Pure Storage (PSTG) 29 Nov 232024 Q3 Earnings call transcript

Good day, and welcome to the Pure Storage Third Quarter Fiscal Year 2024 Earnings Conference Call. Today's conference is being recorded.

[Operator Instructions]

At this time, I'd like to turn the call over to Paul Ziots, Vice President of Investor Relations. Please go ahead.

you. Thank and Third everyone, Earnings Fiscal to Call. Conference welcome afternoon, Quarter Pure's XXXX Good

we Giancarlo, Chief have Kevan call, the On Charles Financial and Krysler, Chief Officer; Rob Officer. Lee, Technology Chief Officer; Executive

Kevin's and will remarks, Following Charlie's prepared take we questions.

These after release facts our forward-looking is On and forward-looking competitive call is Any include of press which can investor.purestorage.com. current assumptions and making today, and industry its no statements webcast. simultaneously will and call The regarding technology our our on trends. Our economic today, uncertainties. and accompany statements close our as where be this at to financial on of webcast website that market subject outlook and are advantages, to update undertake this and them. and we we strategy, we operations, issued was risks new make obligation statements, offerings this being posted product slides that be downloaded based and are various

actual not be materially Our should performance. an of indication reported as from forecasted, future and results the considered results results differ may

of filings. some our and our refer uncertainties SEC, related these with the is contained A discussion in risks business filings to you we the of public and to

directly and During press GAAP non-GAAP or earnings revenue most growth remaining Reconciliations measures all RPO investments. our metrics performance are in release and rates this comparable call, measures and the associated to obligations financial provided are other than slides. cash and

available IR Storage and recorded Relations playback of of for property the will call archive broadcast This the on website Storage. and website purposes. is being the being is the on be Investor is Pure live An Pure webcast

XX, business, begins 'XX of close XXXX. fourth period [indiscernible] Friday, fiscal at Our the quarter January

turn it to With that, Charlie. I'll over

and everyone, Good earnings our welcome QX call. afternoon, to

saw our for without to workloads, Pure model storage their their full the Storage to the and the for always cloud customers. cloud providing customers. are strategy provide consistent disruption. storage Evergreen//One, reduce Pure's deploy customers gaining manage price with service. resonating services saw platform Evergreen/Flex performance demand better and It the developers software to are a for and infrastructure portfolio object as also doubling financial to continued a in extraordinary year-over-year. promises is on the consumption our consumption than provides the vision providers customers quarter, the across applications. Evergreen//One leading cloud-native Storage their customers that ability and in like This never management with and and platform services QX enabling like tailored traction and our provides them The data storage Service model offering healthy more our Pure Pure platform that throughout storage Storage proving The our environment and results. like guarantees We a is with guarantees cloud We costs operating management age the growth, for power pleased cloud to traditional The Pure's a to customers, with as data storage both preferred basis. consume and industry change cloud services the downtime. experienced get range for block, lowest space e-waste file platform a

data behavior, customers continued to continue sales we the capabilities Evergreen the storage. of storage cloud and we activities, driven Evergreen//One the current offer our is are low But and it. ability CapEx, as new as by to the security choice consume need Although demand consuming storage advanced believe as service and Customers with environment. being cost on-prem of high to attracted buying manage macro for the a customer they

above and level of through strong our has continue demand this Evergreen//One we now of been outperformance to this year significantly expect QX. expectations prior The

model, its detail. have business long a is revenue, an Kevan of cover on near-term effect anticipated welcome overperformance While which in success will this and our will expansion

guarantees or set agreement Pure Evergreen industry service across X new QX, with level standard In a services. our SLA

With space costs. the that technology. first-of-a-kind the addresses paid innovative we by This ability desire center and is rack program customers reliable and energy pay customers cost of enabled deliver our rack the new and power to program, increasing our data power power and efficient most cloud the Evergreen and space. attributes Paid with storage rack directly electricity

upgrades SLAs or related loss. had a our container in software downtime, storage X data data record for hardware introduced change and guarantee no no Portworx, Kubernetes expansions applications cloud QX quarter. Additional and future migrations also and for native replacements,

named Marketscape a data management. recently IDC was the leader for container inaugural in Fortworks

across customers automation environments saw pod ensuring earning We preferred logging development We their number with models single models transformative for consistent intelligence and Customer Portworx accelerate for solution solutions. supporting existing applications. for leadership have selected and Pure's double-digit solutions also AI cloud-based with environment, wins retailer suite in multiple strengthened multi-cloud systems. Portworx adopted solution integration, integrated to certification. on for and a leading was the a databases, cloud clouds. continues government of Portworx a based deploying AI the by large-scale intelligence the infrastructure for AI a of and FlashBlade seamless customers' customers new with machine and innovation across included AI-ready to competitive products and learning field quarter a performance XXX%. ensuring our platform momentum success outperforming Olympus This messaging technology new deployed that era chose capacity increased analysts Portworx deployments and and artificial their international also researchers authority portfolio. our provide AI-based artificial their remain partner multiyear for renewals in and by by global machine for Pure NVIDIA from learning of NVIDIA-based A intelligence mission-critical large is AI in platform our and decision our and

our latest FlashBlade//S architecture platform storage AI and deployments the AI-ready Aerie, scaling our and easier DGX on pod NVIDIA built base and infrastructure complete the makes customers. for reference faster

FlashBlade//E. we Gartner Quadrant latest strong for month, FlashArray//E This X accolade, see shipped object now to for general a demand distributed our leader of announced our we it's past orders. systems the file and running. years announced Magic in And first and availability and storage, this continue We the quarter,

This been in E leadership our reinforces that Pure's in replacing acknowledged by marks tenth industry. our overall family our enterprise the the that has is early flash Gartner opportunity cloud of and successive storage storage. transforming this enlarging year The success eventually belief

is major advanced performance, XG win QX, reliability, In density, Pure's on our deployed our scored be success space management another fiscal capabilities. continuing new infrastructure to XG in for in based superior the and remote longevity XXXX. Pure

in announced seeing interest with Microsoft AVS. early and Azure public strong of our store expanded also and customer Microsoft with Block Solution, partnership Pure the Pure preview the as are VMware known Cloud We integration services service providing or are AVS advanced this them CVS the with the more systems. quarter. they storage providing Pure's opportunity customers by half this their enterprise while to experience and reduce spend that cloud

storage Evergreen in low data consistent business and difference Customers and enthusiastic challenging uncertainties IT economy. a Despite ownership the a environment. cost environment, Pure are and clouds data across about are superior hybrid also of their offerings of in making this total centers managing the current

position the to gives our the to overall strong enabling platform storage We response This in for the are center the to larger from consistent, position ever our to demand seeing enterprise all data a us having cloud. unified of footprints platform confidence with needs This, continued positive share strong a and market. accounts. coupled the for flash me our outpace large take for compete in ability is

commentary. for turn further I'll Kevan over to it that, With

Charlie. you, Thank

our with prior are seen spending operating profit We remains this Revenue relatively We pleased to and our we was for quarter. this both guidance quarter. The the environment consistent revenue delivered was what million. up $XXX year-over-year, million, profit, financial strong above year. $XXX XX% have throughout results operating macro and

was However, QX. demand for our throughout solutions robust

FlashBlade to on business since for continues late quarter has value including sales Evergreen very customers, subscription-based consumption We and customer generally of portfolio, services. our quickly portion and transitioning in demand portfolio, another of business across becoming which which meaningful types FlashBlade//E, April. resonating grown become more Our Evergreen//One These and customers is especially offerings offerings FlashBlade achieved record to of Portworx our a of our our available strategy our strong. provide our to subscription as consumption to offerings for focus is our

our offering. We Service technology, as including seeing as FlashBlade are FlashBlade customers consuming a a Evergreen//One Storage also our service, leveraging

of profit $XXX exceeded million operating in expectations. Our QX

Our our powered continues driver differentiated margins. technology flash with and by flash management purity operating raw software key to a gross subscription product strong natively be of

on our capacity of majority is based [indiscernible]. the shipped quarter, last QLC mentioned we As

expected not of the QX. Our outlook remarks further product very which this this strong in totaling in the RPO which end schedule until our with included order year, [indiscernible] a Based million discuss for large is is shipment noncancelable product revenue $X that impacts the at of year, updating exceeds customer and when telco the on next RPO balance $XX revenue annual billion. guidance. I'll order, my timing was

RPO from was with at year our the When one outstanding system noncancelable of the excluding product last our XX%. in current for in quarter services of and strong commitment RPO subscription growth QX both the global also order integrators, very

fully with satisfied $X.X commitment highlighting revenue integrator year. strong consumption grew annual system for last nearly of services In the was subscription-based offerings. our QX, XX% subscription we billion, quarter, As during global year-over-year our QX the to mentioned traction outstanding recurring and service this

date mentioned services has have not where subscription started service Evergreen//One ARR contracts we closed has date calculation service not started, XX%. are growing the where excluded closed also subscription the services was ARR the effective strong, including As Evergreen//One contracts from previously, yet

total services international million Subscription of $XXX for revenue. QX revenue was million comprised revenue $XXX million. of XX% U.S. revenue $XXX was and

new quarter. as acquisition Our we sequentially the new grew customers during XXX acquired customer

Product As we margin services XX.X%. of gross margin our pleased performance XX.X%, XX%. strong margin gross subscription was previously and with was were mentioned, gross

slightly Our employees the X,XXX head the of increased to quarter. count end at approximately

was our we returning In QX. our remains a as of were parameters flow last cash repurchase expenditures and lower very Consistent million that at operations activity place over during $XX throughout balance stock, level to end repurchases fixed of $XXX Pure's repurchased represent from result XXX,XXX our trading billion $X.XX including the shareholders. a of over remarks investments liquidity shares million. quarter of with capital and and quarter, strong, quarter. totaled the the the share in Cash QX, sheet $XX million in

authorization. repurchase our have million on $XXX We existing $XXX million approximately remaining

year. spending Though for especially platform be the consumption is despite are increasing holding these challenging. year offerings. half A not This demand turning for 'XX. year guide updated or beginning environment deteriorate to would FY the at to annual 'XX our our annual derive the macro that assumption data used was subscription second environment and in improve FY to challenges, storage the seeing continues of of Now the we as our meaningfully revenue assumption the key guidance the throughout across service

for and are Although increase expect of billion, X the now factors that million, expect expectation revenue important year, we the be $XXX X.X%. declining are we QX year, $X.XX demand growing annual to X.X% there second the to which to this expected be our is revenue half impacting

factors revenue next a not to guide points basis be First represent will of second incremental detail. as annual $XX a is compared Both we impact year. the of discussed of Storage customer expected non-canceled to our the at is the provided which with in be Service of approximately impact the X.X fulfilled beginning telco a more the a headwind million until product momentum, Evergreen//One when is that combined order year. And on

momentum offering, of that with create at to while our the offering was momentum the of Evergreen//One revenue sales service guide a headwind service We short-term annual we quarter, of the revenue provided creates are pleased beginning points impact we X of X Last very this stated and the appreciating on Evergreen//One to year. to that growth growth. expected our

on we offerings the opportunities Evergreen//Flex in to at Evergreen//One this QX points that provided will beginning we our the than guide nearly the will Based year. in annual expect of seasonally our quarter sales and the largest double Evergreen//One more expect and now headwind our year, now reaching QX, annual of the impact sales of million $XXX X and create

at shift increased revenue annual would our of a to the order compared telco When year. the beginning Evergreen//One customer, $XX offering guide revenue excluding and with against annual a the the been X% our the of provided impacts million we when have growth

growth long-term our and our of our offerings grow, Pure will the subscription we drive for rates consumption subscription will business We that help to improved consumption measure growth of to expect translating sale. business rate health includes and a our This a will metrics our under business additional that CapEx business. provide consumption traditional as of service model and subscription continues models growth

operating annual operating to guidance strength. our QX is from gross margin by approximately be margin Finally, and are continued operational driven XX.X% our XX%. expected we increasing to margin XX% discipline

and our are including this our sales entire the closing, Pure more year doubling our demand than strength with Storage pleased as expectation combined Evergreen//Flex platform, a we In Evergreen//One environment, consistent, with leveraging Storage and across cannot how be technology. of solutions nondisruptive advanced delivering our more Service our customers, We and resonate a offerings. of most management the excited with flash operating

across innovation extends to platform our and business providing Our with models, our Evergreen storage flexibility also increasing business customers value.

that, will to I back Q&A. With it for Paul turn

Thanks, Kevan.

[Operator Instructions]

Operator, let's started. get

Instructions] [Operator

The of Amit comes line of first question from the Evercore. Daryanani

ago, a much the to the do why versus let's I XX anything a how there maybe you macro. towards XX of advantage the lot shortfall Pure's love delta say, massively traditional the realize guide if think days and there fair I'd of a I realize on obviously maybe understand buying impacting you of you is what guess expectations start are micro sense competitive expected your are days shifted in to seasonality that's the about shift there's has currents increasing big number a you Yes. Jan is the kind Evergreen//One But storage versus part ago. of versus from discussion, to get it. I there. it. talk that's extent can your manner. And to Evergreen//One focus quarter cross out I'd versus positioning of of love customers think versus a

a cloud, and for customer. greater obvious continued consumption and just subscription year very, has a a strong. invested on one that is be macro it it's than this for very the Yes. this could cloud a hands-off. well think, shift for that service. they we you been moving Well, is we've to has that Amit, that the years. model strong. model, had in in model stated with, been true And forward even a But a times. it driven the just as but investing to very for you just therefore, X And the paying like lot their premise, now where manage has anticipation of space know, in it consumption nailed it, it over say and service -- our interest one power the the I that other easier it's so cloud make sits And their reasons, we're that, rack an even you we've for difficult that than heavily it's make true fact it to more to if will, But in bite, economically it not It's

So the in has been difficult in times especially uptake tremendous. this, more challenging these

lifted primarily X boats. the would certainly it the tightly overall macro and aligned. really, change helped. as shift are The the hasn't driven put you was So have model. all by macro Better to it, consumption subscription But

is This Yes. Thanks, Charlie. Kevan.

momentum down factors really change that we've in If you as take does to look on well. strength it Evergreen//One. and second, at that's impact is And all come the QX, what a really order. the has is the product the as described. which guide One was X to as of telco well QX the our step and obviously, highlighted, then back is annual an having key That impact Charlie

Your of question from of Aaron Wells next Fargo. comes line Rakers the

Yes.

from about talking Amit's $XX like Just if higher right, to math this $XX I kind build guess million, question contribution. an I'm you're the doing it about of on looks there. of Evergreen//One impact million

I $XXX And number, look X -- you million is million. just Is expectation? guess ARR threw of contribution. ago how I in out months about question a what actually So $XXX that that would the like embedded number think do your like

this and into how grow year? fast next understand what could necessarily headwinds about this $XXX me help thinking Just the move transition to million forward. we this as incremental from consumption here is Just model

million Aaron, of is the Yes. our year. Evergreen//One and $XXX this Evergreen//Flex is The Kevan. for sales really

take adding -- We a the that points strong as has into TCV exiting had about range Think talked that if QX, fact the going in growth. QX, and So of into the sales and to we were about we another had we've during increased if a you then contemplated And annual X our to And that as guide that year. QX step QX volume about back strength Evergreen//One exiting X as what and seeing we're opportunities X seen that QX. been -- with well terms to headwind in then growth of on headwind in points. of now

when telco order, in right impact effects as in dollars to and to terms again, in math the having your that, annual about context our absolute an well. tacking which And the is revenue So then is guide. on of

from Morgan the comes of Marshall of question line Next Meta Stanley.

of year? on I the kind fiscal that on would update on of staying kind the how -- you next your -- any year. mean, same just sometime a just then in least conditions order question a And most second Maybe I Meta would of coming the you're of assume questions. are for at of probability couple back this have One, seeing largely said or

have has transition Or throughout And and kind a the this this culminated something Evergreen into so not of environment? transition better evergreen quarter seeing just a of progress for of up given more year? seen headwind how make kind been you than this just you couldn't it for kind

the with start Meta me Let question.

customer. -- So we to a Meta continued continues be good

the... concerned. blossom one as to continue forward. It second Meta Meta good RSE go And see RSE. relationship and -- on not calls, to to then had when generally, continues better, have but quarter, expect past continues We opportunities as No talk in we meaningful we we about in And we've -- we're as the was to segments. far other that get these to contribution to contribution this by sales

as clarify question second to You well. your want

we transition. much guess to Evergreen question get been year? or of of the environment entire headwind for a fiscal -- is headwind headwind the QX, given much stayed new into a how kind has just just this I a The But macro during as a quarter it's year, versus this sense of say the second that [indiscernible] go clearly is of has probably for this trying I'm stable much of how

we Well, quarters whole growth been where such program a new because every this It start. been in never had case, the is good when headwind if had Evergreen//One Evergreen//One. was One, -- off to a had a might Evergreen//One in the quarters, it strong the QX almost visibility is by really opportunity as in QX continued I and the bit specific so this as we've the the economy we this year, way quarters well, strength year, weaker. saw And we balanced sustained growth remember, but in of now and you has strong it quarter-over-quarter strength other We year. What's bit then other have the different you it's up. like may around and pick -- were just Evergreen//One year, turned into weak early expecting last time around the as there.

So it's yes, now. meaningful a number more but becoming

Yes. to on add that, saying, was to it effect. an to Charlie what And accumulation just if I would of is really

starting the came So annual into of was environment. digits. Evergreen//One in there year. of momentum mid- One of guide second macro obviously, high that considering were when provided, the we to we that with guide revenue were contemplation X key components we And our was, that were single

we X seeing, added were to headwind for we exiting QX on additional and of both points QX, and result QX our of to visibility Now a X QX. what as

our QX QX strong as raised very in even outperformed looks well. Now expectations

but we as was revenue lastly, QX, Evergreen//One. effect do result pressure the there you seeing were product the on, more when of going with momentum a so And about definitely accumulation think we have on

part in orders execution quarter. a would really job close nice And strong the subset throughout have of the to that did team product accelerating probably been executing included of sales this a fulfillment and And of expected QX.

color an is you there as additional And that adds hopefully, for there. well. there impact So some

of is line from Long the Tim The of next question Barclays.

are on the helpful. recognition kind we more a talk just that you these some more Maybe differentiated, coming portfolio from big That color a how kind of deals revenue these timing there quarter. AI deals? in Could out. Any double-digit that's see give about wins have bit just to little that's product be the would little there winning us of

the continues that this absolutely, of AI one. application connected that is at importantly, certainly, what strong and us. to us for This broader areas And Yes, quarter for take But environments. and a traditional really more is training the of AI Pure. workflows. be environments, wins Number to are AI-driven Certainly, generative seen the as variety three, Rob. of we've number segment AI, all of Tim. that's well inference opportunity I'll AI some inclusive the is AI a number across the two, environments AI being these as here one, infrastructure data of and

we if to the infrastructure, a us. be years, continues we've for so been And at this training AI the look, in look for -- space area strong

we AI these example, automaker, had really wins data data as at deploying as thirdly, saw as two, expand environments. FlashBlade are -- an deployments. flash both a part as repositories And application customers' as serving autonomous as their applications preparation some we good really opportunity the data And inference quarter, As as environments. these as their connected data well preparation of bulk as some number Portworx database we efforts of driving to broader customers driving equally look large our both well in around solutions our AI then important in array parts footprint, environments, and this their the of well, these these well saw and other management areas both we

these in we're opportunity portfolio out AI by the so from well, GPU benefit net of well I if being the as strong it if connected positioned technology, look look, and to us environments across entire at data larger continues we the be to terms environments both segment And a the for deployments. driven

JPMorgan. of The Pinjalim next question of comes from Bora line the

about are the This how really about forward? some going And we what highlight Pinjalim. we on think should the the is when takes can think there parts XXXX? of especially for and really seasonality puts the given year you all business of guess Noah moving fiscal I

of Yes. QX. Thanks into won't we're But I things quarter, largest detail seeing. for We through our navigate go X away to important year. lot think specific next the question. which a want is And to that to really, take we seasonally has the to that good is half, that the that's strengthen strengthened demand and is Evergreen//One through sign first expected And is variety One a second seeing and of Charlie strength on a and us. through. momentum for walked reasons we're for for

And so both anything in of to those we specific year, year. want would through factors before play for will be how but get in QX next more about terms think providing next

The next Cowen. the Sankar question is from TD of Krish line of

on like It I million concentration. order. the a $XX on such [ you a had pretty have big the under a ] customer impression basis. number telco high was quarterly a I question seems

So can also, that? useful. talk is is little of you being kind used about And applications a application what bit for this being XG

scheduled would in space, environment it The It And it's aligns that to application in environment. the a is has of have time to longevity general, been advantages for market well that not going us management from in space us. in not very quarter this say And say, we does and X in a distributed happen is, I unusual I we a terribly very And is cooling, product in its strong telco power have capability remote XG telco although unusual especially for shipments is XG XG, fact, this aligning in No, for reliability order will highlighted into. XG Yes. that of unusual which to really their us. with distributed time. and type with upgrades their and it's the environment.

ship and So build business book their on other build-out This based XG their and outs scheduled within of our weeks. environment. is IT in areas is shipment typical a -- schedule

Sidney Deutsche next of from the of comes The question Bank. Ho line

I And growth many XX.X%, very, margin win good look of and access in you or margin you looking to given be pricing product product to of your you price are forward, keep -- being that, order pricing businesses, if environment, sustainability the gross see at the the look is what in in very especially would competition? now? at do want lower the especially at competitors characterize have about curious particularly to have how gross specifically starting more to aggressive more to areas that components actually,

be disk market we the lower Thank the very you, and the of opportunity to market. every enterprise and market, is huge, we Sidney. especially there penetrate in the of opportunity half believe We it's aggressive tiers more we other special for price That's new of market. the ahead than a player -- storage pricing and flash have in performance a intend that as overall

have that market above So to cost our product point as is intended And in gain the very to use continue family out, our be Frankly, the natural intention aggressive advantage range we to E grows to XX is a share. is that segment. you for margins. gross going we're

the products to efficient, less sustained Because of differentiation. an just And that advantage it's complex, the technology. end And really direct flash, competitive set that products are a that, more Purity think of the just performance. day, got remember our behind flash who on that cost-effective more and flash, highlight delivered our are can structural management I translates way. that reliable, more is to more to we've SSD-based software deliver add at and we technology in to and of direct important trapped And significant because over the that, a better

we advantages sustainable, and our are really significant on to to And points, and hardware just add to just structural that software the -- Charlie's driven by so have again, IP.

And quite strong, majority that the back, obviously taking ties then So wanting disk validating gross our reiterate little very in some shipped with bit innovation agreeing board we a were we be and really I'm solutions. will be step and currently just pricing, reiterating margins continue that with a going weakening continued performance and to QLC, both the strategy and to this benefit into strong product now agreeing E and Charlie financial more, that point, Charlie's well we And to Rob price with the bits our look, from with and and from aggressive really the our that our lens pleased improvement pricing. the in are improving we're family across margins, a gross seeing as so do NAND flash add driving. to we're of which takeout

scale seeing subscription As margins, contributor, going that's our combination and to to. our Rob Evergreen think the a also structural strength gross to growth that in including benefiting advantages the margins from are subscription a portfolio our we're alluded be we the product as about similar subscription consumption key Evergreen also our offerings, of margins, on

of pleased So terms yes, overall. what performance we're definitely our margin seeing with in

next of SFC Mehdi (sic) The [ of SIG is the question from Hosseini line ].

Yes. Hosseini. It's Mehdi actually

to want impact Evergreen//One this anywhere here, model? working your the there with we in that Evergreen//One. understand track and capital And balance is sheet To the Just follow-up could requirement? look better would traction better

Yes.

the the million think and a key for being over added sales this we year-over-year. was that quarter, model metric, obviously, combined doubling $XXX Evergreen//Flex this and which total new expected I Evergreen//One metric year the

that be would a that added that helpful. new metric is we've So hopefully

that that ARR is throughout year, metric really also the then strength that and growth is obviously, our is our strong. RPO layering including think we've would in our helpful QX. being I metric to services be quite driven on which by And in is Evergreen//One momentum other The the RPO subscription growth, seen

services our you health and the business. I'd metrics point consumption those So are probably assessing to subscription in the around

The of is Simon from Leopold the next question James. Raymond of line

double handholding but I -- you're April ready you've quick I tough down typically little quarter fiscal your quarter, for think of given January first to a clarification. bit appreciate teens is guide not it to the this a first, in helpful I get got would digits, kind be 'XX, situation quarter. your but that of just

that. clarification on some just So

to ask, And environment then seeing competitive as description the and what there. question fight updates to Charlie's love the that as terms I'd competitors booth. your actions of hard of I love in hearing get wanted competitors. drive to flash and well I some competitive in both phone a and ability displace disk in you're hybrid the as nice

our think you providing But details. the for to it my hit telco about year, of through the QX the for for a Evergreen//One next navigate next about And us setup the lot take through and without we this Evergreen//One really year, look and I'll back, for at year Yes. X% Evergreen//One. as should a is growth. order, is It's expectations discussion QX. critical of But really a in be we mind, momentum and and not, seasonal this if the question. at performance again step

And is the and second seen in what that demand. seeing of top half what so on strengthening we're we've

next would year. see QX as continue we that into And I to as move and we hope through

against data So about for a on points consideration. annual guide that Evergreen//One. be headwind the We annual the talked would guide for X point of

an point Look, we're on Evergreen//One. We're our with inflection customers continue thrilled to actually seeing that we're that expecting momentum with model.

specific more we you momentum so to provide for year. as next move color Charlie? have to And through we'll Evergreen//One QX, the

Yes.

have less out been In the say terms of I'd selling like a and situation improving. what gross generally perhaps, looks as as competitive margins ever, the little field. so in it's competitive

would at directly What a win overall, So has and as do, I with competition as both and little ever, bit better, overall been perusing overall. perhaps I in but is the rates pricing say the our channel environment customers [indiscernible]. is, having will as tough always the we say,

Our against overall our very hold win steady competitors. rates

is environment So -- but a without tough it doubt.

comes line Capital question next Market. the Nehal The Chokshi of Northland from of

click double Slide here to XX. want I on Yes.

sort that I've from go Your And and Evergreen//Flex reviewed good as always Evergreen//One true? [indiscernible]. a that of for A, sales. then your unbilled I'll proxy is there, RPO,

to then been true. we've add And I the well. this be as specific would quarter on would discussing that highlighting is that order and Nehal, that telco for

Right.

Okay.

RPO Q-o-Q do about million. year a And just a you're $XX then if That's Telco a significant basis, still increase. change more a order, year basis. talking unbilled I the $XXX that's that for $XX the in than take to simply year-over-year doubling this on it out ago, cumulative million million, relative a So for on X-year

some X that Evergreen//Flex, you in the quarter in was explosion in third can quarters the you're So then the sold of and first there talk now seeing an normalization sort sort and the in about linearity acceleration quarter you of expect this here? relatively fourth in

Yes. a and And seen of And is momentum this about Evergreen//One. what talked cumulative we've it's we've primarily year build Evergreen//One.

again, was growth annual saw year And guide we rate our that points QX, guide. out of the to the as growth had that year, for So bit again, in X navigated our and really impacted developing through we a Evergreen//One. more a significant contemplated coming we little against QX X and

been through that we've now we that's annual what about Now QX, QX had our in guide. and visibility incremental our to X points provided to

point has model as of has due also in but are think macro, I this seeing really business an think, value customers part, well. And to I inflection Charlie So the out, this pointed a embracing as cumulative the really been effect.

question from of of Wamsi the Mohan Bank of comes next The line America.

as we wondering sort momentum revenue if think Service. should have you CapEx about give given how can the where you was momentum maybe could Storage of about infrastructure support? the continued increased terms of I build-out are currently that Evergreen//One, a this the when level update maybe in you And on us what of of you some think

how our a Yes. about had well perspective. innovation I don't as of headquarters. build-out of significant think of in R&D the our we'll to of from we're this Obviously, lot CapEx. due got CapEx Obviously, change thinking year amount see higher terms a an we've we

only other So we've supporting And CapEx the is big CapEx requirements really, there. of some got the Evergreen//One. momentum requirement

that subscription on how effect obviously, a of Evergreen//One from the of a terms as seeing. coming that's And thinking would on services revenue then so be it a ramping And result perspective. got sales layering about we're CapEx the in we you've

of the Your of Stifel. Matt next question line Sheerin comes from

Commentary the industry. from a your across QLC-based one competitors of pointed broader night last to adoption

add on comments expectations FlashBlade//E success any types And previous surprises pressure or share you're you of that. far seeing that some you've for like array with and seeing so And It second, new the any So introduction. cases seen customers? are of given market competitive from changes use you color E? can in more landscape new or your product not in sounds terms the first, the

petabytes E even from and service. to now customers a less incoming on FlashBlade now X for given down we've it array price to Well, bet. family what I'll take if the that refer if You was introduced now the X they you FlashArray//E, on as flash will, petabyte point, lowers which

feel very, very a strong product it's really line. we that So

that. We competitors. have the closer competitors our one E comes substantially much seen see is below We by to really that offering of entry -- feel our E the in C offering.

The all and disk for had So develop further, And the that in, the of as in is many E to fastest disk. say still course, with address we've use years environment but And ahead drives disk, That we growth it's we involved different we're growth. several product our that. of competitive is flavors. at largely the here comes growth further its that still what have cases disk. which offering is We of new company. any

we're very the but it's growth, full pleased still X with quarters So in. we're at the -- only

-- anticipate more part it's will we be So much meaningful year. that our revenue of next a

of question next is Martinuzzi Street. The the Eric from of Lake line

planning adding to is about you the sales? Curious Yes. your for evaluating you're know typically your feel how you sales Are coverage on when year? capacity coming

had capacity planned believe to is at is that yes. answer for. our The We level we're obviously, grow. the And planning, we

time players. the year, a adding our throughout is to have So new are in been QX but key we sales bring to force

to so will our And be sales force. we adding

follow-up TD is Cowen. question question line a the Krish of from next The Sankar of

these example, just to make sort to simple. up like frame Evergreen//One. wanted time of the the are just for follow I What on contracts, -- are it

your X I'm is Evergreen//One these subscription about a think percentage very the kind it X-year just simply 'XX a X that this It because next one, X% years curious every uptake it's X of like flat outlook. FY next of a said is how headwind it's are You and point the for if model. years, over to subscription.

we a over year, commitments CapEx the our to of that we've to if X.X Evergreen//One Yes, little those this in at that it's closed probably averaging as duration we're similar orders associated bit really look a orders, which with date years great question. well. is Look, traditional

So duration we're that's the that answer in seeing. of terms

to I are these out point contracts. do consumption want that

to minimums. is expect course, these so expect And goes higher, The continue after consumption we done. contracts even more. of then, course, And the we are, the contract we'd effect, in of

the seeing it -- the headwind Charlie. beginning incremental in a the And is the against then against year, about right, that is, -- growth guide we're traditional provided, going the annual translate basically to the was growth just if and we that That's we the in XX% we again of using assumed CapEx annual annual guide calculate headwind revenue had beyond when we provided we at sale. our product what the

calculating against points we're headwind our that's of revenue the annual guide. how So

There are questions this time. no at additional waiting

for conference over management the team So pass the remarks. I'll to closing

operator. you, Thank

believe provide and a storage on cloud platform model a storage to continues needs to customers our strength customers based Our of industry success. we our continues us to outperform, propel and unified strategy distinguish our benefiting in both modern their And consistent, for Pure. all operating consumption the our offerings and

enter all our investors, our customers, thanks the holiday our employees. heartfelt to we I of suppliers As to partners, extend our and our season, want

storage. data Your generation effort Thank the lead in of defining the next enables industry Pure to you.

Call. concludes for Fiscal Earnings participation. you That the Conference Thank XXXX Pure Storage Third your Quarter Year

disconnect now may You your lines.