reputational loss and the diversion of funds. To alleviate the financial, operational and reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable laws or regulations prohibit such payments). Similarly, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our platform, systems and network or the systems and networks of third parties that support us and our business.

We devote significant resources to network security, authentication technologies, data encryption and other security measures designed to protect our systems and data, ~~but these security measures cannot provide absolute security. While we use encryption and authentication technologies~~including to secure the transmission and storage of data and prevent third-party access to our data or accounts, ~~these~~but there can be no assurance that our security measures ~~are subject to~~or those of our service providers, partners and other third ~~party~~parties upon whom we rely will be effective in protecting against a security ~~breaches, employee error, malfeasance, faulty password management~~incident or ~~other irregularities.~~the materially adverse impacts that may arise from a security incident. Any destructive or intrusive breach of our internal systems could result in the information stored on our networks and systems or the networks and systems of third parties upon whom we rely being accessed, publicly disclosed, lost or stolen.

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Additionally, an effective attack on our products could disrupt the proper functioning of our products, allow unauthorized access to sensitive, proprietary or confidential information of ours or our customers, disrupt or temporarily interrupt our and our customers’ operations or cause other destructive outcomes, including the theft of information sufficient to engage in fraudulent transactions. The risk that these types of events could seriously harm our business is likely to increase as we expand our network of channel partners, resellers and authorized service providers and operate in more countries. The economic costs to us to eliminate or alleviate cyber or other security problems, viruses, worms, malicious software systems and security vulnerabilities could be significant and may be difficult to anticipate or measure because the damage may differ based on the identity and motive of the programmer or hacker, which are often difficult to identify. If any of these types of security breaches were to occur and we were unable to protect ~~sensitive~~our products, systems and data, or if we were perceived to have such a security incident, our relationships with our business partners and customers could be materially damaged, our reputation and brand could be materially harmed, use of our products could decrease and we could be exposed to a risk of loss or litigation, including, without limitation, class action litigation, and other possible ~~liability.~~liabilities. A security incident could also result in government enforcement actions that could include investigations, fines, penalties, audits and inspections, additional reporting requirements and/or oversight, temporary or permanent bans on all or some processing of personal information.

Moreover, applicable data protection laws, contracts, policies and other data protection obligations may require us to notify relevant stakeholders of security incidents, including affected individuals, customers, regulators, and credit reporting agencies. Such disclosures are costly and the disclosures or the failure to comply with such requirements could lead to material adverse impacts such as negative publicity, loss of customer confidence in our services our security measures, investigations and private or government claims. Security incidents that impact our information technology systems could also result in breaches of our contracts (some of which may not have liability limitations and/or require us to indemnify affected parties) and could lead to litigation with customers, partners or other relevant stakeholders. These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business and adversely affect our reputation or otherwise adversely affect our business.

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We may acquire other businesses which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results.

We may, from time to time, acquire complementary products, technologies or businesses, such as our acquisitions of Portworx in October 2020 and Compuverde AB in April 2019. We also may enter into relationships with other businesses in order to expand our product offerings, which could involve preferred or exclusive licenses, additional channels of distribution or discount pricing or investments in other companies. Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to third-party or government approvals, which are beyond our control. Consequently, we can make no assurance that these transactions, once undertaken and announced, will close.

These kinds of acquisitions or investments may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel or operations of acquired companies, particularly if the key personnel of the acquired business choose not to work for us, and we may have difficulty retaining the customers of any acquired business. Acquisitions may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for development of our business. Any acquisition or investment could expose us to unknown liabilities. Moreover, we cannot assure investors that the anticipated benefits of any acquisition or investment will be realized. In connection with these types of transactions, we may issue additional equity securities that would dilute our stockholders, use cash that we may need in the future to operate our business, incur debt on terms unfavorable to us or that we are unable to repay, incur large charges or substantial liabilities, encounter difficulties integrating diverse business cultures and become subject to adverse tax consequences, substantial depreciation or deferred compensation charges. These challenges related to acquisitions or investments could harm our business and financial condition.

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Risks Related to Our Credit Facility and Notes

Restrictive covenants in the agreement governing our senior secured revolving credit facility may restrict our ability to pursue business strategies.

In August 2020, we entered into a Credit Agreement with a consortium of financial institutions and lenders that provides for a five-year, senior secured revolving credit facility of $300.0 million (Credit Facility). We have borrowed $250.0 million under this Credit Facility. We could repay and re-borrow funds under this Credit Facility at any time, subject to customary borrowing conditions, for general corporate purposes and working capital.

The agreement governing our senior secured revolving Credit Facility limits our ability, among other things, to: incur additional secured indebtedness; sell, transfer, license or dispose of assets; consolidate or merge; enter into transactions with our affiliates; and incur liens. In addition, our senior secured revolving Credit Facility contains financial and other restrictive covenants that limit our ability to engage in activities that may be in our long term best interest, such as, subject to permitted exceptions, making capital expenditures in excess of certain thresholds, making investments, loans and other advances, and prepaying any additional indebtedness while our indebtedness under our senior secured revolving Credit Facility is outstanding. Our failure to comply with financial and other restrictive covenants could result in an event of default, which if not cured or waived, could result in the lenders requiring immediate payment of all outstanding borrowings or foreclosing on collateral pledged to them to secure the indebtedness.

We may not have the ability to raise the funds necessary to settle conversions of the Notes or to repurchase the Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.

Holders of the Notes will have the right to require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest. In addition, if a make-whole fundamental change (as defined in the indenture for the Notes) occurs prior to the maturity date of the Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Notes in connection with such make-whole fundamental change. Upon a conversion of the Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Notes surrendered therefor or pay cash with respect to Notes being converted.

In addition, our ability to repurchase or to pay cash upon conversion of the Notes may be limited by law, regulatory authority or agreements governing our future indebtedness. Our failure to repurchase the Notes at a time when the repurchase is required by the indenture governing the Notes or to pay cash upon conversion of the Notes as required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversion of the Notes.

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Servicing our debt will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the amounts payable under the Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

We may still incur substantially more debt or take other actions that would diminish our ability to make payments on the Notes when due.

We and our subsidiaries may incur substantial additional debt in the future, subject to the restrictions contained in our future debt instruments, some of which may be secured debt, like the Credit Facility. We are not restricted under the terms of the indenture governing the Notes from incurring additional debt, securing existing or future debt, recapitalizing our debt or taking a number of other actions that could have the effect of diminishing our ability to make payments on the Notes when due. Furthermore, the indenture prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Notes and the indenture. These and other provisions in the indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to holders of the Notes.

The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.

If the conditional conversion feature of the Notes is triggered, holders of the Notes will be entitled to convert the Notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than by paying cash in lieu of delivering any fractional share), we may settle all or a portion of our conversion obligation in cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

The capped call transactions may affect the value of the Notes and our common stock.

In connection with the Notes, we entered into capped call transactions with certain financial institutions (the option counterparties). The capped call transactions are expected generally to reduce the potential dilution upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount upon conversion of the Notes, with such reduction and/or offset subject to a cap.

In connection with establishing their initial hedges of the capped call transactions, the option counterparties and/or their respective affiliates purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock. This activity could have increased (or reduced the size of any decrease in) the market price of our common stock or the Notes at that time.

In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock in secondary market transactions (and are likely to do so during any observation period related to a conversion of notes or following any repurchase of notes by us on any fundamental change repurchase date or otherwise). This activity could also cause or avoid an increase or a decrease in the price of our common stock or the Notes.

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The potential effect, if any, of these transactions and activities on the price of our common stock or the Notes will depend in part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of our common stock.

Risks Related to Our Common Stock

The trading price of our common stock has been and may continue to be highly volatile, and an active, liquid, and orderly market for our common stock may not be sustained.

The trading price of our common stock has been, and will likely continue to be, highly volatile. Since shares of our common stock were sold in our initial public offering in October 2015 at a price of $17.00 per share, our closing stock price has ranged from $8.76 to $28.90, through ~~June 4,~~September 1, 2021. Some of the factors, many of which are beyond our control, affecting our volatility may include:

•price and volume fluctuations in the overall stock market from time to time;

•significant volatility in the market price and trading volume of technology companies in general and of companies in our industry;

•actual or anticipated changes in our results of operations or fluctuations in our operating results;

•whether our operating results meet the expectations of securities analysts or investors;

•issuance or new or updated research or reports by securities analysts, including the publication of unfavorable reports or change in recommendation or downgrading of our common stock;

•actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;

•litigation involving us, our industry or both;

•general economic conditions and trends, including the impact of the COVID pandemic;

•major catastrophic events;

•sales of large blocks of our stock; or

•departures of key personnel.

In several recent situations where the price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our business, operating results and financial condition.

We cannot guarantee that our share repurchase program will enhance shareholder value, and share repurchases could affect the price of our common stock.

In February 2021, our board of directors authorized a $200.0 million share repurchase program, which is being funded from available working capital. The repurchase authorization has no fixed end date. Although our board of directors has authorized a share repurchase program, this program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares. The share repurchase program could affect the price of our common stock, increase volatility and diminish our cash reserves.

If securities analysts do not publish research or reports about our business, or if they downgrade our stock, the price of our stock could decline.

The trading market for our common stock will likely be influenced by research and reports that securities or industry analysts publish about us or our business. If one or more of these analysts downgrades our stock, lowers their price target, or publishes unfavorable or inaccurate research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

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We have never paid dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future.

We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. As a result, investors may only receive a return on their investment in our common stock if the market price of our common stock increases.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and under Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions:

•establish a classified board of directors so that not all members of our board of directors are elected at one time;

•authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;

•prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

•prohibit stockholders from calling a special meeting of our stockholders;

•provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and

•establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder and which may discourage, delay, or prevent a change of control of our company.

Any provision of our amended and restated certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. If a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business and financial condition.

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General Risk Factors

Adverse economic conditions may harm our revenues and profitability.

Our operations and performance depend in part on worldwide economic conditions and the economic health of our current and prospective customers. Inflation, global economic uncertainty, civil unrest and political and fiscal challenges in the United States and abroad can arise suddenly and affect the rate of information technology spending and could adversely affect our customers' ability or willingness to purchase our products and services. For example, the global macroeconomic environment could be negatively affected by the growth rate in the economy of the European Union, China, or the United States, trade relations between the United States and China, the impact of public health epidemics or pandemics, such as the COVID-19 pandemic, political uncertainty in the Middle East and other geopolitical events. Additionally, the United Kingdom's exit from the European Union is disruptive and remains subject to the successful conclusion of a final withdrawal agreement between the parties. In the absence of such an agreement, there would be no transitional provisions and any exit from the European Union could lead to adverse economic consequences. Weak economic conditions would likely adversely impact our business, operating results and financial condition in a number of ways, including by reducing sales, lengthening sales cycles and lowering prices of our products and services.

Our business is subject to the risks of earthquakes, fires, floods and other natural catastrophic events, and to interruption by man-made factors such as computer viruses or terrorism or by the impact of public health epidemics or pandemics, such as the COVID-19 pandemic.

We and our suppliers have operations in locations, including our headquarters in California, that are subject to earthquakes, fires, floods and other natural catastrophic events, such as severe weather and geological events, which could disrupt our operations or the operations of our customers and suppliers. Our customers affected by a natural disaster could postpone or cancel orders of our products, which could negatively impact our business. Moreover, should any of our key suppliers fail to deliver components to us as a result of a natural disaster, we may be unable to purchase these components in necessary quantities or may be forced to purchase components in the open market at significantly higher costs. We may also be forced to purchase components in advance of our normal supply chain demand to avoid potential market shortages. Our business interruption insurance may be insufficient to compensate us for losses due to a significant natural disaster or due to man-made factors. Any natural catastrophic events may also prevent our employees from being able to reach our offices in any jurisdiction around the world, and therefore impede our ability to conduct business as usual.

In addition, man-made factors, such as acts of terrorism or malicious computer viruses, and public health epidemics or pandemics, such as the COVID-19 pandemic, could cause disruptions in our or our customers’ businesses or the economy as a whole. To the extent that these disruptions result in delays or cancellations of customer orders or the deployment of our products, our business, operating results and financial condition could be harmed.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities by the Issuer

The following table summarizes our stock repurchase activity for the ~~first~~second quarter of fiscal 2022 (in thousands except for price per share):
Period Average Price Paid per Share
Total Number of Shares Purchased as Part of Share Repurchase Program(1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
February 1 - February 28 $ 23.37 134 $ 196,879
March 1 - March 28 $ 21.55 1,153 $ 172,022
March 29 - May 2 $ 20.93 96 $ 170,024


Period	Average Price Paid per Share		Total Number of Shares Purchased as Part of Share Repurchase Program(1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
May 3 - May 30	$	—	—	$	170,008
May 31 - June 27	$	19.19	1,043	$	150,001
June 28 - August 1	$	19.15	1,270	$	125,681

(1) In February 2021, our board of directors authorized additional share repurchases of up to $200.0 million of our outstanding common stock. See "Liquidity and Capital Resources—Share Repurchase Program" included under Part I, Item 2 in this Quarterly Report on Form 10-Q.

The following table summarizes the shares of restricted common stock that were delivered by certain employees upon vesting of equity awards to satisfy tax withholding requirements during the ~~first~~second quarter of fiscal 2022 (in thousands except for price per share):

Period Average Price per Share Delivered Total Number of Shares Delivered to Satisfy Tax Withholding Requirements Approximate Dollar Value of Shares Delivered to Satisfy Tax Withholding Requirements
February 1 - February 28 $ — — $ —
March 1 - March 28 $ 22.30 226 $ 5,050
March 29 - May 2 $ — — $ —


Period	Average Price per Share Delivered		Total Number of Shares Delivered to Satisfy Tax Withholding Requirements	Approximate Dollar Value of Shares Delivered to Satisfy Tax Withholding Requirements
May 3 - May 30	$	—	—	$	—
May 31 - June 27	$	18.91	80	$	1,514
June 28 - August 1	$	—	—	$	—

Item 3. Defaults upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

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Item 6. Exhibits.

Incorporation By Reference

Exhibit
Number

Description

Form

SEC File No.

Exhibit

Filing Date

3.1

Amended and Restated Certificate of Incorporation.

10-Q

001-37570

3.1

12/11/2015

3.2

Amended and Restated Bylaws.

S-1

333-206312

3.4

9/9/2015

4.1

Form of Class A Common Stock Certificate of the Company.

S-1

333-206312

4.1

9/9/2015

4.2

Indenture dated as of April 9, 2018 by and between Pure Storage, Inc. and U.S. Bank National Association, as Trustee

8-K

001-37570

4.1

4/10/2018

4.3

Form of Global Note, representing Pure Storage, Inc.'s 0.125% Convertible Senior Notes due 2023 (included as Exhibit A to the Indenture incorporated by reference as Exhibit 4.2 hereto)

8-K

001-37570

4.2

4/10/2018

4.4

Reference is made to Exhibits 3.1 and 3.2

31.1*

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1

Form of Confirmation for Capped Call Transactions.

8-K

001-37570

99.1

4/10/2018

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101)

* Filed herewith.

** Furnished herewith.

+ Indicates management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		PURE STORAGE, INC.

Date:	~~June~~September 8, 2021	By:	/s/ CHARLES GIANCARLO
			Charles Giancarlo
			Chief Executive Officer and Director (Principal Executive Officer)

Date:	~~June~~September 8, 2021	By:	/s/ KEVAN KRYSLER
			Kevan Krysler
			Chief Financial Officer (Principal Financial and Accounting Officer)

6064


Delaware						27-1069557
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


		Page
Note About Forward-Looking Statements		ii
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders' Equity	4
	Condensed Consolidated Statements of Cash Flows	56
	Notes to Condensed Consolidated Financial Statements	67
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2425
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3436
Item 4.	Controls and Procedures	3537
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	3638
Item 1A.	Risk Factors	3638
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5862
Item 3.	Defaults Upon Senior Securities	5862
Item 4.	Mine Safety Disclosures	5862
Item 5.	Other Information	5862
Item 6.	Exhibits	5963
Signatures


		At the End of					At the End of
		Fiscal 2021		First Quarter of Fiscal 2022			Fiscal 2021		Second Quarter of Fiscal 2022

ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	337,147	$	300,808	Cash and cash equivalents	$	337,147	$	340,252
Marketable securities	Marketable securities	916,388		933,376		Marketable securities	916,388		944,285
Accounts receivable, net of allowance of $1,033 and $1,046		460,879		327,507
Accounts receivable, net of allowance of $1,033 and $960						Accounts receivable, net of allowance of $1,033 and $960	460,879		358,460
Inventory	Inventory	46,733		49,287		Inventory	46,733		47,169
Deferred commissions, current	Deferred commissions, current	57,183		55,212		Deferred commissions, current	57,183		58,003
Prepaid expenses and other current assets	Prepaid expenses and other current assets	89,836		117,880		Prepaid expenses and other current assets	89,836		111,390
Total current assets	Total current assets	1,908,166		1,784,070		Total current assets	1,908,166		1,859,559
Property and equipment, net	Property and equipment, net	163,041		172,381		Property and equipment, net	163,041		184,048
Operating lease right-of-use assets	Operating lease right-of-use assets	134,668		129,582		Operating lease right-of-use assets	134,668		122,638
Deferred commissions, non-current	Deferred commissions, non-current	130,741		130,663		Deferred commissions, non-current	130,741		137,962
Intangible assets, net	Intangible assets, net	76,648		72,351		Intangible assets, net	76,648		68,279
Goodwill	Goodwill	358,736		358,736		Goodwill	358,736		358,736

Restricted cash	Restricted cash	10,544		10,544		Restricted cash	10,544		10,544

Other assets, non-current	Other assets, non-current	36,896		39,611		Other assets, non-current	36,896		41,918
Total assets	Total assets	$	2,819,440	$	2,697,938	Total assets	$	2,819,440	$	2,783,684
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	67,530	$	40,563	Accounts payable	$	67,530	$	54,686
Accrued compensation and benefits	Accrued compensation and benefits	160,817		84,322		Accrued compensation and benefits	160,817		126,589
Accrued expenses and other liabilities	Accrued expenses and other liabilities	61,754		52,823		Accrued expenses and other liabilities	61,754		53,043
Operating lease liabilities, current	Operating lease liabilities, current	32,231		33,886		Operating lease liabilities, current	32,231		34,482
Deferred revenue, current	Deferred revenue, current	438,321		458,705		Deferred revenue, current	438,321		485,927
Total current liabilities	Total current liabilities	760,653		670,299		Total current liabilities	760,653		754,727
Long-term debt	Long-term debt	755,814		763,064		Long-term debt	755,814		770,662
Operating lease liabilities, non-current	Operating lease liabilities, non-current	120,361		114,304		Operating lease liabilities, non-current	120,361		106,693
Deferred revenue, non-current	Deferred revenue, non-current	405,376		407,455		Deferred revenue, non-current	405,376		423,887

Other liabilities, non-current	Other liabilities, non-current	27,230		27,343		Other liabilities, non-current	27,230		30,271
Total liabilities	Total liabilities	2,069,434		1,982,465		Total liabilities	2,069,434		2,086,240
Commitments and contingencies (Note 7)	Commitments and contingencies (Note 7)	0		0		Commitments and contingencies (Note 7)	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, par value of $0.0001 per share— 20,000 shares authorized; 0 shares issued and outstanding		0		0
Class A and Class B common stock, par value of $0.0001 per share— 2,250,000 (Class A 2,000,000, Class B 250,000) shares authorized; 278,363 and 283,352 Class A shares issued and outstanding		28		28
Preferred stock, par value of $0.0001 per share— 20,000 shares authorized; no shares issued and outstanding						Preferred stock, par value of $0.0001 per share— 20,000 shares authorized; no shares issued and outstanding	—		—
Class A and Class B common stock, par value of $0.0001 per share— 2,250,000 (Class A 2,000,000, Class B 250,000) shares authorized; 278,363 and 284,734 Class A shares issued and outstanding						Class A and Class B common stock, par value of $0.0001 per share— 2,250,000 (Class A 2,000,000, Class B 250,000) shares authorized; 278,363 and 284,734 Class A shares issued and outstanding	28		28
Additional paid-in capital	Additional paid-in capital	2,307,580		2,359,895		Additional paid-in capital	2,307,580		2,388,418
Accumulated other comprehensive income	Accumulated other comprehensive income	7,410		4,768		Accumulated other comprehensive income	7,410		3,481
Accumulated deficit	Accumulated deficit	(1,565,012)		(1,649,218)		Accumulated deficit	(1,565,012)		(1,694,483)
Total stockholders’ equity	Total stockholders’ equity	750,006		715,473		Total stockholders’ equity	750,006		697,444
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,819,440	$	2,697,938	Total liabilities and stockholders’ equity	$	2,819,440	$	2,783,684


		First Quarter of Fiscal				Second Quarter of Fiscal				First Two Quarters of Fiscal
		2021		2022				2021		2022		2021		2022

Revenue:	Revenue:						Revenue:
Product	Product	$	246,939	$	249,888		Product	$	272,309	$	324,935	$	519,248	$	574,823
Subscription services	Subscription services	120,180		162,819			Subscription services	131,414		171,896		251,594		334,715
Total revenue	Total revenue	367,119		412,707			Total revenue	403,723		496,831		770,842		909,538
Cost of revenue:	Cost of revenue:						Cost of revenue:
Product	Product	69,285		79,064			Product	84,731		101,150		154,016		180,214
Subscription services	Subscription services	41,009		51,777			Subscription services	44,266		55,654		85,275		107,431
Total cost of revenue	Total cost of revenue	110,294		130,841			Total cost of revenue	128,997		156,804		239,291		287,645
Gross profit	Gross profit	256,825		281,866			Gross profit	274,726		340,027		531,551		621,893
Operating expenses:	Operating expenses:						Operating expenses:
Research and development	Research and development	112,446		131,381			Research and development	114,652		140,107		227,098		271,488
Sales and marketing	Sales and marketing	173,433		183,496			Sales and marketing	171,434		190,386		344,867		373,882
General and administrative	General and administrative	41,125		43,146			General and administrative	44,471		43,464		85,596		86,610
Restructuring and other	Restructuring and other	14,702		0			Restructuring and other	8,288		—		22,990		—
Total operating expenses	Total operating expenses	341,706		358,023			Total operating expenses	338,845		373,957		680,551		731,980
Loss from operations	Loss from operations	(84,881)		(76,157)			Loss from operations	(64,119)		(33,930)		(149,000)		(110,087)
Other income (expense), net	Other income (expense), net	(3,416)		(4,727)			Other income (expense), net	1,603		(7,410)		(1,813)		(12,137)
Loss before provision for income taxes	Loss before provision for income taxes	(88,297)		(80,884)			Loss before provision for income taxes	(62,516)		(41,340)		(150,813)		(122,224)
Provision for income taxes	Provision for income taxes	2,297		3,322			Provision for income taxes	2,451		3,925		4,748		7,247
Net loss	Net loss	$	(90,594)	$	(84,206)		Net loss	$	(64,967)	$	(45,265)	$	(155,561)	$	(129,471)
Net loss per share attributable to common stockholders, basic and diluted	Net loss per share attributable to common stockholders, basic and diluted	$	(0.34)	$	(0.30)		Net loss per share attributable to common stockholders, basic and diluted	$	(0.25)	$	(0.16)	$	(0.59)	$	(0.46)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	262,935		280,331			Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	264,799		283,931		263,867		282,147


		First Quarter of Fiscal				Second Quarter of Fiscal				First Two Quarters of Fiscal
		2021		2022				2021		2022		2021		2022

Net loss	Net loss	$	(90,594)	$	(84,206)		Net loss	$	(64,967)	$	(45,265)	$	(155,561)	$	(129,471)
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Unrealized net gains (losses) on available-for-sale securities	Unrealized net gains (losses) on available-for-sale securities	4,890		(2,219)			Unrealized net gains (losses) on available-for-sale securities	2,715		(1,192)		7,605		(3,411)
Less: reclassification adjustment for net gains on available-for-sale securities included in net loss	Less: reclassification adjustment for net gains on available-for-sale securities included in net loss	(166)		(423)			Less: reclassification adjustment for net gains on available-for-sale securities included in net loss	(703)		(95)		(869)		(518)
Change in unrealized net gains (losses) on available-for-sale securities	Change in unrealized net gains (losses) on available-for-sale securities	4,724		(2,642)			Change in unrealized net gains (losses) on available-for-sale securities	2,012		(1,287)		6,736		(3,929)
Comprehensive loss	Comprehensive loss	$	(85,870)	$	(86,848)		Comprehensive loss	$	(62,955)	$	(46,552)	$	(148,825)	$	(133,400)


Pure Storage, Inc.
(Exact Name of Registrant as Specified in its Charter)


		First Quarter of Fiscal 2021																		Second Quarter of Fiscal 2021
		Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income			Accumulated Deficit				Total Stockholders' Equity				Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total Stockholders' Equity
		Shares	Amount								Shares								Amount
Balance at the end of fiscal 2020		264,008	$	26			$	2,107,579						$	5,449			$	(1,282,936)		$	830,118
Balance at the end of the first quarter of fiscal 2021																			Balance at the end of the first quarter of fiscal 2021	263,970			$	26		$	2,120,189		$	10,173		$	(1,373,530)		$	756,858
Issuance of common stock upon exercise of stock options	Issuance of common stock upon exercise of stock options	2,175	0		9,388				—			—				9,388			Issuance of common stock upon exercise of stock options	2,138			1		12,237			—			—			12,238
Stock-based compensation expense	Stock-based compensation expense	—	—		58,694				—			—				58,694			Stock-based compensation expense	—			—		61,456			—			—			61,456
Vesting of restricted stock units	Vesting of restricted stock units	2,525	0		—				—			—				—			Vesting of restricted stock units	2,930			1		(1)			—			—			—
Cancellation of restricted stock		(230)	—		—				—			—				—

Tax withholding on vesting of restricted stock	Tax withholding on vesting of restricted stock	(134)	—		(1,374)				—			—				(1,374)			Tax withholding on vesting of restricted stock	(85)			—		(1,467)			—			—			(1,467)
Common stock issued under employee stock purchase plan		1,585	—		16,021				—			—				16,021

Repurchases of common stock	Repurchases of common stock	(5,959)	0		(70,119)				—			—				(70,119)			Repurchases of common stock	(1,177)			(1)		(20,023)			—			—			(20,024)
Other comprehensive income	Other comprehensive income	—	—		—				4,724			—				4,724			Other comprehensive income	—			—		—			2,012			—			2,012
Net loss	Net loss	—	—		—				—			(90,594)				(90,594)			Net loss	—			—		—			—			(64,967)			(64,967)
Balance at the end of the first quarter of fiscal 2021		263,970	$	26	$	2,120,189			$	10,173		$	(1,373,530)			$	756,858
Balance at the end of the second quarter of fiscal 2021																			Balance at the end of the second quarter of fiscal 2021	267,776			$	27	$	2,172,391		$	12,185		$	(1,438,497)		$	746,106


	First Two Quarters of Fiscal 2021
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at the end of fiscal 2020	264,008	$	26	$	2,107,579	$	5,449	$	(1,282,936)	$	830,118
Issuance of common stock upon exercise of stock options	4,313	1		21,625		—		—		21,626
Stock-based compensation expense	—	—		120,150		—		—		120,150
Vesting of restricted stock units	5,455	1		(1)		—		—		—
Cancellation of restricted stock	(230)	—		—		—		—		—
Tax withholding on vesting of restricted stock	(219)	—		(2,841)		—		—		(2,841)
Common stock issued under employee stock purchase plan	1,585	—		16,021		—		—		16,021
Repurchases of common stock	(7,136)	(1)		(90,142)		—		—		(90,143)
Other comprehensive income	—	—		—		6,736		—		6,736
Net loss	—	—		—		—		(155,561)		(155,561)
Balance at the end of the second quarter of fiscal 2021	267,776	$	27	$	2,172,391	$	12,185	$	(1,438,497)	$	746,106


	First Two Quarters of Fiscal 2022
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at the end of fiscal 2021	278,363	$	28	$	2,307,580	$	7,410	$	(1,565,012)	$	750,006
Issuance of common stock upon exercise of stock options	1,897	—		11,284		—		—		11,284
Stock-based compensation expense	—	—		132,785		—		—		132,785
Vesting of restricted stock units	6,327	—		—		—		—		—
Tax withholding on vesting of equity awards	(305)	—		(6,564)		—		—		(6,564)
Forfeiture of restricted stock	(37)	—		—		—		—		—
Common stock issued under employee stock purchase plan	2,185	—		17,726		—		—		17,726
Repurchases of common stock	(3,696)	—		(74,393)		—		—		(74,393)

Other comprehensive loss	—	—		—		(3,929)		—		(3,929)
Net loss	—	—		—		—		(129,471)		(129,471)
Balance at the end of the second quarter of fiscal 2022	284,734	$	28	$	2,388,418	$	3,481	$	(1,694,483)	$	697,444


		At the End of Fiscal 2021															At the End of Fiscal 2021
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1	Level 1															Level 1
Money market accounts	Money market accounts	$	—	$	—	$	—	$	49,984	$	39,440	$	0	$	10,544	Money market accounts	$	—	$	—	$	—	$	49,984	$	39,440	$	—	$	10,544
Level 2	Level 2															Level 2

U.S. government treasury notes	U.S. government treasury notes	339,253		3,241		(1)		342,493		15,340		327,153		0		U.S. government treasury notes	339,253		3,241		(1)		342,493		15,340		327,153		—
U.S. government agencies	U.S. government agencies	56,729		516		0		57,245		0		57,245		0		U.S. government agencies	56,729		516		—		57,245		—		57,245		—
Corporate debt securities	Corporate debt securities	425,115		4,176		(33)		429,258		0		429,258		0		Corporate debt securities	425,115		4,176		(33)		429,258		—		429,258		—
Foreign government bonds	Foreign government bonds	21,486		307		0		21,793		0		21,793		0		Foreign government bonds	21,486		307		—		21,793		—		21,793		—
Asset-backed securities	Asset-backed securities	79,924		1,015		0		80,939		0		80,939		0		Asset-backed securities	79,924		1,015		—		80,939		—		80,939		—
Total	Total	$	922,507	$	9,255	$	(34)	$	981,712	$	54,780	$	916,388	$	10,544	Total	$	922,507	$	9,255	$	(34)	$	981,712	$	54,780	$	916,388	$	10,544


		At the End of the First Quarter of Fiscal 2022															At the End of the Second Quarter of Fiscal 2022
		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Marketable Securities		Restricted Cash
Level 1	Level 1															Level 1
Money market accounts	Money market accounts	$	—	$	—	$	—	$	49,323	$	38,779	$	0	$	10,544	Money market accounts	$	—	$	—	$	—	$	29,449	$	18,905	$	—	$	10,544
Level 2	Level 2															Level 2
U.S. government treasury notes	U.S. government treasury notes	320,320		2,387		(14)		322,693		0		322,693		0		U.S. government treasury notes	341,033		1,842		(8)		342,867		10,000		332,867		—
U.S. government agencies	U.S. government agencies	54,735		395		0		55,130		0		55,130		0		U.S. government agencies	54,741		322		—		55,063		—		55,063		—
Corporate debt securities	Corporate debt securities	459,297		3,054		(164)		462,187		0		462,187		0		Corporate debt securities	465,168		2,535		(48)		467,655		—		467,655		—
Foreign government bonds	Foreign government bonds	19,502		230		(2)		19,730		0		19,730		0		Foreign government bonds	17,281		177		—		17,458		—		17,458		—
Asset-backed securities	Asset-backed securities	70,502		705		(3)		71,204		0		71,204		0		Asset-backed securities	68,331		477		(4)		68,804		—		68,804		—
Municipal bonds	Municipal bonds	2,440		0		(8)		2,432		0		2,432		0		Municipal bonds	2,440		—		(2)		2,438		—		2,438		—
Total	Total	$	926,796	$	6,771	$	(191)	$	982,699	$	38,779	$	933,376	$	10,544	Total	$	948,994	$	5,353	$	(62)	$	983,734	$	28,905	$	944,285	$	10,544


		At the End of the First Quarter of Fiscal 2022					At the End of the Second Quarter of Fiscal 2022
		Amortized Cost		Fair Value			Amortized Cost		Fair Value
Due within one year	Due within one year	$	360,362	$	362,340	Due within one year	$	355,927	$	358,013
Due in one to five years	Due in one to five years	566,434		571,036		Due in one to five years	579,137		582,333

Due in five to ten years						Due in five to ten years	3,930		3,939
Total	Total	$	926,796	$	933,376	Total	$	938,994	$	944,285


		At the End of Fiscal 2021													At the End of Fiscal 2021
		Less than 12 months				Greater than 12 months				Total					Less than 12 months				Greater than 12 months				Total
		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government treasury notes	U.S. government treasury notes	$	8,301	$	(1)	$	0	$	0	$	8,301	$	(1)	U.S. government treasury notes	$	8,301	$	(1)	$	—	$	—	$	8,301	$	(1)

Corporate debt securities	Corporate debt securities	32,996		(33)		0		0		32,996		(33)		Corporate debt securities	32,996		(33)		—		—		32,996		(33)

Total	Total	$	41,297	$	(34)	$	0	$	0	$	41,297	$	(34)	Total	$	41,297	$	(34)	$	—	$	—	$	41,297	$	(34)


Fiscal Years Ending	Fiscal Years Ending	Estimated Future Amortization Expense		Fiscal Years Ending	Estimated Future Amortization Expense
Remainder of 2022	Remainder of 2022	$	11,934	Remainder of 2022	$	7,862
2023	2023	15,685		2023	15,685
2024	2024	15,282		2024	15,282
2025	2025	14,477		2025	14,477
2026	2026	11,924		2026	11,924
Thereafter	Thereafter	3,049		Thereafter	3,049
Total	Total	$	72,351	Total	$	68,279


Fiscal Years Ending	Operating Leases
The remainder of 2022	$	31,804
2023	37,777
2024	32,170
2025	27,488
2026	19,322
Thereafter	24,371
Total future lease payments	172,932
Less: imputed interest	(24,742)
Present value of lease liabilities	$	148,190


FORM			10-Q


		At the End of													At the End of
		Fiscal 2021						First Quarter of Fiscal 2022							Fiscal 2021						Second Quarter of Fiscal 2022
		Gross Carrying Value		Accumulated Amortization		Net Carrying Amount		Gross Carrying Value		Accumulated Amortization		Net Carrying Amount			Gross Carrying Value		Accumulated Amortization		Net Carrying Amount		Gross Carrying Value		Accumulated Amortization		Net Carrying Amount
Technology patents	Technology patents	$	19,125	$	(11,722)	$	7,403	$	19,125	$	(12,420)	$	6,705	Technology patents	$	19,125	$	(11,722)	$	7,403	$	19,125	$	(12,891)	$	6,234
Developed technology	Developed technology	77,373		(17,499)		59,874		77,373		(20,567)		56,806		Developed technology	77,373		(17,499)		59,874		77,373		(23,635)		53,738
Customer relationships	Customer relationships	6,459		(308)		6,151		6,459		(538)		5,921		Customer relationships	6,459		(308)		6,151		6,459		(769)		5,690
Trade name	Trade name	3,623		(403)		3,220		3,623		(704)		2,919		Trade name	3,623		(403)		3,220		3,623		(1,006)		2,617
Intangible assets, net	Intangible assets, net	$	106,580	$	(29,932)	$	76,648	$	106,580	$	(34,229)	$	72,351	Intangible assets, net	$	106,580	$	(29,932)	$	76,648	$	106,580	$	(38,301)	$	68,279


		First Quarter of Fiscal				Second Quarter of Fiscal				First Two Quarters of Fiscal
		2021		2022				2021		2022		2021		2022
Beginning balance	Beginning balance	$	139,204	$	187,924		Beginning balance	$	142,363	$	185,875	$	139,204	$	187,924
Additions	Additions	29,762		29,189			Additions	30,534		42,791		60,296		71,980
Recognition of deferred commissions	Recognition of deferred commissions	(26,603)		(31,238)			Recognition of deferred commissions	(28,210)		(32,701)		(54,813)		(63,939)
Ending balance	Ending balance	$	142,363	$	185,875		Ending balance	$	144,687	$	195,965	$	144,687	$	195,965


		First Quarter of Fiscal				Second Quarter of Fiscal				First Two Quarters of Fiscal
		2021		2022				2021		2022		2021		2022
Beginning balance	Beginning balance	$	697,288	$	843,697		Beginning balance	$	706,060	$	866,160	$	697,288	$	843,697
Additions	Additions	131,734		186,851			Additions	155,435		215,613		287,169		402,464
Recognition of deferred revenue	Recognition of deferred revenue	(122,962)		(164,388)			Recognition of deferred revenue	(136,744)		(171,959)		(259,706)		(336,347)
Ending balance	Ending balance	$	706,060	$	866,160		Ending balance	$	724,751	$	909,814	$	724,751	$	909,814


		Options Outstanding							Options Outstanding
		Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (In Years)	Aggregate Intrinsic Value (in thousands)			Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (In Years)	Aggregate Intrinsic Value (in thousands)
Balance at the end of fiscal 2021	Balance at the end of fiscal 2021	18,558,974	$	9.60	4.3	$	251,503	Balance at the end of fiscal 2021	18,558,974	$	9.60	4.3	$	251,503

Options exercised	Options exercised	(1,330,998)	5.91					Options exercised	(1,897,316)	5.94
Options forfeited	Options forfeited	(42,310)	11.49					Options forfeited	(206,000)	12.13
Balance at the end of the first quarter of fiscal 2022		17,185,666	$	9.88	4.1	$	178,086
Vested and exercisable at the end of the first quarter of fiscal 2022		15,177,675	$	10.30	3.7	$	150,613
Balance at the end of the second quarter of fiscal 2022								Balance at the end of the second quarter of fiscal 2022	16,455,658	$	9.99	3.8	$	157,211
Vested and exercisable at the end of the second quarter of fiscal 2022								Vested and exercisable at the end of the second quarter of fiscal 2022	15,048,622	$	10.41	3.5	$	137,085


		Number of RSUs Outstanding	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)			Number of RSUs Outstanding	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Unvested balance at the end of fiscal 2021	Unvested balance at the end of fiscal 2021	30,830,082	$	15.77	$	712,657	Unvested balance at the end of fiscal 2021	30,830,082	$	15.77	$	712,657
Granted	Granted	9,393,611	22.36				Granted	12,888,506	21.54

Vested	Vested	(3,082,031)	15.61				Vested	(6,327,142)	16.58
Forfeited	Forfeited	(1,829,331)	15.65				Forfeited	(2,957,268)	15.83

Unvested balance at the end of the first quarter of fiscal 2022		35,312,331	$	17.53	$	714,015
Unvested balance at the end of the second quarter of fiscal 2022							Unvested balance at the end of the second quarter of fiscal 2022	34,434,178	$	17.74	$	672,155


		Number of Restricted Stock Outstanding	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)			Number of Restricted Stock Outstanding	Weighted- Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Unvested balance at the end of fiscal 2021	Unvested balance at the end of fiscal 2021	557,836	$	19.06	$	12,903	Unvested balance at the end of fiscal 2021	557,836	$	19.06	$	12,903

Vested	Vested	(180,337)	19.33				Vested	(289,234)	18.88
Forfeited							Forfeited	(37,262)	20.92

Unvested balance at the end of the first quarter of fiscal 2022		377,499	$	18.94	$	7,633
Unvested balance at the end of the second quarter of fiscal 2022							Unvested balance at the end of the second quarter of fiscal 2022	231,340	$	19.00	$	4,516


		First Quarter of Fiscal				Change				Second Quarter of Fiscal		Change				First Two Quarters of Fiscal				Change
		2021		2022		$		%				2021		2022		$		%		2021		2022		$		%
(dollars in thousands, unaudited)	(dollars in thousands, unaudited)										(dollars in thousands, unaudited)
Product revenue	Product revenue	$	246,939	$	249,888	$	2,949	1	%		Product revenue	$	272,309	$	324,935	$	52,626	19	%	$	519,248	$	574,823	$	55,575	11	%
Subscription services revenue	Subscription services revenue	120,180		162,819		42,639		35	%		Subscription services revenue	131,414		171,896		40,482		31	%	251,594		334,715		83,121		33	%
Total revenue	Total revenue	$	367,119	$	412,707	$	45,588	12	%		Total revenue	$	403,723	$	496,831	$	93,108	23	%	$	770,842	$	909,538	$	138,696	18	%