Financial Data and Key Metrics Changes - The company reported a 13% year-over-year growth and remains strongly profitable in the last quarter [6] - The percentage of revenue from subscriptions is expected to remain around 40% throughout the year [6] - The company is now spending as much on R&D as its competitors, indicating a significant investment in innovation [5] Business Line Data and Key Metrics Changes - The company is focusing on a unified data plane that supports various types of data, including block, file, and object storage [17] - The introduction of the Fusion capability allows for a more integrated approach to data management across different applications [18] Market Data and Key Metrics Changes - The company is positioning itself to capitalize on the growing demand for AI and cloud-based solutions, indicating a shift in market focus [20] - The enterprise data cloud architecture is designed to address the challenges of data silos and improve data accessibility for analytics and AI [20] Company Strategy and Development Direction - The company aims to bring a cloud operating model to enterprise storage, emphasizing automation and standardization [16] - The focus is on creating a unified data plane that enhances customer experience and operational efficiency [17][25] - The company is committed to continuous improvement and innovation through its Evergreen architecture, which allows for non-disruptive upgrades [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing to outperform the market and highlighted the importance of R&D spending for future growth [4][5] - The shift towards AI and data-driven solutions is seen as a significant opportunity for the company [20] - Management acknowledged the challenges of changing long-standing architectures in organizations but believes progress is being made [25] Other Important Information - The company has launched several new products aimed at enhancing its data management capabilities and addressing various customer needs [21] - The FlashBlade Exa product is highlighted as a flexible architecture that can handle high-performance metadata and data storage needs [23] Q&A Session Summary Question: What are the key advantages of Pure Storage's technology? - The company highlighted its unique approach to software designed specifically for flash, avoiding the inefficiencies of SSD architectures [32][36] - The integration of hardware and software is central to the company's Evergreen promise, allowing for seamless upgrades and scalability [34][38] Question: How does the company plan to address the needs of hyperscalers? - The company is focusing on providing storage solutions that integrate well with hyperscalers' existing management systems and hardware [44] - DirectFlash software is emphasized as a key enabler for improving the transition from hard disk drives to flash storage [44]

Core Insights - Pure Storage has been recognized as a Leader in the 2025 Gartner Magic Quadrant for Enterprise Storage Platforms, marking the twelfth consecutive year of this recognition, positioned highest in execution and furthest in vision [1][2]. Company Overview - Pure Storage specializes in advanced data storage technology and services, providing a unified storage platform that supports diverse workloads across on-premises, public cloud, and hybrid environments [2][10]. - The company emphasizes its ability to deliver unmatched agility and risk reduction through its Enterprise Data Cloud (EDC), which allows organizations to manage their data effectively [3][10]. Market Context - The rise of AI is driving exponential growth in data volumes, creating challenges for traditional storage models that lead to fragmentation and data sprawl [3]. - The new Enterprise Storage Platforms category by Gartner highlights the importance of unified storage solutions in addressing these challenges [2]. Product Innovations - Key innovations in 2025 include the expansion of Pure Storage FlashArray and FlashBlade offerings, designed for high-performance workloads and scalability [6]. - The introduction of Pure Fusion enables workload automation and enhances performance for modern workloads, addressing the growth of unstructured data [6]. Customer Validation - Pure Storage has received an overall rating of 4.9 out of 5 from customers in the Enterprise Storage Platforms market, with 98% of reviewers willing to recommend the platform [5]. - Customer testimonials highlight the reliability and performance of Pure Storage solutions across various industries, including energy, healthcare, and banking [5][12].

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2026 was $861 million, representing a 13% year-over-year growth, while operating profit was $130 million with an operating margin of 15.1% [22][28] - Subscription services revenue reached $415 million, up 15% year-over-year, accounting for 48% of total revenue [26] - Total remaining performance obligations (RPO) grew 22% to $2.8 billion, reflecting robust renewals and new commitments [26] - Total gross margin remained strong at 72.1%, with subscription services gross margin at 76.5% [27] Business Line Data and Key Metrics Changes - Strong performance was noted across the entire portfolio, particularly in FlashBlade and core software and services offerings like Evergreen One, Cloud Block Store, and Portworx [22][24] - Total contract value (TCV) sales for Storage as a Service offerings grew 24% year-over-year to $125 million [24] - The FlashBlade E family showed strength, contributing to overall product gross margin improvement [88] Market Data and Key Metrics Changes - U.S. revenue was $577 million, growing 7%, while international revenue was $284 million, growing 26% year-over-year [27] - More than 300 new customers were added, maintaining a 62% penetration rate in the Fortune 500 [27] Company Strategy and Development Direction - The company is focused on the enterprise data cloud architecture, which is transforming how organizations manage data, emphasizing the shift from traditional siloed storage to a software-defined model [9][11] - Continued investment in partnerships with hyperscalers, including Meta, to enhance direct flash technology and expand market presence [25][17] - The introduction of a guidance range for financial metrics aims to align with industry practices and provide flexibility for growth opportunities [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to extend industry leadership despite a variable macro environment, citing strong execution and planning [20] - Positive momentum is expected in the second half of the fiscal year, driven by strong demand signals and an increasing pipeline of large deals [110] - The company anticipates revenue for FY 2026 to be in the range of $3.6 billion to $3.63 billion, representing a 14% year-over-year growth at the midpoint [31] Other Important Information - The company reported a strong free cash flow performance of $150 million, with a free cash flow margin of 17.4% [29] - A new partnership with Nutanix is expected to enhance customer interest and scalability in virtualization environments [58] Q&A Session Summary Question: What is driving the acceleration of growth in the back half of the fiscal year? - Management noted broad-based strength in product lines and improved visibility into the pipeline, contributing to confidence in growth forecasts [36] Question: How has the relationship with Meta evolved? - The relationship is progressing as expected, with deployments on track and revenue recognition beginning [42] Question: What factors contributed to the sequential gross margin improvement? - Management attributed the improvement to revenue mix, product mix, and pricing discipline, with Meta's contribution being less material than anticipated [48] Question: How is the engagement with other hyperscalers progressing? - Early-stage engagements are ongoing, with technology assessments and proofs of concept underway, but still in the initial phases [64] Question: What are the long-term expectations for Meta's contribution? - Management expects to achieve one to two exabytes of deployment this fiscal year, with potential for double-digit contributions in the next fiscal year [70] Question: How should the split between product versus subscriptions be viewed? - Management indicated that both product and subscription revenues are expected to grow, with subscription gross margins being higher than product gross margins [98]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2026 was $861 million, representing a 13% year-over-year growth [20] - Operating profit was $130 million, resulting in an operating margin of 15.1% [20] - Subscription services revenue reached $415 million, up 15% year-over-year, accounting for 48% of total revenue [25] - Total remaining performance obligations (RPO) grew 22% to $2.8 billion [25] - Free cash flow was $150 million, with a free cash flow margin of 17.4% [28] Business Line Data and Key Metrics Changes - Strong performance in FlashBlade and core software and services offerings, including Evergreen One, Cloud Block Store, and Portworx [20][6] - TCV sales for Storage as a Service offerings grew 24% year-over-year to $125 million [23] - Product gross margin rose to 68%, aligning with long-term expectations [26] Market Data and Key Metrics Changes - U.S. revenue was $577 million, growing 7%, while international revenue was $284 million, growing 26% year-over-year [26] - The company added over 300 new customers, maintaining a 62% penetration of the Fortune 500 [26] Company Strategy and Development Direction - The company is focused on the enterprise data cloud architecture, which transforms data management for organizations [9][13] - Continued emphasis on modernizing IT environments, including partnerships with hyperscalers and financial institutions [11][15] - The introduction of a guidance range for financial metrics to align with industry practices and allow flexibility for growth opportunities [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the macroeconomic environment, indicating a positive outlook for the second half of the fiscal year [36][110] - The company anticipates revenue growth of 14% year-over-year for FY 2026, with Q3 revenue expected to be between $950 million and $960 million [29][30] Other Important Information - The company recognized its first revenue from a strategic co-engineering effort with Meta during Q2 [24] - The balance sheet remains strong with $1.5 billion in cash and investments [27] Q&A Session Summary Question: What is driving the acceleration of growth in the back half of the fiscal year? - Management noted broad-based strength in product lines and improved visibility into the pipeline, contributing to confidence in forecasts [35] Question: How has the relationship with Meta evolved? - The relationship is progressing as expected, with revenue recognition beginning and confidence in achieving the forecasted deployment of one to two exabytes [40][42] Question: How much of the gross margin improvement was due to Meta shipments? - Management indicated that while Meta contributed to gross margin improvement, the majority came from product and revenue mix, as well as pricing discipline [48] Question: What are the expectations for the partnership with Nutanix? - The partnership is generating strong customer interest, with plans for general availability by the end of the year [57] Question: How are early engagements with other hyperscalers progressing? - Engagements are progressing well, with technology assessments and proofs of concept underway, but still in early stages [62] Question: What are the demand drivers observed in the quarter? - Demand was steady with above-average linearity, indicating strong macro and competitive environments, along with an increasing willingness from customers to expand their needs [110]

Financial Data and Key Metrics Changes - Q1 revenue grew 12% year-over-year, reaching $830 million, with operating profit of $83 million and an operating margin of 10.6% [23][26] - Subscription services revenue increased 17% to $406 million, representing over half of total revenue, while annual recurring revenue (ARR) grew 18% to $1.7 billion [25][26] - Total remaining performance obligations (RPO) grew 17% to $2.7 billion, indicating strong renewals and new commitments [25][26] - Total gross margin improved to 70.9%, with subscription services margin at 77.2% [26][27] Business Line Data and Key Metrics Changes - Storage as a Service (SaaS) solutions saw a 70% increase in total contract value (TCV) sales, reaching $95 million, driven by large Evergreen One deals [23][25] - Product margin rose 1.1 points sequentially to 64%, with expectations for mid-60s product gross margin for the year [27] Market Data and Key Metrics Changes - U.S. revenue grew 9% to $531 million, while international revenue increased 21% to $248 million year-over-year [26] - The company added 235 new customers, achieving a penetration rate of 62% within the Fortune 500 [26] Company Strategy and Development Direction - The company is focused on modernizing IT infrastructure and breaking down data silos, with a strong emphasis on AI and high-performance computing solutions [10][15] - A major partnership with Nutanix was announced to integrate their cloud platform with Pure Storage, aimed at enhancing virtualization solutions [12][15] - The company is expanding its cloud block store integration into a fully managed service available through Azure VMware service [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties while maintaining strong performance [18][30] - The company anticipates continued growth in the second half of the year, with a revenue forecast of $845 million for Q2, representing a 10.6% year-over-year increase [30] Other Important Information - The CFO, Kevan Krysler, will be leaving the company after more than five years, with a smooth transition planned [20][21] - The company has a strong balance sheet with $1.6 billion in cash and investments, and Q1 operating cash flow was $284 million [28] Q&A Session Summary Question: Update on hyperscale opportunity with Meta - Management indicated that the evaluation and testing process with Meta is on track, with expectations for significant progress in the second half of the year [39][40] Question: Size of the newly announced AXA offering - The opportunity is seen as niche but substantial, targeting markets like government and large-scale GPU clusters, with expected margins at or above company standards [45][46] Question: Changes in buyer behavior during macro uncertainty - Management noted no significant changes in customer sentiment or purchasing behavior in Q1, with broad-based strength across traditional sales and Evergreen One [51][54] Question: Clarification on subscription margins amid tariff costs - Management stated that they can absorb any potential tariff costs without significantly impacting subscription gross margins [94] Question: Revenue contribution from Meta's one to two exabytes - Some de minimis revenue contribution has been contemplated in the annual guide, expected to be recognized in the second half [72][73] Question: Time to close larger deals - Management reported that larger deals are tracking as expected, with solid momentum in both larger and higher velocity transactions [78]