Pure Storage(PSTG) - 2025 Q1 - Quarterly Report

Revenue Growth - Total revenue increased by $104.2 million, or 18$347.4 million, a 12% increase from $308.9 million in Q1 FY2024, primarily due to strong demand for FlashBlade solutions [151][152]. - Subscription services revenue grew by 23$346.1 million, up from $280.3 million in Q1 FY2024, largely driven by Evergreen subscription services [151][153]. - Subscription Annual Recurring Revenue (ARR) reached$1.45 billion, reflecting a year-over-year growth of 25% [156]. Financial Performance - Total remaining performance obligations (RPO) stood at $2.3 billion, with an expectation to recognize approximately 48$221.5 million in Q1 FY2025 from $173.2 million in Q1 FY2024, driven by improved sales collections [182]. Expenses - Cost of revenue increased by$21.8 million, or 12%, during Q1 FY2025, with product cost of revenue at $100.8 million and subscription services cost at$97.0 million [160]. - Research and development expenses increased by $8.5 million, or 5$18.5 million, or 8%, in Q1 FY2025 compared to Q1 FY2024, primarily due to a $22.8 million increase in employee compensation [166]. - General and administrative expenses rose by$9.4 million, or 14%, in Q1 FY2025 compared to Q1 FY2024, driven by additional stock-based compensation [168]. - The company recognized $15.9 million in restructuring and impairment costs during Q1 FY2025, including$9.5 million in severance and termination benefits [169]. Cash and Investments - Cash, cash equivalents, and marketable securities totaled $1.7 billion at the end of Q1 FY2025, sufficient to fund operating and capital needs for at least the next 12 months [174]. - Net cash used in investing activities was$48.4 million in Q1 FY2025, primarily for capital expenditures related to new product innovation [184]. - The share repurchase authorization increased to $395.4 million, with no repurchases made during Q1 FY2025 [180]. Market Risks - A hypothetical 1.00$9.3 million [196]. - The company assessed a potential adverse change of 10% in foreign currency exchange rates, which could impact loss before income taxes by approximately $6.9 million [198]. - The company has not engaged in derivative or hedging transactions for foreign currency exchange risks due to their historical insignificance [197]. - The company’s sales contracts are primarily in U.S. dollars, with a small proportion in foreign currencies, exposing it to currency fluctuations [197]. - The company incurs a portion of its operating expenses in foreign currencies, which may lead to transaction gains and losses [197]. - The company may consider entering into hedging transactions in the future if foreign currency exposure increases significantly [197]. - The company is exposed to market risks from fluctuations in interest rates affecting interest income and investment values [195]. Operational Developments - The company introduced new self-service capabilities in March 2024, enhancing customer control over their data storage environment [138]. - Operating expenses as a percentage of total revenue decreased from 31% in Q1 FY2024 to 28% in Q1 FY2025 [164].