Pure Storage(PSTG) - 2025 Q4 - Annual Report

Revenue Growth - Total revenue for fiscal 2025 increased by 12% to $3,168,164, compared to$2,830,621 in fiscal 2024, driven by a 5% increase in product revenue and a 22% increase in subscription services revenue [220]. - Subscription Annual Recurring Revenue (ARR) grew by 21% year-over-year, reaching $1,657,806 at the end of fiscal 2025, compared to$1,373,506 in fiscal 2024 [224]. - Total remaining performance obligations (RPO) at the end of fiscal 2025 were $2.6 billion, reflecting a year-over-year growth of 14$2.0 billion to $2.2 billion, while revenue from the rest of the world increased by 13$851.3 million to $960.8 million [221]. Cost and Expenses - Product cost of revenue increased by 22$562,736 in fiscal 2025, while subscription services cost of revenue rose by 12% to $347,497 [228]. - Operating expenses are expected to increase in absolute dollars, with significant investments in research and development to support production deployment ramp starting in fiscal 2027 [212]. - Research and development expenses increased by$33.9 million (6%) from $569.5 million in fiscal 2024 to$603.3 million in fiscal 2025, primarily due to higher employee compensation and stock-based compensation costs [234]. - Sales and marketing expenses rose by $54.3 million (6$870.3 million in fiscal 2024 to $924.6 million in fiscal 2025, driven by increased employee compensation and travel costs [235]. - General and administrative expenses increased by$33.9 million (13%) from $252.2 million in fiscal 2024 to$286.2 million in fiscal 2025, mainly due to higher stock-based compensation [236]. - Stock-based compensation expense in fiscal 2025 included $36.6 million related to modifications of performance restricted stock units, contributing to higher overall operating expenses [232]. Income and Cash Flow - Net cash provided by operating activities increased by$75.4 million from $677.7 million in fiscal 2024 to$753.1 million in fiscal 2025, driven by higher net income [252]. - Net cash used in investing activities was $217.7 million in fiscal 2025, primarily due to capital expenditures of$226.7 million [255]. - Other income increased by $25.5 million from$37.0 million in fiscal 2024 to $62.6 million in fiscal 2025, attributed to higher interest income and a larger cash balance [239]. - Cash, cash equivalents, and marketable securities totaled$1.5 billion at the end of fiscal 2025, sufficient to fund operating and capital needs for at least the next 12 months [242]. - The company had cash, cash equivalents, and marketable securities totaling $1.5 billion at the end of fiscal 2024 and 2025 [269]. Tax and Obligations - Provision for income taxes rose by$11.8 million (40%) from $29.3 million in fiscal 2024 to$41.1 million in fiscal 2025, primarily due to increased profits in foreign jurisdictions [240]. - Non-cancelable contractual purchase obligations amounted to $540.1 million at the end of fiscal 2025, with$385.9 million classified as short-term [244]. Market and Risk Factors - A hypothetical 1.00% increase in interest rates would have resulted in a decrease in the fair value of marketable securities by approximately $8.8 million as of the end of fiscal 2025 [270]. - Adverse changes in foreign currency exchange rates of 10$9.0 million at the end of fiscal 2025 [272]. Share Repurchase - The company repurchased 6.7 million shares at an average price of $55.57 per share for a total of$373.8 million during fiscal 2025 [250].