Everpure, Inc. Class A common stock

If you would like to ask a question, please press star one on your telephone keypad. At this time, I'd like to turn the call over to Paul Zayas, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to Pure's second quarter fiscal year 2025 earnings conference call. On the call, we have Charlie Giancarlo, Chief Executive Officer, Kevin Chrysler, Chief Financial Officer, and Rob Lee, Chief Technology Officer. Following Charlie's and Kevin's prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website where this call is being simultaneously webcast. The slides that accompany this webcast can be downloaded at investor.purestorage.com. On this call today, we will make forward-looking statements which are subject to various risks and uncertainties. These include statements regarding our financial outlook and operations, our strategy, technology and its advantages, our current and new product offerings, and competitive industry and economic trends. 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 some of the risks and uncertainties related 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 revenue, remaining performance obligations, or RPO, and cash and investments. Reconciliations to the most directly comparable GAAP measures are provided in our earnings press release and slides. 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. Our third quarter fiscal 2025 quiet period begins at the close of business Friday, October 18, 2024. With that, I'll turn it over to Charlie.

Thank you, Paul. Good afternoon, everyone, and welcome to our Q2 FY25 earnings call. We were pleased with our Q2 revenue growth of 11% year over year. Cure continues to pick up market share and outpace the industry both in innovation and in growth. During the quarter, we hosted customers and partners at our annual Accelerate conference. Our Las Vegas Accelerate, held in June, kicked off a series of local events across the Americas, Europe, and Asia Pacific, where thousands of customers and partners learned about our platform strategy and fusion vision, as well as Pure's offerings in AI, virtualization, and application modernization. Specifically, we introduced the next generation of Fusion, a first-of-its-kind storage cloud architecture soon to be available as a non-disruptive upgrade to all of our global customers. Fusion allows businesses to transform their pure storage systems into an automated data storage cloud that eliminates the data silos of existing enterprise data storage systems. We also unveiled the industry's first AI storage as a service for GPU clouds. Growing GPU and AI clouds need flexibility in their infrastructure as they are uncertain of their future growth and the type of workloads that they will need to address. Shure's Evergreen One for AI provides them flexibility in both their consumption and price performance needs and matches cost to their revenue growth. Our Evergreen One service offering remains strong. Evergreen One removes the hard work, expense and risk of operating a storage environment from enterprise IT organizations. It provides flexibility. It avoids over provisioning and rigid planning, and it simplifies customers operations with solid and guaranteed SLAs. It also significantly boosts efficiency in terms of capital costs, energy and labor. Options Technology, a financial technology company, started with one small Evergreen One subscription back in 2019 and has grown over the last five years to 18 petabytes of storage across multiple sites globally. Through Evergreen One, Cure regularly enhances the delivery of their SaaS services, improving resiliency, efficiency, and overall performance. While the lengthening of large enterprise deal times impacted Evergreen One growth in the first half, we continue to see strong deal activity. Artificial intelligence continues to be of great interest to our customers. Specifically, customers continue to study both the potential areas for AI use, as well as how to accommodate AI in their infrastructure. We were pleased to have had NVIDIA join us at Accelerate to announce our expected NVIDIA DGX SuperPOD certification by the end of this year. The AI market for data storage has progressed as we have consistently predicted. Cure sees three separate AI opportunities for our solutions. First, storage for machine learning and training environments, where Pure provides high performance storage for public and private GPU farms. This quarter, we signed a deal with SoftBank Corporation, one of the big four telecommunication services in Japan. Pure is providing the storage layer behind many of SoftBank's cutting-edge services, including their new generative AI platform, created specifically to develop the market-leading large language model for the Japanese language. The second AI opportunity we foresee focuses on tailored storage for enterprise inference or RAG environments. Many, if not most, enterprises will use commercial LLMs or other models to operate on their own proprietary data in-house. These systems will use relatively small GPU environments to provide AI insight from their data. Pure is working closely with NVIDIA on a number of vertical market offerings to satisfy this market. We continue to believe that our largest opportunity opened by AI is to address the siloed nature of enterprises' existing data storage architectures. Current data stores sit behind application stacks and generally have neither the performance nor the connectivity to serve data directly for AI engines and analytics. Customers that are the most advanced in their AI investigations all acknowledge that data access and preparation are major barriers to AI deployment. Pure Fusion will allow customers to upgrade their enterprise storage to function as a storage cloud, simplifying data access and management, and eliminating data silos to enable easier access for AI. The focus and uncertainty around AI has caused customers to begin to reevaluate their planning on how they will invest their IT dollars. We're also seeing large organizations increase their focus on managing escalating costs from software, cloud and SaaS services. Our pure cloud block store or Microsoft Azure VMware solution is helping enterprises contain cloud storage costs generally by more than 50%. Put simply, Cloud Block Store provides a more resilient and performant public cloud storage infrastructure for large enterprise cloud application deployments that is dramatically less expensive than cloud-native services. Furthermore, Cloud Block Store is fully compatible with enterprise storage interfaces and services, including disaster recovery and data protection. One case in point is a Fortune Global 500 food and beverage customer that faced a growing hyperscaler data footprint and accelerating costs with limited visibility into its overall workload performance. By leveraging Cloud Block Store, reducing thousands of cloud-managed disks to just dozens of Cloud Block Store volumes, equipped with data protection, ransomware remediation features and advanced workload performance reporting, The company is looking to save 50% of its total storage bill. Our discussions with hyperscalers to replace their core storage with pure technology continues to progress positively. Our lead prospect has advanced from extensive evaluation of our core technology to testing an integrated solution, and we have been engaged in detailed contractual negotiations for many months. we remain confident that we will secure our first hyperscaler design win by year-end. The longer-term opportunity for Pure with hyperscalers is significant. To provide a sense of scale, the top 10 hyperscalers are projected to buy almost 70% of all disk drives, over 600 exabytes this year alone. Because of Pure's unique direct-to-flash technology, we can offer hyperscalers better performance, reliability, and power and space savings than hard disks at a similar or better total cost of ownership. With nearly 15 years of experience with software and hardware flash management, we continue to far outdistance the industry in energy efficiency, density, and performance. Pure holds key intellectual property and unmatched multi-vendor, multi-process flash expertise that no other vendor can match and cannot be replicated with standard SSDs. Our latest 150 terabyte direct flash module shipping later this year is but the next stop on our robust industry-leading flash roadmap. Energy and space savings generated by our direct-to-flash advantage are significant. We reduce space, power, and cooling requirements by a factor of 5 to 10 compared to hard disks. In a world of greater power demands and limited electrical supply, the savings on electricity alone provides a compelling incentive to switch from hard disks in both hyperscaler as well as enterprise data centers. Our E family of products, Focus on replacing enterprise hard disk systems with more efficient and higher performance Pure technology continues to grow strongly. Enterprises increasingly recognize that Pure direct flash technology has reached the price level where they can eliminate the last mechanical component from their data centers. As highlighted in our latest ESG report, power reduction on storage from Pure's direct flash technology can reduce total power approximately 20%. Businesses are facing higher energy costs and greater power constraints while committing to higher sustainability goals. BT, the British multinational service provider, has set a target to achieve net zero carbon emissions in its operations by the end of March, 2031. As a foundational storage provider to BT, we directly support their data center energy reduction program. We have enabled BT to grow its data storage while reducing its energy usage. BT has measured your storage to be about 18 times more efficient than their legacy storage benchmarks. Looking back over this past quarter, we have not seen a significant change in the overall macro environment or our customers' intentions to buy. We have, however, seen customers look to manage increasing costs in cloud, software, and SaaS. We believe that the storage market will be resilient in this IT economy, but we have yet to see a positive inflection. Overall, we are well positioned in all of the segments in which we compete and believe we will continue to gain share in our markets. We know we are gaining ground as our growing strength has forced competitors to intensify their efforts and mimic our messaging. It is clear now that legacy competitors in our market see Pure as the alpha competitor and have focused their messaging and strategies on us. We appreciate the attention and look forward to the competition. We remain confident in our ability to expand our market share and maintain our strong leadership in storage. With that, I'll turn it over to Kevin.