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PSTG Pure Storage

Participants
Nicole Noutsios IR
Charlie Giancarlo CEO
Kevan Krysler CFO
Matt Kixmoeller VP, Strategy
Jason Ader William Blair
Alex Kurtz KeyBanc
Karl Ackerman Cowen
Rod Hall Goldman Sachs
Tim Long Barclays
Eric Suppiger JMP Securities
Pinjalim Bora JPMorgan
Simon Leopold Raymond James
Katie Huberty Morgan Stanley
Irvin Liu Evercore
Call transcript
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Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Pure Storage Fourth Quarter Fiscal Year 2021 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. introduce for to Ms. conference like would your today's host call, I Noutsios. Nicole Ms. Noutsios, please go ahead.

Nicole Noutsios

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

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

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

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

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

Charlie Giancarlo

fiscal your quarter for revenue for year. and Hello, ended full ones, and earnings on and loved with each sales fiscal joining and you, of call records great the today. and everyone. the healthy. growth, QX are Pure colleagues setting I XXXX safe strength hope that all Thank our for you us

offering, cloud FlashBlade, our accelerated and segments with Our verticals. never and in stronger, end major has of Portwox. portfolio sales it and been our suite FlashArray//C, in and Pure-as-a-service growth enterprise our in in each The our theater every completeness record sales product

the a Our indicator are of our long-term growth. strategy share of today accelerate QX strength these am opportunity QX to confirmation of pleased results leading successes. with and our I you to

we've more is significantly chose many Our deliver so customers plans a to critical data It existing relationship of long-term transformation. to modern deepen in experience to customers. was their digital component ever gratifying become our an Pure as own the strategy with that for

ago in significant acquisition years booked We eight large we also two last In record. and eight, saw It enterprise net enterprise new market investments we was new continued quarter just eight-figure strength our in deals enterprise. over a customer with growth customers, began go-to QX, that team.

that of year past in successful point this is proof strength segment Our that the strategy. of execution

year customers Magic of our improved our measured Quadrant we And customer our With experience already Arrays ongoing leading to ranked innovation vision as in our this leadership Gartner's ability leader, seven Our of and as for promoter their validation execute strategy. Storage net to great a also score. in excellence is Primary both marrying with a customer-centric years the Pure’s is model commitment industry. by increasingly recognized business recognition and clear across technological through

sixth was in the year For and leadership XXXX, by Medallia. Pure’s position vendors score among third-party XX.X%, certified our a calendar NPS highest measured

team. course, our Pure’s One of strategy leadership growth most of important the is, components of

Singh, quarter, Chief welcomed This Officer. we our Product new Ajay

as-a-service to accelerate contributor will cloud-native deliver to expertise and model software our CPO, to technology into He support. Pure strategy to be a services. will units As data be extensive our Ajay our for responsible services and modern five brings in and and business key our our alliances growth

Our structured growth and But data to to cloud advanced operations that continue of from services They provide at say, that hybrid a managed scale desire wide in to and is dramatically beyond experience vision the resonating data to our outpace our that to cloud customers. continue consumption. a access Pure And range our via is customers workload. industry and to why with excited and reasons across four both Customers supports technology managed goes innovation benefits Pure ability to modern unstructured with see share is lead code the developers value flexible resilient dynamic any QX a I'm customer this. a in experience data storage with proposition to The real-time of trusted services proof are deliver on-demand managers. storage of deliver leader Needless and delight. we Pure. well

Pure First, storage simplest operate. to the delivers platform

Their as innovate continue charts score cloud traditional spending resonating hyperscalers seamless both vendors validated adoption. This a leads models, showed and native report We and services. survey to pay-as-you-go an for net with consumption legacy appreciate spending customers the customers strategy is namely analyst and both off XX%. customer Pure on-premise with what in Wikibon cloud upgrades, intent management, of and data with in cloud that

easy services any we've time, the offerings. complexity we Pure services true by enterprise an cloud licenses year a with at Second, additional to utility catalog support and adoption a and path flexible to continue subscription and of subscription costs Pure our to consumption, see to customer which delivers include eliminating Evergreen continued aligns data service strong as-a-Service class our Only move on-premise, spend pricing. with actual and experience platform our This with reducing transparent introducing advance cloud storage a consumption.

subscription grew ago. from one over XX% year This quarter, services our

Pure VAVCOM. MACA our as adoption customer million, Mining German major as one of as-a-Service in the across included telecom world. over $XX well for US offering increase and Cloud@Work, And Customers customer customer saw New Australia, Services we area every provider,

forward. customer enhancements our going compensation with offers significant field benefits the have these services, created subscription our Given we to for

less we FlashBlade been applications, and as has our quarter, we just OpenShift, analytics their continuously costs, are best-in-class adopt customers to on databases, point. with how From equipment, their and cases. and has With such best cloud FlashArray Portworx. for frameworks engine has earlier our successfully Best use, Elasticsearch, the Rackspace capabilities build SPARC, rebuy enabled to It's month, when capacity. to and updates which MongoDB, Pure’s growth scale. And Pure billion data. avoiding experienced. XX% and rather cloud-native over storage to acquisition enhanced Kafka, are pack the helps billion on go-to-market vendors. miles storage allows Portworx. applications FlashArray performance, than saw for any PostgreSQL, is Purity center and less drive data to cooling, quarter, compared X avoiding through is Red to which at up these tools integration protection And less AI data save these for applications industry-leading the TensorFlow produce now, founding, XX,XXX deployments focused and other can on compared capabilities that customers markets we or or Pure Evergreen In levels performance the vendors upgrades, estimate new and highest containerized discard on support Hat Sustainability or with I software has the less with energy, legacy Pure’s FlashBlade. needs additional ransomware upon rip-and-replace modern leverage products of of use not services center IBM our this use customers legacy storage with centers by major in infrastructure, Cassandra, any one Pure to the software gear flagship disruption, us to flash of downtime, data to our XX,XXX And in-cloud, The growth broadened an expanded partnership final our particular of gas more Cloud-native over last this the new maintenance landfills. pipelines. Pure’s these power given market customers requirement we beginning both equivalent reducing data comprehensive at expand into emissions less required energy significant kilowatt Portworx ever X tons and density my We years, alone eight upgrade in saved deliver and waste to support innovations of been have the greenhouse security. expanded Portworx legacy the offering Third, without leadership serve require automobile applications we all, space industry-leading take fourth to space Portworx data of approximately on-prem And waste. serving racks last of in hours when file of IBM travel. for older of over that our eliminated our in-cloud to solutions we deployed.

for roughly make pandemic year initiatives customers one discipline. increasing effective Now, the would model and X our to is what size We continuing a of petabyte while entertainment, fit growth box. the and line, deliver of commitment into continue cash Portworx, of rack the right customer’s our unit, can innovation bottom Paying income one generating travel, only talent of on consumes for with this past expenses scaling in ensures FlashArray//C, in that on global the use storage the reduced operating in and we've both energy We internal pleased customer while we and strategic over company. positive physical investments I'm COVID-XX power right-sizing don't and including customers that other growth early year anticipation and cool focus very with flows. pay to investments our focusing support, operating fiscal to infrastructure talent dramatically excess and increasing made equipment. in operating critical a made operational and the pizza acquisition investments

to of attract part-time. the hybrid allow office that up at in to to and us a deliver work COVID-XX Continuing able and industry. in foundation, recently we the and hybrid communities, this our office plan we use I on with in thoughtful announced Workforce approach believe to our employees retain that the and We best individual Pure operating local employees company team and our combination also employees more the stepped be model continue approach to will Our return in charitable focused never productivity fortunate the and normal, home housing Pure. we from felt to new Good, to to our response, Development the when food most investments Initiative. have best

effect loyal as displayed past months past economy Our customers, each out despite our The challenges we all has positivity during played dedicated faced. this over largely on personal incredible predicted they our partners COVID the and business and and perseverance, creativity, Puritans, year. the the Pure’s of XX suppliers

stabilization to both of stock as took prospects based of for business, on a then as new they short a pullback normal. and gradual digital new their work-at-home by online plans shifted the First, acceleration transformation, customers followed business a business sharp and

their Now, will increasing QX. economic Pure They in effective the we recovery. on that plentiful you. economic expect turn to On growth this increasingly return will will as I fiscal Kevan use their about accelerate our COVID now, that effects And of front, their high I new significant of in I with Thank more to year, will we being digital list. details be meeting confidence and investment promise believe into the macro this diminish and the have over year on begin look cases. for to our transformation the hopeful vendors, a fiscal software our distributed to to And forward better a new increasingly financials. world. will confident will I'm vaccines deploy customers systems, new far be in be than ability renewed confidence last. of throughout during

Kevan Krysler

good Charlie, and afternoon. you, Thank

our which are to very strong our with planned. than we was the pleased our be consecutive a what customers both above quarter $XX sales million as-a-Service. Fortune completed seeing of have with delivering. $XX the are recognize deals deals been We our record to strong who QX we one sales. that subscription FlashArray//C, value see customers. year, the continue Pure much being of also with including achieved achieved of million above demand FlashBlade XXX of we during top record consistent and performance continue record services we strength the to We our enterprise throughout number Sales And and stronger

chose US with Our pleased XXX international in strength solutions. was orders over sales very in also by customers the the QX We're excluding to acquisitions last during more of quarter customer driven slightly or X% growth year both new cancellable and as new markets. compared our one

services not revenue to Total impacted approximately QX the COVID approximately Subscription by our million and specific of was turning expectations represents results. QX headwinds. grew revenue. Now, revenue financial X% growing year-over-year. exceeded of year strong year-over-year last $XXX approximately comparators, Despite XX% total XX%

compared includes revenue, in the reminder, the Block unified revenue includes services and a Total growth United subscription international which strong subscriptions, Evergreen Store. Cloud States Pure as-a-Service year. last saw to a subscription As both slight QX

Our QX compared was and XX.X% gross non-cancellable or to to which obligations year. points includes our in year. grew gross XX were compared remaining approximately future margins XX.X% performance basis last last year-over-year. Non-GAAP margins sequentially XX% RPO XX.X%, XX.X% committed revenue Product total up

approximately was the operating net million $XX $XX average We for in billion Operating $X.XX per were $XX share for that in and operating compared recall, employees. for year's flow $XX.X to you the pleased million gross pricing per benefited was to net Subscription XX.X% and QX navigating free margins last increasing while operating X%. product share was income the was headwinds, the slightly expenses. calculation quarter operations was were As the invest margin as with business than non-GAAP cash XXX during We unprecedented year only over quarter. X,XXX Weighted of million million were we million non-GAAP the year $X.XX. ended compared profit COVID-related Cash $XX.X quarter grew continue and cash income year. net was last Non-GAAP from from strong was less gross the NAND. we million approximately flows as earnings last XX.X% might overall during million in shares services year. QX Non-GAAP at dynamics approximately expenses income to shares. $XX.X used

QX, repurchased for little $XXX completing million we approximately planned million, our purchase X During over shares million $XX.X program. a

announced million. share of also have to new a up We repurchase program $XXX

progress we're on this well to year Now about turning we our QX. We updating do color how some as year. plan as will guidance the where view annual on we provide not thinking throughout as

that will XXXX, significant XXXX, be we to a our operating range service growth made an to the overall our million. we the to contributor on expect that FY to XX% in will expect of XX% subscription For a FY $XX offerings growth total near during revenue grow of continued Capitalizing performance. income be investments we

outlook. to moving Now, QX our

expect are business loss As our enterprise to Consistent we an revenue remainder operating income high and conclusion, and improve continued forecasting in QX And the QX seasonality, the of the In with expectations of platform, of $XXX we XX% the quarter. to the visibility midst strength are the for continues will to our growing operating momentum approximately COVD with are from million, million technology end year. be year. performance on our $XX surpassed generate we forecasting last our pleased positive in of headwinds. year of a our note as

satisfaction that investments value. revenue our levels drive accelerated growth in confidence have innovation We continued customer share of believe we high and increasing while will

We front our on the are in year, this on excited to have build we capitalizing opportunities of momentum that us. tremendous

to can get turn the your that, it over questions. We headwinds our lessen so will operator, to expect second COVID With quarter. to during I we

Operator

of Aaron Fargo. comes Instructions] you. first from question Thank Wells Rakers [Operator Your

now may question. You your ask

Unidentified Analyst

[ph] by I Jake if could what's and was and on on a Well, deferred start a outside about RPO. deferred little you wondering quarter. talking is reminding of for growth bit This revenue congrats Hi. out me Aaron. great

Charlie Giancarlo

that us And as even future we overall given we've going just in the additional see excellent with fact than the you forward. the which just good we start revenues Kevan? commented growth well upon like for seeing me quarter actual and really conversation bodes confidence we we're revenues than the that deferred board. to greater might an -- gives start subscription Let had the because across in I'd did overall strength

Kevan Krysler

the terms or being sequentially in services well you're sales principally growth of let RPO seeing subscription of unified when our deferred We're revenue momentum services CBS. momentum sales really our by Jake, in the add performance with as the obligations, and seeing unified as me remaining we’re around Pure our we're seeing Yeah, with subscription subscription strength and as-a-Service as increased Pure that's some around seeing of service momentum as in principally a driven really on We're momentum well the with CBS. with both our and subscription services just seeing in the overall. the on subscription

as sales strengths to part the with our momentum well. due and subscription services some overall both really well deferred seeing in increased sales of we’re seeing We’re and integrated on revenue as well the that’s our with as as of our momentum appliances solutions

Unidentified Analyst

talk wondering you then, more Portworx And competitive was Great. I about another there? could landscape Thanks little on and in you’re if for that. what seeing a the note,

Charlie Giancarlo

see areas. town the on-prem which we've is around The actually for Pete, layer call what for that information Portworx created services. systems. now, and And backup almost fact, offering and base backup can storage operates with a of container-based on in cloud. data by the from only Kubernetes the to management two SPS is policy. is they’ve systems the that orchestration the respect Right of additional bet. allows in backup we regular what automate You top enables for PX second to storage One container And game in customers the Portworx or we recently their that provided both

and that it’s only really, good two combines very and So those elements we’re capability traction. seeing the

is traction good and seeing banks customers. high traction And that have channels. and uptake the -- well. seeing what in we fact we’re particular, customers areas Large We’re enterprise by especially directly our good other the by through very gratifying as is

Kevan Krysler

transition just container to Kubernetes. customer been Portworx very the using you adopting to their all hand, add think really banks shared have the gratifying and Charlie, build are of to Kubernetes different world large would literally Portworx out largestWall it's to one that I in see On that and environment. I Yeah. that the types applications Street

customers that more probably have, world of the the largest for we kids totally other globally, where Portworx. more in points some powered on gaming gaming unfortunately cloud, Now, hand, time with my host all sessions, presence time you to building the example, log in much too on by the and they're spend every those

amazing. cases well diversity large on-prem as the use so is between totally And cloud-native as

Charlie Giancarlo

It’s days, still we're early of good But seeing course. growth.

Operator

from Your William next question Ader Jason with Blair. comes

ask may question. You your now

Jason Ader

Charlie, generally right the guess talk for you then which strongest the and I now -- I what enterprise about Thank surprised what overall? demand, in can guess you verticals Yeah. you. you quarter are

Charlie Giancarlo

Yeah.

One remarks, sold really mentioned make our a two And until that is can while are year that as us enterprise call really more out. it major we our of fill. couple can eight of existing portfolio know, enterprise most of customers effects customers, with in more their and strengthening had time, seeing, contracted that a new we've figures. a a overall in figures. the are customers we've brand in into particular, eight And -- enterprise several were existence, sales enterprise. that by of we secondly, we standpoint We as uptake good sales uptake for major mentioned, as and -- We've it’s that on that we by focus And a had you since we ago. didn't faster years taking new from in customers on really this

were was whom two PaaS PaaS of -- whom, actually a through the of One year, deals.

in reputation our enterprise think, can so, and very we strong, think to this continue has improve. asconditions we COVID I around expect, been And

Jason Ader

then quarter? And surprised on the in what just verticals and comments you any

Charlie Giancarlo

us is big And up been of one if had that and segment that -- well, banks. might -- use in we coming new big through and opening that say, an of we've new the vertical for We us. Frankly, conservative technology vendors. their Yeah. banks now bit were, especially seen a for struggling you new more where is

good as in and us been strong service care health in this also for year well. have those provider We’re

Jason Ader

to then good. the And business obviously, cloud continues

Charlie Giancarlo

only of Yeah. that cloud again, their service and into to companies I through cloud companies before, of cloud traditional call as service about customers. Apex. of includes more course, we've or customers We XX% that such provide that it cloud through mean, provide plus the end talked as well sales our -- as or X,XXX

in So, the asset cloud. we're

Jason Ader

that? one quick any In federal, on

Charlie Giancarlo

to be making we where changes are Yeah. honest. and Federal That’s of make area looking area still not is improvement. an for an strength to us some

Jason Ader

you. All right. Thank

Operator

question next KeyBanc. Your comes Alex from Kurtz of

ask You question. may your now

Alex Kurtz

quarter, good Thanks on and congrats guys. the

Pure and be I thinking is of reported going Just business right of on thoughts given the for business to just your about thinking you revenue move the on forward? at outside what growth about Store, measuring that RPO the hear how as-as-service guys rate and the look should Block like growth the are really growth. Cloud metrics to the how

Kevan Krysler

that is in year-over-year which growth we look revenue subscription is Alex. Kevan. our Obviously continued look revenue in share. at outpacing we at Yeah, things we���re bookings seeing were part A one sales at outpacing given really of This we the metric on is X% services. couple that and the momentum large

by we’re down If strength bit we’re revenue offering. as-a-Service appliances around and supported you well unbilled our at by support That’s Evergreen as our looking we’re is of momentum break and component Pure of momentum sales seeing the offering there. in that RPO Evergreen subscription. the the our a as the deferred well driven includes the seeing more, really which primarily then And continued incremental as

and kind So it of board about the we’re there. that’s momentum good strength in seeing across how thinking

Alex Kurtz

is Pure around at you the as-a-Service, if shouldn’t of the the add RPO And, anything be the the the increasingly company because future of discussions business to rate center would kind is? growth going of what Charlie, of there be

Charlie Giancarlo

such a and part RPO becomes past. to term as release we information yes, need on lines to basis. longer in about new. before along ACV we increasingly a can going basis, do, as to we’re other identify larger larger start it to are talked the going what We -- before need there and get On certain mass them we we regular one We think of those to certainly sense of makes to investors. to But those a more metrics, subscription through net critical be this think

Kevan Krysler

in overall on on that will beyond obviously. through will for other year date at Day of and give which Yeah. Portworx well some at a this and do layered business. take plan an you And, great. we’ll Alex, go We a having me, we’ll as Evergreen as-a-Service land Because But is are metrics into good look that read that Pure and our subscription just terms we year. nicely far our look as obviously it’s Analyst this a

Operator

question of Your line comes with from Karl Ackerman next the Cowen.

may question. now You ask your

Karl Ackerman

Yes. for Good on of gentlemen. the asked year the implies QX OpEx afternoon, I Kevan, $XX discuss bit leverage normal could seasonality, loss operating you XXXX? $XX larger little appears margin fiscal the linearity million a than million full record. outlook because for margin, best in but yet the operating

So, you I in could are outlook the QX? might that the discuss guess, specifically, you maybe for investments making explain Portworx

Charlie Giancarlo

And Yeah, typically think Karl. quarter I then revenue consistent. our yeah, start is seasonality. question, -- with That first have thing you and lowest QX, this out I’d think seasonally in with I terms is of the good pretty that’s

do because really of we’re last which And might in a with around bit so, OpEx fact what our realignment of time the I over a on our areas, in front, so couple and When more that s in compare we the we a of as subscription at QX took did at sales of comp services. through on subscription coming strength we our about certainly different the result do look have benefit looking QX little the some last year. think services will be QX one benefit year different if some around that you workforce

your really the looking see we’re this through indicators COVID QX. expect lot return rest and And post early year. dealing returning the to seeing with we in bit little capitalizing some made of happy your on and of of of strengths saw profitability as QX to And $XX at almost with really that we operating what through But to is that point, to profitability the in a we’re forward carry what the So, of environment. we million year. fact the continue for point, doing really, just investments QX, that a we that we’re terms in

Carl. out, Just hopefully it helps you

Karl Ackerman

years. Thank Maybe Charlie. data Kevan. Seagate’s Yes, it does, a talked every question double today, going about for you. growth Earlier three to is how

While shown in to on of from very improvement well. would ATV it continue disk maps, that these data high-capacity addresses road arrow, most will stored FlashArray//C be your especially appear the

I across for think multi-tenant storage low-cost environment. the demand

XX% first, the do than two you there remain that you. of largest revenue, frame opportunity growth next FlashArray//C to for over Second, will offering? be And TAM driver a three or FlashArray//C your to appears way the so, think the is years? or now you Thank FlashArray of more

Charlie Giancarlo

Yeah. No. We within had that do numbers up regularly -- TAM all, product new that fastest numbers But a It’s we've fits of question. just the identified a more previously, think had be, FlashArray//C to portion. from great the we We opens continues FlashArray//C we given TAM think serviceable before. ever out of market first to us introduced.

we’re to see going the to of best we're as think flash. tier FlashArray//C. to going basis converged, cost market to magnetic position move of a price of given the able in we’re what It opens to Secondly, on more what the to disk see up the arrays. -- hybrid And continues class to faster advantage XC and the price the to only and QLC Flash that And price with of more shows with standpoint a decrease product and opportunity point, purely third, that for of that mover -- your us the magnetic. We its that storage a secondary that can than bit of from with those take do means we're that. keep advantage and over in per our is first continue

Kevan Krysler

only that I about we're quarter just from add But this And is that commentary how a misses the complete that reduction. to convergence. last the couple thing great data of would years benefit there are some analysts’ off commentary

XX crystalarity with I XX we think today, replace really founding of disk to as And dream being the all-flash FlashBlade flash. something able in value ago, flash Pure are to case. for of away be are think at the deliver of the technology so FlashArray, kind actually to deliver our FlashArray//C the years seemed after exact that data It bringing that of today go center the years to the storage doing we're pipe strength a the use completely in customers, would it's datacenter. together every ago deals And datacenter of vision dominant the but folks those like years look and

Charlie Giancarlo

your FlashArray//C the to has it's great up to from expect of else, immune expect segments primary I growth do They're versus also with advantage new Portworx. until in to a of. and And of to market we already it's finish and been it. great that we've market. which product FlashBlade it's the large things market now, all tier has economics the certainly and equal and a It's taken great in great the question things opportunity the from secondary of true tier that size everything flash

So, going opportunity think it's but for us be one. not we the a only great to yes,

Operator

Your from next of question comes Rod Hall Sachs. Goldman

question. now your may ask You

Rod Hall

you. Oh, great. Thank

eight case bit maybe So I enterprise a to particular there? ask to see guys we're large talk I'm any there you about -- back deals resonating wanted called these go the little to displacing that's situation going and out could Was you with used out Any people. competitive particular -- if you you that there. call competitor

and little could dig a then bit help you got a deals Just wonder and those understand those, in won us how if you more I've follow-up. at

Charlie Giancarlo

up is very out our pretty companies. would on it mixture traditional primarily average average, of was more It to say. competitive big existing but eight mostly cloud NetApp would a similarly across and say on Absolutely. all them, and those big to customers, mostly in two verticals, I against vendors, that and portfolio as think -- certainly, mixture existing the customers, enterprise NetApp I win certainly say of of banks, that, traditional, Dell portfolio new I shook

Rod Hall

are the is then follow-up later on price maybe And Great. wonder can supply I wanted up questions those Okay. expectations to there I if shortages that and into the you can answer. two year. to one that out NAND wrap go in going

Charlie Giancarlo

Yeah.

Rod Hall

do a your to expect you're problem be you're your then in, is how in supply into NAND Thanks. you and Do it that the thinking, year? and what factoring to economics later shortages factoring

Charlie Giancarlo

bet. You

-- strong completely very of very year supply a team are -- recall, COVID busy. you supply our at and, was hit. have chain we were chain. customers as when we beginning We But unaffected of So, may the unaffected course, last we were our

the best the times We overall. in of have business some lead

stabilize, also couple don’t of As we to and not are that to we a do supplies shortages. bit higher is up bit get yes, a have a NAND look shortages. bit There in the expect as next pricing any But course, has we expect picked demand constrained. forward, been we strong of reports semiconductor think going quarters, other if of

expect to don’t lead are top overall. of on actions the we’re although, any, that. was. part appropriate see to lengthened question times there We’re was certainly but starting taking to We another There

was I think that it.

Rod Hall

that sort impact margin the on the of… us expect that remind NAND of kind you Well any would you

Charlie Giancarlo

to due change due at lot of really change is we expect don’t of right now expect margin look well We But don’t therefore, in fairly the yeah. Oh, behaved a we pricing. to in much things. NAND margins NAND -- much and way from

Rod Hall

Great.

Okay. Thank you.

Operator

Tim of Long Your comes from Barclays. next question

You may your question. ask now

Tim Long

you. Thank

two Just could. I if

deals it can touch can looks you and Charlie, following and commercial the little Just large on a quarter. talk complexion was about big you, for Obviously, Could great pipeline there? the about you the then second, obviously, vertical? a enterprise bit little those, Talk a cloud bit were it the a how just deals. on And strong. anything bit little on the call

vertical? us that but Thanks. just of it’s outlook for a through what’s maybe going kind on So there? of lot some in I’m walk macro the sure recovery

Charlie Giancarlo

second take I’ll Kevan. hand part me then, and Let to that over it

continue we and one are as weakness the suffered strength of serial see that end subsides, But on commercial. suffering it’s than large early COVID frankly, see say of in much I we or improve. that average. might it’s should still some So to we of sequential I although saw commercial, the say strengthening to will case, There areas in the hope that overall has midmarket but enterprise clearly, the that be signs more a

are we're tunnel, a see end should suffering. as as what enterprise both and effect still seeing the see our built the middle that's in of in should the we summer sort months at is some our some COVID that going of both QX. midmarket of lessening because the COVID or effects And hopefully the dissipation the in and expectation we commercial vaccine, we've our Our forecast somewhere of of in see a into on COVID and yeah, to market, But improve. of the hoping effect commercial the that But, subsides, in based generally. is we're as that well we're light planning

Kevan Krysler

large progress then we've deals QX in pleased we for of to We'll see with QX terms they have building adding as out next around set, us. of the year. for the out really of then, next and helps that obviously, more with that were bit and deals when guide think and continue and these big with But were on opportunity hopeful. on rolls we're that's plenty bit just and to about we broader we into momentum customers that. correlation about the think continues in annual saw Look, really terms in light think looking services in a as that that at got building working then, year pace great And certainty QX. we Subscription in it's little revenue. a our I including opportunities And through little of how we

for great us to see. And so, that's

our we As in terms beyond we guide which see nice our the build further QX, see nice of for some of year. build-out is annual opportunities,

on big not some So to you completely will, that. pleased focused, But confidence it's good the if we've and which got get. on always we're deals broad-based

Operator

Suppiger Eric from Securities. comes question of JMP next Your

You may ask your question.

Eric Suppiger

question. the for taking Yeah. Thanks

the interested where it with the First What able place? will you? as Is just materialize? dissipating, you be customer take off, to will to change do will to that you more out I'd most for or the think you hear think notable do engage just changes pandemic being personally how look

Charlie Giancarlo

a lot. this about thought We Yeah.

new and go use to willing vendor cases. when on-prem on customers to take enhanced I they think commercial we're two And so talked office. is into But as company the is to can why their a about. Well, do most is And noticeable one one is willing second still tremendously largely on, the change willingness as the will office. products depend we that? the new lot a or things, start put an on products we to into customers actually be re-enter being

are you workload might feel new office they're able imagine And and wrong, So, something the using to into much to product goes that being can that. and they more able be new go something a do customers when that comfortable address concerned a about. is things, if

logos feeling So, go customers into on to our net both the new commercial office. more dependence and on comfortable depends

to going looking at. really that's we're So, what be

require new just to things. their go office, able doesn’t XX% feel be it office of to to going team team Now, in their technology -- the comfortable be to the trying

we'll what that's be looking at. So,

Eric Suppiger

helpful. very That's Okay.

portion break share this across and cross-sell you look categories, different could don't a your what can FlashBlade, FlashArray about [ph] buys You base of maybe at talk customer do bit the little front? but out, that you Anything Taz metrics? you on product your

Charlie Giancarlo

into -- customer. to is well. existing at And we brand new interesting, We bit existing look FlashArray//C do have an metrics it’s new half we customers if a new customer go sales FlashArray//C will will do a customer, FlashBlade, -- customer -- for new But cross-sell go early. say, as majority as customer and an it’s well. tends look be it’s would into existing of XX% brand customer. quite the our at Portworx roughly FlashArray I too sorry,

it's a good about the be on on it’d it If XX/XX. put But on it, had balance. percentage So to I the an product. depends overall

Eric Suppiger

Pure-as-a-Service? the about What

Charlie Giancarlo

That's Pure-as-a-Service. very on new unique allowed percentage with before. been has not us have value customers to high It had new very of We've net really a proposition, a chance enter where customers we might a given interesting.

Operator

JPMorgan. from question comes Pinjalim next of Your Bora

You now question. ask your may

Pinjalim Bora

fiscal put processes, Charlie, on about that any and in the and you construction sales of investment the in first this and put material thinking terms on its how concrete could congrats changes Thank is talk you’ve of changes? already to year going guys his new the year the you quarter. designs you’re that place into given for Dominic fiscal

Charlie Giancarlo

operations single and at treat us overlay. will the And be operation are the you allows a Yeah. sales Absolutely. that’s while technical sales going and time now to really sales as to operations. new to consolidated mature -- the really highly transitioning core What going allow which new products the that a into we've is to sales overlay -- the same and balance mainstream more us into if products

So, a been significant that has change.

for the about products want of going do every talked year. we've made this We’ve service sure periods Portworx we made just to I Not changes balancing for of and for that as have making forward. And compensation. intentions have be major changes I course but before but year and in talked my instead remarks Of we about clear. of we to the prepared we all that also

service therefore really has thought sell important and the time the sales the of and I entire it that our mainstream making force modified has at think sure our us that sell really Dominick’s many allowed really to make to to focus in portfolio. understanding the else on an training, program same skills software how knowledge how we've to while in to are everything and enterprise elements compensation particular and our the and sell, ways simplify change about offerings that. way to the

Matt Kixmoeller

and Dom terms And the on Charlie, to for in I and Evergreen yourself extends really of, it have fuel to subscription. say what Gold just doing compensation

the Block sure well is We’re FlashBlade. really promoting field value there, to as trying and the Store proposition Cloud Portworx and Pure given that make that as-a-Service,

we that cases continue FlashBlade momentum the So, new wonderful got and as year. then FlashBlade. to highlight We at next with offering continue we look will and

Pinjalim Bora

it's But little I look follow range Kevan, guidance than usual. at And look can maybe just bit the a -- take wider this. solid. pretty seems of I when the up, anyone when a maybe Charlie at or you But

of how half that. understand second versus Would back understand forward. say would it to first normal? peg shape us the more ramp it half. you year, would the trying is So, -- environment the the you the mean Is towards going to I Help there be

Kevan Krysler

to right? how entire noticeable in And COVID. to tactically we’ve year. about of with the that start that I you Yeah. effects, looking So, to that thinking let the will, if diminishing I'll you're start on add Charlie QX thinking it. think we're and we're in built timeframe right, at really probably to about But see

is that into so playing And it.

how that? we're to you Charlie, So obviously add are in half, have outlook. incremental any you for want thinking second momentum some about on we our thoughts looking annual of terms

Charlie Giancarlo

Yeah.

the coming are the last -- continue we forecast to The the year, the correct. that QX a standpoint. is fall end the But said, does that it as And the is face beginning at -- that year our -- of what But is only the the and of the COVID we of about the I to does about have. belief year. think uncertainty year to well throughout fairly of will obviously guide like this what feel COVID going look from we end QX, that's got at improve about next wonky comparison being that we've the good given half. second be the

Matt Kixmoeller

our as little I’d subscription of looking Yeah. continued services, the will in in the us terms really and midmarket post-COVID terms things year at expect mentioned, that just we this terms obviously outperformance bit a predictability more we've recovery more a that FlashBlade year seen on As it's to with how drivers FlashArray/C, do enterprise. little half next and momentum add on continue with we've Charlie talked if second you of in really fall. commercial will. of got about And expect really and bit momentum give solid We've growth

Pinjalim Bora

it. you much. very Got Thank

Operator

with James. question Raymond Leopold comes next from Your Simon

may ask You your question.

Simon Leopold

about we've question. the comparison goes to the and little Charlie, easy a bit trend question a that -- comment the the back your or really to my I a think got relatively taking pandemic. very for Thanks being wonky

some idea should the be? adjust the you for what of if So could growth to if you I'm pandemic year-over-year think there of us rate on what some way the and as your maybe effect basis normalized you give been what growth is wondering see has a

Charlie Giancarlo

definitely, safely Well, double-digit range Yeah. certainly. within the

is, rate. least XX% a time with months hard be. that how five effect. why forward. And believe calendar this four exactly to But we're rate been as reason growth we You wouldn’t it be that might COVID recall, to this say facing year no still going going long last have of projecting to were strong I at it’s to will the growth have a year,

expect So, be. I hope some gives to on would that semblance where you we

Matt Kixmoeller

on the in QX for set in later that was COVID strong for of Obviously, year. us quarter. when add for would That I would the last be a that compare. quarter to

COVID. we start some had the strong as well to had through to fact to as quarter folks last a tailwinds we so And working some were respond as that debt technical

I compare, actually as view the strong year. year a last a So QX but it's statement for full fair

Simon Leopold

recovery this where some of Have travel and Thanks. expense you for that? that this operating reintroducing in line operating impact then that timing considered, the the terms expenses you assumption some made is you things that budget like and your thinking for incorporated think and later? the sort income and year do And into happens or you've for full your of Great. is idea return normal, of might in to be what introducing or that

Charlie Giancarlo

right. All

our You're into right. year if to thinking in. guide. put way, it into Clearly, and we've that you past exactly T&E want that about -- taken head We're It's count, to this this into we've taken incorporated put investment. going it feather

up. to As we they build own which pace time It's Customers travel start like will get going have to a and their go light take will by to switch. forward, up meet together. want physically

same the is entertainment going pre-COVID. to time, it to even and than expenses and So at total want was expectation revenue, basis. up don't a we're be that's to cautious. will travel get I same level on that slower grow the But our

since in area you head and travel of entertainment. So will, count, even growth by slower the pre-invested, mean an we've it definition, if into will

Operator

from question next Stanley. Morgan comes Katie of Huberty your And

All is Katie your You Stanley, Huberty may your question. now line Morgan now ask of right. open.

may You question. ask your

Katie Huberty

COVID buying subscription up. a impressive sustained And is this particularly driving how I what cash a on the adoption in as about focus a on million more you just was is time? a $XX are as much deal have of about Can of in follow shift quarter. The Is you thinking underlying companies Pure customers product preservation, talk or think service? factor

Charlie Giancarlo

sustained Katie, a it's I shift. more latter, think the Yes.

about want I flow uncertainty going-forward about their cash for it's think the data what basis. a more of on and they are -- they it's se less per more where customer about --

the to with shift needs whatever to two the their can be months on-prem or which able a and XX a whether or that they're tend that so without that Pure or And know they're reduced as years on-prem ongoing cloud looking fulfill having today service, for. then or they balance having obligation it's year obligation

extreme So them it gives flexibility.

worrying it today without to make about saves allows -- effects. decision them long-term it So them a

Katie Huberty

That makes sense.

Charlie Giancarlo

this options And that strategy offering we of much just when also there innovation to of you look add model. one as think it's what view business that that product as would compared really I a real as the I many financing a we're at kind quickly bridges it up our the experience unified we And services actual to the delivering our this on-prem allows differentiate experience competitors and deployment did us customers. subscription. offer, catalog. thing cloud really that’s open We're in a another with last quarter interesting cloud-like was

where So go in we it. and a were storage come can through providing that transparent the costs seen first transactions exactly automated and pricing what we've customer subscribe an to fashion. And see in

Katie Huberty

like I close that pipeline. market? just to large Charlie, broader conversion versus in October? earlier commercial back looked asked talk deal started you already an want about the improved pipeline about exiting have Can the Great. What and somebody rates to And, you And to even January. question come see

Charlie Giancarlo

far below year, instance. but as we improving last I’ve still We’ve seen is where market, commercial exited somewhat -- for the had mentioned,

of We’re the seeing enterprise better conversions things. on side

in compared enterprise that you large say general, some color. that fraction of I’d gives enterprise, year hope large deal the larger us I a And much amount certainly increased to so and And of gives ago, hope. exiting.

Operator

Your Daryanani next question Evercore. of comes from Amit

line open. is Your

question. your ask may You

Irvin Liu

the Hi. This the was jumped bit of us call a with late, understand Can me is some on better assumptions forgive you I addressed. Irvin help if this so Amit. Liu in dialing in growth out. to be support revenue this Just products fiscal would are any XX% Thanks. on that revenue XX% your to helpful, XXXX? trajectories thoughts parse embedded outlook versus trying for just

Kevan Krysler

by the the chatting and that really on we’ve year. the that’s being Subscription, as-a-Service, out seen as is really start build what I’ll unified to with But Portworx. subscription to then Evergreen terrific we Cloud throughout expect entire our momentum We jump And Charlie by Store driven let of I’ll Yeah. year. that fully about in. look services obviously subscription we’ve Pure Block been and next

usual momentum as say continued So, again, business with there. I’d

you’ve QX -- the in we’re on is from of product think terms in seen where perspective. that what modest I side, what some improvement landing

that. We on expect to build

we as QX And strengths back then it. to we you FlashArray//C. diminishes anything some of for growth And throughout as to look fully thinking recovery then, on building after get expect new to get we to QX. The You’ll continue commercial we would as improvement that? drivers see terms to would about of that on expect upon from further FlashBlade, in Charlie's Enterprise our in COVID be. to or well our that Charlie point, saw answer net logo. business. how at the we're product we And terms how well will really as obviously, revenue go year growth in as

Charlie Giancarlo

-- of albeit, most product outpace increase say we subscription going Kevan to it. expect the just I handled growth forward growth capital would expect I you basis. product growth expense -- on traditional to CapEx think going that, capital we growth a that do equipment the is

Operator

back session. the over closing this question-and-answer I Hi. This Giancarlo At concludes the remarks. time, will turn to for Charlie call

Charlie Giancarlo

and and deal terms Thank great products, as to both thank around I'd I market all innovation in of this all support through to scale of well Despite it a the to customers our Pure the our in for exact us want uncertainty for partners like of We're of accomplished our from today. Pure. the as and penetration. you employees, in has closing, And this team's all past their timing even pandemic. year. vision, you our strategy of our all you. joining thank ability confident Goodbye. to with our In grow our recovery thank our and the all all,

Operator

conference concludes today's call. This

You may now disconnect.