Pure Storage Inc

Previous wording

The increase in subscription services revenue during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was largely driven by increases in sales of our Evergreen subscription services, including Evergreen//One, as well as recognition of revenue from previously contracted Evergreen subscription services.

Current wording

The growth in subscription services revenue during the second quarter and first two quarters of fiscal 2025 compared to the second quarter and first two quarters of fiscal 2024 was largely driven by sales growth of our Evergreen subscription services, including Evergreen//One.

Previous wording

During the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024, total revenue in the United States grew 14% from $427.2 million to $489.0 million while total rest of the world revenue grew 26% from $162.1 million to $204.5 million.

Current wording

During the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024, total revenue in the United States grew 9% from $494.7 million to $537.7 million while total rest of the world revenue grew 16% from $194.0 million to $226.0 million. During the first two quarters of fiscal 2025 compared to the first two quarters of fiscal 2024, total revenue in the United States grew 11% from $921.8 million to $1.0 billion while total rest of the world revenue grew 21% from $356.2 million to $430.5 million.

Previous wording

Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $2.3 billion at the end of the first quarter of fiscal 2025. Total RPO includes $57.0 million in remaining 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. Of the $2.3 billion RPO at the end of the first quarter of fiscal 2025, we expect to recognize approximately 48% over the next 12 months, and the remainder thereafter. RPO is expected to increase as our subscription services business grows over time.

Current wording

Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $2.3 billion at the end of the second quarter of fiscal 2025. Total RPO includes $49.0 million in remaining 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. Of the $2.3 billion RPO at the end of the second quarter of fiscal 2025, we expect to recognize approximately 48% over the next 12 months, and the remainder thereafter. RPO is expected to increase as our subscription services business grows over time.

Previous wording

Cost of revenue increased by$21.8 million, or 12%, during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024. The increase in product cost of revenue was primarily attributable to higher product sales, partially offset by lower excess and obsolete inventory charges. The increase in subscription services cost of revenue during these periods was primarily attributable to supporting our growing Evergreen subscription installed base, including Evergreen//Oneand Portworx. The increase in subscription services cost of revenue was also partially impacted by the modification of our fiscal 2024 performance restricted stock units (PRSUs) that resulted in additional stock-based compensation as discussed below.

Current wording

The increase in subscription services cost of revenue during the second quarter and first two quarters of fiscal 2025 compared to the second quarter and first two quarters of fiscal 2024 was primarily attributable to supporting our growing Evergreen subscription installed base, including Evergreen//Oneand Portworx. The increase was also partially impacted by the modification of our fiscal 2024 performance restricted stock units (PRSUs) that resulted in additional stock-based compensation as discussed below.

Previous wording

During the first quarter of fiscal 2025, we recognized $28.7 million in stock-based compensation related to a modification of our fiscal 2024 PRSUs increasing year-over-year stock-based compensation expense. Refer to Note 11 of Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

During the second quarter and first two quarters of fiscal 2025, we recognized$3.2 million and$31.9 million in stock-based compensation related to a modification of our fiscal 2024 PRSUs in the first quarter of fiscal 2025 that resulted in higher stock-based compensation expense across all functions when compared to the corresponding prior year periods. Refer to Note 11 of Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Previous wording

In addition, operating expenses in the first quarter 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

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.

Previous wording

The decrease in research and development expense as a percentage of total revenue during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was primarily due to higher revenue.

Current wording

The decrease in research and development expense as a percentage of total revenue during the first two quarters of fiscal 2025 compared to the first two quarters of fiscal 2024 was primarily due to higher revenue.

Previous wording

Sales and marketing expense increased by$18.5 million, or 8%, during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024, primarily due toan increase of $22.8 million in employee compensation and related costs, partially offset by adecrease of$4.1 million in sales and marketing events. The increase in employee compensation and related costs was partially impacted by the modification of our fiscal 2024 PRSUs that resulted in additional stock-based compensation.

Current wording

The increase in sales and marketing expense during the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 was primarily due toan increase in employee compensation and related costs, including stock-based compensation.

Previous wording

The decrease in sales and marketing expense as a percentage of total revenue during thefirst quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was primarily due to higher revenue and lower costs for sales and marketing events.

Current wording

The decrease in sales and marketing expense as a percentage of total revenue during thefirst two quarters of fiscal 2025 compared to the first two quarters of fiscal 2024 was primarily due to higher revenue and lower costs for sales and marketing events.

Previous wording

General and administrative expense increased by$9.4 million, or 14%, during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024, primarily driven by the modification of our fiscal 2024 PRSUs that resulted in additional stock-based compensation, partially offset by a decrease in outside services costs.

Current wording

The increase in general and administrative expense during the first two quarters of fiscal 2025 compared to the first two quarters of fiscal 2024, was primarily driven by higher stock-based compensation, partially offset by a decrease in outside services costs.

Previous wording

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 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 incremental 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

Other income (expense), net increased by$2.3 million during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024, primarily due to an increase in interest income due to increased interest rate environment, partially offset by higher net foreign exchange losses as the U.S. dollar strengthened relative to certain foreign currencies.

Current wording

The increase in other income (expense), net during the second quarter and first two quarters of fiscal 2025 compared to the second quarter and first two quarters of fiscal 2024 was primarily due to an increase in interest income from a higher interest rate environment, and, to a lesser extent, by higher net foreign exchange gains as the U.S. dollar weakened relative to certain foreign currencies.

Previous wording

At the end of the first quarter of fiscal 2025, we had cash, cash equivalents and marketable securities of $1.7 billion. Our cash and cash equivalents primarily consist of bank deposits and money market accounts. Our marketable 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 second quarter of fiscal 2025, we had cash, cash equivalents and marketable securities of $1.8 billion. Our cash and cash equivalents primarily consist of bank deposits and money market accounts. Our marketable 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 the 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, growth of our Evergreen//One offering, the addition or closure of office space, ongoing construction of our new headquarters facility, the timing of new product introductions, payments for workforce realignment restructuring activities, our share repurchases, and expected 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 rights. We may seek additional equity or debt financing in the future.

Current wording

We believe our existing cash, cash equivalents, marketable securities and the 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, growth of our Evergreen//One offering, the addition or closure of office space, the timing of new product introductions, our share repurchases, 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

In April 2023, we borrowed $100.0 million under the Credit Facility. The outstanding loan bore weighted-average interest at an annual rate of approximately 6.83% based on a one-month term SOFR resulting in interest expense of $2.0 million during the first quarter of fiscal 2025.

Current wording

In April 2023, we borrowed $100.0 million under the Credit Facility. The outstanding loan bore weighted-average interest at an annual rate of approximately 6.49% and 6.83% during the second quarter and first two quarters of fiscal 2025 based on a one-month term SOFR period with interest expense not material during either period.

Previous wording

Loans under the Credit Facility are collateralized by substantially all of our assets and subject to certain restrictions and two financial ratios measured as of the last day of each fiscal quarter: a Consolidated Leverage Ratio not to exceed 4.5:1 and an Interest Coverage Ratio not to be less than 3:1. We were in compliance with all covenants under the Credit Facility at the end of the first quarter of fiscal 2025.

Current wording

Loans under the Credit Facility are collateralized by substantially all of our assets and subject to certain restrictions and two financial ratios measured as of the last day of each fiscal quarter: a Consolidated Leverage Ratio not to exceed 4.5:1 and an Interest Coverage Ratio not to be less than 3:1. We were in compliance with all covenants under the Credit Facility at the end of the second quarter of fiscal 2025.

Previous wording

At the end of the first quarter of fiscal 2025, we had outstanding letters of credit in the aggregate amount of $7.7 million in connection with our facility leases. The letters of credit are collateralized by either restricted cash or the Credit Facility and mature on various dates through September 2030.

Current wording

At the end of the second quarter of fiscal 2025, we had outstanding letters of credit in the aggregate amount of $7.7 million in connection with our facility leases. The letters of credit are collateralized by either restricted cash or the Credit Facility and mature on various dates through September 2030.

Previous wording

There were no share repurchases of our common stock during the first quarter of fiscal 2025. $395.4 million remained under our share repurchase authorization as of the end of the first quarter of fiscal 2025.

Current wording

There were no share repurchases of our common stock during the first two quarters of fiscal 2025. $395.4 million remained under our share repurchase authorization as of the end of the second quarter of fiscal 2025.

Previous wording

Net cash provided by operating activities during the first quarter of fiscal 2024 and 2025 was primarily driven by cash collections from sales of our product and subscription services, partially offset by payments to our contract manufacturers, employee compensation, and general corporate operating expenditures. The year-over-year increase in net cash provided by operating activities was primarily driven by increased sales of our product and subscription services, including improved timing of collections.

Current wording

Net cash provided by operating activities during the first two quarters of fiscal 2024 and 2025 was primarily driven by cash collections from sales of our product and subscription services, partially offset by payments to our contract manufacturers, employee compensation, and general corporate operating expenditures. The year-over-year increase in net cash provided by operating activities was primarily driven by increased sales of our product and subscription services, including improved timing of collections.

Previous wording

Net cash used in investing activities during the first quarter of fiscal 2025 was driven by $48.8 million in capital expenditures relating to test equipment for new product innovation, and equipment supporting our growing Evergreen//Oneoffering, as well as the continued construction of our new headquarters facility.

Current 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 growing Evergreen//Oneoffering as well as the continued construction of our new headquarters facility, and net purchases of $24.0 million in marketable securities.

Previous wording

Net cash provided by investing activities during the first quarter of fiscal 2024 was driven by net maturities of $202.6 million in marketable securities, partially offset by $51.4 million in capital expenditures relating to test equipment for new product innovation, and equipment supporting our growing Evergreen//Oneoffering, as well as the construction of our new headquarters facility.

Current wording

Net cash provided by investing activities during the first two quarters of fiscal 2024 was driven by net maturities of $188.8 million in marketable securities, partially offset by $106.5 million in capital expenditures relating to test equipment for new product innovation, and equipment supporting our growing Evergreen//Oneoffering, as well as the construction of our new headquarters facility.

Previous wording

Net cash provided by financing activities during the first quarter of fiscal 2025 was primarily driven by proceeds from the issuance of common stock from employee stock purchase plan (ESPP) of $25.3 million, and the exercise of stock options of $13.2 million, partially offset by cash outflows related to tax withholding on vesting of equity awards of $12.5 million.

Current wording

Net cash used in financing activities during the first two quarters of fiscal 2025 was primarily driven by tax withholding remittances on vesting of equity awards of $86.7 million, partially offset by proceeds from the issuance of common stock from employee stock purchase plan (ESPP) of $25.3 million, and the exercise of stock options of $17.8 million. The year-over-year increase in tax withholding remittances on vesting of 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.

Previous wording

Net cash used in financing activities during the first quarter of fiscal 2024 was primarily driven by cash outflows related to the repayment of the principal amount of the Notes of approximately $575.0 million, share repurchases of $69.9 million and tax withholding on vesting of equity awards of $6.8 million. These cash outflows were partially offset by proceeds from borrowing under the Credit Facility of $100.0 million, the issuance of common stock from ESPP of $21.2 million, and the exercise of stock options of $4.6 million.

Current wording

Net cash used in financing activities during the first two quarters of fiscal 2024 was primarily driven by cash outflows related to the repayment of the principal amount of the Notes of approximately $575.0 million, share repurchases of $91.9 million and tax withholding on vested equity awards of $11.8 million. These cash outflows were partially offset by proceeds from borrowing under the Credit Facility of $100.0 million, the exercise of stock options of $29.8 million, and the issuance of common stock from ESPP of $21.2 million.