Pure Storage Inc
For the period ended May 4, 2025. Filed Jun 11, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 4, 2025 · Filed Jun 11, 2025
P$96.75+3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-03; filed 2024-12-12.
0001628280-24-050852
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-05-04; filed 2025-06-11.
0001628280-25-030567
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 95 current paragraphs.
47 unchanged; 35 reworded; 12 added; 13 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
•In March 2025, we further expanded our AI portfolio with the introduction of FlashBlade//EXA, the industry's most powerful storage platform, to empower the most demanding specialty GPU clouds and high performance computing (HPC) environments. Featuring a purpose-built, massively parallel architecture that independently scales both data and metadata, FlashBlade//EXA delivers industry-leading performance, scalability, and adaptability.
Current report
•In May 2025, we announced a partnership with Nutanix to provide a joint, integrated solution to provide customers with a seamless way to deploy and manage virtual workloads on a scalable, modern infrastructure.
Current report
The increase in product revenue during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily driven by sales of our FlashArray solutions, including FlashArray//XL and FlashArray//E.
Current report
The decrease in product gross margin during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily due to increasing sales of our FlashBlade//E, FlashArray//Esolutions as customers’ transition their cost-sensitive workloads from traditional disk solutions to flash. We also experienced higher QLC component costs. We expect product gross margin to improve as we progress through the year, driven by continued demand for our//E family of solutions and moderation of QLC flash pricing.
Current report
The annual interest rates applicable to U.S. Dollar denominated loans under the 2025 Credit Facility are, at our option, equal to either the term SOFR or the daily simple SOFR, in each case, plus a margin initially set at 0.875% per annum. In addition, we will incur a commitment fee on the unused portion of the commitments at an initial rate of 0.075% per annum. The respective margins will fluctuate based on the then-applicable Consolidated Net Leverage Ratio.
Current report
Loans under the 2025 Credit Facility are subject to certain restrictions and 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 2025 Credit Agreement) measured as of the last day of each fiscal quarter, commencing with the fiscal quarter ending August 3, 2025.
Current report
Share Repurchase Program and Shares Withheld to Cover Taxes
Current report
During the first quarter of fiscal 2026, we withheld approximately 1.2 million shares to cover $60.1 million in tax withholding obligations.
Current report
Net cash provided by operating activities consists of net loss, 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 lower net loss of $21.0 million and an increase of $62.5 million from changes in operating assets and liabilities, partially offset by a decrease of $16.7 million in stock-based compensation. The increase from changes in operating assets and liabilities were primarily impacted by increased collections, 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 higher deferred commissions and prepayment of partner rebates.
Current report
Our primary source of cash from operating activities during the first quarter of fiscal 2025 and 2026 were from cash collections from billings for sales of our product and subscription services.
Current report
Our primary uses of cash from operating activities during the first quarter of fiscal 2025 and 2026 were payments to our contract manufacturers, payments for employee compensation, and general corporate operating expenditures.
Current report
Net cash used in investing activities during the first quarter of fiscal 2026 was driven by $72.3 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. Cash outflows were also impacted by net purchases of marketable securities of $39.4 million.
Removed paragraphs (13)
Previous report
•In December 2024, we announced an industry-first design win with a major hyperscaler, extending our DirectFlash® technology into massive scale environments that today are dominated by hard disks. Our DirectFlash® technology delivers new levels of innovation, performance, and scalability to an industry with demanding requirements, enabling hyperscalers to fully modernize their infrastructure, significantly improve operational efficiency, and free up significant amounts of power and space in their data centers.
Previous report
•In December 2024, we announced that v2.0 of Pure Fusion™will be available in the fourth quarter as a non-disruptive free upgrade to all existing Pure block storage arrays, enabling customers to create their own data cloud environment across their global enterprise.
Previous report
•In November 2024, we advanced our ability to serve large-scale AI training environments with the certification of FlashBlade//S500 with NVIDIA DGX SuperPOD architecture, accelerating enterprise AI deployments with an Ethernet-compatible solution that optimizes performance, power, and space efficiency. We also entered into a strategic partnership with CoreWeave to accelerate large-scale AI cloud services innovation by making our Platform available as a standard option within the CoreWeave dedicated cloud environment.
Previous report
•In November 2024, we unveiled Pure Storage Cloud for Microsoft Azure VMware Solution (AVS), a new fully-managed, scalable block storage-as-a-service offering that enables customers to seamlessly migrate on-premises VMware workloads to Azure cloud, reducing complexity and eliminating overhead of managing their storage.
Previous report
The increase in product cost of revenue during the third quarter and first three quarters of fiscal 2025 compared to the third quarter and first three quarters of fiscal 2024 was primarily attributable to higher component costs for our FlashBlade//E, FlashArray//E, and FlashArray//C solutions that enable customers to transition their cost-sensitive workloads from disk to our all-flash solutions, partially offset by lower excess and obsolete inventory charges.
Previous report
The decrease in product gross margin during the third quarterand first three quartersof fiscal 2025 compared to the third quarter and first three quarters of fiscal 2024 was primarily driven by increased sales of our FlashBlade//E, FlashArray//E, and FlashArray//C solutions that address customers' cost-sensitive workloads. We are also expecting a modest sequential decline in product gross margins from the third quarter to fourth quarter of fiscal 2025.
Previous report
The increase in subscription services gross margin during the third quarter and first three quarters of fiscal 2025 compared to the third quarter and first three quarters of fiscal 2024 was driven primarily by increased automation of our service logistics workflows supporting the delivery of our Evergreen subscription services and lower depreciation expense from extending the estimated useful lives of assets for our Evergreen//One offering during the third quarter of fiscal 2025.
Previous report
The increase in research and development expense during the first three quarters of fiscal 2025 compared to the first three quarters of fiscal 2024 was primarily driven by higher stock-based compensation, and, to a lesser extent, an increase in data center and cloud services costs, and higher depreciation expense from equipment purchases.
Previous report
The increase in sales and marketing expense during the first three quarters of fiscal 2025 compared to the first three quarters of fiscal 2024 was primarily due to a$58.8 million increase in employee compensation and related costs, including stock-based compensation.
Previous report
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 third quarter of fiscal 2025.
Previous report
Share Repurchase Program
Previous report
Net cash provided by operating activities during the first three 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, payment for software technology that we licensed, 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 report
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, equipment supporting our growing Evergreen//Oneoffering, investments to scale operations to support our recent design win with a major hyperscaler, and construction costs related to our headquarters facility, partially offset by net proceeds from our marketable securities of $84.5 million.
Reworded paragraphs (35)
Previous wording
Data is foundational to our customers’ business transformation, and we are focused on delivering innovative and disruptive data storage, products and services that enable customers to maximize the value of their data.
Current wording
Data is foundational to our customers’ business transformation, and we are focused on delivering an innovative and disruptive data storage platform that enables customers to maximize the value of their data.
Previous wording
We are a global leader in data storage and management with a mission to redefine the storage experience by simplifying how people consume and interact with data. Our vision of an all-flash data center integrates our foundation of simplicity and reliability with four major market trends that are impacting all organizations large and small: (1) increasing demand to consume data storage as a service; (2) the shift to modernizing today’s data infrastructure with all-flash; (3) the increase of modern cloud-native applications; and (4) increasing demand for data storage to support the acceleration in artificial intelligence (AI) adoption while managing rising energy costs.
Current wording
We are a global leader in data management and storage with a mission to redefine the data experience by simplifying how people manage, consume and interact with data. Our vision of an all-flash data center integrates our foundation of simplicity and reliability with four major market trends that are impacting all organizations large and small: (1) the shift to modernizing today’s data infrastructure with all-flash; (2) the increase of modern cloud-native applications; (3) increasing demand to consume data storage as a service; and (4) increasing demand for data storage to support the acceleration in artificial intelligence (AI) adoption while managing rising energy costs.
Previous wording
Our data storage platform (Platform) supports a wide range of structured and unstructured data, at scale and across any data workloads in hybrid and public cloud environments, and includes mission-critical production, test and development, analytics, disaster recovery, backup and restore, AI and machine learning.
Current wording
Our data storage platform (Pure Platform) supporting structured and unstructured data, at scale and across any data workloads, on premises, in the cloud, and hosted environments, makes it possible for customers to construct their Enterprise Data Clouds (EDC). EDC allows customers to serve a variety of data workloads including mission-critical production, test and development, analytics, disaster recovery, backup and restore, AI, and machine learning with a single consistent, highly automated and agile cloud operating model.
Previous wording
We derive revenue primarily from the sale of our products and services that comprise our Platform. Our Platform includes our FlashArrayand FlashBlade solutions, and our Evergreen and Portworx subscription services. 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 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.
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 for usage above a minimum usage commitment 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 subscription customers renew and expand their consumption and service levels.
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 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.
Previous wording
Cost of product revenue primarily consists of costs paid to our third-party contract manufacturers, which includes the costs of our raw material components, and personnel costs associated with our supply chain operations. Personnel costs consist of salaries, bonuses and stock-based compensation expense. Our cost of product revenue also includes allocated overhead costs, adjustments to inventory and purchase commitments, product warranty costs, amortization of intangible assets pertaining to developed technology and capitalized internal-use software, and freight. Allocated overhead costs consist of certain employee benefits and facilities-related costs. We expect our cost of product revenue to increase in absolute dollars as our product revenue increases.
Current wording
Cost of product revenue primarily consists of costs paid to our third-party contract manufacturers, which includes the costs of our raw material components, and personnel costs associated with our supply chain operations. Personnel costs consist of salaries, bonuses and stock-based compensation expense. Our cost of product revenue also includes allocated overhead costs, adjustments to inventory and purchase commitments based on forecasted demand, product warranty costs, amortization of intangible assets pertaining to developed technology, and freight. Allocated overhead costs consist of certain employee benefits and facilities-related costs. We expect our cost of product revenue to increase in absolute dollars as our product revenue increases.
Previous wording
Cost of subscription services revenue primarily consists of personnel costs associated with delivering our subscription and professional services, part replacements, allocated overhead costs and depreciation of infrastructure used to deliver our subscription services. We expect our cost of subscription services revenue to increase in absolute dollars, as our subscription services revenue increases.
Current wording
Cost of subscription services revenue primarily consists of personnel costs associated with delivering our subscription and professional services, part replacements, allocated overhead costs, depreciation of infrastructure used to deliver our subscription services, and amortization of capitalized internal-use software. We expect our cost of subscription services revenue to increase in absolute dollars, as our subscription services revenue increases.
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 and it may decrease as a percentage of revenue.
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, 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.
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 and it may decrease as a percentage of revenue as we continue to realize efficiencies from scaling our business.
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.
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 and it may decrease as a percentage of revenue.
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.
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 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, unrealized gains (losses) from mark-to-market adjustments on equity investments, and gains (losses) from foreign currency transactions.
Previous wording
The growth in subscription services revenue during the third quarter and first three quarters of fiscal 2025 compared to the third quarter and first three quarters of fiscal 2024 was largely driven by renewals of our Evergreen subscription services across our installed base.
Current wording
The increase in subscription services revenue during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was largely driven by increases in sales of our Evergreen//Oneconsumption and subscription based offering and renewals of our Evergreen subscription services across our installed base.
Previous wording
During the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024, total revenue in the United States grew 5% from $535.5 million to $561.9 million while total rest of the world revenue grew 18% from $227.4 million to $269.2 million. During the first three quarters of fiscal 2025 compared to the first three quarters of fiscal 2024, total revenue in the United States grew 9% from $1.5 billion to $1.6 billion while total rest of the world revenue grew 20% from $583.6 million to $699.7 million.
Current wording
During the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025, total revenue in the United States grew 9% from $489.0 million to $530.7 million while total rest of the world revenue grew 21% from $204.5 million to $247.8 million.
Previous wording
The year-over-year growth in our Subscription ARR at the end of fiscal 2024 was 25%. The decline in year-over-year growth to 22% at the end of the third quarter of fiscal 2025 was impacted by lower than expected Total Contract Value (TCV) sales of Evergreen//One.
Current wording
The year-over-year growth in our Subscription ARR at the end of the first quarter of fiscal 2025 was 25%. The decline in year-over-year growth to 18% at the end of the first 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.
Previous wording
Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $2.4 billion at the end of the third quarter of fiscal 2025. Total RPO includes $35.7 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 $2.4 billion RPO at the end of the third quarter of fiscal 2025, we expect to recognize approximately 47% 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 $2.7 billion at the end of the first quarter of fiscal 2026, and 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 $55.7 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
RPO 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. 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. The year-over-year growth in RPO decreased from 31% at the end of fiscal 2024 to 16% at the end of the third quarter of fiscal 2025. Year-over-year growth in RPO has been primarily impacted by lower than expected TCV sales of Evergreen//One due to both extended closing timelines for larger Evergreen//One opportunities and increased conversion to a traditional sale of our higher velocity Evergreen//One opportunities.
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 17% at the end of the first 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 increase in subscription services cost of revenue during the third quarter and first three quarters of fiscal 2025 compared to the third quarter and first three 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. The increase in subscription services cost was partially offset by lower depreciation expense from extending the estimated useful lives of assets for our Evergreen//One offering during the third quarter of fiscal 2025. Our Evergreen//One offering, supported by our own infrastructure, demonstrate a longer estimated life as a result of deriving benefits from our technology and Evergreen support.
Current wording
The increase in subscription services gross margin during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily driven by (i) lower depreciation expense from increasing the estimated useful lives of assets supporting our Evergreen//One offering during the third quarter of fiscal 2025 and (ii) continued optimization and increased efficiencies in our technical services operations, combined with cost benefits from automating our service logistics workflows that support delivery of our Evergreen subscription services to our installed base. Our Evergreen//One offering, supported by our own infrastructure, demonstrate a longer estimated life as a result of deriving benefits from our technology and Evergreen support.
Previous wording
During the third quarter and first three quarters of fiscal 2025, we recognized$2.6 million and$34.5 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.
Current wording
Stock-based compensation expense in the first quarter of fiscal 2025 included $28.7 million related to a modification of our fiscal 2024 performance restricted stock units (PRSUs), resulting in higher stock-based compensation expense when compared to the first quarter of fiscal 2026. 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 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.
Current 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.
Previous wording
The increase in research and development expense during the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 was primarily driven by an increase in employee compensation and related costs, including stock-based compensation, and an increase in data center and cloud services costs.
Current wording
The increase in research and development expense during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily driven by an increase in employee compensation and related costs, and, to a lesser extent, an increase in data center and cloud services costs, and outside services costs.
Previous wording
The increase in sales and marketing expense during the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 was primarily due toan increase in employee compensation and related costs, including stock-based compensation, and, to a lesser extent, higher costs for sales and marketing events.
Current wording
The increase in sales and marketing expense during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily driven byan increasein employee compensation and related costs, and to a lesser extent, higher costs for sales and marketing events.
Previous wording
The increase in general and administrative expense during the first three quarters of fiscal 2025 compared to the first three quarters of fiscal 2024, was primarily driven by higher stock-based compensation, partially offset by a decrease in outside services costs.
Current wording
The decrease in general and administrative expense during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily driven by higher stock-based compensation as a result of the modification of our fiscal 2024 PRSUs during the first quarter of fiscal 2025.
Previous 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 incremental abandonment and impairment charges related to certain leases associated with our former corporate headquarters. 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 quarter 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 third quarter and first three quarters of fiscal 2025 compared to the third quarter and first three quarters of fiscal 2024 was primarily due to an increase in interest income from a larger balance in cash, cash equivalents and marketable securities and 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.
Current wording
The increase in other income (expense), net during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily due to substantially higher net foreign exchange gains as the U.S. dollar weakened relative to certain foreign currencies.
Previous wording
The increase in provision for income taxes during the third quarter and first three quarters of fiscal 2025 compared to the third quarter and first three quarters of fiscal 2024 was primarily due to an increase in foreign income taxes.
Current wording
The increase in provision for income taxes during the first quarter of fiscal 2026 when compared to the first quarter of fiscal 2025 was primarily driven by an increase in global profits, as well as a decrease in available U.S. tax attributes to offset taxable income.
Previous wording
At the end of the third quarter of fiscal 2025, we had cash, cash equivalents and marketable securities of $1.6 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, and asset-backed securities.
Current wording
At the end of the first quarter of fiscal 2026, we had cash, cash equivalents and marketable securities of $1.6 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, and asset-backed securities.
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 including investments to scale operations to support our recent design win with a major hyperscaler, 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.
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 design win with Meta, 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
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 6.62% and 6.76% during the third quarter and first three quarters of fiscal 2025 based on a one-month term SOFR period with interest expense not material during either period.
Current wording
At the end of the first quarter of fiscal 2026, we had $100.0 million outstanding borrowing under the $300.0 million senior secured revolving credit facility (Existing Credit Facility). The outstanding borrowing bore weighted-average interest at an annual rate of approximately 6.83% and 5.82% during the first quarter of fiscal 2025 and 2026 based on a one-month term Secured Overnight Financing Rate (SOFR) period.
Previous wording
In August 2020, we entered into a Credit Agreement with a consortium of financial institutions and lenders that provides for a five-year, senior secured revolving credit facility of $300.0 million (Credit Facility). Proceeds from the Credit Facility may be used for general corporate purposes and working capital. The Credit Facility expires, absent default or early termination by us, on August 24, 2025. In March 2023, we amended the Credit Facility to transition LIBOR to the Secured Overnight Financing Rate (SOFR) effective April 1, 2023. The annual interest rates applicable to loans under the Credit Facility are, at our option, equal to either a base rate plus a margin ranging from 0.50% to 1.25% or term SOFR (based on one, three, or six-month interest periods), subject to a floor of 0%, plus a margin ranging from 1.50% to 2.25%. Interest on revolving loans is payable quarterly in arrears with respect to loans based on the base rate and at the end of an interest period in the case of loans based on term SOFR (or at each three-month interval, if the interest period is longer than three months). We are also required to pay a commitment fee on the unused portion of the commitments ranging from 0.25% to 0.40% per annum, payable quarterly in arrears.
Current wording
In June 2025, we entered into a Credit Agreement (2025 Credit Agreement) with a consortium of financial institutions and lenders that provides for a five-year, senior unsecured revolving credit facility of $500.0 million (2025 Credit Facility). Proceeds from borrowings under the 2025 Credit Facility may be used for general corporate purposes and working capital. Our Existing Credit Facility was terminated effective June 10, 2025 and the outstanding borrowing of $100.0 million was repaid.
Previous wording
At the end of the third quarter of fiscal 2025, we had outstanding letters of credit in the aggregate amount of $7.2 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 fiscal 2025 and the first 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 September 2030. The letter of credit associated with a certain employee-related benefit is collateralized by restricted cash.
Previous wording
In February 2024, our Board of Directors authorized an additional $250.0 million to repurchase shares of our common stock, increasing the total authorization amount to $395.4 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.
Current 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 first quarter of fiscal 2026, we repurchased and retired approximately 2.5 million shares of common stock at an average purchase price of $48.10 per share for an aggregate repurchase price of $119.9 million. Approximately $151.6 million remained available for future share repurchases at the end of the first quarter of fiscal 2026.
Previous wording
Net cash provided by investing activities during the first three quarters of fiscal 2024 was driven by net proceeds from our marketable securities of $191.7 million, partially offset by $151.6 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 headquarters facility.
Current 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 Evergreen//Oneoffering, as well as the construction of our headquarters facility.
Previous 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 vesting of equity awards of $141.6 million, partially offset by proceeds from the issuance of common stock from employee stock purchase plan (ESPP) of $51.7 million, and the exercise of stock options of $21.2 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.
Current wording
Net cash used in financing activities during the first quarter of fiscal 2026 was primarily driven by cash outflows related to share repurchases of $119.9 million and tax withholding remittances on vesting of equity awards of $61.3 million, 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 $5.4 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.
Previous wording
Net cash used in financing activities during the first three 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 $114.3 million and tax withholding on vested equity awards of $16.6 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 $45.1 million, and the exercise of stock options of $32.9 million.
Current 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 under our ESPP of $25.3 million, and exercise of stock options of $13.2 million, partially offset by cash outflows related to tax withholding remittances on vested equity awards of $12.5 million.
Previous wording
Our financial statements are prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures.
Current wording
Our condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
We expect to recognize approximately 48% of total RPO over the next 12 months, and the remainder thereafter. RPO is expected to increase as our subscription services business grows over time.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The increase in general and administrative expense during the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 was primarily driven by an increase in employee compensation and related costs.
Previous report — wording carried elsewhere
During the first three quarters of fiscal 2024, we recognized $16.8 million in abandonment and impairment charges related to leases associated with our former corporate headquarters that we ceased use during the second quarter of fiscal 2024.
Previous report — wording carried elsewhere
During the third quarter and first three quarters of fiscal 2025, we repurchased and retired approximately 3.6 million shares of our common stock at an average purchase price of $50.53 per share for an aggregate repurchase price of $182.0 million. Approximately $213.4 million remained under our share repurchase authorization as of the end of the third quarter of fiscal 2025.