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Financial Data and Key Metrics Changes - Record revenue for Q4 and fiscal year 2025 was $1,730 million, up 4% year over year and up 6% sequentially [21] - Q4 billings were $2,030 million, up 12% year over year, marking the sixth consecutive quarter of year-over-year revenue and billings growth [21] - Total revenue for fiscal year 2025 was $6,570 million, up 5% year over year, with billings at $6,780 million, up 8% year over year [27] - Q4 operating margin was 28.6%, up 50 basis points year over year, representing the highest for Q4 in the company's history [26] - EPS for Q4 was $1.93, up 7% year over year, driven by lower operating expenses and effective tax rate [26] Business Line Data and Key Metrics Changes - Hybrid cloud revenue for Q4 was $1,570 million, up 3% year over year [22] - Product revenue was $845 million, up 5% year over year, while support revenue was flat at $625 million [23] - Public cloud revenue was $164 million, up 8% year over year; excluding the divested SPOT business, it grew 22% year over year [23][29] - First-party and marketplace cloud storage services grew 44% year over year in Q4, comprising roughly 75% of public cloud segment revenue [12][23] Market Data and Key Metrics Changes - All flash array annualized revenue run rate grew 14% year over year to a record $4,100 million in Q4 [9] - The company gained almost 300 basis points of all flash market share in calendar 2024, more than any other vendor [10] - Public cloud revenue growth was 22% year over year in Q4, excluding the divested SPOT business, indicating strong underlying growth [50] Company Strategy and Development Direction - The company refreshed its entire systems portfolio and sharpened the focus on cloud services to lead in the enterprise AI market [7] - The strategy emphasizes investments in AI and data infrastructure modernization, cloud transformation, and cyber resilience [18][29] - The company plans to make prudent investments in R&D and sales capacity to drive ongoing innovation and capture additional market share [18] Management's Comments on Operating Environment and Future Outlook - The global macroeconomic outlook shows mixed signals with a general slowdown in growth and lingering inflation concerns [17] - The company expects some increased spending caution and ongoing friction in the US public sector and EMEA [17] - Management remains confident in the company's ability to capitalize on significant opportunities in the enterprise AI market [18] Other Important Information - The company exited fiscal year 2025 with $4,540 million in deferred revenue, an increase of 7% year over year [24] - Operating cash flow was $1,510 million, and free cash flow was $1,340 million, both metrics down due to changes in working capital [28] - The company announced an increase in share repurchase authorization by $1,100 million [27] Q&A Session Summary Question: Guidance for Q1 and full year - Management acknowledged Q1 guidance appears light but emphasized strong momentum and large deals in the pipeline for revenue and EPS growth throughout the year [36][39] Question: Execution and timing of deals - Management noted strong Q4 performance and addressed concerns about political instability and macroeconomic factors affecting customer spending [45][46] Question: AI infrastructure deals - Management confirmed ongoing work with large cloud and enterprise providers on data modernization transactions, contributing to FY '26 outlook [55][56] Question: Public cloud revenue performance - Public cloud revenue in Q4, excluding SPOT, was up 22% year on year, with expectations for continued acceleration in FY '26 [50][51] Question: Product gross margins outlook - Management expects product gross margins to improve gradually throughout the fiscal year, with Q1 margins anticipated to be flattish [41][75] Question: Public sector exposure - US public sector accounts for low teens percentage of business, with federal making up 75% to 80% of that, and management is optimistic about upcoming spending bills [104]

Financial Data and Key Metrics Changes - Record revenue for Q4 FY 2025 was $1,730 million, up 4% year over year and up 6% sequentially [20] - Q4 billings were $2,030 million, up 12% year over year, marking the sixth consecutive quarter of year-over-year growth [20] - Total revenue for FY 2025 was $6,570 million, up 5% year over year, with billings at $6,780 million, up 8% year over year [26] - Q4 operating margin was 28.6%, up 50 basis points year over year, representing the highest for Q4 in the company's history [24] - EPS for Q4 was $1.93, up 7% year over year, driven by lower operating expenses and an effective tax rate [24] Business Line Data and Key Metrics Changes - Hybrid cloud revenue for Q4 was $1,570 million, up 3% year over year [20] - Product revenue was $845 million, up 5% year over year, while support revenue was flat at $625 million [21] - Public cloud revenue was $164 million, up 8% year over year, and grew 22% year over year when excluding the recently divested SPOT business [21][28] - First-party and marketplace cloud storage services grew 44% year over year in Q4, comprising roughly 75% of public cloud segment revenue [11][12] Market Data and Key Metrics Changes - All flash array annualized revenue run rate grew 14% year over year to a record $4,100 million in Q4 [8] - The company gained almost 300 basis points of all flash market share in calendar 2024, more than any other vendor [9] - Public cloud revenue growth was driven by strong performance in first-party and marketplace services, which are expected to continue accelerating [47] Company Strategy and Development Direction - The company aims to lead in the enterprise AI market and has positioned itself to capitalize on the growth of all flash systems and public cloud services [6][7] - Focus on modernizing data infrastructure and enhancing cloud transformation to meet customer demands for AI readiness and operational efficiency [7][8] - Plans to make prudent investments in R&D and sales capacity to drive ongoing innovation and capture additional market share [17] Management's Comments on Operating Environment and Future Outlook - The global macroeconomic outlook shows mixed signals, with expectations of increased spending caution and ongoing friction in the US public sector and EMEA [16] - Management remains confident in the company's ability to deliver strong performance despite uncertainties, driven by alignment with key IT priorities [16][17] - The company expects FY 2026 total revenue to be in the range of $6,625 million to $6,875 million, reflecting a cautious outlook due to macroeconomic factors [28][29] Other Important Information - The company exited FY 2025 with $4,540 million in deferred revenue, an increase of 7% year over year [22] - Cash flow from operations was $675 million, and free cash flow was $640 million in Q4 [24] - The company announced an increase in share repurchase authorization by $1,100 million [26] Q&A Session Summary Question: Guidance for Q1 and full year - Management acknowledged Q1 guidance appears light but emphasized strong momentum and large deals in the pipeline for the year [35][38] Question: Execution and macro concerns - Management noted that while there are macro concerns, strong execution in Q4 and a robust pipeline provide confidence in growth [42][44] Question: Public cloud revenue performance - Public cloud revenue in Q4, excluding SPOT, was up 22% year over year, with expectations for continued acceleration in FY 2026 [47] Question: AI infrastructure deals - Management confirmed ongoing negotiations for sizable AI and data infrastructure modernization deals, contributing to FY 2026 outlook [53] Question: Product gross margins outlook - Management expects product gross margins to improve gradually throughout FY 2026, with Q1 margins expected to be flattish [65][70] Question: Public sector exposure - US public sector accounts for low teens percentage of business, with ongoing concerns about budget approvals impacting growth [100][116]

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA from continuing operations for Q4 was $176.8 million, up approximately 20% from $147.9 million in the prior year [6] - Full year adjusted EBITDA from continuing operations was $622.9 million, exceeding previous guidance of $620 million [7] Business Line Data and Key Metrics Changes - Water Solutions adjusted EBITDA for Q4 was $154.9 million, compared to $123.4 million in the prior year [7] - Physical water disposal volumes increased to 2.73 million barrels per day in Q4 from 2.39 million barrels per day in the prior year [8] - Crude Oil Logistics adjusted EBITDA decreased to $13.1 million in Q4 from $15.3 million in the prior year, primarily due to lower volumes on the Grand Mesa pipeline [10][11] - Liquids Logistics adjusted EBITDA was $17.7 million in Q4, down from $22.2 million in the prior year [12] Market Data and Key Metrics Changes - Total volumes paid for disposal increased by 11% in Q4 compared to the same quarter of the previous year [8] - Operating cost per barrel for fiscal 2025 was $0.22, down from $0.24 in fiscal 2024 [9] Company Strategy and Development Direction - The company is focusing on core assets after divesting non-core businesses, which will reduce volatility and seasonality of adjusted EBITDA [5] - Plans to continue reducing leverage and improve capital structure by addressing Class D Preferred Units [6][19] - The company aims to generate approximately 85% of adjusted EBITDA from the Water Solutions segment moving forward [16] Management's Comments on Operating Environment and Future Outlook - Management noted that despite oil price uncertainty, there has been no drop-off in customer activity in the Corita Basin [10] - The company is well-positioned with 90% of volumes committed through acreage dedications and MVCs, with 80% of total volumes from investment-grade counterparties [10] - Future growth is expected in the Water Solutions segment, with guidance for fiscal 2026 adjusted EBITDA between $615 million and $625 million [12] Other Important Information - The company completed the sale of 18 natural gas liquids terminals and other non-core assets, raising $270 million [4][16] - The biodiesel business has been fully wound down, eliminating approximately $75 million of working capital [5] Q&A Session Summary Question: Can you offer more color on your expectations by business for 2026 guidance? - Management explained that the water guidance midpoint implies about $560 million, accounting for a $20 million decline in skim oil revenues due to lower crude prices [21][22] Question: What are the conversations with customers regarding growth opportunities? - Management indicated that they are recontracting and focusing on core customers, with no slowdown in volumes currently observed [27][29] Question: How much lower could you flex capital spending down? - Management stated that capital expenditures are already low and further reductions may not be significant [35][37] Question: How do you think about your low and high range on volumes for the water business? - Management noted that fluctuations in volumes are normal, with a strong base wedge of business and no significant changes expected from customers [40][46] Question: Will there be a reinstatement of common unit distributions? - Management clarified that there are no plans for near-term distributions as the focus is on reducing Class D preferred units [52][54]

Financial Data and Key Metrics Changes - Revenue for the first quarter was $120 million, representing an 8% year-over-year growth, at the top of the guidance range [4][20] - Non-GAAP operating margin reached 20%, exceeding the target by 500 basis points [4] - Annual recurring revenue (ARR) increased to $496 million, reflecting a 7% growth year-over-year [5][20] - Dollar-based net retention was 104%, negatively impacted by higher customer downgrades in the enterprise segment [20] - Gross margin for Q1 was 86%, at the high end of the target range of 84% to 86% [22] - Cash from operations was $31 million, or 26% of revenue, with free cash flow at $29 million, or 24% of revenue [22] Business Line Data and Key Metrics Changes - Significant improvement in net new paid customers, with a total of 15,247 paid customers, adding 127 net new customers, the strongest quarterly acquisition in eight quarters [21] - The commercial segment saw enhancements through a new digital acquisition strategy, leading to improved customer acquisition [5][21] - The enterprise segment is transitioning to a more strategic relationship model, focusing on deeper customer engagement and AI integration [6][8] Market Data and Key Metrics Changes - International revenue increased by 11% year-over-year, contributing 28% of total revenue [20] - The company is actively pursuing FedRAMP moderate authorization to expand its public sector presence, already serving over 700 entities [10] Company Strategy and Development Direction - The company is focused on three key priorities: demonstrating product-market fit for AI offerings, enhancing enterprise engagement to drive retention and expansion, and leveraging automation and AI within operations [17] - A strategic partnership with AWS was strengthened, expanding integration capabilities [9] - The company is evolving its pricing strategy to reduce friction and increase flexibility for customers [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged execution challenges in the enterprise segment but expressed confidence in the transformation efforts and the potential for stronger execution in the second half of the year [38][40] - The macro environment remains uncertain, impacting customer decision-making, but the company is committed to helping customers realize value and efficiencies [62] - The company expects dollar-based net retention to remain between 103% and 105% throughout fiscal 2026 [20] Other Important Information - The company achieved a 90% reduction in scope one and two carbon emissions against the FY23 baseline [16] - A new Chief Customer Officer has been appointed to enhance post-sale engagement and retention strategies [8][63] Q&A Session Summary Question: What is the impact of enterprise pressure on the business? - Management indicated that execution challenges were primarily responsible for the pressure, with a focus on improving customer engagement and sales execution [36][38] Question: How does the full-year guidance reflect the current environment? - The guidance was described as prudent, taking into account organizational transitions and execution challenges faced in Q1 [41][42] Question: What adoption trends are seen in new modules like PagerDuty Advanced? - Early adoption of generative AI solutions is promising, with customers eager to experiment and integrate these offerings into their operations [46][50] Question: Can you elaborate on the enterprise churn and downgrades? - Elevated churn was noted in the SMB segment, while downgrades in the enterprise segment were attributed to mergers and macroeconomic caution [60][62] Question: What are the expectations for net retention rate moving forward? - The company expects net retention to be in the range of 103% to 105%, with opportunities for expansion among existing customers [66][68] Question: How do billings trends reflect underlying business strength? - Trailing twelve-month billings align closely with ARR, providing a clearer picture of business health compared to quarterly fluctuations [71] Question: What is the visibility from large customers regarding multiproduct deals? - Demand for multiproduct platforms remains strong, with a focus on executing transformative deals to capture this demand [107][108]