Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide an update on the adoption and feedback of Fusion 2.0? A: Charles Giancarlo, CEO: We've had dozens of companies download and activate Fusion 2.0, with enthusiastic feedback. Customers appreciate managing systems as a fleet rather than individual arrays, simplifying data handling policies. It's early, but we expect a network effect as more customers adopt Fusion.
Q: How is the hyperscale opportunity progressing, and what discussions are you having with other hyperscalers? A: Charles Giancarlo, CEO: Conversations are evolving and expanding, particularly around different data storage tiers. Engagements with other hyperscalers are progressing faster, with increased interest, although nothing specific to announce yet.
Q: What investments are needed to move from a hyperscale design win to production? A: Charles Giancarlo, CEO: This involves co-development with the hyperscaler, integrating our software with their new architectures, and qualifying different scales of our DirectFlash modules. Kevan Krysler, CFO, adds that investments include integrating Purity software, accelerating density roadmap, qualifying suppliers, and expanding supply chain capabilities.
Q: How much of the product gross margin decline is due to the E and C families versus higher QLC costs? A: Charles Giancarlo, CEO: The decline is entirely due to the E family, which competes with disk solutions. The rise in NAND prices affected the E family more, but we expect margins to normalize as NAND prices moderate.
Q: Can you explain the decline in RPO growth and its implications for your core enterprise business? A: Kevan Krysler, CFO: The decline is due to a drop in Evergreen//One TCV sales. However, we saw a record performance in Q4, and we expect growth in Evergreen//One offerings, which is factored into our revenue guidance.
Q: How do you see enterprise adoption of AI initiatives affecting your business? A: Charles Giancarlo, CEO: AI is driving a shift from data silos to enterprise data clouds. Fusion is well-timed to help customers manage data for AI analysis. Rob Lee, CTO, adds that as enterprises move towards inference and broader data integration, Pure's entire portfolio is being deployed to support AI initiatives.
Q: How are tariffs and geopolitical dynamics factored into your margin guidance? A: Kevan Krysler, CFO: We have diversified our supply chain and developed contingency plans for various tariff scenarios. Charles Giancarlo, CEO, emphasizes their flexibility and capability in managing supply chain disruptions.
Q: Why isn't there a more significant re-acceleration in revenue despite aggressive E family penetration? A: Charles Giancarlo, CEO: The guidance considers a consistent IT spending environment and a return to growth in Evergreen//One. Kevan Krysler, CFO, notes that FY25 saw a benefit from Evergreen//One conversions to traditional sales, which normalizes the growth rate.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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