Pure Storage(PSTG) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For FY '24, total revenue grew by 2.8%, with expectations adjusted to over 7% when accounting for strong Evergreen/One and Evergreen/Flex sales and a noncancelable product sale [25][26] - Operating margin for FY '24 was approximately 16%, exceeding the original guidance of 15% [26] - Subscription services annual recurring revenue (ARR) grew 25% to approximately $1.4 billion, comprising 42$329 million, growing 24% [28] - Total contract value (TCV) sales for Evergreen/One and Evergreen/Flex exceeded $400 million, more than doubling over the prior year [14][24] - FlashBlade sales exceeded$2 billion since launch, indicating strong product and platform innovation [14][15] Market Data and Key Metrics Changes - U.S. revenue for Q4 was $522 million, while international revenue was$268 million [29] - New customer acquisition grew by 349 customers during Q4, including 6 new Fortune 500 customers, with Pure now serving slightly over 60% of the Fortune 500 [29] Company Strategy and Development Direction - The company is focused on consolidating data storage using a single operating and management environment, which is seen as more efficient than managing multiple disparate systems [16][17] - The Evergreen technology allows for an always modern environment without application disruption, enhancing customer value [22][23] - The company aims to return to double-digit revenue growth in FY '25, with expectations of 10.5% growth to $3.1 billion [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the macroeconomic environment, noting signs of improvement [41] - The company is confident in its platform strategy and the opportunity to lead the market, particularly in AI-related storage solutions [41][40] - Management anticipates that the growth of subscription services will continue to drive revenue, with a goal of increasing operating margin to 17$136 million to shareholders [30] - Capital expenditures for FY '24 were nearly $200 million, representing approximately 6.9% of revenue [30] Q&A Session Summary Question: What is resonating with customers regarding Evergreen/One? - Management highlighted the SaaS-like model of Evergreen/One, which simplifies storage management and allows customers to pay only for what they use [35][46] Question: What is the outlook for RPO growth? - Management noted that the unbilled RPO component grew by 93% year-over-year, driven by strong subscription offerings [47][49] Question: How does the company view the AI market? - Management sees significant opportunities in AI, emphasizing the need for modernized data environments to support AI applications [61][124] Question: What are the expectations for FY '25 revenue growth? - Management expects to return to double-digit revenue growth, with a forecast of 10.5% growth for FY '25 [43][44] Question: How is the company positioned in the GPU cloud provider market? - Management confirmed strong engagement with a major GPU cloud provider, focusing on AI training workflows and data preparation [98][126]