Pure Storage, Inc.

Previous wording

We derive revenue primarily from the sale of our products and services that comprise our Pure Platform. Our Pure Platform primarily includes our FlashArrayand FlashBlade solutions, and our portfolio of Evergreen subscription services offerings. Subscription services also include our professional services offerings such as installation and implementation consulting services.

Current wording

We derive revenue primarily from the sale of our integrated storage hardware products and subscription services that comprise our Pure Platform. Product revenue includes the sale of our FlashArrayand FlashBlade solutions, royalties from hyperscaler shipments, and the sale of Portworx term software licenses. Subscription services revenue includes the sale of our portfolio of Evergreen and Portworx subscription services offerings as well as our professional services offerings such as installation and implementation consulting services.

Previous wording

Provided that all other revenue recognition criteria have been met, we typically recognize product revenue upon transfer of control to our customers and the satisfaction of our performance obligations. For Evergreen//Flex, product revenue is recognized upon the commencement of the underlying subscription services. Products are typically shipped directly by us to customers, and our channel partners generally do not stock our inventory. We expect our product revenue may vary from period to period based on, among other things, the timing and size of orders and delivery of products and the impact of significant transactions.

Current wording

Provided that all other revenue recognition criteria have been met, we typically recognize product revenue for our integrated storage hardware products upon transfer of control to our customers and the satisfaction of our performance obligations. Products are typically shipped directly by us to customers, and our channel partners generally do not stock our inventory. Royalties from hyperscaler shipments of third party hardware that provide the customer a perpetual license to use our functional intellectual property (IP) are recognized when the revenue is earned based upon shipments by our supply chain partners. Revenue from Portworx term software licenses, which grant customers the right to use our functional IP for a specified period, is recognized at the point in time the software activation keys are made available to the customer for download at commencement of the initial or renewal term. For Evergreen//Flex, product revenue is recognized upon the commencement of the underlying subscription services. We expect our product revenue may vary from period to period based on, among other things, the timing and size of orders, delivery of products, hyperscaler shipments by our supply chain partners and the impact of significant transactions.

Previous wording

We generally recognize revenue from the fair value of subscription services provided ratably over the contractual service period or on a consumption basis based on the minimum usage commitment as well as usage above the commitment amount and professional services as delivered. We expect our subscription services revenue to increase and continue to grow faster than our product revenue as more customers choose to consume our storage solutions as a service and our existing Evergreen subscription customers renew and expand their offerings.

Current wording

We generally recognize revenue from the fair value of subscription services provided ratably over the contractual service period or on a consumption basis based on the minimum usage commitment as well as usage above the commitment amount and professional services as delivered. We expect our subscription services revenue to continue to increase and in-line with our overall growth rate as more customers choose to consume our storage solutions as a service and our existing Evergreen subscription customers renew and expand their offerings.

Previous wording

Research and Development. Research and development expenses consist primarily of employee compensation and related expenses, prototype expenses, depreciation associated with assets acquired for research and development, data center and cloud services costs, third-party engineering and contractor support costs, as well as allocated overhead. We expect our research and development expenses to increase in absolute dollars. Key incremental investments will focus on accelerating density of our direct flash modules, and increasing operational scale of our supply chain partners to support expected production deployment ramp in connection with our hyperscale design win for large production deployments starting in fiscal 2027.

Current wording

Research and Development. Research and development expenses consist primarily of employee compensation and related expenses, prototype expenses, depreciation associated with assets acquired for research and development, data center and cloud services costs, third-party engineering and contractor support costs, as well as allocated overhead. We expect our research and development expenses to increase in absolute dollars. Key incremental investments will focus on accelerating density of our direct flash modules, increasing the operational scale of our supply chain partners to support large production deployments for our hyperscaler customer, and accelerating product development.

Previous wording

Sales and Marketing. Sales and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, travel and entertainment expenses as well as allocated overhead. Marketing programs consist of advertising, events, corporate communications and brand-building activities. We expect our sales and marketing expenses to increase in absolute dollars.

Current wording

Sales and Marketing. Sales and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, travel and entertainment expenses as well as allocated overhead. Marketing programs consist of advertising, events, corporate communications and brand-building activities. We expect our sales and marketing expenses to increase in absolute dollars, including investments to capture additional growth opportunities, in particular, in the enterprise market.

Previous wording

General and Administrative. General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, facilities, IT and fees for third-party professional services as well as amortization of intangible assets pertaining to defensive technology patents and allocated overhead. We expect our general and administrative expenses to increase in absolute dollars.

Current wording

General and Administrative. General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, facilities, IT and fees for third-party professional services as well as amortization of intangible assets pertaining to defensive technology patents and allocated overhead. We expect our general and administrative expenses to increase in absolute dollars, including investments in back-office systems to support continued business growth.

Previous wording

Other income (expense), net consists primarily of interest income related to cash, cash equivalents and marketable securities, interest expense related to our debt, unrealized gains (losses) from mark-to-market adjustments on an equity security, and gains (losses) from foreign currency transactions.

Current wording

Other income (expense), net consists primarily of interest income related to cash, cash equivalents and marketable securities, interest expense related to our debt, gains (losses) from an equity security, and gains (losses) from foreign currency transactions.

Previous wording

Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and current federal and state income taxes in the United States. Our foreign subsidiaries earn a profit margin based upon transfer pricing principles which require an arm’s length return. Our foreign subsidiaries’ sales and marketing expenses are expected to increase over time as we grow, resulting in higher pre-tax foreign earnings and higher foreign income taxes.

Current wording

Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and current income taxes in the United States. Our foreign subsidiaries earn a profit margin based upon transfer pricing principles which require an arm’s length return. Our foreign subsidiaries’ sales and marketing expenses are expected to increase over time as we grow, resulting in higher pre-tax foreign earnings and higher foreign income taxes.

Previous wording

The increase in product revenue during the second quarter and the first two quarters of fiscal 2026 when compared to the second quarter and the first two quarters of fiscal 2025 was primarily driven by sales to large enterprise customers of our FlashArray and FlashBlade solutions, including FlashBlade//E.

Current wording

The increase in product revenue during the first three quarters of fiscal 2026 when compared to the first three quarters of fiscal 2025 was primarily driven by royalties from hyperscaler shipments and sales to enterprise customers of FlashArray//XL, FlashArray//X, FlashBlade//S, and FlashBlade//E.

Previous wording

The increase in subscription services revenue during the second quarter and the first two quarters of fiscal 2026 when compared to the second quarter and the first two quarters of fiscal 2025 was largely driven by increases in sales of our Evergreen//Oneconsumption and subscription-based offerings and renewals of our Evergreen subscription services across our installed base.

Current wording

The increase in subscription services revenue during the third quarter and the first three quarters of fiscal 2026 when compared to the third quarter and the first three quarters of fiscal 2025 was largely driven by increases in sales of our Evergreen//Oneconsumption and subscription-based offerings and renewals of our Evergreen subscription services across our installed base.

Previous wording

During the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025, total revenue in the United States grew 7% from $537.7 million to $577.0 million while total rest of the world revenue grew 26% from $226.0 million to $284.0 million. During the first two quarters of fiscal 2026 compared to the first two quarters of fiscal 2025, total revenue in the United States grew 8% from $1.0 billion to $1.1 billion while total rest of the world revenue grew 24% from $430.5 million to $531.8 million.

Current wording

During the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025, total revenue in the United States grew 22% from $561.9 million to $683.2 million while total rest of the world revenue grew 4% from $269.2 million to $281.3 million. During the first three quarters of fiscal 2026 compared to the first three quarters of fiscal 2025, total revenue in the United States grew 13% from $1.6 billion to $1.8 billion while total rest of the world revenue grew 16% from $699.7 million to $813.1 million.

Previous wording

The year-over-year growth in our Subscription ARR at the end of the second quarter of fiscal 2025 was 24%. The decline in year-over-year growth to 18% at the end of the second quarter of fiscal 2026 was impacted by lower Total Contract Value (TCV) sales of Evergreen//One and lower Evergreen subscriptions bundled with traditional product sales.

Current wording

The year-over-year growth in our Subscription ARR at the end of the third quarter of fiscal 2025 was 22%. The decline in year-over-year growth to 17% at the end of the third quarter of fiscal 2026 was impacted by lower Evergreen subscriptions bundled with traditional product sales.

Previous wording

Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $2.8 billion at the end of the second quarter of fiscal 2026, and primarily includes non-cancelable TCV sales for our storage-as-a-service offerings, including Evergreen//One, Evergreen//Flex, and Cloud Block Store consumption and subscription-based offerings, as well as $68.2 million of non-cancelable product orders. RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods. Product orders are generally cancelable until delivery has occurred, and as such, unfulfilled product orders that are cancelable are excluded from RPO. Cancelable orders will fluctuate depending on numerous factors.

Current wording

Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $2.9 billion at the end of the third quarter of fiscal 2026, and primarily includes non-cancelable Total Contract Value (TCV) sales for our storage-as-a-service offerings, including Evergreen//One, Evergreen//Flex, and Cloud Block Store consumption and subscription-based offerings, as well as $80.0 million of non-cancelable product orders. RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods. Product orders are generally cancelable until delivery has occurred, and as such, unfulfilled product orders that are cancelable are excluded from RPO. Cancelable orders will fluctuate depending on numerous factors.

Previous wording

TCV sales for our storage-as-a-service offerings is a key business metric we use to evaluate the performance of our consumption and subscription based offerings. TCV sales for these offerings include recurring subscription fees, any non-recurring charges such as initial setup fees, and any other billable services directly tied to the execution of the underlying service contract. Year-over-year growth in RPO to 22% at the end of the second quarter of fiscal 2026 when compared to 14% at the end of fiscal 2025 was driven by both growth of TCV sales for our storage-as-a-service offerings, and strong renewals of our Evergreen subscriptions.

Current wording

TCV sales for our storage-as-a-service offerings is a key business metric we use to evaluate the performance of our consumption and subscription based offerings. TCV sales for these offerings include recurring subscription fees, any non-recurring charges such as initial setup fees, and any other billable services directly tied to the execution of the underlying service contract. Year-over-year growth in RPO to 24% at the end of the third quarter of fiscal 2026 when compared to 14% at the end of fiscal 2025 was driven by both growth of TCV sales for our storage-as-a-service offerings, and strong renewals of our Evergreen subscriptions.

Previous wording

The decrease in product gross margin during the second quarter and first two quarters of fiscal 2026 when compared to the second quarter and first two quarters of fiscal 2025 was primarily due to higher QLC component costs as well as increasing sales of our FlashBlade//E and FlashArray//Esolutions as customers’ transition their cost-sensitive workloads from traditional disk solutions to flash. We expect product gross margin to improve as we progress through the year, driven by moderation of QLC flash pricing and continued deployment for our hyperscale customer.

Current wording

The increase in product gross margin during the third quarter of fiscal 2026 when compared to the third quarter of fiscal 2025 was primarily due to royalties from hyperscaler shipments as we continue to scale our production deployment and favorable product mix driven primarily by sales of higher-performance FlashArray//XLto enterprise customers. Product gross margin during the first three quarters of fiscal 2026 when compared to the first three quarters of fiscal 2025 was impacted by higher QLC component costs and higher sales of our FlashBlade//E and FlashArray//E solutions as customers’ transitioned their cost-sensitive workloads from traditional disk solutions to flash during the first six months of fiscal 2026.

Previous wording

In addition, operating expenses in the first two quarters of fiscal 2025 were positively impacted as a result of the workforce alignment that we initiated in the fourth quarter of fiscal 2024.

Current wording

Operating expenses in the first three quarters of fiscal 2025 were positively impacted as a result of the workforce alignment that we initiated in the fourth quarter of fiscal 2024.

Previous wording

The increase in research and development expense during the second quarter andfirst two quarters of fiscal 2026 when compared to the second quarter and first two quarters of fiscal 2025 was primarily driven by an increase in employee compensation and related costs from growth in headcount, and, to a lesser extent, an increase in data center and cloud services costs.

Current wording

The increase in research and development expense during the first three quarters of fiscal 2026 when compared to the first three quarters of fiscal 2025 was primarily driven by an increase in employee compensation and related costs, including stock-based compensation, from growth in headcount, and, to a lesser extent, an increase in equipment depreciation, facilities-related costs and data center and cloud services costs.

Previous wording

The increase in sales and marketing expense during the second quarter of fiscal 2026 when compared to the second quarter of fiscal 2025 was primarily driven byan increasein employee compensation and related costs.

Current wording

The increase in sales and marketing expense during the third quarter of fiscal 2026 when compared to the third quarter of fiscal 2025 was primarily driven byan increasein employee compensation and related costs from growth in headcount and, to a lesser extent, higher travel costs.

Previous wording

The increase in sales and marketing expense during the first two quarters of fiscal 2026 when compared to the first two quarters of fiscal 2025 was primarily driven by an increase in employee compensation and related costs, and to a lesser extent, higher costs for sales and marketing events.

Current wording

The increase in sales and marketing expense during the first three quarters of fiscal 2026 when compared to the first three quarters of fiscal 2025 was primarily driven by an increase in employee compensation and related costs from growth in headcount and, to a lesser extent, higher costs for sales and marketing events, and higher travel costs.

Previous wording

The increase in general and administrative expense during the second quarter of fiscal 2026 when compared to the second quarter of fiscal 2025 was primarily driven byan increasein employee compensation and related costs.

Current wording

The increase in general and administrative expense during the third quarter and first three quarters of fiscal 2026 when compared to the third quarter and first three quarters of fiscal 2025 was primarily driven byan increase in employee compensation and related costs, including stock-based compensation, from growth in headcount.

Previous wording

During the first two quarters of fiscal 2025, we recognized $15.9 million of restructuring and impairment costs. We recognized $9.5 million in incremental restructuring costs primarily associated with one-time severance and other termination benefits related to a workforce alignment plan that was initiated in the fourth quarter of fiscal 2024. We also recognized $6.4 million in abandonment and impairment charges related to certain leases associated with our former corporate headquarters that we ceased use in the second quarter of fiscal 2024. The incremental impairment charge was due to a revision to the underlying sublease assumptions during the first quarter of fiscal 2025.

Current wording

During the first three quarters of fiscal 2025, we recognized $15.9 million of restructuring and impairment costs. We recognized $9.5 million in incremental restructuring costs primarily associated with one-time severance and other termination benefits related to a workforce alignment plan that was initiated in the fourth quarter of fiscal 2024. We also recognized $6.4 million in abandonment and impairment charges related to certain leases associated with our former corporate headquarters that we ceased use in the second quarter of fiscal 2024. The incremental impairment charge was due to a revision to the underlying sublease assumptions during the first quarter of fiscal 2025.

Previous wording

The increase in other income (expense), net during the second quarter and first two quarters of fiscal 2026 when compared to the second quarter and first two quarters of fiscal 2025 was primarily due to unrealized gains from mark-to-market adjustments on an equity security, and to a lesser extent, higher net foreign exchange gains as the U.S. dollar weakened relative to certain foreign currencies. In August 2025, we sold the equity security for $52.5 million realizing a gain of $27.5 million.

Current wording

The increase in other income (expense), net during the first three quarters of fiscal 2026 when compared to the first three quarters of fiscal 2025 was primarily due to gain from the sale of an equity security, and, to a lesser extent, higher net foreign exchange gains as the U.S. dollar weakened relative to certain foreign currencies. These increases were partially offset by a decrease in interest income from a lower balance in cash, cash equivalents and marketable securities and a lower interest rate environment.

Previous wording

The decrease in provision for income taxes during the second quarter of fiscal 2026 when compared to the second quarter of fiscal 2025 was primarily driven by a decrease in U.S. taxable income due to the enactment of the One Big Beautiful Bill Act (OBBBA), which removed the requirement for domestic research and development capitalization under Section 174.

Current wording

The decrease in provision for income taxes during the third quarter of fiscal 2026 when compared to the third quarter of fiscal 2025 was primarily driven by a decrease in foreign and U.S. withholding tax, as well as a decrease in U.S. taxable income due to the enactment of the One Big Beautiful Bill Act (OBBBA), which removed the requirement for domestic research and development capitalization under Section 174.

Previous wording

At the end of the second quarter of fiscal 2026, we had cash, cash equivalents and marketable securities of $1.5 billion. Our cash and cash equivalents primarily consist of bank deposits and money market accounts. Ourmarketable securities generally consist of highly rated debt instruments of the U.S. government and its agencies, debt instruments of highly rated corporations, debt instruments issued by foreign governments, asset-backed securities, and municipal bonds.

Current wording

At the end of the third quarter of fiscal 2026, we had cash, cash equivalents and marketable securities of $1.5 billion. Our cash and cash equivalents primarily consist of bank deposits and money market accounts. Ourmarketable securities generally consist of highly rated debt instruments of the U.S. government and its agencies, debt instruments of highly rated corporations, debt instruments issued by foreign governments, asset-backed securities, and municipal bonds.

Previous wording

We believe our existing cash, cash equivalents, marketable securities and revolving credit facility will be sufficient to fund our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors including our sales growth, the timing and extent of capital spending to support development efforts including investments to scale operations in support of our hyperscale customer, growth of our Evergreen//One offering, the addition or closure of office space, the timing of new product introductions, our share repurchases, the timing of renewal and/or repayment of borrowings under the revolving credit facility, and cash payments for tax withholding obligations for equity awards held by employees. We may continue to enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property and other licensing rights. We may enter into equipment financing arrangements and seek additional equity or debt financing in the future.

Current wording

We believe our existing cash, cash equivalents, marketable securities and revolving credit facility will be sufficient to fund our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors including our sales growth, the timing and extent of capital spending to support development efforts including investments to scale operations in support of our hyperscale customer and capture additional growth opportunities, the timing and extent of strategic inventory purchases to mitigate the impact of tariffs, higher commodity pricing, and supply chain disruptions, growth of our Evergreen//One offering, the addition or closure of office space, the timing of new product introductions, our share repurchases, the timing of renewal and/or repayment of borrowings under the revolving credit facility, and cash payments for tax withholding obligations for equity awards held by employees. We may continue to enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property and other licensing rights. We may enter into equipment financing arrangements and seek additional equity or debt financing in the future.

Previous wording

We are subject to certain affirmative and negative covenants, including a Consolidated Net Leverage Ratio not to exceed 3.5:1 (which may be increased to 4:1 for the first six consecutive fiscal quarters after a qualified acquisition, as defined in the Credit Agreement) measured as of the last day of each fiscal quarter. As of the end of the second quarter of fiscal 2026, there were no outstanding borrowings and we were in compliance with all covenants under the Credit Facility.

Current wording

We are subject to certain affirmative and negative covenants, including a Consolidated Net Leverage Ratio not to exceed 3.5:1 (which may be increased to 4:1 for the first six consecutive fiscal quarters after a qualified acquisition, as defined in the Credit Agreement) measured as of the last day of each fiscal quarter. As of the end of the third quarter of fiscal 2026, there were no outstanding borrowings and we were in compliance with all covenants under the Credit Facility.

Previous wording

At the end of fiscal 2025 and the second quarter of fiscal 2026, we had outstanding letters of credit in the aggregate amount of $7.2 million and $14.3 million in connection with our facility leases and a certain employee-related benefit. The letters of credit associated with our facility leases are collateralized by either restricted cash or the 2025 Credit Facility and mature on various dates through December 2031. The letter of credit associated with a certain employee-related benefit is collateralized by restricted cash.

Current wording

At the end of fiscal 2025 and the third quarter of fiscal 2026, we had outstanding letters of credit in the aggregate amount of $7.2 million and $13.5 million in connection with our facility leases and a certain employee-related benefit. The letters of credit associated with our facility leases are collateralized by either restricted cash or the Credit Facility and mature on various dates through December 2031. The letter of credit associated with a certain employee-related benefit is collateralized by restricted cash.

Previous wording

In February 2025, our Board of Directors authorized an additional $250.0 million increase to repurchase shares of our common stock under our share repurchase program, increasing the total remaining authorization amount to $271.5 million. The authorization allows us to repurchase shares of our common stock opportunistically and will be funded from available working capital. Repurchases may be made at management’s discretion from time to time on the open market through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The share repurchase program does not obligate us to acquire any of our common stock, has no end date, and may be suspended or discontinued by us at any time without prior notice. During the second quarter of fiscal 2026, we repurchased and retired approximately 0.8 million shares of common stock at an average purchase price of $54.70 per share for an aggregate repurchase price of $42.2 million. During the first two quarters of fiscal 2026, we repurchased and retired approximately 3.3 million shares of our common stock at an average purchase price of $49.66 per share for an aggregate repurchase price of $162.1 million. Approximately $109.4 million remained available for future share repurchases at the end of the second quarter of fiscal 2026.

Current wording

In February 2025, our Board of Directors authorized a $250.0 million increase to repurchase shares of our common stock under our share repurchase program, of which $56.2 million remained available at the end of the third quarter of fiscal 2026. On December 10, 2025, the Audit Committee of our Board of Directors authorized an additional $400.0 million to repurchase shares of our common stock, increasing the total remaining authorization amount to $420.0 million. The authorization allows us to repurchase shares of our common stock opportunistically and will be funded from available working capital. Repurchases may be made at management’s discretion from time to time on the open market through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The share repurchase program does not obligate us to acquire any of our common stock, has no end date, and may be suspended or discontinued by us at any time without prior notice. During the third quarter of fiscal 2026, we repurchased and retired approximately 0.6 million shares of common stock at an average purchase price of $87.23 per share for an aggregate repurchase price of $53.3 million. During the first three quarters of fiscal 2026, we repurchased and retired approximately 3.9 million shares of our common stock at an average purchase price of $55.58 per share for an aggregate repurchase price of $215.4 million.

Previous wording

During the second quarter and first two quarters of fiscal 2026, we withheld approximately 1.1 million and 2.3 million shares to cover $57.8 million and $117.9 million in tax withholding obligations.

Current wording

During the third quarter and first three quarters of fiscal 2026, we withheld approximately 1.0 million and 3.3 million shares to cover $87.7 million and $205.6 million in tax withholding obligations.

Previous wording

Net cash provided by operating activities consists of net income, adjusted for non-cash items and changes in operating assets and liabilities. Non-cash items primarily included stock-based compensation and depreciation and amortization. The year-over-year increase in net cash provided by operating activities was primarily driven by higher net income of $32.5 million and an increase of $49.3 million from changes in operating assets and liabilities, partially offset by $30.4 million in unrealized gains from mark-to-market adjustments on an equity security. The increase from changes in operating assets and liabilities were primarily impacted by higher deferred revenue driven by renewal of our Evergreen subscription services across our installed base, and lower payments for employee compensation. Partial offsets to operating cash inflows were decreased cash collections and higher deferred commissions.

Current wording

Net cash provided by operating activities consists of net income, adjusted for non-cash items and changes in operating assets and liabilities. Non-cash items primarily included stock-based compensation and depreciation and amortization. The year-over-year increase in net cash provided by operating activities was primarily driven by higher net income of $23.6 million, higher stock-based compensation of $29.2 million, and an increase of $29.4 million from changes in operating assets and liabilities, partially offset by $27.5 million in gain from the sale of an equity security. The increase from changes in operating assets and liabilities were primarily impacted by higher deferred revenue driven by renewal of our Evergreen subscription services across our installed base, and lower payments for employee compensation. Partial offsets to operating cash inflows were decreased cash collections due to timing, increased inventory purchases to mitigate the impact of tariffs, higher component pricing and supply chain disruptions, and higher deferred commissions.

Previous wording

Our primary source of cash from operating activities during the first two quarters of fiscal 2025 and 2026 were from cash collections from billings for sales of our product and subscription services.

Current wording

Our primary source of cash from operating activities during the first three quarters of fiscal 2025 and 2026 were from cash collections from billings for sales of our product and subscription services.

Previous wording

Our primary uses of cash from operating activities during the first two quarters of fiscal 2025 and 2026 were payments to our contract manufacturers, payments for employee compensation, and general corporate operating expenditures.

Current wording

Our primary uses of cash from operating activities during the first three quarters of fiscal 2025 and 2026 were payments to our contract manufacturers, payments for employee compensation, and general corporate operating expenditures.

Previous wording

Net cash provided by investing activities during the first two quarters of fiscal 2026 was driven by net purchases of marketable securities of $152.4 million, partially offset by $134.4 million in capital expenditures. Key capital expenditures included investments for: (a) equipment supporting deployments of our Evergreen//One offering; (b) data center expansion to support testing of new products and services, including for our hyperscale solution design win; and (c) developing our Pure Fusion v2 solution.

Current wording

Net cash used in investing activities during the first three quarters of fiscal 2026 was driven by $197.8 million in capital expenditures, partially offset by net proceeds of $123.8 million in marketable securities and $52.5 million from the sale of an equity security. Key capital expenditures included investments for equipment supporting deployments of our Evergreen//One offering, data center expansion to support testing of new products and services, and investments to scale operations in support of our hyperscale customer.

Previous wording

Net cash used in investing activities during the first two quarters of fiscal 2025 was driven by $108.9 million in capital expenditures relating to test equipment for new product innovation, and equipment supporting our Evergreen//Oneoffering, as well as the construction of our headquarters facility, and net purchases of $24.0 million in marketable securities.

Current wording

Net cash used in investing activities during the first three quarters of fiscal 2025 was driven by $170.6 million in capital expenditures relating to test equipment for new product innovation, and equipment supporting our Evergreen//Oneoffering, investments to scale operations in support of our hyperscale customer, and construction costs related to our headquarters facility, partially offset by net proceeds from our marketable securities of $84.5 million.

Previous wording

Net cash used in financing activities during the first two quarters of fiscal 2026 was primarily driven by cash outflows related to share repurchases of $162.2 million and tax withholding remittances on vested equity awards of $117.5 million, and repayment of the $100.0 million outstanding on our former credit facility that terminated in June 2025, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan (ESPP) of $27.2 million, and exercise of stock options of $13.5 million. The year-over-year increase in tax withholding remittances on vested equity awards was due to extending the net-share settlement of equity awards to satisfy tax withholding obligations to the majority of our employees in June 2024 whereas previously, shares were sold to cover such tax withholding obligations.

Current wording

Net cash used in financing activities during the first three quarters of fiscal 2026 was primarily driven by cash outflows related to share repurchases of $215.4 million and tax withholding remittances on vested equity awards of $203.2 million, and repayment of the $100.0 million outstanding on our former credit facility that terminated in June 2025, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan (ESPP) of $56.0 million, and the exercise of stock options of $18.2 million. The year-over-year increase in tax withholding remittances on vested equity awards was primarily driven by higher stock prices.

Previous wording

Net cash used in financing activities during the first two quarters of fiscal 2025 was primarily driven by tax withholding remittances on vested equity awards of $86.7 million, partially offset by proceeds from the issuance of common stock under our ESPP of $25.3 million, and exercise of stock options of $17.8 million.

Current wording

Net cash used in financing activities during the first three quarters of fiscal 2025 was primarily driven by cash outflows related to share repurchases of $182.0 million and tax withholding remittances on vested equity awards of $141.6 million, partially offset by proceeds from the issuance of common stock under our ESPP of $51.7 million, and the exercise of stock options of $21.2 million.