Everpure, Inc. Class A common stock

Good day and welcome to the Peer Storage fourth quarter and full year fiscal 2025 financial results conference call. Today's conference is being recorded. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. 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 Zietz, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to Pure's fourth quarter fiscal year 2025 earnings conference call. On the call, we have Charlie Giancarlo, Chief Executive Officer, Kevin Kreisler, 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 today 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 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 revenue, remaining performance obligations, or RPO, and cash and investments. Reconciliations to the most directly comparable gap measures are provided in our earnings press release and slides. This call is being broadcast live on the Peer 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 Peer Storage. Our first quarter fiscal 2026 quiet period begins at the close of business Friday, April 18, 2025. With that, I'll turn it over to Charlie. Thank you, Paul.

Good afternoon, everyone, and welcome to our Q4 and fiscal 2025 earnings call. We delivered a solid Q4, exceeding both revenue and earnings guidance, and capping off the year marked by progress as our long-term data platform strategy is changing how enterprises think about data storage and management. In FY25, we delivered on several key strategic initiatives. First, We achieved a design win with a top four hyperscaler. This relationship is proceeding well in the next stages of both testing and deployment plans. We see continued progress on certifying our use across multiple price performance layers. Fiora's direct flash technology will enable this hyperscaler to deploy a consistent architecture across multiple performance tiers of their storage hierarchy. It also allows them to redeploy significant amounts of power and space to new workloads and to increase their data storage performance, reliability, and lifetime. We also launched our 150 terabyte direct flash module, marking a five-fold increase in capacity over standard hard disks and two and a half over the largest SSDs. We are on track to deliver a 300 terabyte DFM late this year. Next, our expansion and growth of the E family during the year signified a major advancement to address the expected tenfold increase in unstructured data driven by AI over the next five years. This offers businesses far better economics compared to disk. along with superior power and density efficiencies that will drive the displacement of disk in data centers. The E family has become a strong competitor to existing hybrid and hard disk environments. The rise of NAND prices in 2024 relative to disk competition did affect gross margins negatively in the year, which we expect to abate in 2025. We also continue to invest and see success in our Evergreen One program, which has attracted strong customer satisfaction and high existing customer growth. Perhaps our most significant and revolutionary technology advancement last year was the GA release of our Fusion version 2. Available as a non-disruptive upgrade to all Pure customers, Fusion v2 transforms traditional enterprise data storage architectures from application data silos to enterprise data clouds. With Fusion, Pure can now provide customers with dataset management services supporting their global data estate. This is an area in the enterprise which is largely managed manually, if at all. Manual management and inadequate traceability of datasets is a leading cause of data sprawl and cyber risk for enterprises worldwide. Fusion opens up significant new opportunity and value for Pure in this space. The best way for me to describe the transformational impact of Fusion is with a familiar analogy. A decade ago, many of us used an external hard drive to add storage to our computers. It provided additional storage and could back up our files. However, when it filled up, we needed to replace it with a larger unit and migrate the data from the old unit to the new. If a colleague also had a hard drive which had spare capacity, it couldn't easily be shared. and file sharing between computers was difficult. Finally, if the external hard drive failed, there was little that one could do to recover. Today, few people use external drives. We've all moved to personal cloud storage provided by many different cloud providers. The benefits go well beyond just storage. For example, personal cloud storage provides Unlimited storage scalability. When one needs more, one only needs to pay for more without having to migrate data. Consistent updates to their infrastructure with non-disruptive software and hardware improvement. In other words, the service doesn't grow old. And guaranteed resiliency. One expects never to lose your data. Global access. One can access their data from anywhere, from any machine, with search features to find content. and easy file sharing with just a few mouse clicks. This model has extended to how colleagues now work in a company. Corporate provisioning of personal data storage on services such as Google Drive or Microsoft OneDrive further allows companies to place their corporate data policy on employee data management, such as controlling file sharing to meet corporate compliance requirements, managing file retention and deletion policies, enabling or disabling individual access when employees join, change roles, or leave the company, and providing administrative global search for all stored files. In stark contrast, the surprising secret about enterprise IT data storage is that it works almost exactly like those old personal external disk drives. Standard storage arrays operate as external storage devices attached to a specific application stack. Two storage arrays in the same data center attached to two application stacks are managed separately and do not share performance or capacity. Many enterprise customers have hundreds of storage arrays globally, each operating as an independent data silo. The amazing advancement of Pure Fusion V2 transforms pure storage arrays from individual storage arrays into an enterprise data cloud. Pure Fusion allows all of an enterprise's pure arrays to be managed as an integrated system. Better yet, it allows the stored data to be managed as a data cloud rather than individual data silos. Fusion allows applications to utilize the total shared capacity and performance of all the arrays, not just the ones that they are directly connected to. Fusion automates compliance policies for secure, consistent data handling. It enhances cybersecurity and eliminates manual errors. It enables automated data set management, enforcing and tracking corporate rules and policies. It also allows stored data to be accessed across the global enterprise, breaking down data silos and enabling a true enterprise data cloud. Early feedback from dozens of customers has been enthusiastically positive. As enterprises face challenges like AI integration, cybersecurity threats, and hybrid cloud optimization, the need to move beyond traditional manual storage management is clear. Operating as a data cloud, Fusion automates data management, enhances security, and simplifies hybrid on-prem and cloud environments. It supports real-time AI access, eliminates the need for excessive copies of data, and fosters API-driven innovation. Pure Fusion enables a fundamental shift from data silos to an enterprise data cloud model for data management. With Fusion, Enterprises have a universally accessible storage solution that can automate and simplify their data management across thousands of arrays as simply as managing one array. This enables enterprise to operate all of their data storage on a workflow basis, just like the cloud. This marks not just an evolution, but a revolution in IT infrastructure, redefining enterprise storage standards and data management. The success of several large enterprise deals this quarter was largely due to this expanded platform strategy. For example, a financial services technology company re-architected its entire storage environment with Pure due to slow response times with legacy architecture. By consolidating fragmented storage onto our unified platform, the company now turns data into a powerful asset while processing hundreds of billions of financial transactions a year. One of the world's largest telcos selected Pure to tackle its significant data center power consumption challenges and reduce energy usage in data storage by an impressive 89%. Our 150 terabyte DFMs were foundational to this success, driving substantial business impact. Our solution enabled this provider to manage petabytes of data, run advanced analytics, and archive data for extended periods with the same core architecture. SmartWorks, our storage solution designed for containerized applications in Kubernetes environments, saw a strong increase during FY25, driven by significant growth in AI analytics and cloud-native platform use cases. Last quarter, two Fortune 50 companies decided to transition their VMware environments to a modern virtualization environment using Portworx and Red Hat OpenShift. One of these companies will significantly accelerate its application deployment speed and time to achieve results while also reducing its cost by 30%. The other, a major manufacturer, is consolidating their containerized and virtualized application platforms in their manufacturing plants onto Kubernetes. Portworx enables them to reduce the cost of managing different infrastructures for VMs and containers and to simplify their operations. As I've indicated in recent quarters, Our activity in AI continues to grow. Machine learning and training environments are increasingly utilizing our high-performance storage, and AI data preparation chains increasingly utilizing Portworx. We are looking forward to showcasing our latest AI advancements at the upcoming NVIDIA GPU Technology Conference next month. We will unveil how FlashBlade will set a new bar for unmatched performance scalability, and ease of deployment for large-scale AI infrastructure deployments. Turning to the macro environment, we expect geopolitical uncertainty to contribute to a dynamic environment at least through this year. In addition to our standard practice of operating with globally distributed and diversified supply and distribution chains, we have also developed contingency plans for a variety of tariff scenarios. Overall, we are pleased with our performance in FY25 and remain highly confident in our differentiated leading data platform strategy and vision. We are excited to help our customers build their own enterprise data clouds across their distributed and hybrid IT environments. This confidence is reinforced by the four key competitive advantages of the Pure platform. Our unified purity operating system, our evergreen technology and business model, our Purity Direct Flash technology, and our cloud operating model, now enhanced with Pure Fusion V2, which allows our customers to build their own enterprise data cloud. With that, I'll pass the mic to Kevin.