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PSTG Pure Storage

Participants
Charlie Giancarlo Chief Executive Officer
Kevan Krysler Chief Financial Officer
Matt Kixmoeller Vice President, Strategy
Pinjalim Bora JPMorgan
George Iwanyc Oppenheimer
Wamsi Mohan Bank of America
Simon Leopold Raymond James
Katy Huberty Morgan Stanley
Jason Ader William Blair
Tim Long Barclays
Karl Ackerman Cowen
Alex Kurtz KeyBanc Capital Markets
Raghunathan Kamesh Goldman Sachs
Michael Fisher Evercore
Mehdi Hosseini SIG
Erik Suppiger JMP Securities
Nehal Chokshi Northland Capital
Aaron Rakers Wells Fargo
Call transcript
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Operator

Ladies and gentlemen thank you for standing by and welcome to the Pure Storage Q1 Fiscal 2021 Earnings Call. [Operator Instructions] I would now like to hand the conference over to your speaker today [indiscernible], Investor Relations for Pure Storage. Thank you. Please go ahead.

Unidentified Company Speaker

Thank you and good afternoon. Storage fiscal Pure earnings the to first XXXX quarter call. Welcome at is [indiscernible] name Puree Investor My Relations Storage.

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

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

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

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

Charlie Giancarlo

all I us and you on healthy and Thank hope staying are colleagues for call. everyone. afternoon your well. family, Good friends you earnings today's joining

a our Matt joy have his undiagnosed non-COVID at with Investor unexpectedly lives last us beginning passing vital no spend Danziger, disease. and with. healthy, Head time us. from a work with to As Matt always the and month of genetic died attack, and cardiovascular an due touched he this was has saddened Matt of to you will everyone all. longer met and the intelligent of He related is heart call, noted Relations

Our family hearts go out moment friends. world. to current a crisis thoughts also that to share take around has on everyone and I'd my affected his health like to the the

on that personal Some lives are changes The a in may this And impact. expectations that truly hope livelihoods experience and be uneasy of I its Pure is has And with Every in crisis and day about mixture forever new an you report of or and people's being provided appreciation fortune great contracted extraordinary. able deep know to me COVID-XX the had mid-March. for has will of The of changed. work virtually. normal team virus the what the our each anxiety, future. is brings global uncertainty

basic our world's the meeting all So inspired essential have of have we provided appreciative thank and by We workers. that has to customers our critical others to crisis our tending every Pure, of courage and and with this well-being company. responsibility, mission help in group handled needs been the first those services are the Within their time. responders and who steadfast during to and this

this Pure enables current are and It simple, is that research reliable hospitals, first banks, potent especially to on continue we were that institutions quarter on in communication schools, combination to labs, teams front responders. deliver solve and and critical new proud the This be immediate and customers. needs class products systems, trusted. relied the to infrastructure services including to past and demonstrate and that best We critical products our of to has lines, and governments, Pure our services

and our major to able hours install; footprint, major deliver of installed providing scale their and with load products A customers into network our enabled rather call. when government customers protection ransomware load Pure a of with home our call. in collaboration Pure new infrastructure. as-a-Service, to and and deliver their state against network solutions to products customers due enabling suddenly In install manage did COVID-XX. to the work and from consumption A our all Pure on full new attacks. needed solutions a first legacy Pure two an experienced within was highly few the true the to install partners cases systems, systems. customers increased and was future huge unable contract. We've Pure able previously their customer remote to of production production the made employees rapidly A first from be solutions capabilities they in failures in this solution able a after sooner were XX each than vendors increasing deliver and case, smooth hour those transition and and in Pure ransomware from XX high robust rapidly attack days. to Our our expeditiously, to or was chose of customer early days to product within the their crisis. hit retail hours based in was within remotely The multi-cloud pure automated from obtain demand under increase traffic their because base the some

of tracing or cure virus the Our the technology those structure of spread a enabling scourge, in and the behavior disease. for the of analyzing search the or in is also

fully not proteins shipping this through crowd us performance business of to now and our tested with prepared for on are and when against support focused the but We the new resiliency, expectations FlashBlades maintained needs. have organization service global customers dynamics donated of customers proud simulating high and above therapeutic solutions is support chain our chain those to to computing. supply which I strategy at of crisis. customer and products folding in fight Pure find COVID-XX to level our am plan continuity including companies supply serve demand, involved the an home, critical only well COVID-XX

performance of another data very and past million. all validation to storage strategy, business flexible. I revenues to their this operations fast aspects with was to very our lead quarter be XX% experience modern our was transform and We with unique the reliable, $XXX performance year-over-year simple, this helping our of as pleased customers quarter across innovation for past financial continue grew

the changed may long-term move legacy multimillion it storage these a storage has continuing the years, their cash and large the also lead rewarded modern unstructured be way $X to data we customers in by sales million than innovation option based of recovery we for Pure to These and Evergreen footprint flexibility was quarter. long-term, of FlashBlade management, FlashBlade made portfolio the and expand the both more and models. grow new to customer contract have In Pure and well performance examples offering month, customer array list which COVID has to of latest consolidate of services or and flexible an with strength had of as-a-Service together FlashBlades customers I well performance age. across are and for as program our and it, including speed Customers Pure's to and change now Subscription with of use and XXX is for release, through represent and demand competitors performing Our flexibility Pure leveraging capabilities services, innovation particularly In leapfrogged our with where as-as-Service object to to a for to-date to dollar the logo our far both interest Cloud our risk Pure's analytics, a FlashBlade in their for portfolio their customers what automation, on for services pay and support. is a revenue reducing commitment This free grow rather work obsolescence. short quarter. Pure our in where year-over-year and flexibility commitments include for shared economics nearly catch organizations increased and total Customer data. FlashBlade, modern There seven specifically have subscription any dramatically. environment, reduces right they and Evergreen in in the we've non-disruptive uncertain Kerberos Pure's any broad an grew this their off of place difficult also release environments. Evergreen a multi-cloud where the alone. Store net object the sales. efficient period the model. features consolidation the greater and transform playing services, services. Pure only again, non-disruptive flash in time. hybrid permanent predict Earlier to at and has leadership on-premise risk solution the upgrades, X.X needs technology data as pundits customers significant Purity capital determine ransomware. their multi-cloud as-a-Service U.S. never cloud our including including in to Pure's use and National of continued the Customers than Pure in up of and they Block own Pure hands outstanding the for has beyond approximately ensuring have X.X products place for yet rapid as vendors But to cases in increased continuous as they economics offering XX% our as-a-Service and of our Pure systems as pandemic added Bank file QX, the for their great likely providing each when platform. storage After FlashBlade a restore contract most flexibility demand solutions requirements. still subscription all predictions growing and entire broad new increased simple new as-a-Service a multi-cloud use, storage and the and regardless old. file and existing subscription as Sales in high NFS disruptive consumption subscribe features a refreshed adds this to they this They as-a-Service offering, announced range disaster spending their applications. world's the to freedom a existing to replication that

out It their are as IT environments. their in and Moving is challenging the reevaluating own market QX. push focus navigate spending there initiatives. economy and are on urgent areas all Customers reassess customers uncertainties in on right to important as state IT global now in the to they nearly unpredictability ongoing the the that

uncertainties dynamics QX have and account We these into expectations. our measured taken with

managing while am the that priorities can quarter, We market. committed expenses confident our I the we prudently. our of beyond to navigate Looking waters choppy remain long-term

market and will take technology, customer We culture. the and we recession. will And first the exiting I services differentiated our continue that to superior share market lead confident with am

shelter place people will As do to Pure community we this forward around protect the against guard world, orders and are its lifted go virus. our of continue part spread in to and

daily response planning manage to our meets dedicated Our team global pandemic. the crisis to

We from home for carefully plans for employees have the phase planning local based to a conditions large some while time. reintegrate to working on workplace, fraction regional into continue

what's do each customers, right teams and around our will employee. the for every and We our world Pure,

teams crisis. our Lastly, focus our ever. this enthusiasm as one team like partners, their global new to If more executing enjoyed and have moment anything, thank customers, to I'd their tenacity, to our Kevan. customers of forward through I at help you for and teammates of Personally, employees our events take all communities with our virtual connected with our Partner June a and than genuine routine X Accelerate local throughout are to and connecting and Pure partners hands with the look our I and that, over turn Pure to it company broader community, XX. all And weekly the interacting I'll Digital on entire Digital broadcasts. virtual

Kevan Krysler

services the a includes $XXX year-over-year, Charlie. disruption Financial despite performance which difficult $XXX subscription revenue XX% million Pure growing was and X% you, international was Total our was year-over-year. Block during Cloud in subscriptions, in at QX million growing revenue revenues Evergreen million million product and Revenue constantly X% economic QX year-over-year, States XX% XX% from Thank was revenue $XXX represented United QX year-over-year was QX. environment. approximately XX% growing growing $XXX as-a-Service and year-over-year of significant was $XXX revenue Store. revenue solid, growing Subscription during services during during and million changing total QX total revenue during Total

and Given are to QX overall I were additional and we commercial quarter. across is saw growing, the weakness QX will enterprise verticals the customers. and some provide sales performance bookings our during in broadly diversified in current or States XX% around year-over-year navigating, industry color environment our that grew United and during business. Sales while our sales we government during Total the customers solid

continued partners of We and total a channel are from source and represent our to channel momentum pleased our continues with our partnership worldwide. meaningful sales sales. growing Global percentage

compared New the of customers XXX approximately acquired to year. prior during approximately XXX customers during QX QX were customers

of Our the shortages chain without QX demand unprecedented tailwind, IT these opportunities offsetting from mission the to continue significant Non-GAAP Partially result QX solid to was X.X we to margins needs delays market. Total this in close pipeline on based and points product in were that during differentiation gross response increase non-GAAP benefited and are the the fulfill of in global arising expected gross not an resilience XX.X% and and efforts our quarter orders in business did year-over-year. increasing for increased operations. our our a product in in supply saw services during pandemic. We remarkable close. subscription solution the be supply but of and manufacturing margin critical quarter

of gross non-GAAP non-GAAP of contributed net operating than compared loss marketing loss $X.XX. loss $XX in loss in margin services QX losses. QX the $XX Reduced per net was million calculation in share $X.XX. year. Non-GAAP average XX.X% approximately shares was was QX per and year-over-year. in million QX prior was flow share XXX was for million million $X for cash XXX and QX non-GAAP the QX prior flows was of expenses year. million of the shares and Weighted was was million Operating the year. shares loss non-GAAP non-GAAP cash used non-GAAP our billion QX million in points non-GAAP in year-over-year flow margin X.X the during travel, and operating loss in prior benefited fiscal year million Total Operating investments was collections loss of $XX QX well depreciation operating cash for increasing lower to receivables. a during planned and share during Now increasing Free at the $XX end million billion at part QX points per net was net as approximately non-GAAP prior of negative and in $XX prior was subscription Total of XXXX. the and as $X strong QX QX slower and million end $X.XX from of hiring X.X XX.X% $X to during a compared QX year. was Non-GAAP cash the $X.X to was net product QX

strong to balance $XXX and compared We that $XXX end provides of year. was QX the very million at scenarios. million with the to wide $XXX have of us Total deferred prior end QX revenue for a of a sheet handle at flexibility of million, XXXX fiscal the range

are continued We service the our in subscription pleased see to multiple growth offerings.

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

core Now annual moving our strong. guidance, to remains of fundamentals business the

economic However, of we withdrawing global the our uncertainty given year for the annual COVID-XX. to demand are by due caused guidance remainder contraction the around significant

to continue see strength we and As subscription to we adoption expect the through year, sales of our progress services. in

business Block unified cloud continue momentum, model. to Cloud Store a consumed, our increasing flexibility and customers and as-a-Service with offering Pure gain providing is Our technology offerings also how subscription like

when grow, second how Our current is to half it and given the but will environment. the year opportunities these the economic convert unclear pipeline of generation for continues

be focused and disciplined continue to oversight. are we on tight capital levels initiatives expense investments, our operating spending on savings to spend and Moving

monitoring Our investments plan will innovation in in continue our areas carrying a of and ongoing prudent capacity quota with and business manner conditions. of

let's the quarter. to Now second move

for reasons similar guidance, annual QX. For we were we providing while guidance not also pulling are our

solutions digital our critical needs tailwind. to will continue expect infrastructure for We IT purchasing a their customers provide mission transformation and

infrastructure this who to However, pause customers be decide projects. IT during than offset benefit to by we more expect QX

and derived our mitigation. recurring growing provide base a customer of diverse Our services subscription revenue level our from will

of However, and distributed. outcomes potential are the many widely range

call as long-term To current priorities growth in solid objectives and business for should navigating we've very while near now and we that near changed delivered challenging our that, have flat viewed environment. not view be will the not open operating Our be sales of which our as financial guidance summarize, be results profit a will outcomes, year-over-year QX With will is breakeven. questions.

Operator

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

is open. Your line

Pinjalim Bora

least had computing tracking Is The that? Can annual and you're booking tailwind pretty driving the and rest you part goal cases your secondly, last of above historical. at off VDI about seems add, primarily next that deferred of low like do I you maybe of quarter. and the good versus mix for feel of related end you how your revenue talk the into seems sequential falls kind number VDI user us when year? sequential the seems use pretty given DR that look that add of And the

see So going -- we the RPO? where you. be can that that is Thank we Where in mainly can see bookings these have overall? number to this

Charlie Giancarlo

commerce greater many, service to Internet infrastructure not of, customers, for there mention again, sorts just home, and But levels to VDI et out balanced use needs, that audience, very took for a Pinjalim I cetera. well. but major crisis. Pinjalim from provider work of the the because during I not want were saw We I one for buying Certainly, faring everybody for many well all question. say positive all thank a for the of We saw there. just cases higher was you well, in of the many hope place others wish of demand that really this And needs as you're product. you

So, overall, you, balanced a products well. I'll tell very all it very quarter was doing

see in our for it to in see good which weakness U.S. the mentioned did I don't I strong enterprise, we call. the I'll we strength in think anybody Kevan. over As a second And we should on surprise did think commercial pass the comments, whereas, segment, question,

Kevan Krysler

deferred both In and with deferred we're our growth. pleased Yes. sequential Charlie. revenue really specific Thanks, to year-over-year revenue,

coming quarter, a As highest sequentially, the reminder, seasonally QX. off which be would we're

as some sheet sequentially. going impact that's are correct, looking included that's there's to that in that's well an growing balance revenue offerings, we're But off RPO. have to So growing, an when at component. It's also as have you going our impact you're subscription And as well. deferred

Operator

comes George Iwanyc Your next question Oppenheimer. from from

George Iwanyc

can give proceeded us you April the Charlie, of a have monthly from sense how May? into trends

Charlie Giancarlo

very project as be is have in know, so along still we very from relatively for We the and we early it's we did quarter, month what quarters and on it's quarter along I predict us on like early far we say And QX. did the comment in May do as able would don't QX in May, overall May have month this, to very Well, see Yes. we to again, say generally good so, see by build as we what hard you themselves will looks go hard, linearity alone. go I to but May. it's

George Iwanyc

how sales through give that just you motion us following can work is able up transition? All home, from pretty been right. to smooth and have And you keep to the the moving that, disruption your sense going from a on of

Charlie Giancarlo

the higher you with sales that in that we've customer to take themselves seen meetings much two from worker I in probably -- George now probably tell it's meeting are with that in an communicating I to levels access thirds you that been we're probably have then and mentioned, same about very I'm time. true have higher question. a executives base. to get meetings And great I been base. done a to it easier hitting see meetings twice the convey, seeing sales a the get of If potent to doesn't number sales everything is up, productivity home that team. And from meetings. anything, to the customer say environment. set take people convey of or person home hard the to are efficient, our up. the very I'm to than takes That working available, as pretty It our would appointment, in set to And themselves across much and week get month less is two take have and are the in and the want to time -- hours these is very actually

that BXB expect in sales a So to take of them. virtual permanently technique if environment, I more digital we're on to see anything, going a

Operator

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

Wamsi Mohan

But on guidance assumptions would the that Charlie, and performance year-over-year. his the hear sort puts not with COVID-XX that of it's mean, but any color recovery you give more follow happy We family. sort I'll of about thoughts to get expectation I of you backing all What as are there know we we're there, miss some guidance. I color flattish expectation, holding what us that from up. that. be are Matt not your will Can comment your helpful? well, understand explicit your takes around And and

Charlie Giancarlo

that of that is from puts home, the that positive QX. and traffic the takes positive forth. do work in still transactions in pull customers and urgent so COVID have The expect on continued took home, amount some web and finishing issues from the some and higher school place of that for That we side, either influence Sure. are

half So things. two expecting to full of quarter And to the global some on not the we projecting takes normal we're well. impact QX, in start as that. economy those about in kick we're And the which balance it's a going had is difficulty the have between increase of in in then forget, lower a expecting pre-COVID, let's we we're, not a But are here.

to QX. staying commercial factors the the the opportunities when heavily for us. tailwind thinking their and headwind really, was around on the inputs really about pretty And we're is mark that were obviously, And question middle weighted that how thinking be headwinds we're there we You the in we space conversions a convert us. points field in really the timing the QX, increased headwind, the of total we're time looking will for always other also the expect the couple do. risk of we as for increased be at as us, mitigating recurring that of had are that, QX looking factor we will big to And about for And those would obviously, close really it's as side. those for But larger then revenue at really, to softness a on we over expect a well. on revenue, which continued our market, some there about portion a be were us think

Operator

Your Raymond Leopold from James. Simon comes next from question

Simon Leopold

condolences feeling glad extend Also well. my Charlie and Matt as on better you're

certainly crazy sure. environment So for

XX% of understand could you around talked between is would and think and XX% your the could typically sense split, imagine I I and your us we given to current it's customers If existing help that thoughts customers trending if what existing. the in things wanted that, to get revenue see I past, circumstances. the on land about you've new in new One of new are the a harder trend

Charlie Giancarlo

Yes. question somewhat for couple complex reasons. of a it's a great And It's a makeup. Simon

aversion two accompanying made we an year, let our you the same yes, risk as at lower new past given in saw it's the indeed, last in slowing One But new materials, of time, taking a orientation. COVID you enterprise up commercial started market this transitioning, place customer you is quarter, come the know, our saw the So slightly add things. down, customers by, may to given more market, again. that's towards harder little bit than

quality the number logo, that's on we just quite to been more -- teams net and of logos. so sales our And we've a of the bit. than And new kick the focusing of feel net more the rather quality new in starting

the lower things. mix of those two numbers a So

high take focus that the for It's they putting has comfortable the Thirdly, customers two there that with the can to be to slightly risk risk. that, the Once have time ability do term. testing. started fact new new to we'll going have market, the or say come a it's vendors urgency on really that's quarter general us back. they is new until to being settled and the there not aversion been longer I to I into again, customers something whether that would able features, think they've in time, what is feel new and a products, wanted the then once in so We urgency think they've convert out

Kevan Krysler

I to out new elsewhere, year-over-year the increase strength back really in customers we customers. positive, an the even just actually seeing as terms was or what significant have notes and front, of that customers we clearly will footprint we're from couple new going market, on mid a is which the to commercial interesting add Charlie sales, is of customer expanding enterprise, a seeing new in including the mentioned an we're existing if pull for

Simon Leopold

factory mentioned And anything getting constraints. reports earlier terms a had quarter. in just capacity? Did you the And from of you been recurring supply that think any confront don't theme issues about or chain I in components

Charlie Giancarlo

course, looked paddling supply I've of duck at team, like but smooth from their they a Well, you need my a From supply as zero customer the were as standpoint, of chain. interruption feet water, two as to absolutely on underneath it sides, there chain look crazy. told was surface,

or first we within was, of few in was mentioned a I and XX of it a my two. were were of day there if hours delay there product As instances and able to delay supply call, prepared very remarks,

was as subscription the and true supply chain no really, service interruptions that chain well. on So

So, supply little of But partially our also that it of on very reflects of -- reflected the as any wasn't way reflect distributed service, It assemblies. by concentration very, didn't and a our proud which sub have product the does design it just the It chain high supply pure nature global our very supply dumb operations and people. service in luck. had nature area. chain China, one dependence of just our

Operator

Your Huberty Stanley. comes Katy from next Morgan from question

Katy Huberty

couple the really execution he'd questions. of Had know the were of devastated operational but a proud I news of this Matt's We be passing by quarter.

whether just is percentage services First, for view is this Charlie, Store tell? or trough maintenance? too subscription of in a will be And what point to do you the versus at Kevan's, traditional demand, the as early follow today up Evergreen and a to Block as-a-Service Cloud it have July then Pure

Charlie Giancarlo

point. all Katy, Matt appreciate we if that is to predict predict pandemics or support the beyond late early past family, moving and/or July, as that come Matt's us come the really that or one COVID thank can to for this from they effects you've past do might But from very It's us as we've provided back, and summer. because they that. these much back anything you at very moving can one if July difficult feels of learned the

that true of would later I really some to see are the to there we're be we is And in we for. slowdown do the watermark. unknown, might of those think want will year. the don't we virus agree to sure there's make say of that But July one I that unknowns prepared that what don't a this So know if we COVID, can that, continue lot tend

Kevan Krysler

and and as-a-Service. or Cloud around color enterprise -- breaking and excited out whether really our us out quarter, customer choosing Cloud both And though, and such really commit they're around Store, second Pure subscription, and enabling. technology really aren't our interest Pure we're look, fact we're Block our that's happy results on Block a see. as-a-Service is how are environment especially little Store, as-a-Service Pure that momentum subscription which Very question we in a with on-prem, of specifically, a multi-cloud figure unified where the your on the is bit the to then of Katie, [indiscernible], around seeing, breaking the an deal had customer really that's consume we with But flexibility offerings providing which all customers eight this and whether priority to that to with the

pretty the and we're offerings, all of so excited including Store. about momentum Cloud Block And subscription PaaS a overall our

Operator

William Ader question next comes Blair. Your Jason from from

Jason Ader

headwinds Just more that to do near medium of the storage going you're create through question the is the think affects happening that from walk many maybe how about happened? part already believe thinking Obviously, on-prem term? people has of my to that's to acceleration COVID-XX. for on Charlie, business Does that the your How you shift your whole be that? here us or in potential business? the cloud

Charlie Giancarlo

Yes.

allows migrate on-prem. the same interface it's they say the to that to the on-prem wanted I a for in option and beef move five by And on-prem the Pure wanted Not as their currently cloud-based at solutions. going as-a-Service They saw of to on-prem the our yes, offering. place was designed cloud, to to able contract, only to what sense cloud. of think want being or easier. urgency and time. lines. is construction QX largely software to respects. they of that the Pure to is that migrate up they reasoning is was very it's to them the didn't even exact in the those behind in I it to our our much in as-a-Service their exactly along option, have data the But customers being view is unified several is mean want. the years up we that makes subscription ability single what summed any same application sign-on and environment, point in demand what is from had wherever do And increased their a and also that the and that single to economically, cloud that's was applications there But that to they that unified But anything more it's in in be there's What to

And the yes. very reps our unified our for unified which offering, not account subscription our to glad they have equal But way we're us. And plan account sell. them, it's that's is, but to think of what an to answer just so with subscription, I -- regardless equal

we so, think we're do optimistic timing the cloud We're which that, that And move hopeful that to have to fact, in And respect pass it they'll roughly by and line there. data the of our in with we in terms that. of offerings we services. with were out customers will more to

Jason Ader

for on And revenue you you, quantify in QX subscription terms one growth? Did quick the of Kevan. impact

Kevan Krysler

well total represents in laid what revenue, out subscription as as remarks Yes. increasing. terms the of in prepared it is We growth kind of which our

remarks. And the have that prepared so in we

Charlie Giancarlo

not an would a not sale. it just did we did have had to it we had to But been been perpetual, been what equipment be clear, convert it that capital

Jason Ader

or you been correct. that That's XX% would correct. But That's the growth, have revenue that in had that. see XX% you say XX%? Did I performance? didn't

Kevan Krysler

was… And that's not. Did Charlie what

Charlie Giancarlo

any a inaccurate. out, that We there's and not we it were of lot would didn't takes And conversion. be and puts make conversion turns --

decided do And so it. we've to not

Operator

Tim Barclays. Your from next from question Long comes

Tim Long

and Also, condolences first. better you're for Two to me family feeling Matt's questions Charlie. thankfully

an just that's how gross problem. for update the a to ask wanted us that doesn't us like sounds is seem pricing, And been maybe and well FlashArray of a performance strong has C it along second, been? FlashBlade competition really has that that moving but rollout give take then margin or and Just on kind let like know about

in that So maybe gross comments the kind we're and of on both you. overall? of any product strength sustainability seeing line Thank that margin

Charlie Giancarlo

Absolutely.

there introduced by And just since months roughly, had customers. there's we And product or we're As [color far base C, several to large C] [ph], deployments in good had see. with C. been with on continued been customer comes it. revenue it's and even new uptake the a We've had also out our even course, nine no very as pleased competitive We've that acceptance. its introduced very of that individually of close of performance

ago, portfolio a we much of can us And with been pretty were further to wide two So as of years further us needs gee, really us niche would seeing now. as and it's saying, customers a variety still now penetrated well, we're unique a go customers. even across use the our really allowing enterprise. but or into into and Pure we the an say, power great benefit because to that's open product. all storage now field are And great we've a product And for right offering as it's I

Kevan Krysler

on true. where how the and We're where every quarter really be product really, the and that our each continues with And while competitive the are margin, that's unchanged. our of remains is of but hit in driving terms results our of on seeing view performance the the of and on IP range And margin. And margin our gross you're view to the software margin, we head very the solutions, long-term the again, And and both head we're to is margin our then gross and value product of long of And differentiation value. the seeing value services I'll development. product is what pleased where is. we're customers design really subscription on That's really the particular, and gross say software changed. thinking competing gross it hasn't gross that's cost, about margin that on gross in gross margin

Operator

Cowen. question next Karl Your comes from Ackerman from

Karl Ackerman

Charlie may. I or questions, two if Kevin,

that some I but But you are extended that not component on a some you're do any one kind how the next in controllers costs first off follow actions, of shelf COGS, a up. of you rein expect subdued times. these your just works both be half? stack I reverse. SSPs, driver, peers, of your actually much guess largest And the room with in the Have in quick half few can understand demand component while if really the these First, risen flash second It enacting and tailwind to Where for a remained lead is restructuring kind also of have cost OpEx to just year. but quarters? the curious have like on software side,

Charlie Giancarlo

we're year. to we you make look that into performance be to Puritan Karl. not or to have Look, we drive case. of going kind we I we're we that, which at I up to do we every the it's said, to furloughs. we're that's Thank the both to make company you that customers. there more personal my quarter that's large more identifying the at have any believe really we've But, that that and the and activities that might undertake are busy perform in been the operate going to positive, And this lot furloughs We we as a company very events, case, is layoffs sure the our can that believe as to such and so And company also but that can dedicated the of saving the terrific. efficient. breakeven will that is already as we look year And very lots much, taking this -- mission to and not as of as personal the way more, productive, long support imagine, make it's market can my Yes, goal or able a pick so both course, sure those T&E year. we feel or the put in share but company forward, on going layoffs we near as and need

not need to it. actions will any We associated with have restructuring

to in thoughts any around inside question. deploy time them that as have restructuring to want like before people COVID that that's that people economic are company. over you year there even a and you other company the year what areas early any did displaced. last being go And the a do planned But We a productive. action I in forward, when Because a the follow resources more you but perhaps that a rebalancing to in of was as preempt consideration. went times was Now, was rebalancing. areas in year early in really up be was resulted through not we and small are really It number an that

Kevan Krysler

of And NAND on including during getting at. pricing, what really probably in then question pricing is QX. see particular -- your We did just you're on real stabilization quick

really pricing NAND saw modestly we QX. fact, in rising In

take expect, environment the we're half decline throughout compared year. in at pricing we at last us we're in second a normalized half the back, year when might to step year. saw are more we pricing that may one the data the is later across looking much board. second mixed when As the of for the indicators But looking what some There a

Karl Ackerman

Yes. Thanks for that.

trajectory eliminate influence that the growth know you. the I how visibility. I you your of support some view more of qualitatively demand Thank not outlook, network of added implementation? hardware to angrier a year and speak your makes professional asked, that the fabric peers, limited one NVMe given because see how you Just, which forward full reported, quantitative over But since hardware? just of you can that Rocky providing you're last array business? VMware flash on largest your does Doesn't all impediments Given you're of fabrics. trajectory than sense

Matt Kixmoeller

the point NVMe support from absolutely. fabric, VMware on around Just over

support see also over NVMe we're from part UCS excited for platform. So VMware the as to Cisco fabric of very from

obviously we broad see, embraced think some this very, we we wholeheartedly. seen of more usage. cloud to were that we've so out But the we opens enterprise it providers really to up largest already that And game. very sell in early And

on. So something quite we're bullish

Charlie Giancarlo

into play brings maintain it way to all into really to the consolidate their designed to to seen a just has of our device down and enthusiasm reminder, of single double a now because I'll on state. lot ability over that a lot a stateless Yes. over as our that. Yes, a cloud third especially customers to fabric rack their consolidate cloud improve we've sales, structure just state enthusiasm, customers been servers of for of but among a the are NVMe have and

actually of large and infrastructure. increases the and the reliability it the So increases density scale lowers cost

I use and believe cases it's the frankly, vendor us. that for over NVMe out we overall, So there support us. that I support that we there, first fabric support good being think see probably any more than almost is other more out still the the better it for

Operator

from question Kurtz next Your Markets. Capital comes KeyBanc from Alex

Alex Kurtz

get between revenue the Charlie, to of better, had being pricing kind guys disconnect we street the of And, of in taken in model more want of back around know, Kevan here stabilizes of kind to kind to in when CFO, we year your view teams? kind this of time last to pricing quarters Is and that. was a still about, and was how just had you been NAND up, feel a relayed goes market I Tim one models. and for of what have couple back that pricing you that's -- and forth that reset kind previous maybe what go the confident discussion actions all a and

Charlie Giancarlo

to was decline cetera, What et year go and for expects could not quarter-over-quarter beyond not last because accurate expect Alex. project Thanks, us side, three a that time. usually It X% was are to -- one to we not memory our it's up and NAND the as so disruptions how X% we predict off looking the get that to what I'm for commodity was precipitous what the market like steady, we're partially NAND a so, drops were year three was how One used to two partially demand times predict. which it'll Yes. over to an see. way I we so how normal sudden can in rate it that of that declined are so rapidly NAND, and any how, to some looking any falling didn't are of argue that which changes, much normally well and on supply really what course, down are one it in two demand much and prices NAND I'm ability because that But -- over quarter. that the drops one was And the to certainly, we -- two what three they pricing. on knocked dropped quarter something largely period, market, weekly is now to updates

it that, around. for out eyes next if we time our address keeping will it, will the we're earlier then flag we So

stayed dealing with way model now. had within had before because always that's it It normal the just range. we're been in not So it our the

Alex Kurtz

just Kevan, little the a bookings bit on call to for here. Okay. late a follow-up And

So miss make didn't remarks. revenue just delta I between But to what drove sure that? this the like I the bookings want just growth, in and prepared

Kevan Krysler

Alex. around really be going the It's driver that's really primary to. offerings be will coming down that's Well, to our what subscription really

we're have doing the Store. difference. of terms Cloud Evergreen what Those be drivers main either Pure In our on as-a-Service or that would Block or model

Operator

from Hall Rod from comes question next Goldman Sachs. Your

Raghunathan Kamesh

competitor have question. a you follow-up. as-a-Service as of Thanks Pure And taking condolences behalf contrast deepest offering Hi. I service and Rod. guys your offering? RK family. my for other This with nice on a on quarter is Congrats Could my to Matt's a

Charlie Giancarlo

Yes.

start Let that. me

first service is offering just as a are warmed a an because not a is just really lease. model, The offering service that as an not over economic we it's an

buy in -- it the procurement all, of First based buy our an way product, of model, you cloud-based a you as on it's a terms SLA.

So on gets the it's into that place. based put not hardware

works a cloud subscription it's managed the have that model operating We of it's it both that a regardless the on-premise true by and clouds. common environments system. where in whether the a operating you software or That place same of same in It's your you place platform, across is management equipment. data, cloud utility unified

we can applications placed based that to So cloud either charge the that your for with drip minimal the the customer basically, what or on be actually in be And on use. they on-prem done. easily refactoring

reserve, they So rather not they have but what to actually what use.

put So lease, to together components. contain any some -- economic doesn't an other those effectively try it of have our is competitors put model, of a which but

Operator

from comes question Amit next Your from Daryanani Evercore.

Michael Fisher

on This is Amit. for Michael Fisher

expectations for the quarter. July qualitative the appreciate So

in product single-digit Just could as year-over-year down we revenue be if low as touch you wondering maybe what's thinking on July? embedded expectations? far Should

Kevan Krysler

Yes.

again, specific revenue capital that. product is of out. So product giving And sales. we're derivation came saw But look, our portion a revenue product just guidance how the on you not of

our subscription in services. be our did on will solutions selling products we're anything offerings So include subscription

and be growth momentum overall, obviously, sales we flattish I the when services. in the And And in see QX, total see potentially this so to year-over-year. think subscription at point we about

a be that'll on headwind revenue. So product

Operator

Your Mehdi SIG. Hosseini next from question from comes

Mehdi Hosseini

of I Want or year-over-year, the through context prior would I million for and to mix couple if provide quarters I put have competitive ups. you XX but follow-up? we the think you providing how better some thank q-on-q flash it this compare for had a follow play, we a a in should could

Charlie Giancarlo

mark you, a XXX want you make we then. said we sales. September of for certainty FlashBlade Thank be color that the quarter-by-quarter the provide breakouts don't projections we of believe product but XX% those cumulative them. Well, is and as color a we by don't was you when on the want Mehdi. of end habit in do basis, know, we our year. to accelerate, that now sales And in we Yes. will would without And which it achieve to we providing we we be then, you believed -- usually million provided every I total passing this

just So as that Purity growth quarter-by-quarter. want but we also to opportunity FlashBlade the the so where waiting but the where can it. government, another in you new going they into that in existing you for to Appreciate example. habit open don't it accounts for desperately should of replication, see, give up get indication, significant with they've both need doing it's we're market and particular, for capability of Kerberos pleased product be X.X been But accounts new to in in

market open to going it's So opportunities. new up

and going product So we're very growth. about continued excited forward the expect

Operator

Your next Securities. question from Suppiger JMP comes from Erik

Erik Suppiger

C, Array can as as you Flash to growing And along question whether team Most fastest my pass product Pure's do comment well Matt's I that's to there. to asked my as still history? condolences were family on but the the in

Charlie Giancarlo

Quite yes. Yes. simply,

Operator

Your Chokshi from next Nehal comes Capital. from Northland question

Nehal Chokshi

power be condolences now that Can you that would when well. my you rates at family And store see great. Achilles to that's talk [indiscernible] maybe and about improved then and also potential Or -- a actually that see as affected heels as Matt's about all? talk what color did you out was

Charlie Giancarlo

you. Thank

simply really and them. opens is new there's to upgrade. But very part answer it is Let there's And vendors, out that a in it of second opens buzz upgrade, because loves so the very Obviously, disruptive new the me new see brand through basically this the disruptive four vendors, lot frankly, new God it store replace there. all opportunity products, so up and view first, opportunity product. far. of It's didn't it's X.X upgrade forth. which to brand to all disruptive going case, product. trouble. customer It's another a just much Power whenever Whenever a question a is very about a the is there's we our up go

non-disruptive non-disruptive XRX, and trying mature here product reliability. program And on with seventh upgrades. So and competitors very an which generation are years we we've catch up upgrade And our just still first this we our is Evergreen type very seven introduction that can with proven introduced over. do to a from over later of we've on are our high of

Pure else done now if economics risk So is, seven effectively about the the and it we're of migration on prem protecting years Evergreen risk out that And to lastly, a does they and Pure the that. what about terrible of they've to lowering actually come of storage, time a are I'll to as-a-Service product. our improving one and this -- adverse. the for was store program validated on ago economics as-a-Service, lowering Customers just the with no power and And X.X nothing cloud. there's which is say risk is new a

great really we us. So opportunity see a as for this

Operator

from And Aaron question Rakers your last from Fargo. Wells comes

Aaron Rakers

have to to was and systems bit. with answered, And family. integrator. He I with. of global questions also wanted and you guys a Matt's announced condolences kind channel the quarters to to been my back work go my of you but guess guys a engagement ago, great most partnership a Several little I asked

how of the Thank or motion Just curious seen GSI clear characterize channel Pure come not you to you. whether current kind of you've would additional opportunity? expansion. as And

Charlie Giancarlo

Yes.

been interesting integrators a frankly, as and but more. VARs in more both What's well accelerated, I have. to say would the Pure have global quarter the system year, last really last, last the national to this over over as nine embraced very degree months is and We which

in of the enterprise think, long terms a these And partner are require partner product in in truly aggressive opportunities us, the grow. this place activity. of us is collectively we Pure. to brought ability but frankly, may they help these storage more bringing still what than a cloud a but throw of we call which they both continue we're by address needs, to partner rather what sourced, has sourced we the programs convinced opportunities these were with not what that particular, them them. growth that lot integrators to of for really now the addresses seen in that scale, seeing we're that put to seeing us to expansion source I more that partner generally, really the We've wider our is but from their and much line the very increase product significant We're large to and line, and our in with in were pleased expect now fact part needs of partner enterprise growth Now in integrators, variety --with to partner close

Charlie Giancarlo

very closing, hour. think the you've and time I that I at all the attention we're Well, end of appreciate of much we're provided the really us.

the and our joining choice continue us information you please all the next safe providing. While virus. to quarter have have join are increase you for care. to differentiation Please things want to seeing us. forward Digital event of Shelter There's us And we look virtually of be going for that you stay easy going forward XX. serious really with lot there. say our Pure will I be Take our the is healthy we'll way, and to market future in that -- and speaking for June uncertain, I be information, we're to by our look X our then. it's on We We of Accelerate time -- make upcoming again our serious, a about for are combination to are opportunities oh, simplicity, new look you new And safe well. confident in projections and to we unmatched that a highly reliability, extraordinarily our share, thank actually the near and at customers. quarter-after-quarter the this ahead ability optimistic a to place

Operator

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

disconnect. now You may