Everpure, Inc. Class A common stock

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Peer Storage second quarter fiscal year 2023 earnings release conference call. At this time, all participants are in listen only mode. At the conclusion of our prepared remarks, there will be a question and answer session. If anyone should require assistance during the conference, please press the star zero on your touchtone pad at any time. As a reminder, this call is being recorded. I would now like to introduce our host for today's conference call, Mr. Sanjot Khurana. Mr. Sanjot Khurana, please go ahead.

Thank you and good afternoon. Welcome to the Pure Storage second quarter fiscal 2023 earnings conference call. My name is Sanjot Khurana, Vice President of Investor Relations and Treasurer at Pure Storage. Joining me today are our CEO, Charlie Giancarlo, our CFO, Kevin Chrysler, and our CTO, Rob Lee. Before we begin, I would like to remind you that during this call, management will make forward-looking statements which are subject to various risks and uncertainties. These include statements regarding the COVID-19 pandemic and related disruptions, our growth and sales prospects, competitive industry and technology trends, our strategy and its advantages, our current and future product offerings, and our business and operations. Any forward-looking statements that we make are based on facts and assumptions as of today and we undertake no obligation to update them. Our actual results may differ materially from the results forecasted and reported results should not be considered as an indication of future performance. A discussion of the risks and uncertainties relating to our business is contained in our filings with the SEC and we refer you to these public filings. During this call, all financial metrics and associated growth rates are non-GAAP measures other than revenues, remaining performance obligations or RPO, and cash and investments. Reconciliations to the most directly compatible GAAP measures are provided in our earnings press release and slides. Additionally, when we refer to sales in our prepared remarks, we mean total bookings excluding cancelable orders. This call is being broadcast live on the Pure Storage Investor Relations website and is being recorded for playback purposes. An archive of the webcast will be available on the IR website and is the property of Pure Storage. With that, I'll turn the call over to our CEO, Charlie Giancarlo.

Hello, everyone, and thank you for joining us today. Once again, we are very pleased with Pure's continued success as demonstrated by this quarter's strong results. Pure's Q2 revenue grew by 30% year-over-year, with our subscription ARR up 31%. Our growth was balanced between the U.S. and our international markets, highlighting the broad and durable appeal of our portfolio and Pure's continuing ability to deliver simple, sustainable data storage and management solutions that every organization needs. Data is the modern linchpin of business transformation, and Pure is the innovation and customer experience leader in one of the largest segments of technology investments. Building on our momentum, we introduced a number of major advancements in our portfolio during our annual Accelerate conference in Q2, generating strong excitement from current and potential customers. We unveiled FlashBlade S, our next generation FlashBlade, a significant step forward in performance, density, and capacity, providing a modular architecture for increased efficiency and flexibility. FlashBlade S significantly expands the use cases for this product line, including a wide price performance range of file and object workloads, such as computational analytics and AI, image search and recognition, electronic design automation, media special effects, high performance computing, and data protection. FlashBlade S was designed with full evergreen capabilities, enabling the system to be continuously upgraded without disruption. With its launch in mid Q2, FlashBlade S comprised 20% of all Q2 FlashBlade orders, and customer feedback on the first installed units is excellent. In Q2, our Evergreen subscription portfolio was extended with the addition of Evergreen Flex, a new fleet-level Evergreen offering. Evergreen Flex provides customers additional flexibility as they optimize their data infrastructure. It provides utilization pricing across a customer's entire storage environment with the ability for customers to purchase inexpensive storage hardware and consume capacity on a pay-as-you-go model. Evergreen Flex joins Evergreen Forever and Evergreen One, formerly known as Pure as a Service, and is available across our Pure portfolio. We also released our PureFusion service for general availability this past quarter. PureFusion enables customers, managed service providers, and cloud service providers to implement a cloud operating model for data storage management and offerings. The industry sometimes refers to this as infrastructure as code. Customers can use PureFusion to orchestrate and manage their entire fleet of pure storage, reducing costs and complexity, and also offer storage services to their customers or developers through APIs, dramatically increasing developer productivity and corporate agility. While Pure Fusion is still in its early days, it has generated great interest from our largest enterprise and MSP customers. Pure Fusion is yet another example of how Pure continues to drive the data storage and management industry forward. Pure's Portworx software was chosen by GigaOM Radar Reports for the third consecutive year as the leader for enterprise Kubernetes storage and cloud native Kubernetes data storage. Their in-depth analysis awarded us the highest scores among all market segments, deployment models, and evaluation metrics. Portworx's ability to empower developers to deliver superior outcomes on every cloud, both public and private, is the reason that a large global credit card company dramatically expanded their use of Portworx this quarter to support their hybrid cloud data strategy. Portworx Data Services, released just three months ago, has likewise generated great interest, including many POCs and its first sales in Q2. Customers valued its simple one-stop shop for modern database operations its rapid time to deploy and scale database as a service for developers, and ability to avoid cloud lock-in due to its multi-cloud compatibility. As I have said before, Pure believes data storage and management is high-tech, a fundamental component of critical infrastructure, and we invest in it accordingly. We are reaping the rewards of delivering leading products and services in a massive market that was written off as a commodity by legacy competitors. In this uncertain macro environment, customers are especially looking for solutions that speed their digital transformation roadmaps while reducing their overhead and total cost of ownership. I've just returned from two weeks of customer and partner visits in Australia and Japan, including hosting a very successful Tokyo Accelerate event. In our Asia-Pacific theater, as elsewhere, customers are simply blown away by the superior performance, reliability, and simplicity of our products, and they rave about their entire experience with Pure. One customer who installed Pure to replace a competitor's all-flash product reported a tenfold improvement in performance while also significantly reducing their labor and energy expenses. And now, for the first time, I increasingly hear from international customers that they actively consider Pure specifically for our ability to drive down energy usage and e-waste. The demand for solutions that reduce customers' environmental footprint is now top of mind in a majority of international enterprises that we speak to. We added more than 350 new customers this past quarter. In addition to sustained growth of new customers in enterprise and commercial segments, we also saw very strong interest from public sector customers this quarter. Many of them cited sustainability and energy reduction goals as equal to their performance, price, and reliability targets. One example is San Luis Obispo County's IT department, which reduced their data center storage footprint by 75% and power consumption by 59% while substantially increasing their storage capacity. By replacing a competitor's all-flash systems with Pure, They also reduced their time dedicated to storage administration with Pure One and enabled safe mode to protect their data infrastructure against cyber threats. Now I will discuss the business environment as we see it today. I'm pleased with our ability to deliver on our strategy of strong growth while increasing operating profit, all while navigating the external inflationary and supply chain environments without raising list prices. Our customers are continuing to expand their data storage with Pure and we continue to expand our customer base. We do, however, see signs of increased diligence of purchases by enterprise customers resulting in some lengthening of sales cycle. Overall, I remain confident in our ability to take market share and to grow faster than the market. As reported last quarter, our hiring remains strong. Our attrition rates are below the rest of our industry peers. and are reduced from the highs experienced this past spring. As companies around the world adjust to a post-COVID normal, we believe that investment in critical data infrastructure will remain central to their growth plans and that the dedication of our talented technology, sales, customer success, and other core teams will enable Pure to outperform the market. Next week, we are officially kicking off our new hybrid work policy, Which will have full teams come together in the office on specified days to collaborate enhance creativity and increase employee engagement. Many of our development teams are already at over 50% in office occupancy. Like everyone else at pure. I'm excited about our new Silicon Valley campus that we will be moving into this coming spring. I'd now like to hand the mic over to our CFO, Kevin Chrysler, for a detailed review of our numbers.