Pure Storage, Inc. — Call Transcript 2026

Delighted to have with us Charles Giancarlo, CEO of Everpure, formerly Pure Storage. Formerly Pure Storage. I guess before we get started, I'm just going to read a few statements on behalf of Everpure. Statements made in these discussions which are not statements of historical facts are forward-looking statements based on current expectations. Actual results could differ materially from those projected due to a number of factors, including those referenced in Everpure's most recent SEC filings on Forms 10-Q, 10-K, and 8-K. Thank you very much. Perfect. Anytime. Well, Charlie, thanks a lot for being here. Really appreciate your time. Maybe just even before we get kicked off, start off with all the questions, you folks reported earnings a couple of weeks ago. Correct. Very strong numbers in Q1. There's a lot of questions around the guide and the back half expectations. Right. Maybe just level-set kind of some of the key points on the earnings call. Yeah. How you folks thought about the back half, and then we'll dig into the questions from there? Sure. Well, the key points about the first quarter is it was another billion-dollar quarter and the first time ever a billion-dollar quarter in our first quarter, building on a billion-dollar quarter in our fourth quarter of last year. Just as a reminder, our quarters end roughly the end of January each year. We reported 35% overall revenue growth, which is certainly a significant pickup in overall revenue growth. I think even more importantly, 55% increase in our product revenue growth, which, by all accounts, is a proof point of a significant gain in market share overall as a company. We also raised our guide for Q2 and for the year as a whole. To give you a sense, last year, at the beginning of the year, we had guided to 11%. We delivered over 15%, close to 16% for the year. Thank you so much. This year, we guided, at the beginning of the year, to 19%. The guide at the end of Q1 for the year is 22%, already a 3% increase. What we did do is that 22%, that extra 3% came about because of the beat we had in Q1, as well as we increased for the full year by the amount that we're projecting for Q2, which is, again, a significant increase in terms of our guide as well as year-over-year. What we didn't do is raise the second half of the year. There's a lot going on in this market. Prices are increasing, which is creating all sorts of effects. Supply chains are tightening, which creates other types of effects. We didn't think it was really worthwhile or that we were adding anything by trying to define the macro in the second half of the year. We have a history of not changing guidance for a second half of the year after a first quarter, because we just don't believe that there's enough information. Generally, if you will, we guide on the basis of our pipeline and, to some extent, our backlog, which is only one to two quarters in advance. Guiding towards for the end of the year is just we generally don't do that after a first quarter. There was some disappointment, I think, by some people in the stock that we didn't guide even higher for the second half of the year. On the other hand, we're not trying to be the best crystal ball viewers. We're trying to run a company by improving and gaining market share each and every quarter, which we are doing. Perfect. No, it certainly seems a lot more prudent of a guide that's perhaps more de-risked, I would say, than maybe some of the other ones that are out there. I'm sure we'll come back and talk about memory a bit. Maybe at a very high level, think about it, these massive investments in AI infrastructure, more from hyperscalers. Correct. Heavily on compute, but certainly on memory storage as well. As enterprises start to get AI-ready. Right. Some signs this is happening. Can you just talk about what role does storage play for enterprises as they get AI-ready, as they look to build out their AI infrastructure? Where does Everpure really play into that? Sure. Well, for enterprises to get ready for AI, it's very interesting. A lot of the focus on the media is getting ready for AI on the compute side, right? Building out compute farms, super pods, adding components for that, whether it's networking or storage. What the media doesn't pay a lot of attention on is the fact that getting ready for AI is much more, in the enterprise, about getting their data ready for AI. What do I mean by that? Well, for decades, we've had an application-centric, application-focused model for how we build infrastructure. Across the board. Doesn't matter, enterprises, hyperscalers, it's all been application-focused. What that's done is it's fragmented the data across the enterprise. We hope to be, soon actually, part of the Fortune 500, but we're not yet. Despite that, we've cut our application use in half just to be more efficient. We're still well over 500 applications, okay? That's the ones we know about. Most of the enterprises we sell to are thousands of applications. Every one of those applications has their own data set, okay? Every one has their own data set, which is slightly different than another application. To do anything in an enterprise, such as issue a quote or an invoice, you have to pull information from many different applications. What's happened is the data is not consistent across these applications. When you have inconsistent data such as a customer name means one thing in one application, a different thing in a second, a different thing in the third, then coming up with the correct answers to an AI inquiry. It's a data problem. It is not specifically a compute problem. There's a lot of work going on. If you were to ask enterprises, "What are your biggest challenges for AI?" They will say it's their data. There's a lot that we are doing in helping customers get their data ready. It's part of the reason why we acquired 1touch. It allows customers to create a complete catalog of their data. It allows them to rationalize the different data that exists in these different data sets that they have. Enabling customers to get their data ready for AI, in my opinion, in the enterprise, is a huge market opportunity. That is still very nascent in its infrastructure. That being said, let's go to what the popular media talks about. Our FlashBlade product has been in place for six to seven years in AI environments. It can easily handle up to several hundred GPUs, which is what most enterprises, to the extent they build their own infrastructure, will be using. Our FlashBlade//EXA, which now goes up to several hundred thousand GPUs, is available for sovereign clouds, for GPU clouds, for tech titans who scale to that level. Finally, Portworx is in tremendous use right now in data pipelines around ETL. We have a lot of irons in the fire when it comes to AI. Got it. Maybe in the spirit of the irons in the fire with AI, you folks have this engagement with hyperscaler. Meta is the one you folks have talked about a fair amount. Clearly, I think investors have a lot of focus on thes hyperscaler engagements. Maybe we just stick with Meta because you have publicly discussed this. What are you helping Meta with? What is Everpure offering them that they can't do organically, perhaps? I'm going to genericize this a little bit. It's the same set of values that we can offer to any of the hyperscalers, so it's not specific to one, and we're developing this hyperscale solution to be roughly the same solution. Each of them will have their little differences here or there, but it's the same solution for any of the hyperscalers, and that's one of the things that makes it attractive to them. What are the advantages? Well, first of all, we're the only company literally in the world that has what we call DirectFlash technology. What is that? Most people think, as we would, as consumers, that an SSD is flash, and that's what everybody uses today, with the exception. of our customers. They use SSDs. What is an SSD? Well, the truth is that an SSD is flash masquerading as a hard drive. In order to get flash into things like laptops and everything else, instead of forcing all of the different operating system vendors to have to change their operating system, the flash manufacturers came up with a brilliant idea. Let's just make it look like a hard drive, and then anybody can use it. No change in software necessary. That's great, except that hard drives and flash work entirely differently. By developing software that works directly with flash, we automatically have about a 30%-40% price performance improvement. We're not going to spend time on that now. We have lots of patents and papers in this area. People can go reference that. That's valuable to a hyperscaler as well, right? Storage is their second-largest spend in infrastructure after servers. As more and more of their business goes to flash, we can not only save them a lot of money, but we have a number of other advantages as well. One is we make better use of the flash, so better space, power, and cooling. Our lifetimes are at least twice as long as an SSD, if not longer. Our failure rate is one-tenth of SSDs. One-tenth. There are those benefits, and then finally, if that weren't enough, every SSD, every hard disk, every different size, every different vendor, when there is a flash change, new flash changes, requires tweaks to the operating system because that's where disks are managed, out of the operating system. Our software goes into what's called user space in an operating system, so no changes to the operating system, and the hyperscaler doesn't have to worry about modifying the operating system for the next generation or just for a different scale. Our software takes care of all of that. We're just a much easier infrastructure to be able to manage. A lot of advantages to the hyperscaler. Of course, it's a big change from what they do today. Hyperscalers only modify their environment on roughly a three-year development cycle. There's a lot, obviously, of qualification, so it takes time, and it's an engineering-to-engineering interface, so it takes time. If I just think of a lot of the stuff, the way you described it, the way I've understood Pure, right, it's a lot about we can help you do this in a more efficient manner, right? Correct. Be that raw NAND, raw memory, right? Maybe hyperscalers could ignore it historically because it's like the price of NAND just kept going down, so your problem was getting smaller, not bigger, in a way. Correct. If you're in a place where memory just keeps going up at this point for several years, isn't, in a way, it's not TAM but the problem you solve is getting bigger. Even if you keep the percentage the same of our advantage, the dollar value of that percentage goes up. Therefore, it's more attractive. Charlie, maybe two things on that, right? A, why wouldn't the hyperscalers accelerate qualification processes? You're going to save them a lot of money. I'd rather do it now than later. Right. Secondly, maybe you can just talk about how does this engagement work from a financial basis for you? Is it here's the install, here's how much data we manage, and here's how we get paid for it? Is it à la carte? Just talk about those two vectors a bit. Yeah. Well, what the current environment has done is open the aperture or widen the funnel. We're getting more interest. I'd also say that the hyperscalers are more busy now, and have got more to do. It hasn't shortened the qualification cycle. Secondly, we're only one part of their design process. We're a relatively small part of their design process. Their design process is governed by the next-generation processor, the next generation of their own software the next generation of the switching systems that go in there. The qualification could be sped up, but not their design element. Right. That doesn't get sped up at all. Right. Unfortunately, while we're getting more interest, it hasn't sped up the design cycle. All right, now on the economics. It's a different set of economics than our traditional economics in that we're not selling a system per se. We're providing technology. A large portion of it is not our supply chain. We allow, in a sense, the hyperscalers. They're responsible for the NAND. They're also responsible. They buy a completed product from their supply chain. Now, our involvement is it's our design. We work with their supply chain so that they can supply it, but the NAND is sourced by the customer, in this case, the hyperscaler. What we get is a royalty on every, what we call, DirectFlash Module that the hyperscaler buys. We have some COGS because while the hyperscaler contracts, if you will, for the NAND directly, there are other components that they don't want to be responsible for. We're responsible for that. Our gross margins, and there are mix issues that will vary the gross margin, but generally in the 75%-85% range, given the mix. Got it. A lot of your, not your peers, but a lot of companies right now are talking about, "Hey, we're seeing this uplift in general purpose x86 servers in a very profound manner, actually. Yes. Historically, I think there's been a decent relationship between, hey, if you want to spin up these new servers and create new workloads, you've got to store your data somewhere, i.e., storage will follow through at some point. Yeah. Just talk about, historically, how has that lagged in between compute versus storage, and does that happen as you go into an AI world as well? Well, they have somewhat different cycles, sales cycles. On the other hand, storage in a traditional data center, so let's leave AI out of this for the moment. In a traditional data center, compute will generally be on the order of 60%-70% of spend, storage 20%-25%, and what's left over is networking at 5%-10% broadly speaking, about correct. Storage is larger than a lot of people think in terms of percentage of spend on infrastructure in a data center. I'm not counting power supplies and air conditioning and stuff like that. In an AI world, because of the cost of both HBM and GPUs, storage is much smaller. Because AI uses the fastest, highest performance networking is actually number two, storage is number three in a AI environment. No, the bottom is sort of lag between. It's not so much that. Yeah, I would say that the purchase cycle around processors and the purchase cycle around storage tends to, they're not tightly connected because a lot of times you can buy processors and you have spare capacity on your existing storage. Sometimes you start running out of storage because the data increases. It may not be tied so directly to a compute purchase cycle. Got it. Memory's been another topic that everyone's been focused on. I'm sure you spend a lot of time on it, from an input cost basis. If I think about what's happening with memory, maybe in a bit more of a strategic basis versus just the prices, historically, when you've had these periods of component tightness, it's reshaped a lot of competitive dynamics in the industry as well at the same time. Can you just maybe talk about how do you think the current memory environment influences your competitive positioning and how do customers' value proposition change with us? Right. When we talk about memory, I want to broaden it a little bit. There's the memory such as DRAM, and now HBM, but there's also storage, a storage memory, right? Both of them are going through the same significant price rises. The way it affects us is quite interesting. We, as you know, up until recently, we can talk about that, our gross margin on the product side has been in the upper 60s%, right? Even past 70%. 70, yeah. Whereas our competitive set, the storage industry as a whole, generally has about 50% gross margins on product. Right away, the equivalent increase of cost in our BOM results in a lower requirement for us to raise prices. We've been able to raise prices less and later than our competition because we don't use as much memory or storage, okay, for us to be able to deliver the same capacity of storage. Secondly, we've chosen to share some of the pain with our customers, who are operating at the lower end of our guidance while these price rises are taking place. For a variety of reasons, but at the end of the day, I can't go into a customer and say, "I'm so sorry that you have to pay more, and we're going to take more profit at the same time." Our first value as a company is customer first, and we live that. It's not just a saying. In the short term, we have chosen to operate at the lower end of our 65%-70% guidance. At the same time, that also makes us more competitive. I think we're going to see enhanced growth from a competitive standpoint, a market share standpoint, because we don't have to raise as much, and we're choosing to be in league with our customers. Maybe just on the price increase, I think there's been three price increases that I can track in the last, since the start of this year, at least, right? Since the start of the year. It is the best we can track. Your price increases are being less benign. They're all crazy numbers. Yeah They're less benign than what others are doing. You actually had a letter out to your customers, which I thought was very well-read. You mean more benign, less increase. Less increases, more benign to your customers. You touched on this a bit already, but just talk about it, why are you able to provide or have a lot lower price increases than your customers, and is it resulting in you winning more business over time, actually? One of it is just the physics of the financials, which is if traditionally our COGS were 30% of our product sales versus 50%, a 15%, let's say, or a 50% rise in your COGS would take you to 45% for the same price. You only have to raise prices by 15%, roughly speaking to make it up. Versus if it's 50%, you have to raise it higher to keep the same margin. Right? Just the physics of the financials make it possible to raise it less. Secondly, we are choosing to share some of the pain with our customers, that's even less. We bring it down to roughly 65%. If that doesn't raise market share, then I don't know what will. What I will say is that Q1 still, because of the lag between pricing, shipments, and backlog. Q1 was still mostly at Q4 pricing. Right? Q2 will be much more on Q1 pricing, which, as you said, has increased. I think what you're going to see as we go forward, or what I hope to see, I should say, going forward, is increasing market share. Got it. Now, I will say, let me just go further than that. Yeah. When we announced last quarter, I mentioned, you asked me about it right up front, 35% growth. Right? Rough estimate, we thought about a third of that was on the basis of price increases in pull-ins. That would be about, what, 10%-12%. We grew 35%, which means 20% growth. If you look at our competitors, they all grew less than 12%. I don't think we're special in terms of how many pull-ins are coming in, no matter what anybody says. If their pull-ins are roughly the same because everybody's responding to price increases by trying to get in a bit early to avoid future price increases. We're growing quite substantially. It's totally fair. Beyond pull-ins, which I think everyone's going to debate is it happening and how much is it happening, but there's certainly this element of it. When you talk to your customers, right, IT budgets at the end of the day are relatively finite. Correct. How are they navigating this surge in storage pricing very specifically? Are they saying, "I'll take a lower-tier storage. I'll take maybe some HDDs," I've heard from people, for example. Just how are customers dealing with this right now? It is, in fact, from a numbers standpoint, too early to say, because the prices are just starting to take place, and customers are attempting to get ahead of future price increases by ordering early. Right now, demand is very high. Which is why we're trying to parse out what is true demand, what is market share gains, versus what is pull-ins, right? Because what we care about is market share gains. Those will last. Market share gains will last. Short-term activities by customers associated with price rises or anticipated price rises, that's temporary, right? I think it's a bit early to say, but historically our experience is that with price rises or price declines. Environment that one lives in, is that demand of bits, right, does vary, does change with price rises or decreases, but not so much as to overcome the price itself. Price trumps capacity, but capacity does respond to price changes in both directions. Yep. What about a desire to shift to slower storage or even HDD or hybrid arrays? Are you seeing customers actively make the decision? Historically, it's been a one-way train, everything goes more flash. Right. Well, yes, that has changed because the ratio, and it's still in transition changing now, because both flash and hard disks on the source side are sold out through 2028. Okay? There's no more supply of flash, that hasn't been accounted for, of hard disk until 2028. Prices are still, demand, sorry, supply has not kept up with demand, or looked upon another way, demand has not declined enough to match supply, and that's why we're seeing continuing price increases. What we can say right now is that the market that we were very active in about a year ago of flash being competitive on a total cost of ownership basis with hard disk, that doesn't exist right now. That's gone into stasis. Right. I'm a big believer in reversion to the mean. It'll come back, but just not with us right now. Got it. From your advantage point, you have to buy a lot of memory to meet your customers' demand as well. Just talk about what sort of visibility, what sort of conviction do you have with your memory as an input cost. You're talking about both flash and in RAM. More flash because it's a bigger input cost for you, I feel, right, than DRAM. In broad, just talk about your LTAs, the visibility on bits and pricing or just bits. We have very good visibility on both, and part of that is because of our hyperscale commitments that we currently have in place. We have plenty of flash. What has changed is that there's a separation now between being able to get long-term commitments on volume and getting long-term commitments on price. There are no long-term commitments on price right now. It's an allocation game, and pricing is basically every 30 days, right? We have allocation on capacity. Price was at 30, which is part of the reason why prices are escalating, is because you can no longer say, "I can buy ahead for six months." You can't. You can get capacity but not price. Does that change how you quote business to your customers at a 30-day increment as well or? Yes. For our entire life as a company, we have been quoting with a 90-day quote expiration. We're down to 30-day quote expiration. By the way, that's longer than most of our competitors. Yeah. Yeah. I've heard stories about right for cancellation, right to change pricing up until shipment. Yeah, until shipment. It's all kinds of fun clauses that are getting implemented. Exactly. We'll see how well they stick over time. One of the dynamics that's emerged is this neoclouds as a category, right? CoreWeave and others of the world, they have a lot of spending dollars. They're doing a lot of stuff. How do you think of that as an emerging customer base for Everpure? You, I think, have a relationship with CoreWeave? With CoreWeave, yeah. On a couple of different levels. Just talk about the neoclouds. What do they want? How are you tackling that kind of customer base? The neoclouds or GPU clouds, or for that matter, the sovereign clouds, was a market that we did not have a product to engage with up until the last year or so. To put that in perspective, most of the large-scale, sorry, LLM, large scale AI environment grew out of the HPC market, the high-performance computing market. For storage, was typically somewhat of a cul-de-sac. It was a very specialized market, very scientific in nature, very specs-oriented versus reliability-oriented. You were selling to scientists, and they like to tune things. They liked a lot of what we call nerd knobs in the business. Think of it sort of like, what was the name of the company that HP bought? What's it? No. The supercomputer company. Cray. Cray. Thank you so much. Think of it like Cray. Cray didn't expand to do other things in the standard commercial market, right? That was a lot like the companies that satisfied the HPC market. Well, AI grew out of that. It turns out that it was the people that were in HPC that now people all of the large-scale GPU environments, whether it's sovereign clouds or the tech titans or the GPU clouds. We didn't have a product in the race. We didn't speak the same language. We didn't go to the same schools. We didn't have the secret decoder ring. We certainly have certain beliefs as a company, in particular, that all of our systems should operate on the same software and have the same abilities, if you will, reliability, upgrade ability, the Evergreen capabilities that we have. It took us a while to modify or add a new set of capabilities to our FlashBlade product. Now, as I said, we introduced FlashBlade//EXA about a year ago, same Purity operating system, different configuration, where we are now publishing the best performance specs in the business, bar none. While we are still a little bit behind in features, we're catching up and not only are we replacing some of the traditional competitors in that market, but we're starting to play a bigger role in these GPU environments. Got it. It's still early days, but we feel that as these GPU clouds start to have to perform, you have to be able to provide a higher quality, more reliable, consistent service. They're going to appreciate a lot of our abilities that come with our product, versus some of the ones that were designed specifically for the scientific community. I was wondering where you would stack up. One of the things I hear is like, "Hey, these neoclouds with GPUs need a parallel file system. That's sort of what you need to deploy. That, to your point, doesn't come with all the redundancies and services that you want. That's right. Is that the delta that as they get more mature, Purity will work or? Purity will work. These are all just features. I personally, having been in the business a long time, things like reliability, sustainability, diagnostics, that's really hard stuff that you only get over a lot of experience over a lot of period of time. Things like individual features, like a parallel file system or KV cache. Quality of service guarantees. These are all just features. One of the other things that distinguishes us is at a much more foundational business level, is that we are a dyed-in-the-wool R&D company. One of the things that 70% gross margins allows us to do is we spend 20% of our revenue on R&D. By the way, in storage, that makes us the largest R&D spender in storage, bar none. Okay? We invest more than anybody else. I think that accrues to our growth, it accrues to the quality of the product that we can put out, but it also allows us to expand in other areas. Unless you believe that we're not terribly efficient at that, but it's something we work on a lot to make sure we are efficient in the way we invest our R&D, and I think our growth shows that. I don't worry about a feature gap if we're focused on the market segment. Got it. Perfect. If you shift gears a bit, Evergreen//One, right? It's sort of your subscription services offering. I would imagine in a time where memory's inflationary, it would resonate with customers versus not. I'm sure it is. Just talk about a bit more of the Evergreen//One offering. Are you seeing a better uptake of it in an environment like this? Yeah. Just to put some numbers behind that, Evergreen//One grew, I think it was 50% year-over-year, in Q4, and roughly 70% in Q1. That indicates that it is growing faster than our CapEx product. Our historical experience with this is that as prices go up, it becomes more competitive. By the way, our price increases on Evergreen//One is far less than our price increases on the CapEx. We can go into why, there are reasons why it is not as directly affected by price increases or input cost increases. What that would say as we go forward, and we only have one quarter of price increases really so far to measure this off of, but I'd be surprised if it didn't mean that the relative amount of bookings that come in via Evergreen//One will be higher than the CapEx. Got it. Maybe just two things on Evergreen//One. What are the gating factors? Why wouldn't customers adopt it faster than they already have? What limits them in that? Maybe I'll ask you the second one after that. Well, first of all, it's a different way. It's so funny. Even though they're used to buying on subscription in the cloud, right or for SaaS or for the hyperscalers, they're very unused to doing it inside their own data center. It's a CapEx model inside their data center. Honestly, sometimes we spend two to three months with the finance organization in the customer, trying to train them on how they do it. Obviously, it's growing faster than our CapEx product, but it's not unusual for them to finally say, "You know, it's just going to be easier if we do CapEx, so we're just going to do that." Now, pricing does make a difference, so we'll see. That is customer financial models sometimes are more difficult to change than their technical model. Right. Why isn't it just automatic? It's generally for those reasons. Got it. Why is the investment, or from your side, lower for Evergreen//One versus the traditional product side? Yeah. Well, first of all, obviously, our terms are longer, but it's more than that. Our Evergreen//One is a true subscription, so it's not a lease, it is not a financing. What do we mean by this? What we sell to the customer is purely a service-level agreement. It's a service level agreement on performance. It's a service level agreement on capacity. It's a service level agreement on reliability, right? That's it. There's no serial number involved. We own the equipment. We get to choose. There's no guarantee of new equipment. If you go to Amazon, do they tell you, "We're delivering new equipment to you?" No. You're just getting a service. We provide a service. Our Evergreen//Forever subscription, which is for customers that do purchase, they are guaranteed hardware upgrades every few years. That hardware that comes back has more life associated with it. We're able to use that in our Evergreen//One service. What does that mean? That means we're blending costs over a long period of time. We refurbish it, of course. All the data is erased. We're using refurbished equipment in addition to new equipment, and we get to sell it at prices that are competitive with as-a-service pricing. Our costs don't go up automatically, and we happen to be in a great cycle because we just went through a refresh on our CapEx product, which means we have a lot of equipment coming back for refresh that was priced at three years ago. All right. Perfect. That is helpful. You folks recently changed your name from Pure Storage to Everpure. You've certainly done a few deals like 1touch, Portworx a couple of years back. You are trying to become more than just, "Hey, here's the storage layer," right? Just talk about like, maybe this should've been my question to you at the start, not the end. What is the vision with this? Is it more like we're going to be a storage bottleneck solution provider? Yeah It's more than just traditional storage medium. No. We fundamentally believe, I alluded to this early on, that the nature of applications and data is fundamentally changing. It's fundamentally changing because the app world has fragmented the customer's data environment. AI, if left to the current way of doing things, is going to fragment it even further. Everything wants another copy of your data. Every SaaS company's strategy right now is give me all your data and I'll give you the AI answers. The Databricks of the world and the Snowflake of the world, they all say, "Give us all your data and we will provide you all the AI answers." How many different organizations is a customer going to give all their data to? I don't think it's scalable. I don't think it's a viable solution. Our belief is that if these applications are no longer systems of record, which they can't be because in order to do anything, you have to have information from all of these different systems. If that information is not consistent, the world's in big trouble. What can be consistent is no longer the application, but the data has to be consistent. If the world's going to migrate from app-centric to data-centric, data primacy, what we're calling data primacy, we're in a very good position to help customers get there. What does 1touch do? 1touch, for example, allows customers to get a catalog of all their data, all of it, not just what's on our stuff, what's on competitive stuff, what's in SaaS, what's in the cloud, what is with partners, and allows them, first of all, to not only get a catalog, but to get a map of how this data set relates to that data set. That it has the same name of the customer in two different places, but it has different semantics for what that customer is doing. It has different information about that customer. 1touch, like the name sounds, brings that all together so you can have a common semantic understanding of an entity like a customer or like an asset, or like a quote, all right, or an order. Where we're going is we're going from pure data storage, pun intended, to data management, where we can help customers manage their data and have fewer copies, have more comprehensive understanding of their data as we go into this world. It's not just about AI. There is a data crisis going on. If you ask any customer, "What is your biggest challenge to implementing AI?" They're going to say right away that it's their data. Their data is a mess. Perhaps we're taking a what is not a well-known or untraditional approach to helping customers in this world of AI, but we believe it's fundamentally a data problem, and that's what we're going after. Yeah. I was going to say, I certainly have an affinity to the name Everpure, but maybe it's because I work at Evercore. Yeah. There's a link there. I certainly think it's more than just a data storage problem. It does make a lot of sense. I think the time's almost up. Maybe I'll pause my questions there, Charlie. I'll turn it back to you. Anything we did not touch on that we did not cover that you think folks should be aware about? You were very kind in not spending half the time on the hyperscale challenge, so I appreciate that. We are very pleased with the progress we're making there overall. Outside of that, no, it was a great conversation. Thank you. Thank you very much. We appreciate the time. Yeah. Thank you. Thank you.

Speaker 2: Delighted to have with us Charles Giancarlo, CEO of Everpure, formerly Pure Storage. Delighted to have with us Charles Giancarlo, CEO of Everpure, formerly Pure Storage. delighted to have with us charles giancarlo ceo of everpure formerly pure storage

Speaker 1: Formerly Pure Storage. Formerly Pure Storage. formerly pure storage

Speaker 2: I guess before we get started, I'm just going to read a few statements on behalf of Everpure. Statements made in these discussions which are not statements of historical facts are forward-looking statements based on current expectations. Actual results could differ materially from those projected due to a number of factors, including those referenced in Everpure's most recent SEC filings on Forms 10-Q, 10-K, and 8-K. I guess before we get started, I'm just going to read a few statements on behalf of Everpure. i guess before we get started i'm just going to read a few statements on behalf of everpure Statements made in these discussions which are not statements of historical facts are forward-looking statements based on current expectations. statements made in these discussions which are not statements of historical facts are forward-looking statements based on current expectations Actual results could differ materially from those projected due to a number of factors, including those referenced in Everpure's most recent SEC filings on Forms 10-Q, 10-K, and 8-K. actual results could differ materially from those projected due to a number of factors including those referenced in everpure's most recent sec filings on forms 10-q 10-k and 8-k

Speaker 1: Thank you very much. Thank you very much. thank you very much

Speaker 2: Perfect. Anytime. Well, Charlie, thanks a lot for being here. Really appreciate your time. Maybe just even before we get kicked off, start off with all the questions, you folks reported earnings a couple of weeks ago. Perfect. perfect Anytime. anytime Well, Charlie, thanks a lot for being here. well charlie thanks a lot for being here Really appreciate your time. really appreciate your time Maybe just even before we get kicked off, start off with all the questions, you folks reported earnings a couple of weeks ago. maybe just even before we get kicked off start off with all the questions you folks reported earnings a couple of weeks ago

Speaker 1: Correct. Correct. correct

Speaker 2: Very strong numbers in Q1. There's a lot of questions around the guide and the back half expectations. Very strong numbers in Q1. very strong numbers in q1 There's a lot of questions around the guide and the back half expectations. there's a lot of questions around the guide and the back half expectations

Speaker 1: Right. Right. right

Speaker 2: Maybe just level-set kind of some of the key points on the earnings call. Maybe just level-set kind of some of the key points on the earnings call. maybe just level-set kind of some of the key points on the earnings call

Speaker 1: Yeah. Yeah. yeah

Speaker 2: How you folks thought about the back half, and then we'll dig into the questions from there? How you folks thought about the back half, and then we'll dig into the questions from there? how you folks thought about the back half and then we'll dig into the questions from there

Speaker 1: Sure. Well, the key points about the first quarter is it was another billion-dollar quarter and the first time ever a billion-dollar quarter in our first quarter, building on a billion-dollar quarter in our fourth quarter of last year. Just as a reminder, our quarters end roughly the end of January each year. We reported 35% overall revenue growth, which is certainly a significant pickup in overall revenue growth. I think even more importantly, 55% increase in our product revenue growth, which, by all accounts, is a proof point of a significant gain in market share overall as a company. We also raised our guide for Q2 and for the year as a whole. To give you a sense, last year, at the beginning of the year, we had guided to 11%. We delivered over 15%, close to 16% for the year. Thank you so much. Sure. sure Well, the key points about the first quarter is it was another billion-dollar quarter and the first time ever a billion-dollar quarter in our first quarter, building on a billion-dollar quarter in our fourth quarter of last year. well the key points about the first quarter is it was another billion-dollar quarter and the first time ever a billion-dollar quarter in our first quarter building on a billion-dollar quarter in our fourth quarter of last year Just as a reminder, our quarters end roughly the end of January each year. just as a reminder our quarters end roughly the end of january each year We reported 35% overall revenue growth, which is certainly a significant pickup in overall revenue growth. we reported 35% overall revenue growth which is certainly a significant pickup in overall revenue growth I think even more importantly, 55% increase in our product revenue growth, which, by all accounts, is a proof point of a significant gain in market share overall as a company. i think even more importantly 55% increase in our product revenue growth which by all accounts is a proof point of a significant gain in market share overall as a company We also raised our guide for Q2 and for the year as a whole. we also raised our guide for q2 and for the year as a whole To give you a sense, last year, at the beginning of the year, we had guided to 11%. to give you a sense last year at the beginning of the year we had guided to 11% We delivered over 15%, close to 16% for the year. we delivered over 15% close to 16% for the year Thank you so much. thank you so much This year, we guided, at the beginning of the year, to 19%. The guide at the end of Q1 for the year is 22%, already a 3% increase. What we did do is that 22%, that extra 3% came about because of the beat we had in Q1, as well as we increased for the full year by the amount that we're projecting for Q2, which is, again, a significant increase in terms of our guide as well as year-over-year. What we didn't do is raise the second half of the year. There's a lot going on in this market. Prices are increasing, which is creating all sorts of effects. This year, we guided, at the beginning of the year, to 19%. this year we guided at the beginning of the year to 19% The guide at the end of Q1 for the year is 22%, already a 3% increase. the guide at the end of q1 for the year is 22% already a 3% increase What we did do is that 22%, that extra 3% came about because of the beat we had in Q1, as well as we increased for the full year by the amount that we're projecting for Q2, which is, again, a significant increase in terms of our guide as well as year-over-year. what we did do is that 22% that extra 3% came about because of the beat we had in q1 as well as we increased for the full year by the amount that we're projecting for q2 which is again a significant increase in terms of our guide as well as year-over-year What we didn't do is raise the second half of the year. what we didn't do is raise the second half of the year There's a lot going on in this market. there's a lot going on in this market Prices are increasing, which is creating all sorts of effects. prices are increasing which is creating all sorts of effects Supply chains are tightening, which creates other types of effects. We didn't think it was really worthwhile or that we were adding anything by trying to define the macro in the second half of the year. We have a history of not changing guidance for a second half of the year after a first quarter, because we just don't believe that there's enough information. Generally, if you will, we guide on the basis of our pipeline and, to some extent, our backlog, which is only one to two quarters in advance. Guiding towards for the end of the year is just we generally don't do that after a first quarter. There was some disappointment, I think, by some people in the stock that we didn't guide even higher for the second half of the year. On the other hand, we're not trying to be the best crystal ball viewers. Supply chains are tightening, which creates other types of effects. supply chains are tightening which creates other types of effects We didn't think it was really worthwhile or that we were adding anything by trying to define the macro in the second half of the year. we didn't think it was really worthwhile or that we were adding anything by trying to define the macro in the second half of the year We have a history of not changing guidance for a second half of the year after a first quarter, because we just don't believe that there's enough information. we have a history of not changing guidance for a second half of the year after a first quarter because we just don't believe that there's enough information Generally, if you will, we guide on the basis of our pipeline and, to some extent, our backlog, which is only one to two quarters in advance. generally if you will we guide on the basis of our pipeline and to some extent our backlog which is only one to two quarters in advance Guiding towards for the end of the year is just we generally don't do that after a first quarter. guiding towards for the end of the year is just we generally don't do that after a first quarter There was some disappointment, I think, by some people in the stock that we didn't guide even higher for the second half of the year. there was some disappointment i think by some people in the stock that we didn't guide even higher for the second half of the year On the other hand, we're not trying to be the best crystal ball viewers. on the other hand we're not trying to be the best crystal ball viewers We're trying to run a company by improving and gaining market share each and every quarter, which we are doing. We're trying to run a company by improving and gaining market share each and every quarter, which we are doing. we're trying to run a company by improving and gaining market share each and every quarter which we are doing

Speaker 2: Perfect. No, it certainly seems a lot more prudent of a guide that's perhaps more de-risked, I would say, than maybe some of the other ones that are out there. I'm sure we'll come back and talk about memory a bit. Maybe at a very high level, think about it, these massive investments in AI infrastructure, more from hyperscalers. Perfect. perfect No, it certainly seems a lot more prudent of a guide that's perhaps more de-risked, I would say, than maybe some of the other ones that are out there. no it certainly seems a lot more prudent of a guide that's perhaps more de-risked i would say than maybe some of the other ones that are out there I'm sure we'll come back and talk about memory a bit. i'm sure we'll come back and talk about memory a bit Maybe at a very high level, think about it, these massive investments in AI infrastructure, more from hyperscalers. maybe at a very high level think about it these massive investments in ai infrastructure more from hyperscalers

Speaker 1: Correct. Correct. correct

Speaker 2: Heavily on compute, but certainly on memory storage as well. As enterprises start to get AI-ready. Heavily on compute, but certainly on memory storage as well. heavily on compute but certainly on memory storage as well As enterprises start to get AI- ready. as enterprises start to get ai- ready

Speaker 1: Right. Right. right

Speaker 2: Some signs this is happening. Can you just talk about what role does storage play for enterprises as they get AI-ready, as they look to build out their AI infrastructure? Where does Everpure really play into that? Some signs this is happening. some signs this is happening Can you just talk about what role does storage play for enterprises as they get AI- ready, as they look to build out their AI infrastructure? can you just talk about what role does storage play for enterprises as they get ai- ready as they look to build out their ai infrastructure Where does Everpure really play into that? where does everpure really play into that

Speaker 1: Sure. Well, for enterprises to get ready for AI, it's very interesting. A lot of the focus on the media is getting ready for AI on the compute side, right? Building out compute farms, super pods, adding components for that, whether it's networking or storage. What the media doesn't pay a lot of attention on is the fact that getting ready for AI is much more, in the enterprise, about getting their data ready for AI. What do I mean by that? Well, for decades, we've had an application-centric, application-focused model for how we build infrastructure. Across the board. Sure. sure Well, for enterprises to get ready for AI, it's very interesting. well for enterprises to get ready for ai it's very interesting A lot of the focus on the media is getting ready for AI on the compute side, right? a lot of the focus on the media is getting ready for ai on the compute side right Building out compute farms, super pods, adding components for that, whether it's networking or storage. building out compute farms super pods adding components for that whether it's networking or storage What the media doesn't pay a lot of attention on is the fact that getting ready for AI is much more, in the enterprise, about getting their data ready for AI. what the media doesn't pay a lot of attention on is the fact that getting ready for ai is much more in the enterprise about getting their data ready for ai What do I mean by that? what do i mean by that Well, for decades, we've had an application-centric, application-focused model for how we build infrastructure. well for decades we've had an application-centric application-focused model for how we build infrastructure Across the board. across the board Doesn't matter, enterprises, hyperscalers, it's all been application-focused. What that's done is it's fragmented the data across the enterprise. We hope to be, soon actually, part of the Fortune 500, but we're not yet. Despite that, we've cut our application use in half just to be more efficient. We're still well over 500 applications, okay? That's the ones we know about. Most of the enterprises we sell to are thousands of applications. Every one of those applications has their own data set, okay? Every one has their own data set, which is slightly different than another application. To do anything in an enterprise, such as issue a quote or an invoice, you have to pull information from many different applications. What's happened is the data is not consistent across these applications. Doesn't matter, enterprises, hyperscalers, it's all been application- focused. doesn't matter enterprises hyperscalers it's all been application- focused What that's done is it's fragmented the data across the enterprise. what that's done is it's fragmented the data across the enterprise We hope to be, soon actually, part of the Fortune 500, but we're not yet. we hope to be soon actually part of the fortune 500 but we're not yet Despite that, we've cut our application use in half just to be more efficient. despite that we've cut our application use in half just to be more efficient We're still well over 500 applications, okay? we're still well over 500 applications okay That's the ones we know about. that's the ones we know about Most of the enterprises we sell to are thousands of applications. most of the enterprises we sell to are thousands of applications Every one of those applications has their own data set, okay? every one of those applications has their own data set okay Every one has their own data set, which is slightly different than another application. every one has their own data set which is slightly different than another application To do anything in an enterprise, such as issue a quote or an invoice, you have to pull information from many different applications. to do anything in an enterprise such as issue a quote or an invoice you have to pull information from many different applications What's happened is the data is not consistent across these applications. what's happened is the data is not consistent across these applications When you have inconsistent data such as a customer name means one thing in one application, a different thing in a second, a different thing in the third, then coming up with the correct answers to an AI inquiry. It's a data problem. It is not specifically a compute problem. There's a lot of work going on. If you were to ask enterprises, "What are your biggest challenges for AI?" They will say it's their data. There's a lot that we are doing in helping customers get their data ready. It's part of the reason why we acquired 1touch. It allows customers to create a complete catalog of their data. It allows them to rationalize the different data that exists in these different data sets that they have. Enabling customers to get their data ready for AI, in my opinion, in the enterprise, is a huge market opportunity. When you have inconsistent data such as a customer name means one thing in one application, a different thing in a second, a different thing in the third, then coming up with the correct answers to an AI inquiry. when you have inconsistent data such as a customer name means one thing in one application a different thing in a second a different thing in the third then coming up with the correct answers to an ai inquiry It's a data problem. it's a data problem It is not specifically a compute problem. it is not specifically a compute problem There's a lot of work going on. there's a lot of work going on If you were to ask enterprises, "What are your biggest challenges for AI?" They will say it's their data. if you were to ask enterprises "what are your biggest challenges for ai?" they will say it's their data There's a lot that we are doing in helping customers get their data ready. there's a lot that we are doing in helping customers get their data ready It's part of the reason why we acquired 1touch. it's part of the reason why we acquired 1touch It allows customers to create a complete catalog of their data. it allows customers to create a complete catalog of their data It allows them to rationalize the different data that exists in these different data sets that they have. it allows them to rationalize the different data that exists in these different data sets that they have Enabling customers to get their data ready for AI, in my opinion, in the enterprise, is a huge market opportunity. enabling customers to get their data ready for ai in my opinion in the enterprise is a huge market opportunity That is still very nascent in its infrastructure. That being said, let's go to what the popular media talks about. Our FlashBlade product has been in place for six to seven years in AI environments. It can easily handle up to several hundred GPUs, which is what most enterprises, to the extent they build their own infrastructure, will be using. Our FlashBlade//EXA, which now goes up to several hundred thousand GPUs, is available for sovereign clouds, for GPU clouds, for tech titans who scale to that level. Finally, Portworx is in tremendous use right now in data pipelines around ETL. We have a lot of irons in the fire when it comes to AI. That is still very nascent in its infrastructure. that is still very nascent in its infrastructure That being said, let's go to what the popular media talks about. that being said let's go to what the popular media talks about Our FlashBlade product has been in place for six to seven years in AI environments. It can easily handle up to several hundred GPUs, which is what most enterprises, to the extent they build their own infrastructure, will be using. our flashblade product has been in place for six to seven years in ai environments. it can easily handle up to several hundred gpus which is what most enterprises to the extent they build their own infrastructure will be using Our FlashBlade//EXA, which now goes up to several hundred thousand GPUs, is available for sovereign clouds, for GPU clouds, for tech titans who scale to that level. our flashblade//exa which now goes up to several hundred thousand gpus is available for sovereign clouds for gpu clouds for tech titans who scale to that level Finally, Portworx is in tremendous use right now in data pipelines around ETL. finally portworx is in tremendous use right now in data pipelines around etl We have a lot of irons in the fire when it comes to AI. we have a lot of irons in the fire when it comes to ai

Speaker 2: Got it. Maybe in the spirit of the irons in the fire with AI, you folks have this engagement with hyperscaler. Meta is the one you folks have talked about a fair amount. Clearly, I think investors have a lot of focus on thes hyperscaler engagements. Maybe we just stick with Meta because you have publicly discussed this. What are you helping Meta with? What is Everpure offering them that they can't do organically, perhaps? Got it. got it Maybe in the spirit of the irons in the fire with AI, you folks have this engagement with hyperscaler. maybe in the spirit of the irons in the fire with ai you folks have this engagement with hyperscaler Meta is the one you folks have talked about a fair amount. meta is the one you folks have talked about a fair amount Clearly, I think investors have a lot of focus on thes hyperscaler engagements. clearly i think investors have a lot of focus on thes hyperscaler engagements Maybe we just stick with Meta because you have publicly discussed this. maybe we just stick with meta because you have publicly discussed this What are you helping Meta with? what are you helping meta with What is Everpure offering them that they can't do organically, perhaps? what is everpure offering them that they can't do organically perhaps

Speaker 1: I'm going to genericize this a little bit. It's the same set of values that we can offer to any of the hyperscalers, so it's not specific to one, and we're developing this hyperscale solution to be roughly the same solution. Each of them will have their little differences here or there, but it's the same solution for any of the hyperscalers, and that's one of the things that makes it attractive to them. What are the advantages? Well, first of all, we're the only company literally in the world that has what we call DirectFlash technology. What is that? Most people think, as we would, as consumers, that an SSD is flash, and that's what everybody uses today, with the exception. I'm going to genericize this a little bit. i'm going to genericize this a little bit It's the same set of values that we can offer to any of the hyperscalers, so it's not specific to one, and we're developing this hyperscale solution to be roughly the same solution. it's the same set of values that we can offer to any of the hyperscalers so it's not specific to one and we're developing this hyperscale solution to be roughly the same solution Each of them will have their little differences here or there, but it's the same solution for any of the hyperscalers, and that's one of the things that makes it attractive to them. each of them will have their little differences here or there but it's the same solution for any of the hyperscalers and that's one of the things that makes it attractive to them What are the advantages? what are the advantages Well, first of all, we're the only company literally in the world that has what we call DirectFlash technology. well first of all we're the only company literally in the world that has what we call directflash technology What is that? what is that Most people think, as we would, as consumers, that an SSD is flash, and that's what everybody uses today, with the exception. most people think as we would as consumers that an ssd is flash and that's what everybody uses today with the exception of our customers. They use SSDs. What is an SSD? Well, the truth is that an SSD is flash masquerading as a hard drive. In order to get flash into things like laptops and everything else, instead of forcing all of the different operating system vendors to have to change their operating system, the flash manufacturers came up with a brilliant idea. Let's just make it look like a hard drive, and then anybody can use it. No change in software necessary. That's great, except that hard drives and flash work entirely differently. By developing software that works directly with flash, we automatically have about a 30%-40% price performance improvement. We're not going to spend time on that now. We have lots of patents and papers in this area. of our customers. of our customers They use SSDs. they use ssds What is an SSD? what is an ssd Well, the truth is that an SSD is flash masquerading as a hard drive. well the truth is that an ssd is flash masquerading as a hard drive In order to get flash into things like laptops and everything else, instead of forcing all of the different operating system vendors to have to change their operating system, the flash manufacturers came up with a brilliant idea. in order to get flash into things like laptops and everything else instead of forcing all of the different operating system vendors to have to change their operating system the flash manufacturers came up with a brilliant idea Let's just make it look like a hard drive, and then anybody can use it. let's just make it look like a hard drive and then anybody can use it No change in software necessary. no change in software necessary That's great, except that hard drives and flash work entirely differently. that's great except that hard drives and flash work entirely differently By developing software that works directly with flash, we automatically have about a 30%-40% price performance improvement. by developing software that works directly with flash we automatically have about a 30%-40% price performance improvement We're not going to spend time on that now. we're not going to spend time on that now We have lots of patents and papers in this area. we have lots of patents and papers in this area People can go reference that. That's valuable to a hyperscaler as well, right? Storage is their second-largest spend in infrastructure after servers. As more and more of their business goes to flash, we can not only save them a lot of money, but we have a number of other advantages as well. One is we make better use of the flash, so better space, power, and cooling. Our lifetimes are at least twice as long as an SSD, if not longer. Our failure rate is one-tenth of SSDs. One-tenth. There are those benefits, and then finally, if that weren't enough, every SSD, every hard disk, every different size, every different vendor, when there is a flash change, new flash changes, requires tweaks to the operating system because that's where disks are managed, out of the operating system. People can go reference that. people can go reference that That's valuable to a hyperscaler as well, right? that's valuable to a hyperscaler as well right Storage is their second-largest spend in infrastructure after servers. storage is their second-largest spend in infrastructure after servers As more and more of their business goes to flash, we can not only save them a lot of money, but we have a number of other advantages as well. as more and more of their business goes to flash we can not only save them a lot of money but we have a number of other advantages as well One is we make better use of the flash, so better space, power, and cooling. one is we make better use of the flash so better space power and cooling Our lifetimes are at least twice as long as an SSD, if not longer. our lifetimes are at least twice as long as an ssd if not longer Our failure rate is one-tenth of SSDs. our failure rate is one-tenth of ssds One-tenth. one-tenth There are those benefits, and then finally, if that weren't enough, every SSD, every hard disk, every different size, every different vendor, when there is a flash change, new flash changes, requires tweaks to the operating system because that's where disks are managed, out of the operating system. there are those benefits and then finally if that weren't enough every ssd every hard disk every different size every different vendor when there is a flash change new flash changes requires tweaks to the operating system because that's where disks are managed out of the operating system Our software goes into what's called user space in an operating system, so no changes to the operating system, and the hyperscaler doesn't have to worry about modifying the operating system for the next generation or just for a different scale. Our software takes care of all of that. We're just a much easier infrastructure to be able to manage. A lot of advantages to the hyperscaler. Of course, it's a big change from what they do today. Hyperscalers only modify their environment on roughly a three-year development cycle. There's a lot, obviously, of qualification, so it takes time, and it's an engineering-to-engineering interface, so it takes time. Our software goes into what's called user space in an operating system, so no changes to the operating system, and the hyperscaler doesn't have to worry about modifying the operating system for the next generation or just for a different scale. our software goes into what's called user space in an operating system so no changes to the operating system and the hyperscaler doesn't have to worry about modifying the operating system for the next generation or just for a different scale Our software takes care of all of that. our software takes care of all of that We're just a much easier infrastructure to be able to manage. we're just a much easier infrastructure to be able to manage A lot of advantages to the hyperscaler. a lot of advantages to the hyperscaler Of course, it's a big change from what they do today. of course it's a big change from what they do today Hyperscalers only modify their environment on roughly a three-year development cycle. hyperscalers only modify their environment on roughly a three-year development cycle There's a lot, obviously, of qualification, so it takes time, and it's an engineering-to-engineering interface, so it takes time. there's a lot obviously of qualification so it takes time and it's an engineering-to-engineering interface so it takes time

Speaker 2: If I just think of a lot of the stuff, the way you described it, the way I've understood Pure, right, it's a lot about we can help you do this in a more efficient manner, right? If I just think of a lot of the stuff, the way you described it, the way I've understood Pure, right, it's a lot about we can help you do this in a more efficient manner, right? if i just think of a lot of the stuff the way you described it the way i've understood pure right it's a lot about we can help you do this in a more efficient manner right

Speaker 1: Correct. Correct. correct

Speaker 2: Be that raw NAND, raw memory, right? Maybe hyperscalers could ignore it historically because it's like the price of NAND just kept going down, so your problem was getting smaller, not bigger, in a way. Be that raw NAND, raw memory, right? be that raw nand raw memory right Maybe hyperscalers could ignore it historically because it's like the price of NAND just kept going down, so your problem was getting smaller, not bigger, in a way. maybe hyperscalers could ignore it historically because it's like the price of nand just kept going down so your problem was getting smaller not bigger in a way

Speaker 1: Correct. If you're in a place where memory just keeps going up at this point for several years, isn't, in a way, it's not TAM but the problem you solve is getting bigger. Even if you keep the percentage the same of our advantage, the dollar value of that percentage goes up. Therefore, it's more attractive. Correct. correct If you're in a place where memory just keeps going up at this point for several years, isn't, in a way, it's not TAM but the problem you solve is getting bigger. if you're in a place where memory just keeps going up at this point for several years isn't in a way it's not tam but the problem you solve is getting bigger Even if you keep the percentage the same of our advantage, the dollar value of that percentage goes up. even if you keep the percentage the same of our advantage the dollar value of that percentage goes up Therefore, it's more attractive. therefore it's more attractive

Speaker 2: Charlie, maybe two things on that, right? A, why wouldn't the hyperscalers accelerate qualification processes? You're going to save them a lot of money. I'd rather do it now than later. Charlie, maybe two things on that, right? charlie maybe two things on that right A, why wouldn't the hyperscalers accelerate qualification processes? a why wouldn't the hyperscalers accelerate qualification processes You're going to save them a lot of money. you're going to save them a lot of money I'd rather do it now than later. i'd rather do it now than later

Speaker 1: Right. Right. right

Speaker 2: Secondly, maybe you can just talk about how does this engagement work from a financial basis for you? Is it here's the install, here's how much data we manage, and here's how we get paid for it? Is it à la carte? Just talk about those two vectors a bit. Secondly, maybe you can just talk about how does this engagement work from a financial basis for you? secondly maybe you can just talk about how does this engagement work from a financial basis for you Is it here's the install, here's how much data we manage, and here's how we get paid for it? is it here's the install here's how much data we manage and here's how we get paid for it Is it à la carte? is it à la carte Just talk about those two vectors a bit. just talk about those two vectors a bit

Speaker 1: Yeah. Well, what the current environment has done is open the aperture or widen the funnel. We're getting more interest. I'd also say that the hyperscalers are more busy now, and have got more to do. It hasn't shortened the qualification cycle. Secondly, we're only one part of their design process. We're a relatively small part of their design process. Their design process is governed by the next-generation processor, the next generation of their own software the next generation of the switching systems that go in there. The qualification could be sped up, but not their design element. Yeah. yeah Well, what the current environment has done is open the aperture or widen the funnel. well what the current environment has done is open the aperture or widen the funnel We're getting more interest. we're getting more interest I'd also say that the hyperscalers are more busy now, and have got more to do. i'd also say that the hyperscalers are more busy now and have got more to do It hasn't shortened the qualification cycle. it hasn't shortened the qualification cycle Secondly, we're only one part of their design process. secondly we're only one part of their design process We're a relatively small part of their design process. we're a relatively small part of their design process Their design process is governed by the next-generation processor, the next generation of their own software the next generation of the switching systems that go in there. their design process is governed by the next-generation processor the next generation of their own software the next generation of the switching systems that go in there The qualification could be sped up, but not their design element. the qualification could be sped up but not their design element

Speaker 2: Right. Right. right

Speaker 1: That doesn't get sped up at all. Right. Unfortunately, while we're getting more interest, it hasn't sped up the design cycle. All right, now on the economics. It's a different set of economics than our traditional economics in that we're not selling a system per se. We're providing technology. A large portion of it is not our supply chain. We allow, in a sense, the hyperscalers. They're responsible for the NAND. They're also responsible. They buy a completed product from their supply chain. Now, our involvement is it's our design. We work with their supply chain so that they can supply it, but the NAND is sourced by the customer, in this case, the hyperscaler. What we get is a royalty on every, what we call, DirectFlash Module that the hyperscaler buys. That doesn't get sped up at all. that doesn't get sped up at all Right. right Unfortunately, while we're getting more interest, it hasn't sped up the design cycle. unfortunately while we're getting more interest it hasn't sped up the design cycle All right, now on the economics. all right now on the economics It's a different set of economics than our traditional economics in that we're not selling a system per se. it's a different set of economics than our traditional economics in that we're not selling a system per se We're providing technology. we're providing technology A large portion of it is not our supply chain. a large portion of it is not our supply chain We allow, in a sense, the hyperscalers. we allow in a sense the hyperscalers They're responsible for the NAND. they're responsible for the nand They're also responsible. they're also responsible They buy a completed product from their supply chain. they buy a completed product from their supply chain Now, our involvement is it's our design. now our involvement is it's our design We work with their supply chain so that they can supply it, but the NAND is sourced by the customer, in this case, the hyperscaler. we work with their supply chain so that they can supply it but the nand is sourced by the customer in this case the hyperscaler What we get is a royalty on every, what we call, DirectFlash Module that the hyperscaler buys. what we get is a royalty on every what we call directflash module that the hyperscaler buys We have some COGS because while the hyperscaler contracts, if you will, for the NAND directly, there are other components that they don't want to be responsible for. We're responsible for that. Our gross margins, and there are mix issues that will vary the gross margin, but generally in the 75%-85% range, given the mix. We have some COGS because while the hyperscaler contracts, if you will, for the NAND directly, there are other components that they don't want to be responsible for. we have some cogs because while the hyperscaler contracts if you will for the nand directly there are other components that they don't want to be responsible for We're responsible for that. we're responsible for that Our gross margins, and there are mix issues that will vary the gross margin, but generally in the 75%-85% range, given the mix. our gross margins and there are mix issues that will vary the gross margin but generally in the 75%-85% range given the mix

Speaker 2: Got it. A lot of your, not your peers, but a lot of companies right now are talking about, "Hey, we're seeing this uplift in general purpose x86 servers in a very profound manner, actually. Got it. got it A lot of your, not your peers, but a lot of companies right now are talking about, "Hey, we're seeing this uplift in general purpose x86 servers in a very profound manner, actually. a lot of your not your peers but a lot of companies right now are talking about "hey we're seeing this uplift in general purpose x86 servers in a very profound manner actually

Speaker 1: Yes. Yes. yes

Speaker 2: Historically, I think there's been a decent relationship between, hey, if you want to spin up these new servers and create new workloads, you've got to store your data somewhere, i.e., storage will follow through at some point. Historically, I think there's been a decent relationship between, hey, if you want to spin up these new servers and create new workloads, you've got to store your data somewhere, i .e., storage will follow through at some point. historically i think there's been a decent relationship between hey if you want to spin up these new servers and create new workloads you've got to store your data somewhere, i .e storage will follow through at some point

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Just talk about, historically, how has that lagged in between compute versus storage, and does that happen as you go into an AI world as well? Just talk about, historically, how has that lagged in between compute versus storage, and does that happen as you go into an AI world as well? just talk about historically how has that lagged in between compute versus storage and does that happen as you go into an ai world as well

Speaker 1: Well, they have somewhat different cycles, sales cycles. On the other hand, storage in a traditional data center, so let's leave AI out of this for the moment. In a traditional data center, compute will generally be on the order of 60%-70% of spend, storage 20%-25%, and what's left over is networking at 5%-10% broadly speaking, about correct. Storage is larger than a lot of people think in terms of percentage of spend on infrastructure in a data center. I'm not counting power supplies and air conditioning and stuff like that. In an AI world, because of the cost of both HBM and GPUs, storage is much smaller. Because AI uses the fastest, highest performance networking is actually number two, storage is number three in a AI environment. Well, they have somewhat different cycles, sales cycles. well they have somewhat different cycles sales cycles On the other hand, storage in a traditional data center, so let's leave AI out of this for the moment. on the other hand storage in a traditional data center so let's leave ai out of this for the moment In a traditional data center, compute will generally be on the order of 60%-70% of spend, storage 20%-25%, and what's left over is networking at 5%-10% broadly speaking, about correct. in a traditional data center compute will generally be on the order of 60%-70% of spend storage 20%-25% and what's left over is networking at 5%-10% broadly speaking about correct Storage is larger than a lot of people think in terms of percentage of spend on infrastructure in a data center. storage is larger than a lot of people think in terms of percentage of spend on infrastructure in a data center I'm not counting power supplies and air conditioning and stuff like that. i'm not counting power supplies and air conditioning and stuff like that In an AI world, because of the cost of both HBM and GPUs, storage is much smaller. in an ai world because of the cost of both hbm and gpus storage is much smaller Because AI uses the fastest, highest performance networking is actually number two, storage is number three in a AI environment. because ai uses the fastest highest performance networking is actually number two storage is number three in a ai environment

Speaker 2: No, the bottom is sort of lag between. No, the bottom is sort of lag between. no the bottom is sort of lag between

Speaker 1: It's not so much that. Yeah, I would say that the purchase cycle around processors and the purchase cycle around storage tends to, they're not tightly connected because a lot of times you can buy processors and you have spare capacity on your existing storage. Sometimes you start running out of storage because the data increases. It may not be tied so directly to a compute purchase cycle. It's not so much that. it's not so much that Yeah, I would say that the purchase cycle around processors and the purchase cycle around storage tends to, they're not tightly connected because a lot of times you can buy processors and you have spare capacity on your existing storage. yeah i would say that the purchase cycle around processors and the purchase cycle around storage tends to they're not tightly connected because a lot of times you can buy processors and you have spare capacity on your existing storage Sometimes you start running out of storage because the data increases. sometimes you start running out of storage because the data increases It may not be tied so directly to a compute purchase cycle. it may not be tied so directly to a compute purchase cycle

Speaker 2: Got it. Memory's been another topic that everyone's been focused on. I'm sure you spend a lot of time on it, from an input cost basis. If I think about what's happening with memory, maybe in a bit more of a strategic basis versus just the prices, historically, when you've had these periods of component tightness, it's reshaped a lot of competitive dynamics in the industry as well at the same time. Can you just maybe talk about how do you think the current memory environment influences your competitive positioning and how do customers' value proposition change with us? Got it. got it Memory's been another topic that everyone's been focused on. memory's been another topic that everyone's been focused on I'm sure you spend a lot of time on it, from an input cost basis. i'm sure you spend a lot of time on it from an input cost basis If I think about what's happening with memory, maybe in a bit more of a strategic basis versus just the prices, historically, when you've had these periods of component tightness, it's reshaped a lot of competitive dynamics in the industry as well at the same time. if i think about what's happening with memory maybe in a bit more of a strategic basis versus just the prices historically when you've had these periods of component tightness it's reshaped a lot of competitive dynamics in the industry as well at the same time Can you just maybe talk about how do you think the current memory environment influences your competitive positioning and how do customers' value proposition change with us? can you just maybe talk about how do you think the current memory environment influences your competitive positioning and how do customers' value proposition change with us

Speaker 1: Right. When we talk about memory, I want to broaden it a little bit. There's the memory such as DRAM, and now HBM, but there's also storage, a storage memory, right? Both of them are going through the same significant price rises. The way it affects us is quite interesting. We, as you know, up until recently, we can talk about that, our gross margin on the product side has been in the upper 60s%, right? Even past 70%. Right. right When we talk about memory, I want to broaden it a little bit. when we talk about memory i want to broaden it a little bit There's the memory such as DRAM, and now HBM, but there's also storage, a storage memory, right? there's the memory such as dram and now hbm but there's also storage a storage memory right Both of them are going through the same significant price rises. both of them are going through the same significant price rises The way it affects us is quite interesting. the way it affects us is quite interesting We, as you know, up until recently, we can talk about that, our gross margin on the product side has been in the upper 60s%, right? we as you know up until recently we can talk about that our gross margin on the product side has been in the upper 60s% right Even past 70%. even past 70%

Speaker 2: 70, yeah. 70, yeah. 70 yeah

Speaker 1: Whereas our competitive set, the storage industry as a whole, generally has about 50% gross margins on product. Right away, the equivalent increase of cost in our BOM results in a lower requirement for us to raise prices. We've been able to raise prices less and later than our competition because we don't use as much memory or storage, okay, for us to be able to deliver the same capacity of storage. Secondly, we've chosen to share some of the pain with our customers, who are operating at the lower end of our guidance while these price rises are taking place. Whereas our competitive set, the storage industry as a whole, generally has about 50% gross margins on product. whereas our competitive set the storage industry as a whole generally has about 50% gross margins on product Right away, the equivalent increase of cost in our BOM results in a lower requirement for us to raise prices. right away the equivalent increase of cost in our bom results in a lower requirement for us to raise prices We've been able to raise prices less and later than our competition because we don't use as much memory or storage, okay, for us to be able to deliver the same capacity of storage. we've been able to raise prices less and later than our competition because we don't use as much memory or storage okay for us to be able to deliver the same capacity of storage Secondly, we've chosen to share some of the pain with our customers, who are operating at the lower end of our guidance while these price rises are taking place. secondly we've chosen to share some of the pain with our customers who are operating at the lower end of our guidance while these price rises are taking place For a variety of reasons, but at the end of the day, I can't go into a customer and say, "I'm so sorry that you have to pay more, and we're going to take more profit at the same time." Our first value as a company is customer first, and we live that. It's not just a saying. In the short term, we have chosen to operate at the lower end of our 65%-70% guidance. At the same time, that also makes us more competitive. I think we're going to see enhanced growth from a competitive standpoint, a market share standpoint, because we don't have to raise as much, and we're choosing to be in league with our customers. For a variety of reasons, but at the end of the day, I can't go into a customer and say, "I'm so sorry that you have to pay more, and we're going to take more profit at the same time." Our first value as a company is customer first, and we live that. for a variety of reasons but at the end of the day i can't go into a customer and say "i'm so sorry that you have to pay more and we're going to take more profit at the same time." our first value as a company is customer first and we live that It's not just a saying. it's not just a saying In the short term, we have chosen to operate at the lower end of our 65%-70% guidance. in the short term we have chosen to operate at the lower end of our 65%-70% guidance At the same time, that also makes us more competitive. at the same time that also makes us more competitive I think we're going to see enhanced growth from a competitive standpoint, a market share standpoint, because we don't have to raise as much, and we're choosing to be in league with our customers. i think we're going to see enhanced growth from a competitive standpoint a market share standpoint because we don't have to raise as much and we're choosing to be in league with our customers

Speaker 2: Maybe just on the price increase, I think there's been three price increases that I can track in the last, since the start of this year, at least, right? Maybe just on the price increase, I think there's been three price increases that I can track in the last, since the start of this year, at least, right? maybe just on the price increase i think there's been three price increases that i can track in the last since the start of this year at least right

Speaker 1: Since the start of the year. Since the start of the year. since the start of the year

Speaker 2: It is the best we can track. Your price increases are being less benign. They're all crazy numbers. It is the best we can track. it is the best we can track Your price increases are being less benign. your price increases are being less benign They're all crazy numbers. they're all crazy numbers

Speaker 1: Yeah Yeah yeah

Speaker 2: They're less benign than what others are doing. You actually had a letter out to your customers, which I thought was very well-read. They're less benign than what others are doing. they're less benign than what others are doing You actually had a letter out to your customers, which I thought was very well-read. you actually had a letter out to your customers which i thought was very well-read

Speaker 1: You mean more benign, less increase. You mean more benign, less increase. you mean more benign less increase

Speaker 2: Less increases, more benign to your customers. You touched on this a bit already, but just talk about it, why are you able to provide or have a lot lower price increases than your customers, and is it resulting in you winning more business over time, actually? Less increases, more benign to your customers. less increases more benign to your customers You touched on this a bit already, but just talk about it, why are you able to provide or have a lot lower price increases than your customers, and is it resulting in you winning more business over time, actually? you touched on this a bit already but just talk about it why are you able to provide or have a lot lower price increases than your customers and is it resulting in you winning more business over time actually

Speaker 1: One of it is just the physics of the financials, which is if traditionally our COGS were 30% of our product sales versus 50%, a 15%, let's say, or a 50% rise in your COGS would take you to 45% for the same price. You only have to raise prices by 15%, roughly speaking to make it up. Versus if it's 50%, you have to raise it higher to keep the same margin. Right? Just the physics of the financials make it possible to raise it less. Secondly, we are choosing to share some of the pain with our customers, that's even less. We bring it down to roughly 65%. If that doesn't raise market share, then I don't know what will. What I will say is that Q1 still, because of the lag between pricing, shipments, and backlog. One of it is just the physics of the financials, which is if traditionally our COGS were 30% of our product sales versus 50%, a 15%, let's say, or a 50% rise in your COGS would take you to 45% for the same price. one of it is just the physics of the financials which is if traditionally our cogs were 30% of our product sales versus 50% a 15% let's say or a 50% rise in your cogs would take you to 45% for the same price You only have to raise prices by 15%, roughly speaking to make it up. you only have to raise prices by 15% roughly speaking to make it up Versus if it's 50%, you have to raise it higher to keep the same margin. versus if it's 50% you have to raise it higher to keep the same margin Right? right Just the physics of the financials make it possible to raise it less. just the physics of the financials make it possible to raise it less Secondly, we are choosing to share some of the pain with our customers, that's even less. secondly we are choosing to share some of the pain with our customers that's even less We bring it down to roughly 65%. we bring it down to roughly 65% If that doesn't raise market share, then I don't know what will. if that doesn't raise market share then i don't know what will What I will say is that Q1 still, because of the lag between pricing, shipments, and backlog. what i will say is that q1 still because of the lag between pricing shipments and backlog Q1 was still mostly at Q4 pricing. Right? Q2 will be much more on Q1 pricing, which, as you said, has increased. I think what you're going to see as we go forward, or what I hope to see, I should say, going forward, is increasing market share. Q1 was still mostly at Q4 pricing. q1 was still mostly at q4 pricing Right? right Q2 will be much more on Q1 pricing, which, as you said, has increased. q2 will be much more on q1 pricing which as you said has increased I think what you're going to see as we go forward, or what I hope to see, I should say, going forward, is increasing market share. i think what you're going to see as we go forward or what i hope to see i should say going forward is increasing market share

Speaker 2: Got it. Got it. got it

Speaker 1: Now, I will say, let me just go further than that. Now, I will say, let me just go further than that. now i will say let me just go further than that

Speaker 2: Yeah. Yeah. yeah

Speaker 1: When we announced last quarter, I mentioned, you asked me about it right up front, 35% growth. Right? Rough estimate, we thought about a third of that was on the basis of price increases in pull-ins. That would be about, what, 10%-12%. We grew 35%, which means 20% growth. If you look at our competitors, they all grew less than 12%. I don't think we're special in terms of how many pull-ins are coming in, no matter what anybody says. If their pull-ins are roughly the same because everybody's responding to price increases by trying to get in a bit early to avoid future price increases. We're growing quite substantially. When we announced last quarter, I mentioned, you asked me about it right up front, 35% growth. when we announced last quarter i mentioned you asked me about it right up front 35% growth Right? right Rough estimate, we thought about a third of that was on the basis of price increases in pull-ins. rough estimate we thought about a third of that was on the basis of price increases in pull-ins That would be about, what, 10%-12%. that would be about what 10%-12% We grew 35%, which means 20% growth. we grew 35% which means 20% growth If you look at our competitors, they all grew less than 12%. if you look at our competitors they all grew less than 12% I don't think we're special in terms of how many pull-ins are coming in, no matter what anybody says. i don't think we're special in terms of how many pull-ins are coming in no matter what anybody says If their pull-ins are roughly the same because everybody's responding to price increases by trying to get in a bit early to avoid future price increases. if their pull-ins are roughly the same because everybody's responding to price increases by trying to get in a bit early to avoid future price increases We're growing quite substantially. we're growing quite substantially

Speaker 2: It's totally fair. Beyond pull-ins, which I think everyone's going to debate is it happening and how much is it happening, but there's certainly this element of it. When you talk to your customers, right, IT budgets at the end of the day are relatively finite. It's totally fair. it's totally fair Beyond pull-ins, which I think everyone's going to debate is it happening and how much is it happening, but there's certainly this element of it. beyond pull-ins which i think everyone's going to debate is it happening and how much is it happening but there's certainly this element of it When you talk to your customers, right, IT budgets at the end of the day are relatively finite. when you talk to your customers right it budgets at the end of the day are relatively finite

Speaker 1: Correct. Correct. correct

Speaker 2: How are they navigating this surge in storage pricing very specifically? Are they saying, "I'll take a lower-tier storage. I'll take maybe some HDDs," I've heard from people, for example. Just how are customers dealing with this right now? How are they navigating this surge in storage pricing very specifically? how are they navigating this surge in storage pricing very specifically Are they saying, "I'll take a lower-tier storage. are they saying "i'll take a lower-tier storage I'll take maybe some HDDs," I've heard from people, for example. i'll take maybe some hdds," i've heard from people for example Just how are customers dealing with this right now? just how are customers dealing with this right now

Speaker 1: It is, in fact, from a numbers standpoint, too early to say, because the prices are just starting to take place, and customers are attempting to get ahead of future price increases by ordering early. Right now, demand is very high. Which is why we're trying to parse out what is true demand, what is market share gains, versus what is pull-ins, right? Because what we care about is market share gains. Those will last. Market share gains will last. Short-term activities by customers associated with price rises or anticipated price rises, that's temporary, right? I think it's a bit early to say, but historically our experience is that with price rises or price declines. It is, in fact, from a numbers standpoint, too early to say, because the prices are just starting to take place, and customers are attempting to get ahead of future price increases by ordering early. it is in fact from a numbers standpoint too early to say because the prices are just starting to take place and customers are attempting to get ahead of future price increases by ordering early Right now, demand is very high. right now demand is very high Which is why we're trying to parse out what is true demand, what is market share gains, versus what is pull-ins, right? which is why we're trying to parse out what is true demand what is market share gains versus what is pull-ins right Because what we care about is market share gains. because what we care about is market share gains Those will last. those will last Market share gains will last. market share gains will last Short- term activities by customers associated with price rises or anticipated price rises, that's temporary, right? short- term activities by customers associated with price rises or anticipated price rises that's temporary right I think it's a bit early to say, but historically our experience is that with price rises or price declines. i think it's a bit early to say but historically our experience is that with price rises or price declines Environment that one lives in, is that demand of bits, right, does vary, does change with price rises or decreases, but not so much as to overcome the price itself. Price trumps capacity, but capacity does respond to price changes in both directions. Environment that one lives in, is that demand of bits, right, does vary, does change with price rises or decreases, but not so much as to overcome the price itself. environment that one lives in is that demand of bits right does vary does change with price rises or decreases but not so much as to overcome the price itself Price trumps capacity, but capacity does respond to price changes i n both directions. price trumps capacity but capacity does respond to price changes i n both directions

Speaker 2: Yep. What about a desire to shift to slower storage or even HDD or hybrid arrays? Are you seeing customers actively make the decision? Historically, it's been a one-way train, everything goes more flash. Yep. yep What about a desire to shift to slower storage or even HDD or hybrid arrays? what about a desire to shift to slower storage or even hdd or hybrid arrays Are you seeing customers actively make the decision? are you seeing customers actively make the decision Historically, it's been a one-way train, everything goes more flash. historically it's been a one-way train everything goes more flash

Speaker 1: Right. Well, yes, that has changed because the ratio, and it's still in transition changing now, because both flash and hard disks on the source side are sold out through 2028. Okay? There's no more supply of flash, that hasn't been accounted for, of hard disk until 2028. Prices are still, demand, sorry, supply has not kept up with demand, or looked upon another way, demand has not declined enough to match supply, and that's why we're seeing continuing price increases. What we can say right now is that the market that we were very active in about a year ago of flash being competitive on a total cost of ownership basis with hard disk, that doesn't exist right now. That's gone into stasis. Right. right Well, yes, that has changed because the ratio, and it's still in transition changing now, because both flash and hard disks on the source side are sold out through 2028. well yes that has changed because the ratio and it's still in transition changing now because both flash and hard disks on the source side are sold out through 2028 Okay? okay There's no more supply of flash, that hasn't been accounted for, of hard disk until 2028. there's no more supply of flash that hasn't been accounted for of hard disk until 2028 Prices are still, demand, sorry, supply has not kept up with demand, or looked upon another way, demand has not declined enough to match supply, and that's why we're seeing continuing price increases. prices are still demand sorry supply has not kept up with demand or looked upon another way demand has not declined enough to match supply and that's why we're seeing continuing price increases What we can say right now is that the market that we were very active in about a year ago of flash being competitive on a total cost of ownership basis with hard disk, that doesn't exist right now. That's gone into stasis. what we can say right now is that the market that we were very active in about a year ago of flash being competitive on a total cost of ownership basis with hard disk that doesn't exist right now. that's gone into stasis

Speaker 2: Right. Right. right

Speaker 1: I'm a big believer in reversion to the mean. It'll come back, but just not with us right now. I'm a big believer in reversion to the mean. i'm a big believer in reversion to the mean It'll come back, but just not with us right now. it'll come back but just not with us right now

Speaker 2: Got it. From your advantage point, you have to buy a lot of memory to meet your customers' demand as well. Just talk about what sort of visibility, what sort of conviction do you have with your memory as an input cost. Got it. got it From your advantage point, you have to buy a lot of memory to meet your customers' demand as well. from your advantage point you have to buy a lot of memory to meet your customers' demand as well Just talk about what sort of visibility, what sort of conviction do you have with your memory as an input cost. just talk about what sort of visibility what sort of conviction do you have with your memory as an input cost

Speaker 1: You're talking about both flash and in RAM. You're talking about both flash and in RAM. you're talking about both flash and in ram

Speaker 2: More flash because it's a bigger input cost for you, I feel, right, than DRAM. In broad, just talk about your LTAs, the visibility on bits and pricing or just bits. More flash because it's a bigger input cost for you, I feel, right, than DRAM. more flash because it's a bigger input cost for you i feel right than dram In broad, just talk about your LTAs, the visibility on bits and pricing or just bits. in broad just talk about your ltas the visibility on bits and pricing or just bits

Speaker 1: We have very good visibility on both, and part of that is because of our hyperscale commitments that we currently have in place. We have plenty of flash. What has changed is that there's a separation now between being able to get long-term commitments on volume and getting long-term commitments on price. There are no long-term commitments on price right now. It's an allocation game, and pricing is basically every 30 days, right? We have allocation on capacity. Price was at 30, which is part of the reason why prices are escalating, is because you can no longer say, "I can buy ahead for six months." You can't. You can get capacity but not price. We have very good visibility on both, and part of that is because of our hyperscale commitments that we currently have in place. we have very good visibility on both and part of that is because of our hyperscale commitments that we currently have in place We have plenty of flash. we have plenty of flash What has changed is that there's a separation now between being able to get long-term commitments on volume and getting long-term commitments on price. what has changed is that there's a separation now between being able to get long-term commitments on volume and getting long-term commitments on price There are no long-term commitments on price right now. there are no long-term commitments on price right now It's an allocation game, and pricing is basically every 30 days, right? it's an allocation game and pricing is basically every 30 days right We have allocation on capacity. we have allocation on capacity Price was at 30, which is part of the reason why prices are escalating, is because you can no longer say, "I can buy ahead for six months." You can't. price was at 30 which is part of the reason why prices are escalating is because you can no longer say "i can buy ahead for six months." you can't You can get capacity but not price. you can get capacity but not price

Speaker 2: Does that change how you quote business to your customers at a 30-day increment as well or? Does that change how you quote business to your customers at a 30-day increment as well or? does that change how you quote business to your customers at a 30-day increment as well or

Speaker 1: Yes. For our entire life as a company, we have been quoting with a 90-day quote expiration. We're down to 30-day quote expiration. By the way, that's longer than most of our competitors. Yes. yes For our entire life as a company, we have been quoting with a 90-day quote expiration. for our entire life as a company we have been quoting with a 90-day quote expiration We're down to 30-day quote expiration. we're down to 30-day quote expiration By the way, that's longer than most of our competitors. by the way that's longer than most of our competitors

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Yeah. Yeah. yeah

Speaker 2: I've heard stories about right for cancellation, right to change pricing up until shipment. I've heard stories about right for cancellation, right to change pricing up until shipment. i've heard stories about right for cancellation right to change pricing up until shipment

Speaker 1: Yeah, until shipment. Yeah, until shipment. yeah until shipment

Speaker 2: It's all kinds of fun clauses that are getting implemented. It's all kinds of fun clauses that are getting implemented. it's all kinds of fun clauses that are getting implemented

Speaker 1: Exactly. Exactly. exactly

Speaker 2: We'll see how well they stick over time. One of the dynamics that's emerged is this neoclouds as a category, right? CoreWeave and others of the world, they have a lot of spending dollars. They're doing a lot of stuff. How do you think of that as an emerging customer base for Everpure? You, I think, have a relationship with CoreWeave? We'll see how well they stick over time. we'll see how well they stick over time One of the dynamics that's emerged is this neo clouds as a category, right? one of the dynamics that's emerged is this neo clouds as a category right CoreWeave and others of the world, they have a lot of spending dollars. coreweave and others of the world they have a lot of spending dollars They're doing a lot of stuff. they're doing a lot of stuff How do you think of that as an emerging customer base for Everpure? how do you think of that as an emerging customer base for everpure You, I think, have a relationship with CoreWeave? you i think have a relationship with coreweave

Speaker 1: With CoreWeave, yeah. With CoreWeave, yeah. with coreweave yeah

Speaker 2: On a couple of different levels. Just talk about the neoclouds. What do they want? How are you tackling that kind of customer base? On a couple of different levels. on a couple of different levels Just talk about the neo clouds. just talk about the neo clouds What do they want? what do they want How are you tackling that kind of customer base? how are you tackling that kind of customer base

Speaker 1: The neoclouds or GPU clouds, or for that matter, the sovereign clouds, was a market that we did not have a product to engage with up until the last year or so. To put that in perspective, most of the large-scale, sorry, LLM, large scale AI environment grew out of the HPC market, the high-performance computing market. For storage, was typically somewhat of a cul-de-sac. It was a very specialized market, very scientific in nature, very specs-oriented versus reliability-oriented. You were selling to scientists, and they like to tune things. They liked a lot of what we call nerd knobs in the business. Think of it sort of like, what was the name of the company that HP bought? What's it? No. The supercomputer company. The neo clouds or GPU clouds, or for that matter, the sovereign clouds, was a market that we did not have a product to engage with up until the last year or so. the neo clouds or gpu clouds or for that matter the sovereign clouds was a market that we did not have a product to engage with up until the last year or so To put that in perspective, most of the large-scale, sorry, LLM, large scale AI environment grew out of the HPC market, the high-performance computing market. to put that in perspective most of the large-scale sorry llm large scale ai environment grew out of the hpc market the high-performance computing market For storage, was typically somewhat of a cul-de-sac. for storage was typically somewhat of a cul-de-sac It was a very specialized market, very scientific in nature, very specs-oriented versus reliability-oriented. it was a very specialized market very scientific in nature very specs-oriented versus reliability-oriented You were selling to scientists, and they like to tune things. you were selling to scientists and they like to tune things They liked a lot of what we call nerd knobs in the business. they liked a lot of what we call nerd knobs in the business Think of it sort of like, what was the name of the company that HP bought? think of it sort of like what was the name of the company that hp bought What's it? what's it No. no The supercomputer company. the supercomputer company

Speaker 2: Cray. Cray. cray

Speaker 1: Cray. Thank you so much. Think of it like Cray. Cray didn't expand to do other things in the standard commercial market, right? That was a lot like the companies that satisfied the HPC market. Well, AI grew out of that. It turns out that it was the people that were in HPC that now people all of the large-scale GPU environments, whether it's sovereign clouds or the tech titans or the GPU clouds. We didn't have a product in the race. We didn't speak the same language. We didn't go to the same schools. We didn't have the secret decoder ring. We certainly have certain beliefs as a company, in particular, that all of our systems should operate on the same software and have the same abilities, if you will, reliability, upgrade ability, the Evergreen capabilities that we have. Cray. cray Thank you so much. thank you so much Think of it like Cray. think of it like cray Cray didn't expand to do other things in the standard commercial market, right? cray didn't expand to do other things in the standard commercial market right That was a lot like the companies that satisfied the HPC market. that was a lot like the companies that satisfied the hpc market Well, AI grew out of that. well ai grew out of that It turns out that it was the people that were in HPC that now people all of the large-scale GPU environments, whether it's sovereign clouds or the tech titans or the GPU clouds. it turns out that it was the people that were in hpc that now people all of the large-scale gpu environments whether it's sovereign clouds or the tech titans or the gpu clouds We didn't have a product in the race. we didn't have a product in the race We didn't speak the same language. we didn't speak the same language We didn't go to the same schools. we didn't go to the same schools We didn't have the secret decoder ring. we didn't have the secret decoder ring We certainly have certain beliefs as a company, in particular, that all of our systems should operate on the same software and have the same abilities, if you will, reliability, upgrade ability, the Evergreen capabilities that we have. we certainly have certain beliefs as a company in particular that all of our systems should operate on the same software and have the same abilities if you will reliability upgrade ability the evergreen capabilities that we have It took us a while to modify or add a new set of capabilities to our FlashBlade product. Now, as I said, we introduced FlashBlade//EXA about a year ago, same Purity operating system, different configuration, where we are now publishing the best performance specs in the business, bar none. While we are still a little bit behind in features, we're catching up and not only are we replacing some of the traditional competitors in that market, but we're starting to play a bigger role in these GPU environments. It took us a while to modify or add a new set of capabilities to our FlashBlade product. it took us a while to modify or add a new set of capabilities to our flashblade product Now, as I said, we introduced FlashBlade//EXA about a year ago, same Purity operating system, different configuration, where we are now publishing the best performance specs in the business, bar none. now as i said we introduced flashblade//exa about a year ago same purity operating system different configuration where we are now publishing the best performance specs in the business bar none While we are still a little bit behind in features, we're catching up and not only are we replacing some of the traditional competitors in that market, but we're starting to play a bigger role in these GPU environments. while we are still a little bit behind in features we're catching up and not only are we replacing some of the traditional competitors in that market but we're starting to play a bigger role in these gpu environments

Speaker 2: Got it. Got it. got it

Speaker 1: It's still early days, but we feel that as these GPU clouds start to have to perform, you have to be able to provide a higher quality, more reliable, consistent service. They're going to appreciate a lot of our abilities that come with our product, versus some of the ones that were designed specifically for the scientific community. It's still early days, but we feel that as these GPU clouds start to have to perform, you have to be able to provide a higher quality, more reliable, consistent service. it's still early days but we feel that as these gpu clouds start to have to perform you have to be able to provide a higher quality more reliable consistent service They're going to appreciate a lot of our abilities that come with our product, versus some of the ones that were designed specifically for the scientific community. they're going to appreciate a lot of our abilities that come with our product versus some of the ones that were designed specifically for the scientific community

Speaker 2: I was wondering where you would stack up. One of the things I hear is like, "Hey, these neoclouds with GPUs need a parallel file system. That's sort of what you need to deploy. That, to your point, doesn't come with all the redundancies and services that you want. I was wondering where you would stack up. i was wondering where you would stack up One of the things I hear is like, "Hey, these neo clouds with GPUs need a parallel file system. one of the things i hear is like "hey these neo clouds with gpus need a parallel file system That's sort of what you need to deploy. that's sort of what you need to deploy That, to your point, doesn't come with all the redundancies and services that you want. that to your point doesn't come with all the redundancies and services that you want

Speaker 1: That's right. That's right. that's right

Speaker 2: Is that the delta that as they get more mature, Purity will work or? Is that the delta that as they get more mature, Purity will work or? is that the delta that as they get more mature purity will work or

Speaker 1: Purity will work. These are all just features. I personally, having been in the business a long time, things like reliability, sustainability, diagnostics, that's really hard stuff that you only get over a lot of experience over a lot of period of time. Things like individual features, like a parallel file system or KV cache. Quality of service guarantees. These are all just features. One of the other things that distinguishes us is at a much more foundational business level, is that we are a dyed-in-the-wool R&D company. One of the things that 70% gross margins allows us to do is we spend 20% of our revenue on R&D. By the way, in storage, that makes us the largest R&D spender in storage, bar none. Okay? Purity will work. purity will work These are all just features. these are all just features I personally, having been in the business a long time, things like reliability, sustainability, diagnostics, that's really hard stuff that you only get over a lot of experience over a lot of period of time. i personally having been in the business a long time things like reliability sustainability diagnostics that's really hard stuff that you only get over a lot of experience over a lot of period of time Things like individual features, like a parallel file system or KV cache. things like individual features like a parallel file system or kv cache Quality of service guarantees. quality of service guarantees These are all just features. these are all just features One of the other things that distinguishes us is at a much more foundational business level, is that we are a dyed-in-the-wool R&D company. one of the other things that distinguishes us is at a much more foundational business level is that we are a dyed-in-the-wool r&d company One of the things that 70% gross margins allows us to do is we spend 20% of our revenue on R&D. one of the things that 70% gross margins allows us to do is we spend 20% of our revenue on r&d By the way, in storage, that makes us the largest R&D spender in storage, bar none. by the way in storage that makes us the largest r&d spender in storage bar none Okay? okay We invest more than anybody else. I think that accrues to our growth, it accrues to the quality of the product that we can put out, but it also allows us to expand in other areas. Unless you believe that we're not terribly efficient at that, but it's something we work on a lot to make sure we are efficient in the way we invest our R&D, and I think our growth shows that. I don't worry about a feature gap if we're focused on the market segment. We invest more than anybody else. we invest more than anybody else I think that accrues to our growth, it accrues to the quality of the product that we can put out, but it also allows us to expand in other areas. i think that accrues to our growth it accrues to the quality of the product that we can put out but it also allows us to expand in other areas Unless you believe that we're not terribly efficient at that, but it's something we work on a lot to make sure we are efficient in the way we invest our R&D, and I think our growth shows that. unless you believe that we're not terribly efficient at that but it's something we work on a lot to make sure we are efficient in the way we invest our r&d and i think our growth shows that I don't worry about a feature gap if we're focused on the market segment. i don't worry about a feature gap if we're focused on the market segment

Speaker 2: Got it. Perfect. If you shift gears a bit, Evergreen//One, right? It's sort of your subscription services offering. I would imagine in a time where memory's inflationary, it would resonate with customers versus not. I'm sure it is. Just talk about a bit more of the Evergreen//One offering. Are you seeing a better uptake of it in an environment like this? Got it. got it Perfect. perfect If you shift gears a bit, Evergreen//One, right? if you shift gears a bit evergreen//one right It's sort of your subscription services offering. it's sort of your subscription services offering I would imagine in a time where memory's inflationary, it would resonate with customers versus not. i would imagine in a time where memory's inflationary it would resonate with customers versus not I'm sure it is. i'm sure it is Just talk about a bit more of the Evergreen//One offering. just talk about a bit more of the evergreen//one offering Are you seeing a better uptake of it in an environment like this? are you seeing a better uptake of it in an environment like this

Speaker 1: Yeah. Just to put some numbers behind that, Evergreen//One grew, I think it was 50% year-over-year, in Q4, and roughly 70% in Q1. That indicates that it is growing faster than our CapEx product. Our historical experience with this is that as prices go up, it becomes more competitive. By the way, our price increases on Evergreen//One is far less than our price increases on the CapEx. We can go into why, there are reasons why it is not as directly affected by price increases or input cost increases. What that would say as we go forward, and we only have one quarter of price increases really so far to measure this off of, but I'd be surprised if it didn't mean that the relative amount of bookings that come in via Evergreen//One will be higher than the CapEx. Yeah. yeah Just to put some numbers behind that, Evergreen//One grew, I think it was 50% year-over-year, in Q4, and roughly 70% in Q1. just to put some numbers behind that evergreen//one grew i think it was 50% year-over-year in q4 and roughly 70% in q1 That indicates that it is growing faster than our CapEx product. that indicates that it is growing faster than our capex product Our historical experience with this is that as prices go up, it becomes more competitive. our historical experience with this is that as prices go up it becomes more competitive By the way, our price increases on Evergreen //One is far less than our price increases on the CapEx. by the way our price increases on evergreen //one is far less than our price increases on the capex We can go into why, there are reasons why it is not as directly affected by price increases or input cost increases. we can go into why there are reasons why it is not as directly affected by price increases or input cost increases What that would say as we go forward, and we only have one quarter of price increases really so far to measure this off of, but I'd be surprised if it didn't mean that the relative amount of bookings that come in via Evergreen// One will be higher than the CapEx. what that would say as we go forward and we only have one quarter of price increases really so far to measure this off of but i'd be surprised if it didn't mean that the relative amount of bookings that come in via evergreen// one will be higher than the capex

Speaker 2: Got it. Maybe just two things on Evergreen//One. What are the gating factors? Why wouldn't customers adopt it faster than they already have? What limits them in that? Maybe I'll ask you the second one after that. Got it. got it Maybe just two things on Evergreen//One. maybe just two things on evergreen//one What are the gating factors? what are the gating factors Why wouldn't customers adopt it faster than they already have? why wouldn't customers adopt it faster than they already have What limits them in that? what limits them in that Maybe I'll ask you the second one after that. maybe i'll ask you the second one after that

Speaker 1: Well, first of all, it's a different way. It's so funny. Even though they're used to buying on subscription in the cloud, right or for SaaS or for the hyperscalers, they're very unused to doing it inside their own data center. It's a CapEx model inside their data center. Honestly, sometimes we spend two to three months with the finance organization in the customer, trying to train them on how they do it. Obviously, it's growing faster than our CapEx product, but it's not unusual for them to finally say, "You know, it's just going to be easier if we do CapEx, so we're just going to do that." Now, pricing does make a difference, so we'll see. That is customer financial models sometimes are more difficult to change than their technical model. Well, first of all, it's a different way. well first of all it's a different way It's so funny. it's so funny Even though they're used to buying on subscription in the cloud, right or for SaaS or for the hyperscalers, they're very unused to doing it inside their own data center. even though they're used to buying on subscription in the cloud right or for saas or for the hyperscalers they're very unused to doing it inside their own data center It's a CapEx model inside their data center. it's a capex model inside their data center Honestly, sometimes we spend two to three months with the finance organization in the customer, trying to train them on how they do it. honestly sometimes we spend two to three months with the finance organization in the customer trying to train them on how they do it Obviously, it's growing faster than our CapEx product, but it's not unusual for them to finally say, "You know, it's just going to be easier if we do CapEx, so we're just going to do that." Now, pricing does make a difference, so we'll see. obviously it's growing faster than our capex product but it's not unusual for them to finally say "you know it's just going to be easier if we do capex so we're just going to do that." now pricing does make a difference so we'll see That is customer financial models sometimes are more difficult to change than their technical model. that is customer financial models sometimes are more difficult to change than their technical model

Speaker 2: Right. Right. right

Speaker 1: Why isn't it just automatic? It's generally for those reasons. Why isn't it just automatic? why isn't it just automatic It's generally for those reasons. it's generally for those reasons

Speaker 2: Got it. Why is the investment, or from your side, lower for Evergreen//One versus the traditional product side? Got it. got it Why is the investment, or from your side, lower for Evergreen//One versus the traditional product side? why is the investment or from your side lower for evergreen//one versus the traditional product side

Speaker 1: Yeah. Well, first of all, obviously, our terms are longer, but it's more than that. Our Evergreen//One is a true subscription, so it's not a lease, it is not a financing. What do we mean by this? What we sell to the customer is purely a service-level agreement. It's a service level agreement on performance. It's a service level agreement on capacity. It's a service level agreement on reliability, right? That's it. There's no serial number involved. We own the equipment. We get to choose. There's no guarantee of new equipment. If you go to Amazon, do they tell you, "We're delivering new equipment to you?" No. You're just getting a service. We provide a service. Yeah. yeah Well, first of all, obviously, our terms are longer, but it's more than that. well first of all obviously our terms are longer but it's more than that Our Evergreen//One is a true subscription, so it's not a lease, it is not a financing. our evergreen//one is a true subscription so it's not a lease it is not a financing What do we mean by this? what do we mean by this What we sell to the customer is purely a service- level agreement. what we sell to the customer is purely a service- level agreement It's a service level agreement on performance. it's a service level agreement on performance It's a service level agreement on capacity. it's a service level agreement on capacity It's a service level agreement on reliability, right? it's a service level agreement on reliability right That's it. that's it There's no serial number involved. there's no serial number involved We own the equipment. we own the equipment We get to choose. we get to choose There's no guarantee of new equipment. there's no guarantee of new equipment If you go to Amazon, do they tell you, "We're delivering new equipment to you?" No. if you go to amazon do they tell you "we're delivering new equipment to you?" no You're just getting a service. you're just getting a service We provide a service. we provide a service Our Evergreen//Forever subscription, which is for customers that do purchase, they are guaranteed hardware upgrades every few years. That hardware that comes back has more life associated with it. We're able to use that in our Evergreen//One service. What does that mean? That means we're blending costs over a long period of time. We refurbish it, of course. All the data is erased. We're using refurbished equipment in addition to new equipment, and we get to sell it at prices that are competitive with as-a-service pricing. Our costs don't go up automatically, and we happen to be in a great cycle because we just went through a refresh on our CapEx product, which means we have a lot of equipment coming back for refresh that was priced at three years ago. Our Evergreen//Forever subscription, which is for customers that do purchase, they are guaranteed hardware upgrades every few years. our evergreen//forever subscription which is for customers that do purchase they are guaranteed hardware upgrades every few years That hardware that comes back has more life associated with it. that hardware that comes back has more life associated with it We're able to use that in our Evergreen//One service. we're able to use that in our evergreen//one service What does that mean? what does that mean That means we're blending costs over a long period of time. that means we're blending costs over a long period of time We refurbish it, of course. we refurbish it of course All the data is erased. all the data is erased We're using refurbished equipment in addition to new equipment, and we get to sell it at prices that are competitive with as-a-service pricing. we're using refurbished equipment in addition to new equipment and we get to sell it at prices that are competitive with as-a-service pricing Our costs don't go up automatically, and we happen to be in a great cycle because we just went through a refresh on our CapEx product, which means we have a lot of equipment coming back for refresh that was priced at three years ago. our costs don't go up automatically and we happen to be in a great cycle because we just went through a refresh on our capex product which means we have a lot of equipment coming back for refresh that was priced at three years ago

Speaker 2: All right. Perfect. That is helpful. You folks recently changed your name from Pure Storage to Everpure. You've certainly done a few deals like 1touch, Portworx a couple of years back. You are trying to become more than just, "Hey, here's the storage layer," right? Just talk about like, maybe this should've been my question to you at the start, not the end. What is the vision with this? Is it more like we're going to be a storage bottleneck solution provider? All right. all right Perfect. perfect That is helpful. that is helpful You folks recently changed your name from Pure Storage to Everpure. you folks recently changed your name from pure storage to everpure You've certainly done a few deals like 1touch, Portworx a couple of years back. you've certainly done a few deals like 1touch portworx a couple of years back You are trying to become more than just, "Hey, here's the storage layer," right? you are trying to become more than just "hey here's the storage layer," right Just talk about like, maybe this should've been my question to you at the start, not the end. just talk about like maybe this should've been my question to you at the start not the end What is the vision with this? what is the vision with this Is it more like we're going to be a storage bottleneck solution provider? is it more like we're going to be a storage bottleneck solution provider

Speaker 1: Yeah Yeah yeah

Speaker 2: It's more than just traditional storage medium. It's more than just traditional storage medium. it's more than just traditional storage medium

Speaker 1: No. We fundamentally believe, I alluded to this early on, that the nature of applications and data is fundamentally changing. It's fundamentally changing because the app world has fragmented the customer's data environment. AI, if left to the current way of doing things, is going to fragment it even further. Everything wants another copy of your data. Every SaaS company's strategy right now is give me all your data and I'll give you the AI answers. The Databricks of the world and the Snowflake of the world, they all say, "Give us all your data and we will provide you all the AI answers." How many different organizations is a customer going to give all their data to? I don't think it's scalable. I don't think it's a viable solution. No. no We fundamentally believe, I alluded to this early on, that the nature of applications and data is fundamentally changing. we fundamentally believe i alluded to this early on that the nature of applications and data is fundamentally changing It's fundamentally changing because the app world has fragmented the customer's data environment. it's fundamentally changing because the app world has fragmented the customer's data environment AI, if left to the current way of doing things, is going to fragment it even further. ai if left to the current way of doing things is going to fragment it even further Everything wants another copy of your data. everything wants another copy of your data Every SaaS company's strategy right now is give me all your data and I'll give you the AI answers. every saas company's strategy right now is give me all your data and i'll give you the ai answers The Databricks of the world and the Snowflake of the world, they all say, "Give us all your data and we will provide you all the AI answers." How many different organizations is a customer going to give all their data to? the databricks of the world and the snowflake of the world they all say "give us all your data and we will provide you all the ai answers." how many different organizations is a customer going to give all their data to I don't think it's scalable. i don't think it's scalable I don't think it's a viable solution. i don't think it's a viable solution Our belief is that if these applications are no longer systems of record, which they can't be because in order to do anything, you have to have information from all of these different systems. If that information is not consistent, the world's in big trouble. What can be consistent is no longer the application, but the data has to be consistent. If the world's going to migrate from app-centric to data-centric, data primacy, what we're calling data primacy, we're in a very good position to help customers get there. What does 1touch do? Our belief is that if these applications are no longer systems of record, which they can't be because in order to do anything, you have to have information from all of these different systems. our belief is that if these applications are no longer systems of record which they can't be because in order to do anything you have to have information from all of these different systems If that information is not consistent, the world's in big trouble. if that information is not consistent the world's in big trouble What can be consistent is no longer the application, but the data has to be consistent. what can be consistent is no longer the application but the data has to be consistent If the world's going to migrate from app-centric to data-centric, data primacy, what we're calling data primacy, we're in a very good position to help customers get there. if the world's going to migrate from app-centric to data-centric data primacy what we're calling data primacy we're in a very good position to help customers get there What does 1touch do? what does 1touch do 1touch, for example, allows customers to get a catalog of all their data, all of it, not just what's on our stuff, what's on competitive stuff, what's in SaaS, what's in the cloud, what is with partners, and allows them, first of all, to not only get a catalog, but to get a map of how this data set relates to that data set. That it has the same name of the customer in two different places, but it has different semantics for what that customer is doing. It has different information about that customer. 1touch, like the name sounds, brings that all together so you can have a common semantic understanding of an entity like a customer or like an asset, or like a quote, all right, or an order. 1touch, for example, allows customers to get a catalog of all their data, all of it, not just what's on our stuff, what's on competitive stuff, what's in SaaS, what's in the cloud, what is with partners, and allows them, first of all, to not only get a catalog, but to get a map of how this data set relates to that data set. 1touch for example allows customers to get a catalog of all their data all of it not just what's on our stuff what's on competitive stuff what's in saas what's in the cloud what is with partners and allows them first of all to not only get a catalog but to get a map of how this data set relates to that data set That it has the same name of the customer in two different places, but it has different semantics for what that customer is doing. that it has the same name of the customer in two different places but it has different semantics for what that customer is doing It has different information about that customer. 1touch, like the name sounds, brings that all together so you can have a common semantic understanding of an entity like a customer or like an asset, or like a quote, all right, or an order. it has different information about that customer 1touch like the name sounds brings that all together so you can have a common semantic understanding of an entity like a customer or like an asset or like a quote all right or an order Where we're going is we're going from pure data storage, pun intended, to data management, where we can help customers manage their data and have fewer copies, have more comprehensive understanding of their data as we go into this world. It's not just about AI. There is a data crisis going on. If you ask any customer, "What is your biggest challenge to implementing AI?" They're going to say right away that it's their data. Their data is a mess. Perhaps we're taking a what is not a well-known or untraditional approach to helping customers in this world of AI, but we believe it's fundamentally a data problem, and that's what we're going after. Where we're going is we're going from pure data storage, pun intended, to data management, where we can help customers manage their data and have fewer copies, have more comprehensive understanding of their data as we go into this world. where we're going is we're going from pure data storage pun intended to data management where we can help customers manage their data and have fewer copies have more comprehensive understanding of their data as we go into this world It's not just about AI. it's not just about ai There is a data crisis going on. there is a data crisis going on If you ask any customer, "What is your biggest challenge to implementing AI?" They're going to say right away that it's their data. if you ask any customer "what is your biggest challenge to implementing ai?" they're going to say right away that it's their data Their data is a mess. their data is a mess Perhaps we're taking a what is not a well-known or untraditional approach to helping customers in this world of AI, but we believe it's fundamentally a data problem, and that's what we're going after. perhaps we're taking a what is not a well-known or untraditional approach to helping customers in this world of ai but we believe it's fundamentally a data problem and that's what we're going after

Speaker 2: Yeah. I was going to say, I certainly have an affinity to the name Everpure, but maybe it's because I work at Evercore. Yeah. yeah I was going to say, I certainly have an affinity to the name Everpure, but maybe it's because I work at Evercore. i was going to say i certainly have an affinity to the name everpure but maybe it's because i work at evercore

Speaker 1: Yeah. Yeah. yeah

Speaker 2: There's a link there. I certainly think it's more than just a data storage problem. It does make a lot of sense. I think the time's almost up. Maybe I'll pause my questions there, Charlie. I'll turn it back to you. Anything we did not touch on that we did not cover that you think folks should be aware about? There's a link there. there's a link there I certainly think it's more than just a data storage problem. i certainly think it's more than just a data storage problem It does make a lot of sense. it does make a lot of sense I think the time's almost up. i think the time's almost up Maybe I'll pause my questions there, Charlie. maybe i'll pause my questions there charlie I'll turn it back to you. i'll turn it back to you Anything we did not touch on that we did not cover that you think folks should be aware about? anything we did not touch on that we did not cover that you think folks should be aware about

Speaker 1: You were very kind in not spending half the time on the hyperscale challenge, so I appreciate that. We are very pleased with the progress we're making there overall. Outside of that, no, it was a great conversation. Thank you. You were very kind in not spending half the time on the hyperscale challenge, so I appreciate that. you were very kind in not spending half the time on the hyperscale challenge so i appreciate that We are very pleased with the progress we're making there overall. we are very pleased with the progress we're making there overall Outside of that, no, it was a great conversation. outside of that no it was a great conversation Thank you. thank you

Speaker 2: Thank you very much. We appreciate the time. Thank you very much. thank you very much We appreciate the time. we appreciate the time

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Thank you. Thank you. thank you

Speaker 1: Thank you. Thank you. thank you