Q1 total revenue growth of 18%, year-over-year Subscription services ARR over $1.4 billion SANTA CLARA, Calif., May 29, 2024 /PRNewswire/ -- Today Pure Storage (NYSE: PSTG), the IT pioneer that delivers the world's most advanced data storage technologies and services, announced financial results for its first quarter fiscal year 2025 ended May 5, 2024. "Pure Storage is uniquely positioned to integrate fragmented data storage environments, which hinders enterprises from easily deploying artificial intelligence, hybrid cloud, and modern application deployment," said Charles Giancarlo, Chairman and CEO, Pure Storage. "At our June Accelerate conference, global customers will see how our latest innovations enable enterprises to adapt to rapid technological change with a platform that fuses data centers and cloud environments." First Quarter Financial Highlights  Revenue $693.5 million, an increase of 18% year-over-year Subscription services revenue $346.1 million, up 23% year-over-year Subscription annual recurring revenue (ARR) $1.4 billion, up 25% year-over-year Remaining performance obligations (RPO) $2.3 billion, up 27% year-over-year GAAP gross margin 71.5%; non-GAAP gross margin 73.9% GAAP operating loss $(41.8) million; non-GAAP operating income $100.4 million GAAP operating margin (6.0%); non-GAAP operating margin 14.5% Q1 operating cash flow $221.5 million; free cash flow $172.7 million Total cash, cash equivalents, and marketable securities $1.7 billion "We are pleased with the strong start to our year as Q1 revenue growth of 18 percent and profitability both outperformed," said Kevan Krysler, Chief Financial Officer, Pure Storage. "We are well positioned with our highly differentiated data storage platform for substantial long-term growth." At the Pure//Accelerate annual customer event next month, the company will be delivering industry-first innovations in the Pure data storage platform to address the most pressing topics critical to customers, including AI and Cyber Resiliency. First Quarter Company Highlights Accelerating Enterprise AI: Through integrations with NVIDIA, Pure delivered new validated reference architectures for running generative AI use cases, including a new NVIDIA OVX-ready validated reference architecture, adding more options for customers in addition to the previously announced NVIDIA BasePod certification. As a leader in AI, Pure Storage, in collaboration with NVIDIA, is arming global customers with a proven framework to manage the high-performance data and compute requirements they need to drive successful AI deployments. Subscription Services Innovation: New self-service capabilities across its Pure1® storage management platform and Evergreen® portfolio empower customers with more control over their data storage environment via a single management layer, simplifying end-to-end operations. Awards and Accolades Financial Times The Americas' Fastest Growing Companies 2024 Data Breakthrough Awards "Overall Data Storage Company of the Year" CRN AI 100 list in the Data Center and Edge category Second Quarter and FY25 Guidance Q2FY25 Revenue $755M Revenue YoY Growth Rate 9.6 % Non-GAAP Operating Income $125M Non-GAAP Operating Margin 16.6 % FY25 Revenue $3.1B Revenue YoY Growth Rate 10.5 % TCV Sales for Evergreen//One & Evergreen//Flex Subscription Service Offerings $600M TCV Sales for Evergreen//One & Evergreen//Flex Subscription Service Offerings YoY Growth Rate Approximately 50% Non-GAAP Operating Income $532M Non-GAAP Operating Margin 17 % These statements are forward-looking and actual results may differ materially. Refer to the Forward Looking Statements section below for information on the factors that could cause our actual results to differ materially from these statements. Pure has not reconciled its guidance for non-GAAP operating income and non-GAAP operating margin to their most directly comparable GAAP measures because certain items that impact these measures are not within Pure's control and/or cannot be reasonably predicted. Accordingly, reconciliations of these non-GAAP financial measures guidance to the corresponding GAAP measures are not available without unreasonable effort. Pure//Accelerate 2024 Register for Pure//Accelerate® 2024 in Las Vegas from June 18-21, 2024 and discover how to embrace the new age of data. Be front and center as we make history, changing the future of storage and the industry. Pure Storage executives and world-leading experts - including Pure Storage CEO, Charles Giancarlo, and World Champion & Mental Health Advocate, Michael Phelps - will share insights, strategies, and their vision for the future. Conference Call Information Pure will host a teleconference to discuss the first quarter fiscal 2025 results at 2:00 pm PT today, May 29, 2024. A live audio broadcast of the conference call will be available on the Pure Storage Investor Relations website. Pure will also post its earnings presentation and prepared remarks to this website concurrent with this release. A replay will be available following the call on the Pure Storage Investor Relations website or for two weeks at 1-800-770-2030 (or 1-647-362-9199 for international callers) with passcode 5667482. Additionally, Pure is scheduled to participate at the following investor conferences: Bank of America Global Technology ConferenceDate: Tuesday, June 4, 2024Time: 2:00 p.m. PT / 5:00 p.m. ETFounder & Chief Visionary Officer John "Coz" ColgroveChief Financial Officer Kevan Krysler William Blair Growth Stock ConferenceDate: Thursday, June 6, 2024Time: 9:20 a.m. PT / 12:20 p.m. ETChief Technology Officer Rob Lee Product & Technology-Focused Meeting for Financial Analysts at Pure//Accelerate 2024Date: Thursday, June 20, 2024Time: 1:00 p.m. PT / 4:00 p.m. ET The presentations will be webcast live and archived on Pure's Investor Relations website at investor.purestorage.com. About Pure Storage Pure Storage (NYSE:PSTG) delivers the industry's best platform to store, manage, and protect the world's data. With a cloud experience across a unified storage operating environment, Pure empowers every organization with the agility to meet evolving data requirements at speed and scale, while reducing total cost of ownership. Pure believes it can make a meaningful impact in reducing data center emissions worldwide by providing a storage platform that enables customers to significantly reduce their carbon and energy footprint. Pure is proud to be a customer-first organization, as evidenced by the highest Net Promoter Score in the industry. For more information, visit www.purestorage.com. Analyst RecognitionLeader in the 2023 Gartner Magic Quadrant for Primary StorageLeader in the 2023 Gartner Magic Quadrant for Distributed File Systems & Object Storage Connect with Pure Blog LinkedInTwitter Facebook  Pure Storage, the Pure P Logo, Portworx, and the marks on the Pure Trademark List at www.purestorage.com/legal/productenduserinfo.html are trademarks of Pure Storage, Inc. Other names are trademarks of their respective owners.  Forward Looking Statements This press release contains forward-looking statements regarding our products, business and operations, including but not limited to our views relating to future period financial and business results, demand for our products and subscription services, including Evergreen//One, our technology and product strategy, specifically customer priorities around sustainability, the benefits to our customers of using our products, our ability to perform during current macro conditions and expand market share, our sustainability goals and benefits, our ability to capture storage workloads for AI environments and hyperscalers, the timing and magnitude of large orders, the impact of inflation, economic or supply chain disruptions, our expectations regarding our product and technology differentiation, including the E//Family, new customer acquisition, and other statements regarding our products, business, operations and results. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, which are available on our Investor Relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information is also set forth in our Annual Report on Form 10-K for the year ended February 4, 2024. All information provided in this release and in the attachments is as of May 29, 2024, and Pure undertakes no duty to update this information unless required by law. Key Performance Metrics Subscription ARR is a key business metric that refers to total annualized contract value of all active subscription agreements on the last day of the quarter, plus on-demand revenue for the quarter multiplied by four. Total Contract Value (TCV) Sales, or bookings, of Pure's Evergreen//One and Evergreen//Flex offerings is an operating metric, representing the value of orders received and/or expected to be received during the fiscal year. Non-GAAP Financial Measures To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, Pure uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses such as stock-based compensation expense, payments to former shareholders of acquired companies, payroll tax expense related to stock-based activities, amortization of debt issuance costs related to debt, amortization of intangible assets acquired from acquisitions, acquisition-related transaction and integration expenses, restructuring costs related to severance and termination benefits, and costs associated with the impairment and early exit of certain leased facilities that may not be indicative of our ongoing core business operating results. Pure believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to free cash flow," included at the end of this release. PURE STORAGE, INC.Condensed Consolidated Balance Sheets(in thousands, unaudited) At the End of First Quarter of Fiscal 2025 Fiscal 2024 Assets Current assets: Cash and cash equivalents $           900,615 $           702,536 Marketable securities 823,397 828,557 Accounts receivable, net of allowance of $965 and $1,060 423,454 662,179 Inventory 40,674 42,663 Deferred commissions, current 85,386 88,712 Prepaid expenses and other current assets 174,238 173,407 Total current assets 2,447,764 2,498,054 Property and equipment, net 368,153 352,604 Operating lease right-of-use-assets 126,435 129,942 Deferred commissions, non-current 211,240 215,620 Intangible assets, net 29,156 33,012 Goodwill 361,427 361,427 Restricted cash 9,595 9,595 Other assets, non-current 69,840 55,506 Total assets $        3,623,610 $        3,655,760 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $             55,709 $             82,757 Accrued compensation and benefits 137,669 250,257 Accrued expenses and other liabilities 127,885 135,755 Operating lease liabilities, current 44,819 44,668 Deferred revenue, current 860,221 852,247 Total current liabilities 1,226,303 1,365,684 Long-term debt 100,000 100,000 Operating lease liabilities, non-current 120,709 123,201 Deferred revenue, non-current 741,255 742,275 Other liabilities, non-current 61,370 54,506 Total liabilities 2,249,637 2,385,666 Stockholders' equity: Common stock and additional paid-in capital 2,890,317 2,749,627 Accumulated other comprehensive loss (5,584) (3,782) Accumulated deficit (1,510,760) (1,475,751) Total stockholders' equity 1,373,973 1,270,094 Total liabilities and stockholders' equity $        3,623,610 $        3,655,760   PURE STORAGE, INC.Condensed Consolidated Statements of Operations(in thousands, except per share data, unaudited) First Quarter of Fiscal 2025 2024 Revenue: Product $         347,384 $         308,963 Subscription services 346,095 280,344 Total revenue 693,479 589,307 Cost of revenue: Product (1) 100,753 96,213 Subscription services (1) 97,020 79,747 Total cost of revenue 197,773 175,960 Gross profit 495,706 413,347 Operating expenses: Research and development (1) 193,820 185,331 Sales and marketing (1) 250,972 232,446 General and administrative (1) 76,787 67,384 Restructuring and impairment (2) 15,901 — Total operating expenses 537,480 485,161