Q2 FISCAL 2022 RESULTS
Transcript of Q2 FISCAL 2022 RESULTS
August 25, 2021Q2 Fiscal 2022 Results
© 2021 Pure Storage,Inc.
2© 2021 Pure Storage, Inc.
FORWARD LOOKING STATEMENTSAND NON-GAAP INFORMATION
This presentation contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Such forward-looking statements include statements concerning our possible or expected future financial or operating results, business strategies, product development plans,technical and business advantages, competitive position, industry trends and potential growth opportunities. Forward-looking statements include all statements thatare not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “intend,” “may,” “plan,” “potential,” “predict,”“project,” “should,” “will,” “would” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements todiffer materially from any future results, performance or achievements expressed or implied by the forward-looking statements, including risks, uncertainties andother factors relating to our beliefs about financial results, our momentum and growth potential, growth and market position, technological leadership and marketopportunity, introduction of new functionality and products, demand for our products and subscription services, the success of the Portworx acquisition andtechnology, customer spending priorities, our competitive position and industry dynamics, pricing environment, global economic situation, and relationships with thirdparties, including partners, customers, suppliers and contract manufacturers and the duration and scope of the COVID-19 pandemic and related restrictions and itsimpact on our business, operating results, cash flows and/or financial condition. Additional risks, uncertainties and other factors are included under the captions "RiskFactors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our reports previously filed with the SEC, which areavailable on our website at investor.purestorage.com and on the SEC's website at www.sec.gov.
Forward-looking statements represent our beliefs and assumptions only as of the date of this presentation. Except as required by law, we assume no obligation toupdate these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-lookingstatements, even if new information becomes available in the future.
This presentation includes certain non-GAAP financial measures as defined by SEC rules. As required by Regulation G, we have provided reconciliations of thosemeasures to the most directly comparable GAAP measures, which are available in the Appendix. We have not reconciled our guidance regarding non-GAAP operatingincome (loss) to its most directly comparable GAAP measure because items such as stock-based compensation expense and payroll tax expense related to stock-based activities that impact these measures are not within our control and/or cannot be reasonably predicted. Accordingly, a reconciliation of the non-GAAPoperating income (loss) to the corresponding GAAP measure is not available without unreasonable effort.
Company Overview
© 2021 Pure Storage,Inc. 3
4© 2021 Pure Storage, Inc.
Pure delivers a modern data experience that helps customers put data to use and allows them to run their operations as a true, automated, storage as-a-service model seamlessly across multiple clouds.
Who are we?
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5© 2021 Pure Storage, Inc. 5© 2021 Pure Storage, Inc.
Pure Storage At A Glance
~380Q2 FY22 Customer Additions
CustomersQ2 FY22 Revenue Subscription Services Revenue
$497 M23% Y/Y Growth
Customers
~50%*Of Fortune 500 companies
31%Q2 FY22 Y/Y Growth
9,000+*Global Customers
CustomersFY21 Annual Revenue Leadership
$1.68 BSatisfaction
83.5 NPSTop 1% of B2B Companies
7 Year LeaderGartner Magic Quadrant
(*) As of the end of Q2 FY22
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Unified Fast File and Object Storage
Mission-CriticalBlock Storage
All-FlashSecondary Storage
Cloud Block Store
Modernizing Infrastructure All-Flash Storage for Accelerating
Traditional Applications
Delivering the Modern Data Experience
Modernizing Operations Automating Storage to Deliver the
Cloud as-a-Service Experience
Modernizing Applications Delivering the Hybrid Cloud Platform
for Tomorrow’s Data Applications
SaaS-Based, AI-Driven Management & Support
Subscription to Continuous SW + HW Innovation
Unified as-a-Service Subscription
Hybrid Data Management for Kubernetes Applications
Hybrid Mobility for Tier1 Apps
Unified Fast File and Object Storage
7© 2021 Pure Storage, Inc.© 2021 Pure Storage, Inc.
Top 10 Reasons Customers Buy Pure
Simplicity - Easy to buy, install and operate
Innovation – 7x leader in Gartner Magic Quadrant
Reliability - Six 9s of reliability
Leadership - 1st flash that costs less than hybrid disk arrays
Flexibility - Differentiated unified as-a-service offering
Trust - Top 1% of NPS of industry B2B scores
Enterprise Proven - Expanding in Global F500 & key verticals
Cloud Chosen - Trusted by the largest and most demanding
Green - Evergreen Storage = less waste
Fair - Transparency & pay as you go
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>9,000CUSTOMERS TO-DATE
~380NEW CUSTOMER ADDITIONS
IN Q2 FY22
~50%OF FORTUNE 500
~$2*Incremental purchases from all customers within 24 months of
initial purchase of $1
~$11*Incremental purchases from top 25 customers within 18 months
of initial purchase of $1
(*) Note: Incremental Purchases exclude Evergreen and Unified Subscription Services purchases
TOTAL AND NEW CUSTOMERS
>6,500>8,000
>9,000
06012018024030036042048054060066072078084090096010201080114012001260132013801440150015601620168017401800186019201980204021002160222022802340240024602520258026402700276028202880294030003060312031803240330033603420348035403600366037203780384039003960402040804140420042604320438044404500456046204680474048004860492049805040510051605220528053405400546055205580564057005760582058805940600060606120618062406300636064206480654066006660672067806840690069607020708071407200726073207380744075007560762076807740780078607920798080408100816082208280834084008460852085808640870087608820888089409000
FY20 Q2 FY21 Q2 FY22 Q2
~10%New Customer Additions
Q2 FY22 Y/Y
Financial Overview
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10© 2021 Pure Storage, Inc.
Q2 FY22 HIGHLIGHTS
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Q2 revenue growth of 23% Y/Y driven by strong sales execution across our portfolio
Subscription Services revenue, up 31% Y/Y with strong growth in Pure as-a-Service which nearly doubled revenues compared to prior year
FlashBlade sales established a new record high for Q2FlashArray//C sales more than tripled Y/YFlashArray//X gained significant strength across our key customer segments
Revenue and gross margin outperformance and improving sales efficiency contributed to delivering strong Non-GAAP operating profit of $46.6 million
Raised FY22 revenue outlook to $2.04 billion
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Q2 FY22 FINANCIAL SUMMARY
Financial Metrics Guidance Actuals Y/Y
Revenue $ 470 Million $ 497 Million +23%
Remaining Performance Obligations (RPO) $ 1,195 Million +25%
Non-GAAP Operating Income * $ 15 Million $ 47 Million
(*) See reconciliation of actual non-GAAP financial metrics to the corresponding GAAP measures in our Appendix.
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TOTAL REVENUE
$1,076 $1,239 $1,144
$284
$405 $540
250
750
1250
1750
FY19 FY20 FY21
Product Revenue (Millions) Subscription Services Revenue (Millions)
$300 $272 $325
$96 $132$172
50
110
170
230
290
350
410
470
530
FY20 Q2 FY21 Q2 FY22 Q2
+18%Total Revenue 3-Year CAGR*
+23%Total Revenue
Q2 FY22 Y/Y Growth
+42% Subscription Services
3-Year CAGR*
$1,360
$1,643$1,684
$396 $404
$497
+31% Subscription Services Q2 FY22 Y/Y Growth
Annual Revenue Second Quarter Revenue
(*) Represents compounded annual growth rate from end of FY18 to end of FY21
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$607 $643 $697 $706 $724 $763$844 $866 $910
$163 $168
$183 $206 $232 $222 *$250 $263
$285
$770 $811
$880 $912 $956 $985 *
$1,094 $1,129$1,195
FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2Axis Title
Deferred Revenue (Millions) Unbilled Remaining Performance Obligations (Millions)
REMAINING PERFORMANCE OBLIGATIONS
(*) Previously reported amount was reduced by $25 million arising from the expiration of a non-PaaS reseller contract.
+25%RPO
Q2 FY22 Y/Y Growth
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$275 $282 $350
69.4% 69.8% 70.5%
FY20 Q2 FY21 Q2 FY22 Q2
GROSS PROFIT & MARGINNon-GAAP as a Percentage of Revenue
See GAAP to non-GAAP reconciliation in our appendix
$919
$1,159 $1,179
67.6%
70.5% 70.0%
FY19 FY20 FY21
LONG-TERMGM TARGET
70%
65%
Non-GAAP Gross Profit (Millions)
Annual Gross Profit & Margin Second Quarter Gross Profit & Margin
Gross Profit Margin
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7.4%
$51
7.8%
$56
8.2%
$4637.8% 40.0% 38.5%
18.7% 19.3% 20.6%
07.9% ($3) 8.5%
$116.6%
$4742.8% 38.1%
34.4%
19.5%20.4%
20.1%
-25
3.7% 3.4% 2.7%(0.8%)
2.8%
9.4%
OPERATING INCOME (LOSS) & MARGINNon-GAAP as a Percentage of Revenue
63.9%*
FY19 FY20 FY21
70.2%* 67.0%*61.1%*
67.1%* 67.3%*
G&A S&M R&D Operating Income (Loss) (Millions) Non-GAAP Operating Margin
Annual Operating Income & Margin Second Quarter Operating Income (Loss) & Margin
FY20 Q2 FY21 Q2 FY22 Q2
(*) Non-GAAP operating expenses as a percentage of revenue
See GAAP to non-GAAP reconciliation in our appendix
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$20 $26 $96
$29 $25
$27
-31
29
89
$64
$102 $93
$100
$88$95
50
110
170
FY19 FY20 FY21
FY19 FY20 FY21
Capital Expenditures (Millions) Free Cash Flow (Millions)
CASH FLOW
See GAAP to non-GAAP reconciliation in our appendix
$164
$190 $188
$49 $51
$123
-FY20 Q2 FY21 Q2 FY22 Q2
(5.6% ofrevenue)
(5.3% ofrevenue)
(7.4% ofrevenue)
(7.3% of revenue)
(6.2% ofrevenue)
(5.6% ofrevenue)
Annual Operating Cash Flow (Millions) Second Quarter Operating Cash Flow (Millions)
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Guidance
(1) We have not reconciled guidance for non-GAAP operating income to the most directly comparable GAAP measure because items such asstock-based compensation expense and payroll tax expense related to stock-based activities that impact this measure is not within our control and/or cannot be reasonably predicted. Accordingly, a reconciliation of this non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.
. Q3 FY22 FY22
Revenue $ 530 Million $ 2.04 Billion
Non-GAAP Operating Income(1) $ 40 Million $ 150 Million
Appendix
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GROSS PROFIT & MARGINGAAP TO NON-GAAP RECONCILIATION
20© 2021 Pure Storage, Inc.
OPERATING EXPENSESGAAP TO NON-GAAP RECONCILIATION
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FREE CASH FLOWGAAP TO NON-GAAP RECONCILIATION
OPERATING INCOME (LOSS) & MARGINGAAP TO NON-GAAP RECONCILIATION