Pure Storage, Inc. — Call Transcript 2026

Good day, welcome to the Everpure first quarter fiscal 2027 financial results conference call. Today's conference is being recorded. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. At this time, I'd like to turn the call over to Paul Ziots, Vice President of Investor Relations. Please go ahead. Thank you. Good afternoon, everyone, and welcome to Everpure's first quarter fiscal year 2027 earnings conference call. On the call, we have Charlie Giancarlo, Chief Executive Officer, Tarek Robbiati, Chief Financial Officer, and Rob Lee, Chief Technology and Growth Officer. Following Charlie's and Tarek's prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website where this call is being simultaneously webcast. The slides that accompany this webcast can be downloaded at investor.everpuredata.com. On this call today, we will make forward-looking statements, which are subject to various risks and uncertainties. These include statements regarding our financial outlook and operations, our strategy, technology, and its advantages, our current and new product offerings, our ability to procure a sufficient supply of components and manage our supply chain, our hyperscaler opportunity, and competitive industry and economic trends. Any forward-looking statements that we make are based on facts and assumptions as of today, we undertake no obligation to update them. Our actual results may differ materially from the results forecasted, reported results should not be considered as an indication of future performance. A discussion of some of the risks and uncertainties related to our business is contained in our filings with the SEC, we refer you to these public filings. During this call, all financial metrics and associated growth rates are non-GAAP measures other than revenue, remaining performance obligations, or RPO, cash and investments. Reconciliations to the most directly comparable GAAP measures are provided in our earnings press release and slides. This call is being broadcast live on the Everpure investor relations website is being recorded for playback purposes. An archive of the webcast will be available on the IR website and is the property of Everpure. Our second quarter fiscal 2027 quiet period begins at the close of business Friday, July 17, 2026. With that, I'll turn it over to Charlie. Thank you, Paul. Good afternoon, everyone, and welcome to Everpure's Q1 fiscal 2027 earnings call. Q1 was another outstanding and a truly remarkable quarter, reflected in the strength of both top and bottom line. Revenue growth of 35% year-over-year is a very strong start to our fiscal year 2027. Operating profit nearly doubled year-over-year to $159 million. Sales momentum started off strong and continued to build throughout the quarter. Revenue and operating profit exceeded the high end of our guidance range, and we foresee continued strength throughout the year as will be seen in our revised full-year guidance. Undoubtedly, much of the recent strength in the market has been kindled by the current supply chain crisis, but our strength is also driven by increased win rates for our solutions in contested opportunities. Our market share gains are accelerating as customers increasingly adopt Everpure as their preferred vendor for data storage and management. Growth was driven by broad-based strength across our core businesses and geographies. Large deals above $5 million were up in high double digits compared to prior year, and our commercial business also showed strong momentum. New customer logos were up 20% year-on-year. We also achieved significant marquee expansions, including a global financial services customer that relies on Everpure as foundational infrastructure for private cloud environments across virtualized and Kubernetes-based workloads. It highlights the strength of our platform as customers bridge traditional and modern application architectures. As expected, Q1 included relatively little revenue associated with our hyperscale products. As discussed last quarter, we expect hyperscale product revenue to rise significantly in Q3 and Q4 based on customer order commitments. In the AI space, FlashBlade//EXA scored more wins this past quarter, including application in AI machine learning and financial services GPU-accelerated trading applications. One fintech customer using advanced GPU-based AI modeling for algorithmic trading on global financial markets selected FlashBlade//EXA for their high-performance AI infrastructure. The firm has processed more than 13 million transactions during their peak trading day, underscoring the performance and consistent reliability that FlashBlade//EXA delivers in data-intensive AI environments. More broadly, we are now beginning to displace competitive AI storage products in the enterprise and neo cloud markets as customers transition to our FlashBlade family for its unmatched performance, operational simplicity, flexibility, and overall quality. As Tarek will explain, current sales performance has been positively affected by industry-wide cost and price increases. In my over 40 years in technology, I have never seen another supply chain situation remotely like this. Obviously, these price increases are of great concern to our customers. Consequently, on April 23rd, we published a letter to customers explaining our position and philosophy during this supply chain crisis. In particular, we wanted our actions and intentions to be clear and transparent. In the letter, we reassured our customers that we would share the cost pain with them and not seek to profiteer from the crisis. To this end, we have carefully managed our component supplies to enable us to hold off price increases until far later, and far less than competitive price raises. As mentioned last quarter, we are choosing to operate at the lower end of our product gross margin range to help our customers while component costs escalate. We expect product gross margins will begin to recover in the second half of our year, but the recovery is likely to be gradual as costs continue to rise. The current environment has enhanced the benefits of our Evergreen//One storage-as-a-service offering. Evergreen//One benefits from longer contracts, lower upfront costs, and longer lifetimes. This allows us to blend costs over many years, leading to more stable and lower operating costs for customers. An increasing number of customers are choosing Evergreen//One to enjoy the benefits of Everpure. Evergreen//One sales were up 73% year-on-year in Q1, reflecting greater customer appreciation for the operational and financial benefits of our storage-as-a-service model. Our enterprise data cloud strategy continues to gain momentum. Purity Fusion adoption, which enables customers to build their own data clouds, doubled in Q1, with more than 1,200 customers. Wins and expansions include CardConnect, a subsidiary of Fiserv, and e&, formerly Etisalat, as well as a leading North American financial institution and a large Asian healthcare IT provider. This growth reflects rising customers' interest in developing their own enterprise data clouds and reinforces Purity Fusion's strategic role within Everpure's architecture. One state department of revenue, which processes more than $9 billion annually, told us that Fusion gave them the ability to scale and manage infrastructure with the simplicity of the cloud, but within their own data centers. It allows their staff to provision with confidence while providing more time for higher value strategic work. Our acquisition of 1touch, which closed earlier this month, will expand Everpure's opportunity to help customers manage their enterprise data. 1touch enables customers to better manage all of their data, whether on Pure products or not, both on-prem and in the cloud. This technology allows customers to build full data catalogs across all enterprise data, add semantics, as well as full ontologies and knowledge graphs, to comprehensively manage their global enterprise data. These capabilities will enable customers to reduce the number of copies of similar data, increase the utility and quality of their data, and reduce the cost of data preparation for AI and analytics. Regarding our hyperscale business, our solution continues to make steady progress with an expanding set of hyperscale, cloud, and large tech titan customers due to its enhanced efficiency, flexibility, and reliability. We are currently investing significant resources in system qualification with multiple prospects. As stated previously, we expect to significantly expand shipments of our hyperscale product in the second half of this year and even further next year. We look forward to providing more details on our product advancements, particularly our expansion into advanced data management at our upcoming Accelerate conference in June, as well as at our financial analyst meeting scheduled for September 23rd here in Santa Clara. We continue to operate in a very dynamic macro environment. The current supply chain crisis, created by seemingly insatiable AI demand, has entirely eclipsed the tariff crisis of last year. Costs and component shortages now change rapidly and are challenging to predict with any degree of certainty. We have confidence in our ability to weather these challenges better than most because of our architectural advantages, strong engineering and supply chain capabilities, and our excellent supplier relationships. The current market turmoil has highlighted the importance of trust and transparency and has separated true partners from profiteers. We are building Everpure to be a long-term trusted partner with customers, channel partners, suppliers, employees, and our long-term shareholders. I will now turn the call over to Tarek to provide greater insight into our performance and our expectations for the remainder of the year. Thank you, Charlie. Q1 was an exceptionally strong quarter for Everpure, highlighted by revenue growth of 35% year-over-year and operating profit growth of more than 90%, both surpassing the high end of our guidance range. Performance was broad-based across our core business segments and geographies, and as expected, we had a minimal contribution to product revenues from hyperscalers in the quarter. We expanded the number of customers transacting during the quarter while delivering solid execution on large-scale opportunities. Product revenue, which includes revenues from hyperscale shipments, as well as a portion of Portworx software revenue when sold as term licenses, grew 55% year-over-year to $577 million. Our Q1 results reflected the combined impact of higher pricing and some degree of customer purchase acceleration as customers moved proactively to secure product availability and mitigate anticipated future price increases amid ongoing supply constraints. We entered Q2 with a strong pipeline and continue to see healthy demand trends across the business. Based on this momentum, we expect continued strength throughout the year as reflected in our increased full year guidance. FlashBlade//EXA continued to gain traction, delivering a number of new wins, including deployments supporting AI and machine learning applications, as well as GPU-accelerated trading environments within financial services. While still in early stages, we are seeing strong engagement and active discussions with dozens of prospective customers across the AI ecosystem. Our market share gains are accelerating, driven by strong competitive win rates across enterprise and commercial businesses and an increased rate of competitor displacements, thanks to our unique ability to support practically all storage needs and use cases. In Q1, we expanded our customer base by 275 new customers, and our penetration of Fortune 500 now stands at 64%. We also added 223 new logos in our commercial business, which attests to the strength of our business across all segments. We completed the acquisition of 1touch on May 7th and are actively integrating the technology into our platform to further enhance our capabilities in preparing and managing data for AI-driven applications. We are very excited to welcome the 1touch team to Everpure. Together, Everpure and 1touch will enable customers to focus on readying infrastructure for AI and unlocking the strategic value of their data. This combination strengthened our ability to help organizations maximize the value of their data assets in an increasingly AI-centric environment. As a reminder, we expect 1touch to be approximately $12 million dilutive to operating profit in fiscal year 2027 and to become accretive to operating profit within 24 months from the acquisition on a post-synergies basis. Turning to margins and profitability, total gross margin was 70.1%, while subscription services margin was 75.6%. Product gross margin stood at 65.5%, in line with our long-term range of 65%-70%, representing an increase of 150 basis points year-over-year and a decrease of 180 basis points sequentially. As foreshadowed in our Q4 earnings call, the sequential change in product gross margin was primarily driven by increased commodities cost, partially offset by price increases and shifts in customer and product mix towards higher performance FlashArray and FlashBlade. As anticipated during our last call, the revenue contribution from our hyperscale business in Q1 was minimal, and we continue to expect the significant majority of hyperscaler revenues in H2 of fiscal year 2027. We expect aggregate product gross margins to improve in the second half of the year, supported by the contribution from hyperscaler revenues, which we expect to yield 75%-85% gross margins. However, the recovery of product gross margin, excluding the contribution from hyperscalers, is expected to be gradual as pricing actions continue to catch up with ongoing volatile and rapidly rising input costs. Operating profit of $159 million grew over 90% year-over-year, resulting in an operating margin of 15.1%. Strong revenue growth and operational discipline drove this excellent performance. Moving on to our subscription business, Q1 subscription services revenue of $476 million increased 17% year-over-year, accounting for 45% of total revenue. Our annual recurring revenue, or ARR, grew 19% to over $2 billion, which represents a sequential acceleration of nearly 300 basis points from Q4 2026 growth levels. Consistent with last quarter, our remaining performance obligations, or RPO, grew 41% to $3.8 billion, driven by the execution of large deals and strength of our Evergreen//Forever and Evergreen//One offerings. TCV sales for our storage-as-a-service offerings of $165 million grew 73% year-over-year. The recent supply chain pricing environment has reinforced the value proposition of our Evergreen//One storage-as-a-service offering, which has experienced significantly lower price increases compared to traditional product sales. Evergreen//One benefits from longer-term contracts, reduced upfront costs, and extended asset life cycles, enabling us to spread costs over multiple years and deliver more predictable, cost-efficient operating models for customers driving strong year-over-year growth momentum. With respect to our geographic mix of revenues, U.S. revenue was $739 million, growing 39%. International revenue was $314 million, growing 27% year-over-year. International revenue represented 30% of total revenue in Q1 2027. Scaling our international presence represents a significant opportunity and a key strategic focus for the company. Moving on to our balance sheet. Our balance sheet remains robust with over $1.5 billion in cash and investments at the end of the quarter. Cash flow from operations was $180 million impacted by elevated sales activity, including higher commission payments pertaining to Q4 over-achievement driven by the strong demand environment, as well as merit bonus payments. Capital investments were $68 million, representing approximately 6.5% of revenue for the quarter. Our capital investments supported the continued scaling of our hyperscale business as we ramp up investments to qualify more NAND for various hyperscalers, tech titans, and cloud providers, and accelerate growth of our Evergreen//One subscription offering. As a result, free cash flow was $112 million. In Q1, we repurchased 1.3 million shares, returning approximately $84 million to shareholders. We also paid $101 million in withholding taxes on employees' awards, offsetting dilution of approximately 1.6 million shares. We currently have about $245 million remaining under our existing $400 million repurchase authorization announced in Q4 of fiscal year 2026. Finally, our headcount increased sequentially by 211 employees, bringing our total headcount to 6,600 employees. Turning on to guidance. As I mentioned earlier, a portion of this year's strength come from the current supply chain environment. The sudden sharp and continuing rise in the cost of components has forced the entire high-tech industry to raise prices. Price increases have led to higher sales per unit and customer pull-ins to buy ahead of future price increases. We estimate that these two effects represented nearly a third of our Q1 year-on-year revenue growth and will continue to drive performance in future quarters this year. The strength of our Q1 results, good short-term pipeline visibility in Q2, and continued momentum we are seeing across our customer base gives us confidence to increase our full-year guidance. For Q2, we anticipate revenue to be in the range of $1.095 billion-$1.105 billion, representing approximately a 28% year-over-year increase at the midpoint. We expect operating profit to be in the range of $195 million-$205 million, representing approximately a 54% year-over-year increase at the midpoint. Again, I would like to remind everyone that we continue to expect hyperscale product revenue to rise significantly in Q3 and Q4 based on customer order commitments. Consequently, for fiscal year 2027, we anticipate revenue to be in the range of $4.41 billion-$4.51 billion, representing a 22% year-over-year increase at the midpoint. This is a 300-basis points increase from our previously provided revenue guidance of 19% year-over-year growth. We expect operating profit to be in the range of $820 million-$860 million, representing approximately a 32% year-over-year increase at the midpoint. This is more than 600 basis points increase from our prior provided operating profit guidance. In terms of seasonality, we entered fiscal year 2027 with very strong momentum and are executing extremely well in a difficult supply chain environment. The current full-year guide indicates that 48% of our revenues will be generated in H1 2027, compared to 45% in prior years. I would like to finish by saying that our execution focus is a balancing act between short-term pipeline generation to improve visibility and drive sales on a quarterly basis while keeping an eye on sustainability of demand in H2 of fiscal year 2027 and beyond. As Charlie said, we're not looking to profiteer from this crisis and have been prudent with our price increases and consistent with terms and conditions offered to customers in order to continue to enhance our market share and protect the franchise for the long term. In normal circumstances, such strong momentum in first half revenue in our core enterprise and commercial business would drive a higher full-year guide with a seasonality akin to prior years. In today's highly dynamic environment, it is too early to call for further upside to our guide in the second half of fiscal year 2027 as market participants adjust to price levels that are unprecedented globally. We continue to be confident in our ability to execute our priorities this year and beyond. With that, I'll now turn the call back to Paul for Q&A. Thanks, Tarek. Before we begin the Q&A session, I will ask you to please limit yourselves to one question consisting of one part, so we can get to as many people as possible. If you have additional questions, we kindly ask that you please rejoin the queue, and we will be happy to take those additional questions as time allows. Operator, let's get started. Thank you. If you would like to ask a question please press star followed by one on your telephone keypad. If for any reason you would like to remove a question, press star followed by one. Again to ask a question, press star one. As a reminder if you are using a speaker phone remember to pick up your headset before asking a question. We will pause here briefly as question are registered. Our first question comes from Amit Daryanani from Evercore. Please go ahead. Your line is open. Yep. Good afternoon, everyone. Thanks for taking my question. I guess, given the strong 35% growth we saw in Q1 and the guidance plus 28% growth in Q2, could you spend some time about how should we think about the demand trajectory in the back half of the year? Really, when I think about your guidance framework, it implies a bit of a natural deceleration in 2H, or are you simply embedding more conservatism given the current component pricing and maybe even the timing of some of the AI infrastructure deployments that are happening? If you just spend a little bit of time on the back half dynamic, that would be helpful. Thank you. Amit, thanks for the question. Hope you're well. Look, the second half of the year is, frankly, in this environment, this is a very dynamic environment. It's dynamic on the supply chain side. Obviously, pricing has been very dynamic, and it frankly changes almost every week. Being able to have high visibility into the second half of the year, I think, is somewhat unrealistic to anyone's calendar. What I will say is we saw very strong demand, as you can see in the first quarter. We continue to see strong demand now. The two things that frankly we'd want to see before raising guidance, one of which is will demand continue given these historically high prices, or will we start to see some demand destruction? We don't know. The second is the supply environment, which is very unstable. There are a lot of shortages, and we have to be able to ship what we promise and make sure that we have the supply to do that, and that is a full-time job at the moment. I think it's more a matter of not knowing what the second half of the year has in store for us, despite the fact that we are seeing very good demand at the moment. Thank you, Amit. Next question, please. Our next question comes from Aaron Rakers from Wells Fargo. Please go ahead. Your line is open. Hi, this is Richard Strifeler on for Aaron. I was just wondering, with the rapidly increasing context windows and tokenomics now becoming top of mind for many workloads and Everpure innovating in the granular prompt caching, what indications of KV cache moving to SSD storage have you seen thus far? Can you help us better understand the conversations you're having with customers on this dynamic? Yeah, absolutely, Richard. This is Rob. I'll take that question. Look, I think the entire space of inference and technologies that support inference continues to evolve. We continue to be supporting leading customers in this space as well as NVIDIA and other ecosystem partners that are driving innovation here. I think as we look at the increase in context windows and what that's driving in terms of memory and storage, overall, the more tokens, the more data you try to process, the more context you need to assemble. We do see that as driving more demand of memory, both in the GPU servers, remote memory, remote storage, and that's a large part of our partnership with NVIDIA, our solutions that we've developed around NVIDIA technology such as KV caching, as well as future plans and product roadmaps that look at where the expansion of context memory is likely to go in the future. Thank you, Richard. Next question, please. Our next question comes from Howard Ma from Guggenheim Securities. Please go ahead. Your line is open. Great. Thanks. I want to congratulate you all on a really strong quarter. My question is for Tarek. You said that hyperscaler shipments or the ramp in Q3 and Q4 is based on customer order commitments. Can you quantify what's actually contracted versus forecasted in the full-year guide, and could the supply shortages result in higher shipments at a higher ASP to your lead hyperscaler than you expected before? We don't. Howard, thanks for the question. We don't quantify specifically the revenues that we will derive from hyperscalers. These are really based on customer order commitments that were agreed before the beginning of this fiscal year. We are on track for that. We feel very good about the prospects of our hyperscaler business. Let me reiterate to you what we said at the end of our Q4 during our earnings call. We do feel very comfortable with the prospects of this business in fiscal year 2027 and beyond, and we expect a multiple of the revenues we generated in 2026 to be realized in fiscal year 2027. Thank you, Howard. Next question, please. Our next question comes from Mike Cikos from Needham & Company. Please go ahead. Your line is open. Hey, guys. This is [Matt Calitri] for Mike Cikos over at Needham. Thanks for taking our question. We're curious on what you're seeing regarding customer reaction to the Evergreen//One price increases. Are customers still viewing SaaS as advantageous to CapEx outlays and signing larger deals, or are they more hesitant around watching their spend? No, as you might have picked up. Sorry, Matt. This is Charlie. What you might have picked up from my dialogue is that Evergreen//One orders were up higher than the overall company revenues, up a little bit higher than the CapEx side. Actually, I'm not seeing as much uptake as I would have predicted because actually the economics of Evergreen//One are even better in this very high pricing supply chain environment. Largely because it's a long-term contract for us, we get to blend the costs over many years, including many years prior to today. The customer doesn't have to buy as much early on. They only have to buy what they need rather than what they think they're going to need several years from now. It's a great economic deal. We are seeing increasing, that was proven this quarter. I expect as we go forward, we'll see it grow even more, relative to the CapEx purchase. Let me add to what Charlie has said. Evergreen//One is incredibly attractive value proposition in the current environment where, as Charlie said, customers buy only what they need. I'd like to point out to the fact that we increased prices on our traditional CapEx products, just below what the competitors have done, but we increased far less our pricing on Evergreen//One, which makes it very attractive. We are making significant CapEx investments to support our Evergreen//One business. We have very strong demand for the business as it stands. Thank you, Matt. Next question, please. Our next question comes from Krish Sankar from TD Cowen. Please go ahead. Your line is open. Yeah. Hi, thanks for taking my question. I have a question for Charlie. I'm just going to be curious, there's a lot of talk about enterprises adopting agentic AI and things like that, and yet when I look at your revenue, if you back out the price increase from February, not quite seen an inflection. I'm kind of curious, where are we on the enterprise AI adoption cycle? Is it imminent? Is it happening? Is it more like a next year thing? Any kind of comment on that would be very helpful. Thanks. I would say that the vast majority of the enterprise AI purchase cycle is still in the cloud. There's a lot of adoption, but not a lot of development of their own native hardware capabilities on-prem, and I think for very good reason. Secondly, I would say, I'm speaking about traditional enterprise, I would say in certainly sovereign clouds, in tech titans, there is a lot of on-prem development. Relatively little, you might see it somewhat in the high-end banking, a bit in the automotive industry and in pharma. Outside of that, it's very low. Krish, this is Rob, just to add on to what Charlie said. I think that in the enterprise at this point, most of the initial uptake is in the cloud or SaaS-based or hosted. That said, for enterprises that are operating AI on-prem, we're seeing them being able to take advantage of our existing solutions and we don't see enterprise AI deployment on-prem necessarily as creating a whole new storage environment, right? We want to be able to serve that environment. We are serving that environment with our standard product today. That's a large part of our sales motion as we go and speak with enterprise customers who are early on the journey of AI adoption, which is that AI doesn't require dedicated storage infrastructure to serve within the enterprise environment. Thank you, Krish. Next question, please. Our next question comes from Samik Chatterjee from JPMorgan. Please go ahead, your line is open. Hi, thanks for taking my question. Charlie, if I can go back to your comments about visibility into the second half and reasons to sort of, not try to really talk, have a great view on demand just yet for the second half. Maybe if you can talk about the pipeline that you have, how far does it extend in terms of the pipeline you're looking at? In terms of the pipeline, are you seeing what actions you're taking on pricing with your customers, where you're dealing as well as taking lower pricing than some of your competitors? Is that leading to any share gain in the pipeline as well? Thank you. Well, yeah, we won't know fully until the analysts come out with their reports in another month or two time. However, if you take the one third that we identified, you can see that, yeah, we're growing well in the 20s without the effect of pricing or pull-ins. We think that is a clear signal that we are picking up share. Also, our win rates are significantly higher over the last couple of quarters. That started before the price increases as well. I think these are positive signs that we are picking up market share. Thank you, Samik. Next question, please. Our next question comes from James Fish from Piper Sandler. Please go ahead. Your line is open. Hi, guys. This is Tim Shoop, down for James Fish. Thanks for taking our questions. Just kind of going off of the competitive win rates that you had mentioned, can you just speak a little bit to what you're seeing from the competitive landscape, and how the competitive dynamic may have changed recently? Thank you so much. I think that there's been, by the systems vendors, the vendors that sell more than just storage, we're seeing a lot more focus on AI and on servers, frankly, on GPU servers than other activities. Much less focus on their storage side of the business. I think from our direct storage competitors, what we've seen is that our strategy of really being able to provide all of a customer's storage needs with the same software environment, block, file, and object, everything from relatively low cost on Flash to the world's very highest performance on our FlashBlade//EXA, and then tying that all together with what we're calling the enterprise data cloud. That is, being able to manage it all as a system or as a cloud rather than as individual boxes, is making just a huge difference. The simplicity of our offering, the fact that from a total cost of ownership, we're significantly stronger, is driving a lot of customers to come our way. Frankly, we have higher reliability than anyone else, and every time there is an issue with reliability in a competitive product, it gives us a new opportunity with the customer. I'll just add one thing to that, which is to say, this dynamic pricing environment is very challenging for customers, as you might imagine, with market prices moving as quickly and as severely as they have. It leaves customers in a tough spot from a budget point of view and from just an understanding which way is up point of view. This is where our strategy of being very transparent, very moderate, and very, I would say, empathetic to the degree we can in monitoring these increases, I believe is accruing to our favor as well. I agree. I'd like to underscore what Rob has said a second ago. It's really important to understand that our growth rate is not based on price. As Charlie highlighted, only a third of our growth realized in the quarter came by way of price increases and pull-in. The rest is therefore volume and in customer wins, and we're winning across multiple customer segments and geographies, and we feel very pleased with our performance as a market share taker. This is why we were pretty considered and intentional in the way we practiced our price increases. We increased price, that's true, but far less than the competition to protect the franchise for the long term and continue on our market share gains trajectory. Thank you. Next question, please. Our next question comes from Wamsi Mohan from Bank of America. Please go ahead. Your line is open. Yes, thank you. I was hoping maybe just that last comment you made, Tarek, a third of this growth coming from pricing and pull forward. As you think about the second half going back on this question, how much of this are you expecting to sustain? I think you said somewhere on the call that you expect this to be a multi-quarter trend. I'm guessing you mean from a pricing standpoint, there's also this notion that enterprises might continue to pull forward from future, including calendar 2027, because there's just sort of no seeming end to the price increases at this point in time. Curious if you're building in any incremental pricing and pull forward as you think about the rest of the year and what that split was in the quarter. Thank you so much. Yeah, Wamsi, I would say that we're not calculating into our forecast at the moment any additional pull forwards. I will say that we project that there will be further price increases this year. That is just something that we have to plan on as we go forward to make sure we can maintain our margins, et cetera, but we haven't rolled that into a forecast from a revenue standpoint. To your point, yes, as long as prices keep going up, we're likely to see pull-ins, but that has not been factored into a second half of a guide by us. Thank you, Wamsi. Next question, please. Our next question comes from Erik Woodring from Morgan Stanley. Please go ahead. Your line is open. Hey, everyone. This is Dylan Liu for Erik Woodring. Thanks for taking my questions. Charlie, can you just elaborate a bit on what you're hearing from hyperscalers in this environment as it relates to the adoption of your DFMs? Because the price differential between HDDs and QLC NAND is only expanding given the NAND inflation. How much of an impact is that having on your conversations and potential timeline to adoption with new major hyperscalers? Thanks for the question, and it's great to have an opportunity to clarify this. Our solution is a replacement for both SSDs and for hard disk. Also, hard disk has been sold out through 2028. I would say that at this point, if we ask about the tenor of our conversations with the hyperscalers, they are effectively desperate for storage capacity of any type in any form. It's certainly helped to increase the urgency of the qualification process in those hyperscale environments. That being said, we still have to go through the qualification process, and then there's always the question of how much NAND is actually available for ourselves as well. All of that has to get rolled into these conversations. If I were to net it out, I'd say the urgency is higher, and because it's not dependent on disk or no disk, because it's sort of capacity at any price if you can get it. Thank you, Dylan. Next question, please. Our next question comes from Param Singh from Oppenheimer. Please go ahead. Your line is open. Yeah. Hi, thank you for taking my question. I was wondering if you could provide some quantitative insight into the memory pricing. From my best understanding, contract pricing was up 60% year-over-year, beginning of the year. It had been 100% year-over-year a month or so ago, and it looks like it might go up, but the spot pricing is stabilizing. Any insight on what you're hearing from your NAND suppliers, one. Two, a lot of these suppliers are talking about long-term agreements. I want to understand if you are participating in some of those long-term agreements, and are those agreements only for supply, or is there some sort of pricing component that is also fixed as part of those agreements? Thank you. Wow, your numbers are very low. We'd be glad to buy from those suppliers that you've just identified at that pricing levels. Prices have gone up anywhere from 5x-10x on the spot market. Long-term contracts were not worth the paper they were written on at former prices. Everything now is being quoted at best with 30 days of longevity. Pricing in both memory as well as NAND is up just an incredible amount. The demand is so high, it's still able to be sold at that level as well. Yeah, your numbers are very low. That's why we've never seen anything like this in my entire career. I've seen prices sometimes double over an 18-month period. We're talking about prices doubling every 18 days. Thank you, Param. Next question, please. Our next question comes from Mehdi Hosseini from SIG. Please go ahead, your line is open. Yes. Charlie, just going back to the previous few questions. What would your revenue be if there was no shortages of NAND? Let's say you can procure as much NAND as you wanted to. How much upside would there be to a $4.5 billion revenue target? Oh, I see. The timing of when we sell NAND to hyperscalers is determined by their build-outs, by our ability to, or our combined ability to be qualified, and then the build-outs by the hyperscalers. That determines timing. I think what Kaz would tell you, what I would tell you is we could probably sell every terabyte of NAND that we could source. Thank you, Mehdi. Next question, please. Our next question comes from Tim Long from Barclays. Please go ahead, your line is open. Hi, this is Alyssa Shreves for Tim Long. I was just following up on one of the prior questions around the pricing dynamics you're seeing. I understand that you said that most likely there'll be further price increases into the year. Are you also changing on your side, the timeline in terms of quotes you're giving to customers? Are you truncating that timeline? Anything else you're doing there to kind of manage, just given the dynamic pricing environment? Thanks. Thank you for the question. Unfortunately so, yes. We've done a number of things. One is the typical cadence, if you will, of a discussion with a customer around a price for a specific quote would be about 30 days of discussion between the sales team and the customer trying to figure out what the exact configuration of the quote would be. We'd typically provide a 90-day quote, a quote that valid for 90 days. That was for the last 15 years up until February. At this point, we're at 30-day quotes. There are other vendors out there, not all of them in our business, but that won't even provide a price until the product ships. They'll provide a quote at an uncertain price. We believe that that's not the right way for us to operate with our customers or with our channels. Currently, we've had to drop it down to a 30-day price quote. Thank you, Alyssa. Next question, please. Our next question comes from Simon Leopold from Raymond James. Please go ahead, your line is open. Great. Thank you very much. Appreciate it. I just want to get a better sense of how you're thinking about the longer-term trends of input costs, particularly NAND chips, in that it sounds like that market is expected, if you're a buyer of NAND chips, to improve in the coming quarters. Just wondering what your expectations and what you've built in for the longer term. Thank you. Actually, no. Our expectation is that there'll be continued price increases, at least through the summer. I can't really project further than that, but through the summer, there'll be further price increases. To a large extent, capacity has been sold out through 2027 at this point in time. There is an interest to have long-term contracts into 2028. That's always a difficult thing to determine at today's pricing, whether or not it makes sense to do that. For the most part, fab capacity across the board, not just NAND, everything, NAND, memory, CPUs, and now it's affecting even low-end chips, is sold out. Fab capacity has been shifted towards the higher margin components, which has put pressure across the entire semiconductor environment. It's really driven by just demand completely outstripping fab supply. Until the demand and supply comes into balance, we'll continue to see price increases. Thank you, Simon. Next question, please. Our next question comes from Matt Bryson from Wedbush Securities. Please go ahead. Your line is open. Hey, thanks for taking my question. I want to go back to guidance. I understand the current market makes it really difficult to forecast future periods, but I'm just having some problems with the math. If I think about pricing being up 15%-20% in Q1, and you said your pricing's up 70% now, you've got a 50%-55% delta, then for me to get to your Q2 numbers, I need your bit shipments or your system shipments to be down 50% Q1 to Q2. Similarly, when I'm thinking about Q4, for instance, in my model, I had system sales up 15% to get to numbers. If pricing's going to be up 70% or more, then I need bit shipments or system shipments to be down 55%. I guess my question is that math right? Is it a sourcing problem, or is it demand destruction? Is it that your mix is just shifting so quickly to Pure as-a-Service that it's shifting how your revenues look? I'd say to you, there are many dynamics in here. First, we get an order, it could be in a prior quarter, then we ship it in the current quarter. That is also part of the dynamic that has to be factored into the equation. We do not expect the number of systems that we ship to decline as much as you highlighted, far from it. We do believe that the growth in units of what we sell continues to be pretty strong. What we indicated as far as the first quarter is concerned is that only a third of our growth came in by way of pull-ins and by way of pricing. The rest is volume. The volume is there because the demand is there. Now the question is how long does that last in a context where the whole industry participants are testing price levels that were unprecedented before? For the second half of the year, we have no reason to believe that shipment volumes will drop to the extent that you highlighted. Matt, just to throw one more variable in there. As you might imagine, we've given you some numbers about average price increases. The price increases varied across the portfolio. As you might imagine, in an elevated pricing environment, the value of our high-performance solutions becomes even more magnified. We do see an expected mix shift within the portfolio that is baked into some of the numbers in there. Thank you, Matt. Next question, please. Our next question comes from Asiya Merchant from Citigroup. Please go ahead. Your line is open. Great. Thank you very much. Could you just highlight how to think about subscription margins? What drove the delta here? Was it the increased CapEx investment that you guys talked about? I think you talked about product growth margins operating maybe perhaps towards the lower end of your range, excluding hyperscalers. Could you help us understand about subscription margins going forward? I would think that as you have more evergreen subscription services, those margins would improve. If you could just help clarify that would be great. Thank you. Yeah. First of all, for the first part of your question on subscription gross margins, there was a sequential quarterly gross margin drop by about 1.4 points for our subscription services. This is really driven by a mix and a shift away from Evergreen//One as part of our subscription revenue. This is temporary, and the reason why I want to highlight this to you, it's because if you really look at our ARR growth, it has accelerated by 300 basis points to 19%, and our remaining performance obligations remains extremely strong in growth terms. We grew our RPO by 41%. I'm sorry, could you repeat, Asiya, the second part of your question? Just how do I think about these margins going ahead if it's temporary like you highlighted? Oh, right. Yeah. Yeah. Mm-hmm. Yeah. for subscriptions. Yeah. The product gross margins we flagged at the beginning of the fiscal year that product revenue gross margins, excluding the contribution from hyperscalers, would be at the bottom end of our range, 65%-70%, which is our long-term target. In this first quarter, we came at 65.5%, right where we thought it would be. Moving forward, you have to think about product gross margins as being, again, another mix effect between revenue that is catching up with the underlying costs. We feel good about what we guided, which is 65%-70% gross margin with a progressive recovery of product gross margins to the upper end of that range in the upcoming quarters. I would just say with respect to the services gross margin, as Tarek mentioned, that was a temporary decline. We expect those to continue to increase over time. Yeah. Thank you, Asiya. Next question, please. Our next question comes from Eric Martinuzzi from Lake Street Capital Markets. Please go ahead. Your line is open. Yeah, I wanted to talk a little bit about the 1touch pipeline, just the receptivity to Everpure as kind of the advanced data management provider of choice. Is there the strategic verticals where it's kind of a slam dunk, your low-hanging opportunity? I would say that it's very early. We'll be going into much greater detail on this at our Accelerate conference next month. 1touch now gives us and our customers the opportunity to really map all of their data across all of their data sources. Not just what's on our product, but what's on competitive products, but what's also in the cloud, what's on their SaaS platforms, and to map it in several respects. One is just to know where all their data is, which is a major cybersecurity problem, and that's exactly where 1touch started its business. They go further than that, which allows them to understand the semantics of the data, which means they can also map the context of the data between the different data sources, which means you can get a full knowledge graph of how their different data sources relate to one another. We think this is going to be very powerful in a world of AI, where now with AI, it's the old phrase, garbage in, garbage out. If the quality of your data source is poor, the quality of your answer is poor. What 1touch will allow customers to do is really rationalize and get a better understanding of their data sources, rationalize those data sources, and be able to have a better source for their AI agents and their analytics. Eric, just to add on to that, as Charlie said, our strategic interest in 1touch really is driven by a lot of the capabilities that they will help add to the portfolio in terms of data intelligence. Between those capabilities as well as their current product in data security posture management, this is driving a lot of initial interest in a lot of enterprise accounts in typical verticals that we're strong in, such as financial services. That said, early days, we just closed the acquisition earlier this month. Early signs of interest and demand are positive. Thank you, Eric. We have time for one more question, so the next question will be the last. Our last question comes from David Vogt from UBS. Please go ahead, your line is open. Great. Thanks, guys. Appreciate all the color, given the difficult operating backdrop. Maybe, Tarek, can I come back to you with regards to the second half? I guess what I'm trying to think through is presumably your outlook three months ago included the benefit of some pricing dynamics and the lag effect, as well as some pull forwards in the quarter. Can you help us understand, obviously you took the guide up by about $100 million+ for the full year, but you benefited probably from $90 million in Q1. Can you share with us how you're thinking about what the impact of pull forward and the lag effect in Q2 and the rest of the year looks like? By my math, it looks like then core storage is going to be a bit of a challenging second half backdrop. I get the uncertainty. Just trying to get a sense for how you're thinking about the underlying demand for the business, given the uncertainty in the second half of the year. Thanks. Let's put things a little bit in perspective here. First of all, demand continues to be robust across all business segments, enterprise and commercial alike. We've raised prices significantly since the beginning of fiscal year 2027. We raised prices later and lower than the competition. To the extent that you continue to have price increases and perception by market participants that there will continue to be price increases, there will be pull-ins. In our first quarter of this fiscal year, we said on the call that about a third of our growth can be attributed to price increases and pull-ins. This will continue. The question is to what degree in the second half, and that is a big unknown because no one will truly be able to point out at what point will customers stop buying and wait for prices to come down over time. Our guide has to be looked at over the long term, and it's important to understand that in the beginning of last fiscal year, we were growing at 11%. We guided midway through last year at 16% growth, and now we're guiding for this fiscal year north of 22% growth on a full year basis. They are quarterly dynamics, but there's no question our growth is accelerating year-over-year because of the quality of our products and our value proposition. Before we conclude, I think Charlie has final comment. Before we close, first of all, thank you all for your time. Before we close, I also want to thank our customers for their trust and our employees for their dedication, our partners and suppliers for their collaboration, and our investors for continued confidence. We also look forward to seeing many of you and certainly many of our customers and partners at our Accelerate Conference next month. Hopefully many of you all at our investor conference on September 23rd. Thanks all for listening. See you next quarter. That concludes the Everpure first quarter fiscal 2027 financial results conference call. Thank you for your participation. You may now disconnect your line.

Speaker 13: Good day, welcome to the Everpure first quarter fiscal 2027 financial results conference call. Today's conference is being recorded. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. At this time, I'd like to turn the call over to Paul Ziots, Vice President of Investor Relations. Please go ahead. Good day, welcome to the Everpure first quarter fiscal 2027 financial results conference call. good day welcome to the everpure first quarter fiscal 2027 financial results conference call Today's conference is being recorded. today's conference is being recorded All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end If you would like to ask a question, please press star one on your telephone keypad. if you would like to ask a question please press star one on your telephone keypad At this time, I'd like to turn the call over to Paul Ziots, Vice President of Investor Relations. at this time i'd like to turn the call over to paul ziots vice president of investor relations Please go ahead. please go ahead

Speaker 15: Thank you. Good afternoon, everyone, and welcome to Everpure's first quarter fiscal year 2027 earnings conference call. On the call, we have Charlie Giancarlo, Chief Executive Officer, Tarek Robbiati, Chief Financial Officer, and Rob Lee, Chief Technology and Growth Officer. Following Charlie's and Tarek's prepared remarks, we will take questions. Our press release was issued after close of market and is posted on our website where this call is being simultaneously webcast. The slides that accompany this webcast can be downloaded at investor.everpuredata.com. On this call today, we will make forward-looking statements, which are subject to various risks and uncertainties. These include statements regarding our financial outlook and operations, our strategy, technology, and its advantages, our current and new product offerings, our ability to procure a sufficient supply of components and manage our supply chain, our hyperscaler opportunity, and competitive industry and economic trends. Thank you. thank you Good afternoon, everyone, and welcome to Everpure's first quarter fiscal year 2027 earnings conference call. good afternoon everyone and welcome to everpure's first quarter fiscal year 2027 earnings conference call On the call, we have Charlie Giancarlo, Chief Executive Officer, Tarek Robbiati, Chief Financial Officer, and Rob Lee, Chief Technology and Growth Officer. on the call we have charlie giancarlo chief executive officer tarek robbiati chief financial officer and rob lee chief technology and growth officer Following Charlie's and Tarek's prepared remarks, we will take questions. following charlie's and tarek's prepared remarks we will take questions Our press release was issued after close of market and is posted on our website where this call is being simultaneously webcast. our press release was issued after close of market and is posted on our website where this call is being simultaneously webcast The slides that accompany this webcast can be downloaded at investor.everpuredata.com. the slides that accompany this webcast can be downloaded at investor.everpuredata.com On this call today, we will make forward-looking statements, which are subject to various risks and uncertainties. on this call today we will make forward-looking statements which are subject to various risks and uncertainties These include statements regarding our financial outlook and operations, our strategy, technology, and its advantages, our current and new product offerings, our ability to procure a sufficient supply of components and manage our supply chain, our hyperscaler opportunity, and competitive industry and economic trends. these include statements regarding our financial outlook and operations our strategy technology and its advantages our current and new product offerings our ability to procure a sufficient supply of components and manage our supply chain our hyperscaler opportunity and competitive industry and economic trends Any forward-looking statements that we make are based on facts and assumptions as of today, we undertake no obligation to update them. Our actual results may differ materially from the results forecasted, reported results should not be considered as an indication of future performance. A discussion of some of the risks and uncertainties related to our business is contained in our filings with the SEC, we refer you to these public filings. During this call, all financial metrics and associated growth rates are non-GAAP measures other than revenue, remaining performance obligations, or RPO, cash and investments. Reconciliations to the most directly comparable GAAP measures are provided in our earnings press release and slides. This call is being broadcast live on the Everpure investor relations website is being recorded for playback purposes. Any forward-looking statements that we make are based on facts and assumptions as of today, we undertake no obligation to update them. any forward-looking statements that we make are based on facts and assumptions as of today we undertake no obligation to update them Our actual results may differ materially from the results forecasted, reported results should not be considered as an indication of future performance. our actual results may differ materially from the results forecasted reported results should not be considered as an indication of future performance A discussion of some of the risks and uncertainties related to our business is contained in our filings with the SEC, we refer you to these public filings. a discussion of some of the risks and uncertainties related to our business is contained in our filings with the sec we refer you to these public filings During this call, all financial metrics and associated growth rates are non-GAAP measures other than revenue, remaining performance obligations, or RPO, cash and investments. during this call all financial metrics and associated growth rates are non-gaap measures other than revenue remaining performance obligations or rpo cash and investments Reconciliations to the most directly comparable GAAP measures are provided in our earnings press release and slides. reconciliations to the most directly comparable gaap measures are provided in our earnings press release and slides This call is being broadcast live on the Everpure investor relations website is being recorded for playback purposes. this call is being broadcast live on the everpure investor relations website is being recorded for playback purposes An archive of the webcast will be available on the IR website and is the property of Everpure. Our second quarter fiscal 2027 quiet period begins at the close of business Friday, July 17, 2026. With that, I'll turn it over to Charlie. An archive of the webcast will be available on the IR website and is the property of Everpure. an archive of the webcast will be available on the ir website and is the property of everpure Our second quarter fiscal 2027 quiet period begins at the close of business Friday, July 17, 2026. our second quarter fiscal 2027 quiet period begins at the close of business friday july 17 2026 With that, I'll turn it over to Charlie. with that i'll turn it over to charlie

Speaker 4: Thank you, Paul. Good afternoon, everyone, and welcome to Everpure's Q1 fiscal 2027 earnings call. Q1 was another outstanding and a truly remarkable quarter, reflected in the strength of both top and bottom line. Revenue growth of 35% year-over-year is a very strong start to our fiscal year 2027. Operating profit nearly doubled year-over-year to $159 million. Sales momentum started off strong and continued to build throughout the quarter. Revenue and operating profit exceeded the high end of our guidance range, and we foresee continued strength throughout the year as will be seen in our revised full-year guidance. Undoubtedly, much of the recent strength in the market has been kindled by the current supply chain crisis, but our strength is also driven by increased win rates for our solutions in contested opportunities. Thank you, Paul. thank you paul Good afternoon, everyone, and welcome to Everpure's Q1 fiscal 2027 earnings call. good afternoon everyone and welcome to everpure's q1 fiscal 2027 earnings call Q1 was another outstanding and a truly remarkable quarter, reflected in the strength of both top and bottom line. q1 was another outstanding and a truly remarkable quarter reflected in the strength of both top and bottom line Revenue growth of 35% year-over-year is a very strong start to our fiscal year 2027. revenue growth of 35% year-over-year is a very strong start to our fiscal year 2027 Operating profit nearly doubled year-over-year to $159 million. operating profit nearly doubled year-over-year to $159 million Sales momentum started off strong and continued to build throughout the quarter. sales momentum started off strong and continued to build throughout the quarter Revenue and operating profit exceeded the high end of our guidance range, and we foresee continued strength throughout the year as will be seen in our revised full-year guidance. revenue and operating profit exceeded the high end of our guidance range and we foresee continued strength throughout the year as will be seen in our revised full-year guidance Undoubtedly, much of the recent strength in the market has been kindled by the current supply chain crisis, but our strength is also driven by increased win rates for our solutions in contested opportunities. undoubtedly much of the recent strength in the market has been kindled by the current supply chain crisis but our strength is also driven by increased win rates for our solutions in contested opportunities Our market share gains are accelerating as customers increasingly adopt Everpure as their preferred vendor for data storage and management. Growth was driven by broad-based strength across our core businesses and geographies. Large deals above $5 million were up in high double digits compared to prior year, and our commercial business also showed strong momentum. New customer logos were up 20% year-on-year. We also achieved significant marquee expansions, including a global financial services customer that relies on Everpure as foundational infrastructure for private cloud environments across virtualized and Kubernetes-based workloads. It highlights the strength of our platform as customers bridge traditional and modern application architectures. As expected, Q1 included relatively little revenue associated with our hyperscale products. As discussed last quarter, we expect hyperscale product revenue to rise significantly in Q3 and Q4 based on customer order commitments. Our market share gains are accelerating as customers increasingly adopt Everpure as their preferred vendor for data storage and management. our market share gains are accelerating as customers increasingly adopt everpure as their preferred vendor for data storage and management Growth was driven by broad-based strength across our core businesses and geographies. growth was driven by broad-based strength across our core businesses and geographies Large deals above $5 million were up in high double digits compared to prior year, and our commercial business also showed strong momentum. large deals above $5 million were up in high double digits compared to prior year and our commercial business also showed strong momentum New customer logos were up 20% year-on-year. new customer logos were up 20% year-on-year We also achieved significant marquee expansions, including a global financial services customer that relies on Everpure as foundational infrastructure for private cloud environments across virtualized and Kubernetes-based workloads. we also achieved significant marquee expansions including a global financial services customer that relies on everpure as foundational infrastructure for private cloud environments across virtualized and kubernetes-based workloads It highlights the strength of our platform as customers bridge traditional and modern application architectures. it highlights the strength of our platform as customers bridge traditional and modern application architectures As expected, Q1 included relatively little revenue associated with our hyperscale products. as expected q1 included relatively little revenue associated with our hyperscale products As discussed last quarter, we expect hyperscale product revenue to rise significantly in Q3 and Q4 based on customer order commitments. as discussed last quarter we expect hyperscale product revenue to rise significantly in q3 and q4 based on customer order commitments In the AI space, FlashBlade//EXA scored more wins this past quarter, including application in AI machine learning and financial services GPU-accelerated trading applications. One fintech customer using advanced GPU-based AI modeling for algorithmic trading on global financial markets selected FlashBlade//EXA for their high-performance AI infrastructure. The firm has processed more than 13 million transactions during their peak trading day, underscoring the performance and consistent reliability that FlashBlade//EXA delivers in data-intensive AI environments. More broadly, we are now beginning to displace competitive AI storage products in the enterprise and neo cloud markets as customers transition to our FlashBlade family for its unmatched performance, operational simplicity, flexibility, and overall quality. As Tarek will explain, current sales performance has been positively affected by industry-wide cost and price increases. In my over 40 years in technology, I have never seen another supply chain situation remotely like this. In the AI space, FlashBlade//EXA scored more wins this past quarter, including application in AI machine learning and financial services GPU-accelerated trading applications. in the ai space flashblade//exa scored more wins this past quarter including application in ai machine learning and financial services gpu-accelerated trading applications One fintech customer using advanced GPU-based AI modeling for algorithmic trading on global financial markets selected FlashBlade//EXA for their high-performance AI infrastructure. one fintech customer using advanced gpu-based ai modeling for algorithmic trading on global financial markets selected flashblade//exa for their high-performance ai infrastructure The firm has processed more than 13 million transactions during their peak trading day, underscoring the performance and consistent reliability that FlashBlade//EXA delivers in data-intensive AI environments. the firm has processed more than 13 million transactions during their peak trading day underscoring the performance and consistent reliability that flashblade//exa delivers in data-intensive ai environments More broadly, we are now beginning to displace competitive AI storage products in the enterprise and neo cloud markets as customers transition to our FlashBlade family for its unmatched performance, operational simplicity, flexibility, and overall quality. more broadly we are now beginning to displace competitive ai storage products in the enterprise and neo cloud markets as customers transition to our flashblade family for its unmatched performance operational simplicity flexibility and overall quality As Tarek will explain, current sales performance has been positively affected by industry-wide cost and price increases. as tarek will explain current sales performance has been positively affected by industry-wide cost and price increases In my over 40 years in technology, I have never seen another supply chain situation remotely like this. in my over 40 years in technology i have never seen another supply chain situation remotely like this Obviously, these price increases are of great concern to our customers. Consequently, on April 23rd, we published a letter to customers explaining our position and philosophy during this supply chain crisis. In particular, we wanted our actions and intentions to be clear and transparent. In the letter, we reassured our customers that we would share the cost pain with them and not seek to profiteer from the crisis. To this end, we have carefully managed our component supplies to enable us to hold off price increases until far later, and far less than competitive price raises. As mentioned last quarter, we are choosing to operate at the lower end of our product gross margin range to help our customers while component costs escalate. Obviously, these price increases are of great concern to our customers. Consequently, on April 23rd, we published a letter to customers explaining our position and philosophy during this supply chain crisis. obviously these price increases are of great concern to our customers. consequently on april 23rd we published a letter to customers explaining our position and philosophy during this supply chain crisis In particular, we wanted our actions and intentions to be clear and transparent. in particular we wanted our actions and intentions to be clear and transparent In the letter, we reassured our customers that we would share the cost pain with them and not seek to profiteer from the crisis. in the letter we reassured our customers that we would share the cost pain with them and not seek to profiteer from the crisis To this end, we have carefully managed our component supplies to enable us to hold off price increases until far later, and far less than competitive price raises. to this end we have carefully managed our component supplies to enable us to hold off price increases until far later and far less than competitive price raises As mentioned last quarter, we are choosing to operate at the lower end of our product gross margin range to help our customers while component costs escalate. as mentioned last quarter we are choosing to operate at the lower end of our product gross margin range to help our customers while component costs escalate We expect product gross margins will begin to recover in the second half of our year, but the recovery is likely to be gradual as costs continue to rise. The current environment has enhanced the benefits of our Evergreen//One storage-as-a-service offering. Evergreen//One benefits from longer contracts, lower upfront costs, and longer lifetimes. This allows us to blend costs over many years, leading to more stable and lower operating costs for customers. An increasing number of customers are choosing Evergreen//One to enjoy the benefits of Everpure. Evergreen//One sales were up 73% year-on-year in Q1, reflecting greater customer appreciation for the operational and financial benefits of our storage-as-a-service model. Our enterprise data cloud strategy continues to gain momentum. Purity Fusion adoption, which enables customers to build their own data clouds, doubled in Q1, with more than 1,200 customers. We expect product gross margins will begin to recover in the second half of our year, but the recovery is likely to be gradual as costs continue to rise. we expect product gross margins will begin to recover in the second half of our year but the recovery is likely to be gradual as costs continue to rise The current environment has enhanced the benefits of our Evergreen//One storage-as-a-service offering. the current environment has enhanced the benefits of our evergreen//one storage-as-a-service offering Evergreen//One benefits from longer contracts, lower upfront costs, and longer lifetimes. evergreen//one benefits from longer contracts lower upfront costs and longer lifetimes This allows us to blend costs over many years, leading to more stable and lower operating costs for customers. this allows us to blend costs over many years leading to more stable and lower operating costs for customers An increasing number of customers are choosing Evergreen//One to enjoy the benefits of Everpure. an increasing number of customers are choosing evergreen//one to enjoy the benefits of everpure Evergreen//One sales were up 73% year-on-year in Q1, reflecting greater customer appreciation for the operational and financial benefits of our storage-as-a-service model. evergreen//one sales were up 73% year-on-year in q1 reflecting greater customer appreciation for the operational and financial benefits of our storage-as-a-service model Our enterprise data cloud strategy continues to gain momentum. our enterprise data cloud strategy continues to gain momentum Purity Fusion adoption, which enables customers to build their own data clouds, doubled in Q1, with more than 1,200 customers. purity fusion adoption which enables customers to build their own data clouds doubled in q1 with more than 1,200 customers Wins and expansions include CardConnect, a subsidiary of Fiserv, and e&, formerly Etisalat, as well as a leading North American financial institution and a large Asian healthcare IT provider. This growth reflects rising customers' interest in developing their own enterprise data clouds and reinforces Purity Fusion's strategic role within Everpure's architecture. One state department of revenue, which processes more than $9 billion annually, told us that Fusion gave them the ability to scale and manage infrastructure with the simplicity of the cloud, but within their own data centers. It allows their staff to provision with confidence while providing more time for higher value strategic work. Our acquisition of 1touch, which closed earlier this month, will expand Everpure's opportunity to help customers manage their enterprise data. 1touch enables customers to better manage all of their data, whether on Pure products or not, both on-prem and in the cloud. Wins and expansions include CardConnect, a subsidiary of Fiserv, and e&, formerly Etisalat, as well as a leading North American financial institution and a large Asian healthcare IT provider. wins and expansions include cardconnect a subsidiary of fiserv and e& formerly etisalat as well as a leading north american financial institution and a large asian healthcare it provider This growth reflects rising customers' interest in developing their own enterprise data clouds and reinforces Purity Fusion's strategic role within Everpure's architecture. this growth reflects rising customers' interest in developing their own enterprise data clouds and reinforces purity fusion's strategic role within everpure's architecture One state department of revenue, which processes more than $9 billion annually, told us that Fusion gave them the ability to scale and manage infrastructure with the simplicity of the cloud, but within their own data centers. one state department of revenue which processes more than $9 billion annually told us that fusion gave them the ability to scale and manage infrastructure with the simplicity of the cloud but within their own data centers It allows their staff to provision with confidence while providing more time for higher value strategic work. it allows their staff to provision with confidence while providing more time for higher value strategic work Our acquisition of 1touch, which closed earlier this month, will expand Everpure's opportunity to help customers manage their enterprise data. 1touch enables customers to better manage all of their data, whether on Pure products or not, both on-prem and in the cloud. our acquisition of 1touch which closed earlier this month will expand everpure's opportunity to help customers manage their enterprise data 1touch enables customers to better manage all of their data whether on pure products or not both on-prem and in the cloud This technology allows customers to build full data catalogs across all enterprise data, add semantics, as well as full ontologies and knowledge graphs, to comprehensively manage their global enterprise data. These capabilities will enable customers to reduce the number of copies of similar data, increase the utility and quality of their data, and reduce the cost of data preparation for AI and analytics. Regarding our hyperscale business, our solution continues to make steady progress with an expanding set of hyperscale, cloud, and large tech titan customers due to its enhanced efficiency, flexibility, and reliability. We are currently investing significant resources in system qualification with multiple prospects. As stated previously, we expect to significantly expand shipments of our hyperscale product in the second half of this year and even further next year. This technology allows customers to build full data catalogs across all enterprise data, add semantics, as well as full ontologies and knowledge graphs, to comprehensively manage their global enterprise data. this technology allows customers to build full data catalogs across all enterprise data add semantics as well as full ontologies and knowledge graphs to comprehensively manage their global enterprise data These capabilities will enable customers to reduce the number of copies of similar data, increase the utility and quality of their data, and reduce the cost of data preparation for AI and analytics. these capabilities will enable customers to reduce the number of copies of similar data increase the utility and quality of their data and reduce the cost of data preparation for ai and analytics Regarding our hyperscale business, our solution continues to make steady progress with an expanding set of hyperscale, cloud, and large tech titan customers due to its enhanced efficiency, flexibility, and reliability. regarding our hyperscale business our solution continues to make steady progress with an expanding set of hyperscale cloud and large tech titan customers due to its enhanced efficiency flexibility and reliability We are currently investing significant resources in system qualification with multiple prospects. we are currently investing significant resources in system qualification with multiple prospects As stated previously, we expect to significantly expand shipments of our hyperscale product in the second half of this year and even further next year. as stated previously we expect to significantly expand shipments of our hyperscale product in the second half of this year and even further next year We look forward to providing more details on our product advancements, particularly our expansion into advanced data management at our upcoming Accelerate conference in June, as well as at our financial analyst meeting scheduled for September 23rd here in Santa Clara. We continue to operate in a very dynamic macro environment. The current supply chain crisis, created by seemingly insatiable AI demand, has entirely eclipsed the tariff crisis of last year. Costs and component shortages now change rapidly and are challenging to predict with any degree of certainty. We have confidence in our ability to weather these challenges better than most because of our architectural advantages, strong engineering and supply chain capabilities, and our excellent supplier relationships. The current market turmoil has highlighted the importance of trust and transparency and has separated true partners from profiteers. We look forward to providing more details on our product advancements, particularly our expansion into advanced data management at our upcoming Accelerate conference in June, as well as at our financial analyst meeting scheduled for September 23rd here in Santa Clara. we look forward to providing more details on our product advancements particularly our expansion into advanced data management at our upcoming accelerate conference in june as well as at our financial analyst meeting scheduled for september 23rd here in santa clara We continue to operate in a very dynamic macro environment. we continue to operate in a very dynamic macro environment The current supply chain crisis, created by seemingly insatiable AI demand, has entirely eclipsed the tariff crisis of last year. the current supply chain crisis created by seemingly insatiable ai demand has entirely eclipsed the tariff crisis of last year Costs and component shortages now change rapidly and are challenging to predict with any degree of certainty. costs and component shortages now change rapidly and are challenging to predict with any degree of certainty We have confidence in our ability to weather these challenges better than most because of our architectural advantages, strong engineering and supply chain capabilities, and our excellent supplier relationships. we have confidence in our ability to weather these challenges better than most because of our architectural advantages strong engineering and supply chain capabilities and our excellent supplier relationships The current market turmoil has highlighted the importance of trust and transparency and has separated true partners from profiteers. the current market turmoil has highlighted the importance of trust and transparency and has separated true partners from profiteers We are building Everpure to be a long-term trusted partner with customers, channel partners, suppliers, employees, and our long-term shareholders. I will now turn the call over to Tarek to provide greater insight into our performance and our expectations for the remainder of the year. We are building Everpure to be a long-term trusted partner with customers, channel partners, suppliers, employees, and our long-term shareholders. we are building everpure to be a long-term trusted partner with customers channel partners suppliers employees and our long-term shareholders I will now turn the call over to Tarek to provide greater insight into our performance and our expectations for the remainder of the year. i will now turn the call over to tarek to provide greater insight into our performance and our expectations for the remainder of the year

Speaker 20: Thank you, Charlie. Q1 was an exceptionally strong quarter for Everpure, highlighted by revenue growth of 35% year-over-year and operating profit growth of more than 90%, both surpassing the high end of our guidance range. Performance was broad-based across our core business segments and geographies, and as expected, we had a minimal contribution to product revenues from hyperscalers in the quarter. We expanded the number of customers transacting during the quarter while delivering solid execution on large-scale opportunities. Product revenue, which includes revenues from hyperscale shipments, as well as a portion of Portworx software revenue when sold as term licenses, grew 55% year-over-year to $577 million. Our Q1 results reflected the combined impact of higher pricing and some degree of customer purchase acceleration as customers moved proactively to secure product availability and mitigate anticipated future price increases amid ongoing supply constraints. Thank you, Charlie. thank you charlie Q1 was an exceptionally strong quarter for Everpure, highlighted by revenue growth of 35% year-over-year and operating profit growth of more than 90%, both surpassing the high end of our guidance range. q1 was an exceptionally strong quarter for everpure highlighted by revenue growth of 35% year-over-year and operating profit growth of more than 90% both surpassing the high end of our guidance range Performance was broad-based across our core business segments and geographies, and as expected, we had a minimal contribution to product revenues from hyperscalers in the quarter. We expanded the number of customers transacting during the quarter while delivering solid execution on large-scale opportunities. performance was broad-based across our core business segments and geographies and as expected we had a minimal contribution to product revenues from hyperscalers in the quarter. we expanded the number of customers transacting during the quarter while delivering solid execution on large-scale opportunities Product revenue, which includes revenues from hyperscale shipments, as well as a portion of Portworx software revenue when sold as term licenses, grew 55% year-over-year to $577 million. product revenue which includes revenues from hyperscale shipments as well as a portion of portworx software revenue when sold as term licenses grew 55% year-over-year to $577 million Our Q1 results reflected the combined impact of higher pricing and some degree of customer purchase acceleration as customers moved proactively to secure product availability and mitigate anticipated future price increases amid ongoing supply constraints. our q1 results reflected the combined impact of higher pricing and some degree of customer purchase acceleration as customers moved proactively to secure product availability and mitigate anticipated future price increases amid ongoing supply constraints We entered Q2 with a strong pipeline and continue to see healthy demand trends across the business. Based on this momentum, we expect continued strength throughout the year as reflected in our increased full year guidance. FlashBlade//EXA continued to gain traction, delivering a number of new wins, including deployments supporting AI and machine learning applications, as well as GPU-accelerated trading environments within financial services. While still in early stages, we are seeing strong engagement and active discussions with dozens of prospective customers across the AI ecosystem. Our market share gains are accelerating, driven by strong competitive win rates across enterprise and commercial businesses and an increased rate of competitor displacements, thanks to our unique ability to support practically all storage needs and use cases. In Q1, we expanded our customer base by 275 new customers, and our penetration of Fortune 500 now stands at 64%. We entered Q2 with a strong pipeline and continue to see healthy demand trends across the business. we entered q2 with a strong pipeline and continue to see healthy demand trends across the business Based on this momentum, we expect continued strength throughout the year as reflected in our increased full year guidance. based on this momentum we expect continued strength throughout the year as reflected in our increased full year guidance FlashBlade//EXA continued to gain traction, delivering a number of new wins, including deployments supporting AI and machine learning applications, as well as GPU-accelerated trading environments within financial services. flashblade//exa continued to gain traction delivering a number of new wins including deployments supporting ai and machine learning applications as well as gpu-accelerated trading environments within financial services While still in early stages, we are seeing strong engagement and active discussions with dozens of prospective customers across the AI ecosystem. while still in early stages we are seeing strong engagement and active discussions with dozens of prospective customers across the ai ecosystem Our market share gains are accelerating, driven by strong competitive win rates across enterprise and commercial businesses and an increased rate of competitor displacements, thanks to our unique ability to support practically all storage needs and use cases. our market share gains are accelerating driven by strong competitive win rates across enterprise and commercial businesses and an increased rate of competitor displacements thanks to our unique ability to support practically all storage needs and use cases In Q1, we expanded our customer base by 275 new customers, and our penetration of Fortune 500 now stands at 64%. in q1 we expanded our customer base by 275 new customers and our penetration of fortune 500 now stands at 64% We also added 223 new logos in our commercial business, which attests to the strength of our business across all segments. We completed the acquisition of 1touch on May 7th and are actively integrating the technology into our platform to further enhance our capabilities in preparing and managing data for AI-driven applications. We are very excited to welcome the 1touch team to Everpure. Together, Everpure and 1touch will enable customers to focus on readying infrastructure for AI and unlocking the strategic value of their data. This combination strengthened our ability to help organizations maximize the value of their data assets in an increasingly AI-centric environment. As a reminder, we expect 1touch to be approximately $12 million dilutive to operating profit in fiscal year 2027 and to become accretive to operating profit within 24 months from the acquisition on a post-synergies basis. We also added 223 new logos in our commercial business, which attests to the strength of our business across all segments. we also added 223 new logos in our commercial business which attests to the strength of our business across all segments We completed the acquisition of 1touch on May 7th and are actively integrating the technology into our platform to further enhance our capabilities in preparing and managing data for AI-driven applications. we completed the acquisition of 1touch on may 7th and are actively integrating the technology into our platform to further enhance our capabilities in preparing and managing data for ai-driven applications We are very excited to welcome the 1touch team to Everpure. we are very excited to welcome the 1touch team to everpure Together, Everpure and 1touch will enable customers to focus on readying infrastructure for AI and unlocking the strategic value of their data. together everpure and 1touch will enable customers to focus on readying infrastructure for ai and unlocking the strategic value of their data This combination strengthened our ability to help organizations maximize the value of their data assets in an increasingly AI-centric environment. this combination strengthened our ability to help organizations maximize the value of their data assets in an increasingly ai-centric environment As a reminder, we expect 1touch to be approximately $12 million dilutive to operating profit in fiscal year 2027 and to become accretive to operating profit within 24 months from the acquisition on a post-synergies basis. as a reminder we expect 1touch to be approximately $12 million dilutive to operating profit in fiscal year 2027 and to become accretive to operating profit within 24 months from the acquisition on a post-synergies basis Turning to margins and profitability, total gross margin was 70.1%, while subscription services margin was 75.6%. Product gross margin stood at 65.5%, in line with our long-term range of 65%-70%, representing an increase of 150 basis points year-over-year and a decrease of 180 basis points sequentially. As foreshadowed in our Q4 earnings call, the sequential change in product gross margin was primarily driven by increased commodities cost, partially offset by price increases and shifts in customer and product mix towards higher performance FlashArray and FlashBlade. As anticipated during our last call, the revenue contribution from our hyperscale business in Q1 was minimal, and we continue to expect the significant majority of hyperscaler revenues in H2 of fiscal year 2027. Turning to margins and profitability, total gross margin was 70.1%, while subscription services margin was 75.6%. turning to margins and profitability total gross margin was 70.1% while subscription services margin was 75.6% Product gross margin stood at 65.5%, in line with our long-term range of 65%- 70%, representing an increase of 150 basis points year-over-year and a decrease of 180 basis points sequentially. product gross margin stood at 65.5% in line with our long-term range of 65%- 70% representing an increase of 150 basis points year-over-year and a decrease of 180 basis points sequentially As foreshadowed in our Q4 earnings call, the sequential change in product gross margin was primarily driven by increased commodities cost, partially offset by price increases and shifts in customer and product mix towards higher performance FlashArray and FlashBlade. as foreshadowed in our q4 earnings call the sequential change in product gross margin was primarily driven by increased commodities cost partially offset by price increases and shifts in customer and product mix towards higher performance flasharray and flashblade As anticipated during our last call, the revenue contribution from our hyperscale business in Q1 was minimal, and we continue to expect the significant majority of hyperscaler revenues in H2 of fiscal year 2027. as anticipated during our last call the revenue contribution from our hyperscale business in q1 was minimal and we continue to expect the significant majority of hyperscaler revenues in h2 of fiscal year 2027 We expect aggregate product gross margins to improve in the second half of the year, supported by the contribution from hyperscaler revenues, which we expect to yield 75%-85% gross margins. However, the recovery of product gross margin, excluding the contribution from hyperscalers, is expected to be gradual as pricing actions continue to catch up with ongoing volatile and rapidly rising input costs. Operating profit of $159 million grew over 90% year-over-year, resulting in an operating margin of 15.1%. Strong revenue growth and operational discipline drove this excellent performance. Moving on to our subscription business, Q1 subscription services revenue of $476 million increased 17% year-over-year, accounting for 45% of total revenue. Our annual recurring revenue, or ARR, grew 19% to over $2 billion, which represents a sequential acceleration of nearly 300 basis points from Q4 2026 growth levels. We expect aggregate product gross margins to improve in the second half of the year, supported by the contribution from hyperscaler revenues, which we expect to yield 75%-85% gross margins. we expect aggregate product gross margins to improve in the second half of the year supported by the contribution from hyperscaler revenues which we expect to yield 75%-85% gross margins However, the recovery of product gross margin, excluding the contribution from hyperscalers, is expected to be gradual as pricing actions continue to catch up with ongoing volatile and rapidly rising input costs. however the recovery of product gross margin excluding the contribution from hyperscalers is expected to be gradual as pricing actions continue to catch up with ongoing volatile and rapidly rising input costs Operating profit of $159 million grew over 90% year-over-year, resulting in an operating margin of 15.1%. operating profit of $159 million grew over 90% year-over-year resulting in an operating margin of 15.1% Strong revenue growth and operational discipline drove this excellent performance. strong revenue growth and operational discipline drove this excellent performance Moving on to our subscription business, Q1 subscription services revenue of $476 million increased 17% year-over-year, accounting for 45% of total revenue. moving on to our subscription business q1 subscription services revenue of $476 million increased 17% year-over-year accounting for 45% of total revenue Our annual recurring revenue, or ARR, grew 19% to over $2 billion, which represents a sequential acceleration of nearly 300 basis points from Q4 2026 growth levels. our annual recurring revenue or arr grew 19% to over $2 billion which represents a sequential acceleration of nearly 300 basis points from q4 2026 growth levels Consistent with last quarter, our remaining performance obligations, or RPO, grew 41% to $3.8 billion, driven by the execution of large deals and strength of our Evergreen//Forever and Evergreen//One offerings. TCV sales for our storage-as-a-service offerings of $165 million grew 73% year-over-year. The recent supply chain pricing environment has reinforced the value proposition of our Evergreen//One storage-as-a-service offering, which has experienced significantly lower price increases compared to traditional product sales. Evergreen//One benefits from longer-term contracts, reduced upfront costs, and extended asset life cycles, enabling us to spread costs over multiple years and deliver more predictable, cost-efficient operating models for customers driving strong year-over-year growth momentum. With respect to our geographic mix of revenues, U.S. revenue was $739 million, growing 39%. International revenue was $314 million, growing 27% year-over-year. International revenue represented 30% of total revenue in Q1 2027. Consistent with last quarter, our remaining performance obligations, or RPO, grew 41% to $3.8 billion, driven by the execution of large deals and strength of our Evergreen//Forever and Evergreen//One offerings. consistent with last quarter our remaining performance obligations or rpo grew 41% to $3.8 billion driven by the execution of large deals and strength of our evergreen//forever and evergreen//one offerings TCV sales for our storage-as-a-service offerings of $165 million grew 73% year-over-year. tcv sales for our storage-as-a-service offerings of $165 million grew 73% year-over-year The recent supply chain pricing environment has reinforced the value proposition of our Evergreen//One storage-as-a-service offering, which has experienced significantly lower price increases compared to traditional product sales. the recent supply chain pricing environment has reinforced the value proposition of our evergreen//one storage-as-a-service offering which has experienced significantly lower price increases compared to traditional product sales Evergreen//One benefits from longer-term contracts, reduced upfront costs, and extended asset life cycles, enabling us to spread costs over multiple years and deliver more predictable, cost-efficient operating models for customers driving strong year-over-year growth momentum. evergreen//one benefits from longer-term contracts reduced upfront costs and extended asset life cycles enabling us to spread costs over multiple years and deliver more predictable cost-efficient operating models for customers driving strong year-over-year growth momentum With respect to our geographic mix of revenues, U.S. revenue was $739 million, growing 39%. with respect to our geographic mix of revenues u.s revenue was $739 million growing 39% International revenue was $314 million, growing 27% year-over-year. international revenue was $314 million growing 27% year-over-year International revenue represented 30% of total revenue in Q1 2027. international revenue represented 30% of total revenue in q1 2027 Scaling our international presence represents a significant opportunity and a key strategic focus for the company. Moving on to our balance sheet. Our balance sheet remains robust with over $1.5 billion in cash and investments at the end of the quarter. Cash flow from operations was $180 million impacted by elevated sales activity, including higher commission payments pertaining to Q4 over-achievement driven by the strong demand environment, as well as merit bonus payments. Capital investments were $68 million, representing approximately 6.5% of revenue for the quarter. Our capital investments supported the continued scaling of our hyperscale business as we ramp up investments to qualify more NAND for various hyperscalers, tech titans, and cloud providers, and accelerate growth of our Evergreen//One subscription offering. As a result, free cash flow was $112 million. In Q1, we repurchased 1.3 million shares, returning approximately $84 million to shareholders. Scaling our international presence represents a significant opportunity and a key strategic focus for the company. scaling our international presence represents a significant opportunity and a key strategic focus for the company Moving on to our balance sheet. moving on to our balance sheet Our balance sheet remains robust with over $1.5 billion in cash and investments at the end of the quarter. our balance sheet remains robust with over $1.5 billion in cash and investments at the end of the quarter Cash flow from operations was $180 million impacted by elevated sales activity, including higher commission payments pertaining to Q4 over-achievement driven by the strong demand environment, as well as merit bonus payments. cash flow from operations was $180 million impacted by elevated sales activity including higher commission payments pertaining to q4 over-achievement driven by the strong demand environment as well as merit bonus payments Capital investments were $68 million, representing approximately 6.5% of revenue for the quarter. capital investments were $68 million representing approximately 6.5% of revenue for the quarter Our capital investments supported the continued scaling of our hyperscale business as we ramp up investments to qualify more NAND for various hyperscalers, tech titans, and cloud providers, and accelerate growth of our Evergreen//One subscription offering. our capital investments supported the continued scaling of our hyperscale business as we ramp up investments to qualify more nand for various hyperscalers tech titans and cloud providers and accelerate growth of our evergreen//one subscription offering As a result, free cash flow was $112 million. as a result free cash flow was $112 million In Q1, we repurchased 1.3 million shares, returning approximately $84 million to shareholders. in q1 we repurchased 1.3 million shares returning approximately $84 million to shareholders We also paid $101 million in withholding taxes on employees' awards, offsetting dilution of approximately 1.6 million shares. We currently have about $245 million remaining under our existing $400 million repurchase authorization announced in Q4 of fiscal year 2026. Finally, our headcount increased sequentially by 211 employees, bringing our total headcount to 6,600 employees. Turning on to guidance. As I mentioned earlier, a portion of this year's strength come from the current supply chain environment. The sudden sharp and continuing rise in the cost of components has forced the entire high-tech industry to raise prices. Price increases have led to higher sales per unit and customer pull-ins to buy ahead of future price increases. We estimate that these two effects represented nearly a third of our Q1 year-on-year revenue growth and will continue to drive performance in future quarters this year. We also paid $101 million in withholding taxes on employees' awards, offsetting dilution of approximately 1.6 million shares. we also paid $101 million in withholding taxes on employees' awards offsetting dilution of approximately 1.6 million shares We currently have about $245 million remaining under our existing $400 million repurchase authorization announced in Q4 of fiscal year 2026. we currently have about $245 million remaining under our existing $400 million repurchase authorization announced in q4 of fiscal year 2026 Finally, our headcount increased sequentially by 211 employees, bringing our total headcount to 6,600 employees. finally our headcount increased sequentially by 211 employees bringing our total headcount to 6,600 employees Turning on to guidance. turning on to guidance As I mentioned earlier, a portion of this year's strength come from the current supply chain environment. as i mentioned earlier a portion of this year's strength come from the current supply chain environment The sudden sharp and continuing rise in the cost of components has forced the entire high-tech industry to raise prices. the sudden sharp and continuing rise in the cost of components has forced the entire high-tech industry to raise prices Price increases have led to higher sales per unit and customer pull-ins to buy ahead of future price increases. price increases have led to higher sales per unit and customer pull-ins to buy ahead of future price increases We estimate that these two effects represented nearly a third of our Q1 year-on-year revenue growth and will continue to drive performance in future quarters this year. we estimate that these two effects represented nearly a third of our q1 year-on-year revenue growth and will continue to drive performance in future quarters this year The strength of our Q1 results, good short-term pipeline visibility in Q2, and continued momentum we are seeing across our customer base gives us confidence to increase our full-year guidance. For Q2, we anticipate revenue to be in the range of $1.095 billion-$1.105 billion, representing approximately a 28% year-over-year increase at the midpoint. We expect operating profit to be in the range of $195 million-$205 million, representing approximately a 54% year-over-year increase at the midpoint. Again, I would like to remind everyone that we continue to expect hyperscale product revenue to rise significantly in Q3 and Q4 based on customer order commitments. Consequently, for fiscal year 2027, we anticipate revenue to be in the range of $4.41 billion-$4.51 billion, representing a 22% year-over-year increase at the midpoint. This is a 300-basis points increase from our previously provided revenue guidance of 19% year-over-year growth. The strength of our Q1 results, good short-term pipeline visibility in Q2, and continued momentum we are seeing across our customer base gives us confidence to increase our full-year guidance. the strength of our q1 results good short-term pipeline visibility in q2 and continued momentum we are seeing across our customer base gives us confidence to increase our full-year guidance For Q2, we anticipate revenue to be in the range of $1.095 billion-$1.105 billion, representing approximately a 28% year-over-year increase at the midpoint. for q2 we anticipate revenue to be in the range of $1.095 billion-$1.105 billion representing approximately a 28% year-over-year increase at the midpoint We expect operating profit to be in the range of $195 million-$205 million, representing approximately a 54% year-over-year increase at the midpoint. we expect operating profit to be in the range of $195 million-$205 million representing approximately a 54% year-over-year increase at the midpoint Again, I would like to remind everyone that we continue to expect hyperscale product revenue to rise significantly in Q3 and Q4 based on customer order commitments. again i would like to remind everyone that we continue to expect hyperscale product revenue to rise significantly in q3 and q4 based on customer order commitments Consequently, for fiscal year 2027, we anticipate revenue to be in the range of $4.41 billion-$4.51 billion, representing a 22% year-over-year increase at the midpoint. consequently for fiscal year 2027 we anticipate revenue to be in the range of $4.41 billion-$4.51 billion representing a 22% year-over-year increase at the midpoint This is a 300-basis points increase from our previously provided revenue guidance of 19% year-over-year growth. this is a 300-basis points increase from our previously provided revenue guidance of 19% year-over-year growth We expect operating profit to be in the range of $820 million-$860 million, representing approximately a 32% year-over-year increase at the midpoint. This is more than 600 basis points increase from our prior provided operating profit guidance. In terms of seasonality, we entered fiscal year 2027 with very strong momentum and are executing extremely well in a difficult supply chain environment. The current full-year guide indicates that 48% of our revenues will be generated in H1 2027, compared to 45% in prior years. I would like to finish by saying that our execution focus is a balancing act between short-term pipeline generation to improve visibility and drive sales on a quarterly basis while keeping an eye on sustainability of demand in H2 of fiscal year 2027 and beyond. We expect operating profit to be in the range of $820 million-$860 million, representing approximately a 32% year-over-year increase at the midpoint. we expect operating profit to be in the range of $820 million-$860 million representing approximately a 32% year-over-year increase at the midpoint This is more than 600 basis points increase from our prior provided operating profit guidance. this is more than 600 basis points increase from our prior provided operating profit guidance In terms of seasonality, we entered fiscal year 2027 with very strong momentum and are executing extremely well in a difficult supply chain environment. in terms of seasonality we entered fiscal year 2027 with very strong momentum and are executing extremely well in a difficult supply chain environment The current full-year guide indicates that 48% of our revenues will be generated in H1 2027, compared to 45% in prior years. the current full-year guide indicates that 48% of our revenues will be generated in h1 2027 compared to 45% in prior years I would like to finish by saying that our execution focus is a balancing act between short-term pipeline generation to improve visibility and drive sales on a quarterly basis while keeping an eye on sustainability of demand in H2 of fiscal year 2027 and beyond. i would like to finish by saying that our execution focus is a balancing act between short-term pipeline generation to improve visibility and drive sales on a quarterly basis while keeping an eye on sustainability of demand in h2 of fiscal year 2027 and beyond As Charlie said, we're not looking to profiteer from this crisis and have been prudent with our price increases and consistent with terms and conditions offered to customers in order to continue to enhance our market share and protect the franchise for the long term. In normal circumstances, such strong momentum in first half revenue in our core enterprise and commercial business would drive a higher full-year guide with a seasonality akin to prior years. In today's highly dynamic environment, it is too early to call for further upside to our guide in the second half of fiscal year 2027 as market participants adjust to price levels that are unprecedented globally. We continue to be confident in our ability to execute our priorities this year and beyond. With that, I'll now turn the call back to Paul for Q&A. As Charlie said, we're not looking to profiteer from this crisis and have been prudent with our price increases and consistent with terms and conditions offered to customers in order to continue to enhance our market share and protect the franchise for the long term. as charlie said we're not looking to profiteer from this crisis and have been prudent with our price increases and consistent with terms and conditions offered to customers in order to continue to enhance our market share and protect the franchise for the long term In normal circumstances, such strong momentum in first half revenue in our core enterprise and commercial business would drive a higher full-year guide with a seasonality akin to prior years. in normal circumstances such strong momentum in first half revenue in our core enterprise and commercial business would drive a higher full-year guide with a seasonality akin to prior years In today's highly dynamic environment, it is too early to call for further upside to our guide in the second half of fiscal year 2027 as market participants adjust to price levels that are unprecedented globally. in today's highly dynamic environment it is too early to call for further upside to our guide in the second half of fiscal year 2027 as market participants adjust to price levels that are unprecedented globally We continue to be confident in our ability to execute our priorities this year and beyond. we continue to be confident in our ability to execute our priorities this year and beyond With that, I'll now turn the call back to Paul for Q&A. with that i'll now turn the call back to paul for q&a

Speaker 15: Thanks, Tarek. Before we begin the Q&A session, I will ask you to please limit yourselves to one question consisting of one part, so we can get to as many people as possible. If you have additional questions, we kindly ask that you please rejoin the queue, and we will be happy to take those additional questions as time allows. Operator, let's get started. Thanks, Tarek. thanks tarek Before we begin the Q&A session, I will ask you to please limit yourselves to one question consisting of one part, so we can get to as many people as possible. before we begin the q&a session i will ask you to please limit yourselves to one question consisting of one part so we can get to as many people as possible If you have additional questions, we kindly ask that you please rejoin the queue, and we will be happy to take those additional questions as time allows. if you have additional questions we kindly ask that you please rejoin the queue and we will be happy to take those additional questions as time allows Operator, let's get started. operator let's get started

Speaker 13: Thank you. If you would like to ask a question please press star followed by one on your telephone keypad. If for any reason you would like to remove a question, press star followed by one. Again to ask a question, press star one. As a reminder if you are using a speaker phone remember to pick up your headset before asking a question. We will pause here briefly as question are registered. Our first question comes from Amit Daryanani from Evercore. Please go ahead. Your line is open. Thank you. If you would like to ask a question please press star followed by one on your telephone keypad. If for any reason you would like to remove a question, press star followed by one. Again to ask a question, press star one. As a reminder if you are using a speaker phone remember to pick up your headset before asking a question. We will pause here briefly as question are registered. Our first question comes from Amit Daryanani from Evercore. thank you. if you would like to ask a question please press star followed by one on your telephone keypad. if for any reason you would like to remove a question, press star followed by one. again to ask a question, press star one. as a reminder if you are using a speaker phone remember to pick up your headset before asking a question. we will pause here briefly as question are registered. our first question comes from amit daryanani from evercore Please go ahead. please go ahead Your line is open. your line is open

Speaker 2: Yep. Good afternoon, everyone. Thanks for taking my question. I guess, given the strong 35% growth we saw in Q1 and the guidance plus 28% growth in Q2, could you spend some time about how should we think about the demand trajectory in the back half of the year? Really, when I think about your guidance framework, it implies a bit of a natural deceleration in 2H, or are you simply embedding more conservatism given the current component pricing and maybe even the timing of some of the AI infrastructure deployments that are happening? If you just spend a little bit of time on the back half dynamic, that would be helpful. Thank you. Yep. yep Good afternoon, everyone. good afternoon everyone Thanks for taking my question. thanks for taking my question I guess, given the strong 35% growth we saw in Q1 and the guidance plus 28% growth in Q2, could you spend some time about how should we think about the demand trajectory in the back half of the year? i guess given the strong 35% growth we saw in q1 and the guidance plus 28% growth in q2 could you spend some time about how should we think about the demand trajectory in the back half of the year Really, when I think about your guidance framework, it implies a bit of a natural deceleration in 2H, or are you simply embedding more conservatism given the current component pricing and maybe even the timing of some of the AI infrastructure deployments that are happening? really when i think about your guidance framework it implies a bit of a natural deceleration in 2h or are you simply embedding more conservatism given the current component pricing and maybe even the timing of some of the ai infrastructure deployments that are happening If you just spend a little bit of time on the back half dynamic, that would be helpful. if you just spend a little bit of time on the back half dynamic that would be helpful Thank you. thank you

Speaker 4: Amit, thanks for the question. Hope you're well. Look, the second half of the year is, frankly, in this environment, this is a very dynamic environment. It's dynamic on the supply chain side. Obviously, pricing has been very dynamic, and it frankly changes almost every week. Being able to have high visibility into the second half of the year, I think, is somewhat unrealistic to anyone's calendar. What I will say is we saw very strong demand, as you can see in the first quarter. We continue to see strong demand now. The two things that frankly we'd want to see before raising guidance, one of which is will demand continue given these historically high prices, or will we start to see some demand destruction? We don't know. The second is the supply environment, which is very unstable. Amit, thanks for the question. amit thanks for the question Hope you're well. hope you're well Look, the second half of the year is, frankly, in this environment, this is a very dynamic environment. look the second half of the year is frankly in this environment this is a very dynamic environment It's dynamic on the supply chain side. it's dynamic on the supply chain side Obviously, pricing has been very dynamic, and it frankly changes almost every week. obviously pricing has been very dynamic and it frankly changes almost every week Being able to have high visibility into the second half of the year, I think, is somewhat unrealistic to anyone's calendar. being able to have high visibility into the second half of the year i think is somewhat unrealistic to anyone's calendar What I will say is we saw very strong demand, as you can see in the first quarter. what i will say is we saw very strong demand as you can see in the first quarter We continue to see strong demand now. we continue to see strong demand now The two things that frankly we'd want to see before raising guidance, one of which is will demand continue given these historically high prices, or will we start to see some demand destruction? the two things that frankly we'd want to see before raising guidance one of which is will demand continue given these historically high prices or will we start to see some demand destruction We don't know. we don't know The second is the supply environment, which is very unstable. the second is the supply environment which is very unstable There are a lot of shortages, and we have to be able to ship what we promise and make sure that we have the supply to do that, and that is a full-time job at the moment. I think it's more a matter of not knowing what the second half of the year has in store for us, despite the fact that we are seeing very good demand at the moment. There are a lot of shortages, and we have to be able to ship what we promise and make sure that we have the supply to do that, and that is a full-time job at the moment. there are a lot of shortages and we have to be able to ship what we promise and make sure that we have the supply to do that and that is a full-time job at the moment I think it's more a matter of not knowing what the second half of the year has in store for us, despite the fact that we are seeing very good demand at the moment. i think it's more a matter of not knowing what the second half of the year has in store for us despite the fact that we are seeing very good demand at the moment

Speaker 15: Thank you, Amit. Next question, please. Thank you, Amit. thank you amit Next question, please. next question please

Speaker 13: Our next question comes from Aaron Rakers from Wells Fargo. Please go ahead. Your line is open. Our next question comes from Aaron Rakers from Wells Fargo. our next question comes from aaron rakers from wells fargo Please go ahead. please go ahead Your line is open. your line is open

Speaker 16: Hi, this is Richard Strifeler on for Aaron. I was just wondering, with the rapidly increasing context windows and tokenomics now becoming top of mind for many workloads and Everpure innovating in the granular prompt caching, what indications of KV cache moving to SSD storage have you seen thus far? Can you help us better understand the conversations you're having with customers on this dynamic? Hi, this is Richard Strifeler on for Aaron. hi this is richard strifeler on for aaron I was just wondering, with the rapidly increasing context windows and tokenomics now becoming top of mind for many workloads and Everpure innovating in the granular prompt caching, what indications of KV cache moving to SSD storage have you seen thus far? i was just wondering with the rapidly increasing context windows and tokenomics now becoming top of mind for many workloads and everpure innovating in the granular prompt caching what indications of kv cache moving to ssd storage have you seen thus far Can you help us better understand the conversations you're having with customers on this dynamic? can you help us better understand the conversations you're having with customers on this dynamic

Speaker 17: Yeah, absolutely, Richard. This is Rob. I'll take that question. Look, I think the entire space of inference and technologies that support inference continues to evolve. We continue to be supporting leading customers in this space as well as NVIDIA and other ecosystem partners that are driving innovation here. I think as we look at the increase in context windows and what that's driving in terms of memory and storage, overall, the more tokens, the more data you try to process, the more context you need to assemble. Yeah, absolutely, Richard. yeah absolutely richard This is Rob. this is rob I'll take that question. i'll take that question Look, I think the entire space of inference and technologies that support inference continues to evolve. look i think the entire space of inference and technologies that support inference continues to evolve We continue to be supporting leading customers in this space as well as NVIDIA and other ecosystem partners that are driving innovation here. we continue to be supporting leading customers in this space as well as nvidia and other ecosystem partners that are driving innovation here I think as we look at the increase in context windows and what that's driving in terms of memory and storage, overall, the more tokens, the more data you try to process, the more context you need to assemble. i think as we look at the increase in context windows and what that's driving in terms of memory and storage overall the more tokens the more data you try to process the more context you need to assemble We do see that as driving more demand of memory, both in the GPU servers, remote memory, remote storage, and that's a large part of our partnership with NVIDIA, our solutions that we've developed around NVIDIA technology such as KV caching, as well as future plans and product roadmaps that look at where the expansion of context memory is likely to go in the future. We do see that as driving more demand of memory, both in the GPU servers, remote memory, remote storage, and that's a large part of our partnership with NVIDIA, our solutions that we've developed around NVIDIA technology such as KV caching, as well as future plans and product roadmaps that look at where the expansion of context memory is likely to go in the future. we do see that as driving more demand of memory both in the gpu servers remote memory remote storage and that's a large part of our partnership with nvidia our solutions that we've developed around nvidia technology such as kv caching as well as future plans and product roadmaps that look at where the expansion of context memory is likely to go in the future

Speaker 15: Thank you, Richard. Next question, please. Thank you, Richard. thank you richard Next question, please. next question please

Speaker 13: Our next question comes from Howard Ma from Guggenheim Securities. Please go ahead. Your line is open. Our next question comes from Howard Ma from Guggenheim Securities. our next question comes from howard ma from guggenheim securities Please go ahead. please go ahead Your line is open. your line is open

Speaker 8: Great. Thanks. I want to congratulate you all on a really strong quarter. My question is for Tarek. You said that hyperscaler shipments or the ramp in Q3 and Q4 is based on customer order commitments. Can you quantify what's actually contracted versus forecasted in the full-year guide, and could the supply shortages result in higher shipments at a higher ASP to your lead hyperscaler than you expected before? Great. great Thanks. thanks I want to congratulate you all on a really strong quarter. i want to congratulate you all on a really strong quarter My question is for Tarek. my question is for tarek You said that hyperscaler shipments or the ramp in Q3 and Q4 is based on customer order commitments. you said that hyperscaler shipments or the ramp in q3 and q4 is based on customer order commitments Can you quantify what's actually contracted versus forecasted in the full-year guide, and could the supply shortages result in higher shipments at a higher ASP to your lead hyperscaler than you expected before? can you quantify what's actually contracted versus forecasted in the full-year guide and could the supply shortages result in higher shipments at a higher asp to your lead hyperscaler than you expected before

Speaker 20: We don't. Howard, thanks for the question. We don't quantify specifically the revenues that we will derive from hyperscalers. These are really based on customer order commitments that were agreed before the beginning of this fiscal year. We are on track for that. We feel very good about the prospects of our hyperscaler business. Let me reiterate to you what we said at the end of our Q4 during our earnings call. We do feel very comfortable with the prospects of this business in fiscal year 2027 and beyond, and we expect a multiple of the revenues we generated in 2026 to be realized in fiscal year 2027. We don't. we don't Howard, thanks for the question. howard thanks for the question We don't quantify specifically the revenues that we will derive from hyperscalers. we don't quantify specifically the revenues that we will derive from hyperscalers These are really based on customer order commitments that were agreed before the beginning of this fiscal year. these are really based on customer order commitments that were agreed before the beginning of this fiscal year We are on track for that. we are on track for that We feel very good about the prospects of our hyperscaler business. we feel very good about the prospects of our hyperscaler business Let me reiterate to you what we said at the end of our Q4 during our earnings call. let me reiterate to you what we said at the end of our q4 during our earnings call We do feel very comfortable with the prospects of this business in fiscal year 2027 and beyond, and we expect a multiple of the revenues we generated in 2026 to be realized in fiscal year 2027. we do feel very comfortable with the prospects of this business in fiscal year 2027 and beyond and we expect a multiple of the revenues we generated in 2026 to be realized in fiscal year 2027

Speaker 15: Thank you, Howard. Next question, please. Thank you, Howard. thank you howard Next question, please. next question please

Speaker 13: Our next question comes from Mike Cikos from Needham & Company. Please go ahead. Your line is open. Our next question comes from Mike Cikos from Needham & Company. our next question comes from mike cikos from needham & company Please go ahead. please go ahead Your line is open. your line is open

Speaker 11: Hey, guys. This is [Matt Calitri] for Mike Cikos over at Needham. Thanks for taking our question. Hey, guys. hey guys This is [Matt Calitri] for Mike Cikos over at Needham. this is [matt calitri] for mike cikos over at needham Thanks for taking our question. thanks for taking our question We're curious on what you're seeing regarding customer reaction to the Evergreen//One price increases. Are customers still viewing SaaS as advantageous to CapEx outlays and signing larger deals, or are they more hesitant around watching their spend? We're curious on what you're seeing regarding customer reaction to the Evergreen//One price increases. we're curious on what you're seeing regarding customer reaction to the evergreen//one price increases Are customers still viewing SaaS as advantageous to CapEx outlays and signing larger deals, or are they more hesitant around watching their spend? are customers still viewing saas as advantageous to capex outlays and signing larger deals or are they more hesitant around watching their spend

Speaker 4: No, as you might have picked up. Sorry, Matt. This is Charlie. What you might have picked up from my dialogue is that Evergreen//One orders were up higher than the overall company revenues, up a little bit higher than the CapEx side. Actually, I'm not seeing as much uptake as I would have predicted because actually the economics of Evergreen//One are even better in this very high pricing supply chain environment. Largely because it's a long-term contract for us, we get to blend the costs over many years, including many years prior to today. The customer doesn't have to buy as much early on. They only have to buy what they need rather than what they think they're going to need several years from now. It's a great economic deal. We are seeing increasing, that was proven this quarter. No, as you might have picked up. no as you might have picked up Sorry, Matt. sorry matt This is Charlie. this is charlie What you might have picked up from my dialogue is that Evergreen//One orders were up higher than the overall company revenues, up a little bit higher than the CapEx side. what you might have picked up from my dialogue is that evergreen//one orders were up higher than the overall company revenues up a little bit higher than the capex side Actually, I'm not seeing as much uptake as I would have predicted because actually the economics of Evergreen//One are even better in this very high pricing supply chain environment. actually i'm not seeing as much uptake as i would have predicted because actually the economics of evergreen//one are even better in this very high pricing supply chain environment Largely because it's a long-term contract for us, we get to blend the costs over many years, including many years prior to today. largely because it's a long-term contract for us we get to blend the costs over many years including many years prior to today The customer doesn't have to buy as much early on. the customer doesn't have to buy as much early on They only have to buy what they need rather than what they think they're going to need several years from now. they only have to buy what they need rather than what they think they're going to need several years from now It's a great economic deal. it's a great economic deal We are seeing increasing, that was proven this quarter. we are seeing increasing that was proven this quarter I expect as we go forward, we'll see it grow even more, relative to the CapEx purchase. I expect as we go forward, we'll see it grow even more, relative to the CapEx purchase. i expect as we go forward we'll see it grow even more relative to the capex purchase

Speaker 20: Let me add to what Charlie has said. Evergreen//One is incredibly attractive value proposition in the current environment where, as Charlie said, customers buy only what they need. I'd like to point out to the fact that we increased prices on our traditional CapEx products, just below what the competitors have done, but we increased far less our pricing on Evergreen//One, which makes it very attractive. We are making significant CapEx investments to support our Evergreen//One business. We have very strong demand for the business as it stands. Let me add to what Charlie has said. let me add to what charlie has said Evergreen//One is incredibly attractive value proposition in the current environment where, as Charlie said, customers buy only what they need. evergreen//one is incredibly attractive value proposition in the current environment where as charlie said customers buy only what they need I'd like to point out to the fact that we increased prices on our traditional CapEx products, just below what the competitors have done, but we increased far less our pricing on Evergreen//One, which makes it very attractive. i'd like to point out to the fact that we increased prices on our traditional capex products just below what the competitors have done but we increased far less our pricing on evergreen//one which makes it very attractive We are making significant CapEx investments to support our Evergreen//One business. we are making significant capex investments to support our evergreen//one business We have very strong demand for the business as it stands. we have very strong demand for the business as it stands

Speaker 15: Thank you, Matt. Next question, please. Thank you, Matt. thank you matt Next question, please. next question please

Speaker 13: Our next question comes from Krish Sankar from TD Cowen. Please go ahead. Your line is open. Our next question comes from Krish Sankar from TD Cowen. our next question comes from krish sankar from td cowen Please go ahead. please go ahead Your line is open. your line is open

Speaker 9: Yeah. Hi, thanks for taking my question. I have a question for Charlie. I'm just going to be curious, there's a lot of talk about enterprises adopting agentic AI and things like that, and yet when I look at your revenue, if you back out the price increase from February, not quite seen an inflection. I'm kind of curious, where are we on the enterprise AI adoption cycle? Is it imminent? Is it happening? Is it more like a next year thing? Any kind of comment on that would be very helpful. Thanks. Yeah. yeah Hi, thanks for taking my question. hi thanks for taking my question I have a question for Charlie. i have a question for charlie I'm just going to be curious, there's a lot of talk about enterprises adopting agentic AI and things like that, and yet when I look at your revenue, if you back out the price increase from February, not quite seen an inflection. i'm just going to be curious there's a lot of talk about enterprises adopting agentic ai and things like that and yet when i look at your revenue if you back out the price increase from february not quite seen an inflection I'm kind of curious, where are we on the enterprise AI adoption cycle? i'm kind of curious where are we on the enterprise ai adoption cycle Is it imminent? is it imminent Is it happening? is it happening Is it more like a next year thing? is it more like a next year thing Any kind of comment on that would be very helpful. any kind of comment on that would be very helpful Thanks. thanks

Speaker 4: I would say that the vast majority of the enterprise AI purchase cycle is still in the cloud. There's a lot of adoption, but not a lot of development of their own native hardware capabilities on-prem, and I think for very good reason. Secondly, I would say, I'm speaking about traditional enterprise, I would say in certainly sovereign clouds, in tech titans, there is a lot of on-prem development. Relatively little, you might see it somewhat in the high-end banking, a bit in the automotive industry and in pharma. Outside of that, it's very low. I would say that the vast majority of the enterprise AI purchase cycle is still in the cloud. i would say that the vast majority of the enterprise ai purchase cycle is still in the cloud There's a lot of adoption, but not a lot of development of their own native hardware capabilities on-prem, and I think for very good reason. there's a lot of adoption but not a lot of development of their own native hardware capabilities on-prem and i think for very good reason Secondly, I would say, I'm speaking about traditional enterprise, I would say in certainly sovereign clouds, in tech titans, there is a lot of on-prem development. secondly i would say i'm speaking about traditional enterprise i would say in certainly sovereign clouds in tech titans there is a lot of on-prem development Relatively little, you might see it somewhat in the high-end banking, a bit in the automotive industry and in pharma. relatively little you might see it somewhat in the high-end banking a bit in the automotive industry and in pharma Outside of that, it's very low. outside of that it's very low

Speaker 17: Krish, this is Rob, just to add on to what Charlie said. I think that in the enterprise at this point, most of the initial uptake is in the cloud or SaaS-based or hosted. That said, for enterprises that are operating AI on-prem, we're seeing them being able to take advantage of our existing solutions and we don't see enterprise AI deployment on-prem necessarily as creating a whole new storage environment, right? We want to be able to serve that environment. We are serving that environment with our standard product today. That's a large part of our sales motion as we go and speak with enterprise customers who are early on the journey of AI adoption, which is that AI doesn't require dedicated storage infrastructure to serve within the enterprise environment. Krish, this is Rob, just to add on to what Charlie said. krish this is rob just to add on to what charlie said I think that in the enterprise at this point, most of the initial uptake is in the cloud or SaaS-based or hosted. i think that in the enterprise at this point most of the initial uptake is in the cloud or saas-based or hosted That said, for enterprises that are operating AI on-prem, we're seeing them being able to take advantage of our existing solutions and we don't see enterprise AI deployment on-prem necessarily as creating a whole new storage environment, right? that said for enterprises that are operating ai on-prem we're seeing them being able to take advantage of our existing solutions and we don't see enterprise ai deployment on-prem necessarily as creating a whole new storage environment right We want to be able to serve that environment. we want to be able to serve that environment We are serving that environment with our standard product today. we are serving that environment with our standard product today That's a large part of our sales motion as we go and speak with enterprise customers who are early on the journey of AI adoption, which is that AI doesn't require dedicated storage infrastructure to serve within the enterprise environment. that's a large part of our sales motion as we go and speak with enterprise customers who are early on the journey of ai adoption which is that ai doesn't require dedicated storage infrastructure to serve within the enterprise environment

Speaker 15: Thank you, Krish. Next question, please. Thank you, Krish. thank you krish Next question, please. next question please

Speaker 13: Our next question comes from Samik Chatterjee from JPMorgan. Please go ahead, your line is open. Our next question comes from Samik Chatterjee from JP Morgan. our next question comes from samik chatterjee from jp morgan Please go ahead, your line is open. please go ahead your line is open

Speaker 18: Hi, thanks for taking my question. Charlie, if I can go back to your comments about visibility into the second half and reasons to sort of, not try to really talk, have a great view on demand just yet for the second half. Maybe if you can talk about the pipeline that you have, how far does it extend in terms of the pipeline you're looking at? In terms of the pipeline, are you seeing what actions you're taking on pricing with your customers, where you're dealing as well as taking lower pricing than some of your competitors? Is that leading to any share gain in the pipeline as well? Thank you. Hi, thanks for taking my question. hi thanks for taking my question Charlie, if I can go back to your comments about visibility into the second half and reasons to sort of, not try to really talk, have a great view on demand just yet for the second half. charlie if i can go back to your comments about visibility into the second half and reasons to sort of not try to really talk have a great view on demand just yet for the second half Maybe if you can talk about the pipeline that you have, how far does it extend in terms of the pipeline you're looking at? maybe if you can talk about the pipeline that you have how far does it extend in terms of the pipeline you're looking at In terms of the pipeline, are you seeing what actions you're taking on pricing with your customers, where you're dealing as well as taking lower pricing than some of your competitors? in terms of the pipeline are you seeing what actions you're taking on pricing with your customers where you're dealing as well as taking lower pricing than some of your competitors Is that leading to any share gain in the pipeline as well? is that leading to any share gain in the pipeline as well Thank you. thank you

Speaker 4: Well, yeah, we won't know fully until the analysts come out with their reports in another month or two time. However, if you take the one third that we identified, you can see that, yeah, we're growing well in the 20s without the effect of pricing or pull-ins. We think that is a clear signal that we are picking up share. Also, our win rates are significantly higher over the last couple of quarters. That started before the price increases as well. I think these are positive signs that we are picking up market share. Well, yeah, we won't know fully until the analysts come out with their reports in another month or two time. well yeah we won't know fully until the analysts come out with their reports in another month or two time However, if you take the one third that we identified, you can see that, yeah, we're growing well in the 20s without the effect of pricing or pull-ins. however if you take the one third that we identified you can see that yeah we're growing well in the 20s without the effect of pricing or pull-ins We think that is a clear signal that we are picking up share. we think that is a clear signal that we are picking up share Also, our win rates are significantly higher over the last couple of quarters. also our win rates are significantly higher over the last couple of quarters That started before the price increases as well. that started before the price increases as well I think these are positive signs that we are picking up market share. i think these are positive signs that we are picking up market share

Speaker 15: Thank you, Samik. Next question, please. Thank you, Samik. thank you samik Next question, please. next question please

Speaker 13: Our next question comes from James Fish from Piper Sandler. Please go ahead. Your line is open. Our next question comes from James Fish from Piper Sandler. our next question comes from james fish from piper sandler Please go ahead. please go ahead Your line is open. your line is open

Speaker 21: Hi, guys. This is Tim Shoop, down for James Fish. Thanks for taking our questions. Just kind of going off of the competitive win rates that you had mentioned, can you just speak a little bit to what you're seeing from the competitive landscape, and how the competitive dynamic may have changed recently? Thank you so much. Hi, guys. hi guys This is Tim Shoop, down for James Fish. this is tim shoop down for james fish Thanks for taking our questions. thanks for taking our questions Just kind of going off of the competitive win rates that you had mentioned, can you just speak a little bit to what you're seeing from the competitive landscape, and how the competitive dynamic may have changed recently? just kind of going off of the competitive win rates that you had mentioned can you just speak a little bit to what you're seeing from the competitive landscape and how the competitive dynamic may have changed recently Thank you so much. thank you so much

Speaker 4: I think that there's been, by the systems vendors, the vendors that sell more than just storage, we're seeing a lot more focus on AI and on servers, frankly, on GPU servers than other activities. Much less focus on their storage side of the business. I think from our direct storage competitors, what we've seen is that our strategy of really being able to provide all of a customer's storage needs with the same software environment, block, file, and object, everything from relatively low cost on Flash to the world's very highest performance on our FlashBlade//EXA, and then tying that all together with what we're calling the enterprise data cloud. That is, being able to manage it all as a system or as a cloud rather than as individual boxes, is making just a huge difference. I think that there's been, by the systems vendors, the vendors that sell more than just storage, we're seeing a lot more focus on AI and on servers, frankly, on GPU servers than other activities. i think that there's been by the systems vendors the vendors that sell more than just storage we're seeing a lot more focus on ai and on servers frankly on gpu servers than other activities Much less focus on their storage side of the business. I think from our direct storage competitors, what we've seen is that our strategy of really being able to provide all of a customer's storage needs with the same software environment, block, file, and object, everything from relatively low cost on Flash to the world's very highest performance on our FlashBlade//EXA, and then tying that all together with what we're calling the enterprise data cloud. much less focus on their storage side of the business. i think from our direct storage competitors what we've seen is that our strategy of really being able to provide all of a customer's storage needs with the same software environment block file and object everything from relatively low cost on flash to the world's very highest performance on our flashblade//exa and then tying that all together with what we're calling the enterprise data cloud That is, being able to manage it all as a system or as a cloud rather than as individual boxes, is making just a huge difference. that is being able to manage it all as a system or as a cloud rather than as individual boxes is making just a huge difference The simplicity of our offering, the fact that from a total cost of ownership, we're significantly stronger, is driving a lot of customers to come our way. Frankly, we have higher reliability than anyone else, and every time there is an issue with reliability in a competitive product, it gives us a new opportunity with the customer. The simplicity of our offering, the fact that from a total cost of ownership, we're significantly stronger, is driving a lot of customers to come our way. the simplicity of our offering the fact that from a total cost of ownership we're significantly stronger is driving a lot of customers to come our way Frankly, we have higher reliability than anyone else, and every time there is an issue with reliability in a competitive product, it gives us a new opportunity with the customer. frankly we have higher reliability than anyone else and every time there is an issue with reliability in a competitive product it gives us a new opportunity with the customer

Speaker 17: I'll just add one thing to that, which is to say, this dynamic pricing environment is very challenging for customers, as you might imagine, with market prices moving as quickly and as severely as they have. It leaves customers in a tough spot from a budget point of view and from just an understanding which way is up point of view. This is where our strategy of being very transparent, very moderate, and very, I would say, empathetic to the degree we can in monitoring these increases, I believe is accruing to our favor as well. I'll just add one thing to that, which is to say, this dynamic pricing environment is very challenging for customers, as you might imagine, with market prices moving as quickly and as severely as they have. i'll just add one thing to that which is to say this dynamic pricing environment is very challenging for customers as you might imagine with market prices moving as quickly and as severely as they have It leaves customers in a tough spot from a budget point of view and from just an understanding which way is up point of view. it leaves customers in a tough spot from a budget point of view and from just an understanding which way is up point of view This is where our strategy of being very transparent, very moderate, and very, I would say, empathetic to the degree we can in monitoring these increases, I believe is accruing to our favor as well. this is where our strategy of being very transparent very moderate and very i would say empathetic to the degree we can in monitoring these increases i believe is accruing to our favor as well

Speaker 20: I agree. I'd like to underscore what Rob has said a second ago. It's really important to understand that our growth rate is not based on price. As Charlie highlighted, only a third of our growth realized in the quarter came by way of price increases and pull-in. The rest is therefore volume and in customer wins, and we're winning across multiple customer segments and geographies, and we feel very pleased with our performance as a market share taker. This is why we were pretty considered and intentional in the way we practiced our price increases. We increased price, that's true, but far less than the competition to protect the franchise for the long term and continue on our market share gains trajectory. I agree. i agree I'd like to underscore what Rob has said a second ago. i'd like to underscore what rob has said a second ago It's really important to understand that our growth rate is not based on price. it's really important to understand that our growth rate is not based on price As Charlie highlighted, only a third of our growth realized in the quarter came by way of price increases and pull-in. as charlie highlighted only a third of our growth realized in the quarter came by way of price increases and pull-in The rest is therefore volume and in customer wins, and we're winning across multiple customer segments and geographies, and we feel very pleased with our performance as a market share taker. the rest is therefore volume and in customer wins and we're winning across multiple customer segments and geographies and we feel very pleased with our performance as a market share taker This is why we were pretty considered and intentional in the way we practiced our price increases. this is why we were pretty considered and intentional in the way we practiced our price increases We increased price, that's true, but far less than the competition to protect the franchise for the long term and continue on our market share gains trajectory. we increased price that's true but far less than the competition to protect the franchise for the long term and continue on our market share gains trajectory

Speaker 15: Thank you. Next question, please. Thank you. thank you Next question, please. next question please

Speaker 13: Our next question comes from Wamsi Mohan from Bank of America. Please go ahead. Your line is open. Our next question comes from Wamsi Mohan from Bank of America. our next question comes from wamsi mohan from bank of america Please go ahead. please go ahead Your line is open. your line is open

Speaker 22: Yes, thank you. I was hoping maybe just that last comment you made, Tarek, a third of this growth coming from pricing and pull forward. As you think about the second half going back on this question, how much of this are you expecting to sustain? I think you said somewhere on the call that you expect this to be a multi-quarter trend. I'm guessing you mean from a pricing standpoint, there's also this notion that enterprises might continue to pull forward from future, including calendar 2027, because there's just sort of no seeming end to the price increases at this point in time. Curious if you're building in any incremental pricing and pull forward as you think about the rest of the year and what that split was in the quarter. Thank you so much. Yes, thank you. yes thank you I was hoping maybe just that last comment you made, Tarek, a third of this growth coming from pricing and pull forward. i was hoping maybe just that last comment you made tarek a third of this growth coming from pricing and pull forward As you think about the second half going back on this question, how much of this are you expecting to sustain? as you think about the second half going back on this question how much of this are you expecting to sustain I think you said somewhere on the call that you expect this to be a multi-quarter trend. i think you said somewhere on the call that you expect this to be a multi-quarter trend I'm guessing you mean from a pricing standpoint, there's also this notion that enterprises might continue to pull forward from future, including calendar 2027, because there's just sort of no seeming end to the price increases at this point in time. i'm guessing you mean from a pricing standpoint there's also this notion that enterprises might continue to pull forward from future including calendar 2027 because there's just sort of no seeming end to the price increases at this point in time Curious if you're building in any incremental pricing and pull forward as you think about the rest of the year and what that split was in the quarter. curious if you're building in any incremental pricing and pull forward as you think about the rest of the year and what that split was in the quarter Thank you so much. thank you so much

Speaker 4: Yeah, Wamsi, I would say that we're not calculating into our forecast at the moment any additional pull forwards. I will say that we project that there will be further price increases this year. That is just something that we have to plan on as we go forward to make sure we can maintain our margins, et cetera, but we haven't rolled that into a forecast from a revenue standpoint. To your point, yes, as long as prices keep going up, we're likely to see pull-ins, but that has not been factored into a second half of a guide by us. Yeah, Wamsi, I would say that we're not calculating into our forecast at the moment any additional pull forwards. yeah wamsi i would say that we're not calculating into our forecast at the moment any additional pull forwards I will say that we project that there will be further price increases this year. i will say that we project that there will be further price increases this year That is just something that we have to plan on as we go forward to make sure we can maintain our margins, et cetera, but we haven't rolled that into a forecast from a revenue standpoint. that is just something that we have to plan on as we go forward to make sure we can maintain our margins et cetera but we haven't rolled that into a forecast from a revenue standpoint To your point, yes, as long as prices keep going up, we're likely to see pull-ins, but that has not been factored into a second half of a guide by us. to your point yes as long as prices keep going up we're likely to see pull-ins but that has not been factored into a second half of a guide by us

Speaker 15: Thank you, Wamsi. Next question, please. Thank you, Wamsi. thank you wamsi Next question, please. next question please

Speaker 13: Our next question comes from Erik Woodring from Morgan Stanley. Please go ahead. Your line is open. Our next question comes from Erik Woodring from Morgan Stanley. our next question comes from erik woodring from morgan stanley Please go ahead. please go ahead Your line is open. your line is open

Speaker 6: Hey, everyone. This is Dylan Liu for Erik Woodring. Thanks for taking my questions. Charlie, can you just elaborate a bit on what you're hearing from hyperscalers in this environment as it relates to the adoption of your DFMs? Because the price differential between HDDs and QLC NAND is only expanding given the NAND inflation. How much of an impact is that having on your conversations and potential timeline to adoption with new major hyperscalers? Hey, everyone. hey everyone This is Dylan Liu for Erik Woodring. this is dylan liu for erik woodring Thanks for taking my questions. thanks for taking my questions Charlie, can you just elaborate a bit on what you're hearing from hyperscalers in this environment as it relates to the adoption of your DFMs? charlie can you just elaborate a bit on what you're hearing from hyperscalers in this environment as it relates to the adoption of your dfms Because the price differential between HDDs and QLC NAND is only expanding given the NAND inflation. because the price differential between hdds and qlc nand is only expanding given the nand inflation How much of an impact is that having on your conversations and potential timeline to adoption with new major hyperscalers? how much of an impact is that having on your conversations and potential timeline to adoption with new major hyperscalers

Speaker 4: Thanks for the question, and it's great to have an opportunity to clarify this. Our solution is a replacement for both SSDs and for hard disk. Also, hard disk has been sold out through 2028. I would say that at this point, if we ask about the tenor of our conversations with the hyperscalers, they are effectively desperate for storage capacity of any type in any form. It's certainly helped to increase the urgency of the qualification process in those hyperscale environments. That being said, we still have to go through the qualification process, and then there's always the question of how much NAND is actually available for ourselves as well. All of that has to get rolled into these conversations. Thanks for the question, and it's great to have an opportunity to clarify this. thanks for the question and it's great to have an opportunity to clarify this Our solution is a replacement for both SSDs and for hard disk. our solution is a replacement for both ssds and for hard disk Also, hard disk has been sold out through 2028. also hard disk has been sold out through 2028 I would say that at this point, if we ask about the tenor of our conversations with the hyperscalers, they are effectively desperate for storage capacity of any type in any form. i would say that at this point if we ask about the tenor of our conversations with the hyperscalers they are effectively desperate for storage capacity of any type in any form It's certainly helped to increase the urgency of the qualification process in those hyperscale environments. it's certainly helped to increase the urgency of the qualification process in those hyperscale environments That being said, we still have to go through the qualification process, and then there's always the question of how much NAND is actually available for ourselves as well. that being said we still have to go through the qualification process and then there's always the question of how much nand is actually available for ourselves as well All of that has to get rolled into these conversations. all of that has to get rolled into these conversations If I were to net it out, I'd say the urgency is higher, and because it's not dependent on disk or no disk, because it's sort of capacity at any price if you can get it. If I were to net it out, I'd say the urgency is higher, and because it's not dependent on disk or no disk, because it's sort of capacity at any price if you can get it. if i were to net it out i'd say the urgency is higher and because it's not dependent on disk or no disk because it's sort of capacity at any price if you can get it

Speaker 15: Thank you, Dylan. Next question, please. Thank you, Dylan. thank you dylan Next question, please. next question please

Speaker 13: Our next question comes from Param Singh from Oppenheimer. Please go ahead. Your line is open. Our next question comes from Param Singh from Oppenheimer. our next question comes from param singh from oppenheimer Please go ahead. please go ahead Your line is open. your line is open

Speaker 14: Yeah. Hi, thank you for taking my question. I was wondering if you could provide some quantitative insight into the memory pricing. From my best understanding, contract pricing was up 60% year-over-year, beginning of the year. It had been 100% year-over-year a month or so ago, and it looks like it might go up, but the spot pricing is stabilizing. Any insight on what you're hearing from your NAND suppliers, one. Two, a lot of these suppliers are talking about long-term agreements. I want to understand if you are participating in some of those long-term agreements, and are those agreements only for supply, or is there some sort of pricing component that is also fixed as part of those agreements? Thank you. Yeah. yeah Hi, thank you for taking my question. hi thank you for taking my question I was wondering if you could provide some quantitative insight into the memory pricing. i was wondering if you could provide some quantitative insight into the memory pricing From my best understanding, contract pricing was up 60% year-over-year, beginning of the year. from my best understanding contract pricing was up 60% year-over-year beginning of the year It had been 100% year-over-year a month or so ago, and it looks like it might go up, but the spot pricing is stabilizing. it had been 100% year-over-year a month or so ago and it looks like it might go up but the spot pricing is stabilizing Any insight on what you're hearing from your NAND suppliers, one. any insight on what you're hearing from your nand suppliers one Two, a lot of these suppliers are talking about long-term agreements. two a lot of these suppliers are talking about long-term agreements I want to understand if you are participating in some of those long-term agreements, and are those agreements only for supply, or is there some sort of pricing component that is also fixed as part of those agreements? i want to understand if you are participating in some of those long-term agreements and are those agreements only for supply or is there some sort of pricing component that is also fixed as part of those agreements Thank you. thank you

Speaker 4: Wow, your numbers are very low. We'd be glad to buy from those suppliers that you've just identified at that pricing levels. Prices have gone up anywhere from 5x-10x on the spot market. Long-term contracts were not worth the paper they were written on at former prices. Everything now is being quoted at best with 30 days of longevity. Pricing in both memory as well as NAND is up just an incredible amount. The demand is so high, it's still able to be sold at that level as well. Yeah, your numbers are very low. That's why we've never seen anything like this in my entire career. I've seen prices sometimes double over an 18-month period. We're talking about prices doubling every 18 days. Wow, your numbers are very low. wow your numbers are very low We'd be glad to buy from those suppliers that you've just identified at that pricing levels. we'd be glad to buy from those suppliers that you've just identified at that pricing levels Prices have gone up anywhere from 5x-10x on the spot market. prices have gone up anywhere from 5x-10x on the spot market Long-term contracts were not worth the paper they were written on at former prices. long-term contracts were not worth the paper they were written on at former prices Everything now is being quoted at best with 30 days of longevity. everything now is being quoted at best with 30 days of longevity Pricing in both memory as well as NAND is up just an incredible amount. pricing in both memory as well as nand is up just an incredible amount The demand is so high, it's still able to be sold at that level as well. the demand is so high it's still able to be sold at that level as well Yeah, your numbers are very low. yeah your numbers are very low That's why we've never seen anything like this in my entire career. that's why we've never seen anything like this in my entire career I've seen prices sometimes double over an 18-month period. i've seen prices sometimes double over an 18-month period We're talking about prices doubling every 18 days. we're talking about prices doubling every 18 days

Speaker 15: Thank you, Param. Next question, please. Thank you, Param. thank you param Next question, please. next question please

Speaker 13: Our next question comes from Mehdi Hosseini from SIG. Please go ahead, your line is open. Our next question comes from Mehdi Hosseini from SIG. our next question comes from mehdi hosseini from sig Please go ahead, your line is open. please go ahead your line is open

Speaker 12: Yes. Charlie, just going back to the previous few questions. What would your revenue be if there was no shortages of NAND? Let's say you can procure as much NAND as you wanted to. How much upside would there be to a $4.5 billion revenue target? Yes. yes Charlie, just going back to the previous few questions. charlie just going back to the previous few questions What would your revenue be if there was no shortages of NAND? what would your revenue be if there was no shortages of nand Let's say you can procure as much NAND as you wanted to. let's say you can procure as much nand as you wanted to How much upside would there be to a $4.5 billion revenue target? how much upside would there be to a $4.5 billion revenue target

Speaker 4: Oh, I see. The timing of when we sell NAND to hyperscalers is determined by their build-outs, by our ability to, or our combined ability to be qualified, and then the build-outs by the hyperscalers. That determines timing. I think what Kaz would tell you, what I would tell you is we could probably sell every terabyte of NAND that we could source. Oh, I see. oh i see The timing of when we sell NAND to hyperscalers is determined by their build-outs, by our ability to, or our combined ability to be qualified, and then the build-outs by the hyperscalers. the timing of when we sell nand to hyperscalers is determined by their build-outs by our ability to or our combined ability to be qualified and then the build-outs by the hyperscalers That determines timing. that determines timing I think what Kaz would tell you, what I would tell you is we could probably sell every terabyte of NAND that we could source. i think what kaz would tell you what i would tell you is we could probably sell every terabyte of nand that we could source

Speaker 15: Thank you, Mehdi. Next question, please. Thank you, Mehdi. thank you mehdi Next question, please. next question please

Speaker 13: Our next question comes from Tim Long from Barclays. Please go ahead, your line is open. Our next question comes from Tim Long from Barclays. our next question comes from tim long from barclays Please go ahead, your line is open. please go ahead your line is open

Speaker 1: Hi, this is Alyssa Shreves for Tim Long. I was just following up on one of the prior questions around the pricing dynamics you're seeing. I understand that you said that most likely there'll be further price increases into the year. Are you also changing on your side, the timeline in terms of quotes you're giving to customers? Are you truncating that timeline? Anything else you're doing there to kind of manage, just given the dynamic pricing environment? Thanks. Hi, this is Alyssa Shreves for Tim Long. hi this is alyssa shreves for tim long I was just following up on one of the prior questions around the pricing dynamics you're seeing. i was just following up on one of the prior questions around the pricing dynamics you're seeing I understand that you said that most likely there'll be further price increases into the year. i understand that you said that most likely there'll be further price increases into the year Are you also changing on your side, the timeline in terms of quotes you're giving to customers? are you also changing on your side the timeline in terms of quotes you're giving to customers Are you truncating that timeline? are you truncating that timeline Anything else you're doing there to kind of manage, just given the dynamic pricing environment? anything else you're doing there to kind of manage just given the dynamic pricing environment Thanks. thanks

Speaker 4: Thank you for the question. Unfortunately so, yes. We've done a number of things. One is the typical cadence, if you will, of a discussion with a customer around a price for a specific quote would be about 30 days of discussion between the sales team and the customer trying to figure out what the exact configuration of the quote would be. We'd typically provide a 90-day quote, a quote that valid for 90 days. That was for the last 15 years up until February. At this point, we're at 30-day quotes. There are other vendors out there, not all of them in our business, but that won't even provide a price until the product ships. They'll provide a quote at an uncertain price. We believe that that's not the right way for us to operate with our customers or with our channels. Thank you for the question. thank you for the question Unfortunately so, yes. unfortunately so yes We've done a number of things. we've done a number of things One is the typical cadence, if you will, of a discussion with a customer around a price for a specific quote would be about 30 days of discussion between the sales team and the customer trying to figure out what the exact configuration of the quote would be. one is the typical cadence if you will of a discussion with a customer around a price for a specific quote would be about 30 days of discussion between the sales team and the customer trying to figure out what the exact configuration of the quote would be We'd typically provide a 90-day quote, a quote that valid for 90 days. we'd typically provide a 90-day quote a quote that valid for 90 days That was for the last 15 years up until February. that was for the last 15 years up until february At this point, we're at 30-day quotes. at this point we're at 30-day quotes There are other vendors out there, not all of them in our business, but that won't even provide a price until the product ships. there are other vendors out there not all of them in our business but that won't even provide a price until the product ships They'll provide a quote at an uncertain price. they'll provide a quote at an uncertain price We believe that that's not the right way for us to operate with our customers or with our channels. we believe that that's not the right way for us to operate with our customers or with our channels Currently, we've had to drop it down to a 30-day price quote. Currently, we've had to drop it down to a 30-day price quote. currently we've had to drop it down to a 30-day price quote

Speaker 15: Thank you, Alyssa. Next question, please. Thank you, Alyssa. thank you alyssa Next question, please. next question please

Speaker 13: Our next question comes from Simon Leopold from Raymond James. Please go ahead, your line is open. Our next question comes from Simon Leopold from Raymond James. our next question comes from simon leopold from raymond james Please go ahead, your line is open. please go ahead your line is open

Speaker 19: Great. Thank you very much. Appreciate it. I just want to get a better sense of how you're thinking about the longer-term trends of input costs, particularly NAND chips, in that it sounds like that market is expected, if you're a buyer of NAND chips, to improve in the coming quarters. Just wondering what your expectations and what you've built in for the longer term. Thank you. Great. great Thank you very much. thank you very much Appreciate it. appreciate it I just want to get a better sense of how you're thinking about the longer-term trends of input costs, particularly NAND chips, in that it sounds like that market is expected, if you're a buyer of NAND chips, to improve in the coming quarters. i just want to get a better sense of how you're thinking about the longer-term trends of input costs particularly nand chips in that it sounds like that market is expected if you're a buyer of nand chips to improve in the coming quarters Just wondering what your expectations and what you've built in for the longer term. just wondering what your expectations and what you've built in for the longer term Thank you. thank you

Speaker 4: Actually, no. Our expectation is that there'll be continued price increases, at least through the summer. I can't really project further than that, but through the summer, there'll be further price increases. To a large extent, capacity has been sold out through 2027 at this point in time. There is an interest to have long-term contracts into 2028. That's always a difficult thing to determine at today's pricing, whether or not it makes sense to do that. For the most part, fab capacity across the board, not just NAND, everything, NAND, memory, CPUs, and now it's affecting even low-end chips, is sold out. Fab capacity has been shifted towards the higher margin components, which has put pressure across the entire semiconductor environment. It's really driven by just demand completely outstripping fab supply. Actually, no. actually no Our expectation is that there'll be continued price increases, at least through the summer. our expectation is that there'll be continued price increases at least through the summer I can't really project further than that, but through the summer, there'll be further price increases. i can't really project further than that but through the summer there'll be further price increases To a large extent, capacity has been sold out through 2027 at this point in time. to a large extent capacity has been sold out through 2027 at this point in time There is an interest to have long-term contracts into 2028. there is an interest to have long-term contracts into 2028 That's always a difficult thing to determine at today's pricing, whether or not it makes sense to do that. that's always a difficult thing to determine at today's pricing whether or not it makes sense to do that For the most part, fab capacity across the board, not just NAND, everything, NAND, memory, CPUs, and now it's affecting even low-end chips, is sold out. for the most part fab capacity across the board not just nand everything nand memory cpus and now it's affecting even low-end chips is sold out Fab capacity has been shifted towards the higher margin components, which has put pressure across the entire semiconductor environment. fab capacity has been shifted towards the higher margin components which has put pressure across the entire semiconductor environment It's really driven by just demand completely outstripping fab supply. it's really driven by just demand completely outstripping fab supply Until the demand and supply comes into balance, we'll continue to see price increases. Until the demand and supply comes into balance, we'll continue to see price increases. until the demand and supply comes into balance we'll continue to see price increases

Speaker 15: Thank you, Simon. Next question, please. Thank you, Simon. thank you simon Next question, please. next question please

Speaker 13: Our next question comes from Matt Bryson from Wedbush Securities. Please go ahead. Your line is open. Our next question comes from Matt Bryson from Wedbush Securities. our next question comes from matt bryson from wedbush securities Please go ahead. please go ahead Your line is open. your line is open

Speaker 10: Hey, thanks for taking my question. I want to go back to guidance. I understand the current market makes it really difficult to forecast future periods, but I'm just having some problems with the math. If I think about pricing being up 15%-20% in Q1, and you said your pricing's up 70% now, you've got a 50%-55% delta, then for me to get to your Q2 numbers, I need your bit shipments or your system shipments to be down 50% Q1 to Q2. Similarly, when I'm thinking about Q4, for instance, in my model, I had system sales up 15% to get to numbers. If pricing's going to be up 70% or more, then I need bit shipments or system shipments to be down 55%. I guess my question is that math right? Hey, thanks for taking my question. hey thanks for taking my question I want to go back to guidance. i want to go back to guidance I understand the current market makes it really difficult to forecast future periods, but I'm just having some problems with the math. i understand the current market makes it really difficult to forecast future periods but i'm just having some problems with the math If I think about pricing being up 15%-20% in Q1, and you said your pricing's up 70% now, you've got a 50%-55% delta, then for me to get to your Q2 numbers, I need your bit shipments or your system shipments to be down 50% Q1 to Q2. if i think about pricing being up 15%-20% in q1 and you said your pricing's up 70% now you've got a 50%-55% delta then for me to get to your q2 numbers i need your bit shipments or your system shipments to be down 50% q1 to q2 Similarly, when I'm thinking about Q4, for instance, in my model, I had system sales up 15% to get to numbers. similarly when i'm thinking about q4 for instance in my model i had system sales up 15% to get to numbers If pricing's going to be up 70% or more, then I need bit shipments or system shipments to be down 55%. if pricing's going to be up 70% or more then i need bit shipments or system shipments to be down 55% I guess my question is that math right? i guess my question is that math right Is it a sourcing problem, or is it demand destruction? Is it that your mix is just shifting so quickly to Pure as-a-Service that it's shifting how your revenues look? Is it a sourcing problem, or is it demand destruction? is it a sourcing problem or is it demand destruction Is it that your mix is just shifting so quickly to Pure as-a-Service that it's shifting how your revenues look? is it that your mix is just shifting so quickly to pure as-a-service that it's shifting how your revenues look

Speaker 20: I'd say to you, there are many dynamics in here. First, we get an order, it could be in a prior quarter, then we ship it in the current quarter. That is also part of the dynamic that has to be factored into the equation. We do not expect the number of systems that we ship to decline as much as you highlighted, far from it. We do believe that the growth in units of what we sell continues to be pretty strong. What we indicated as far as the first quarter is concerned is that only a third of our growth came in by way of pull-ins and by way of pricing. The rest is volume. The volume is there because the demand is there. I'd say to you, there are many dynamics in here. i'd say to you there are many dynamics in here First, we get an order, it could be in a prior quarter, then we ship it in the current quarter. first we get an order it could be in a prior quarter then we ship it in the current quarter That is also part of the dynamic that has to be factored into the equation. that is also part of the dynamic that has to be factored into the equation We do not expect the number of systems that we ship to decline as much as you highlighted, far from it. we do not expect the number of systems that we ship to decline as much as you highlighted far from it We do believe that the growth in units of what we sell continues to be pretty strong. we do believe that the growth in units of what we sell continues to be pretty strong What we indicated as far as the first quarter is concerned is that only a third of our growth came in by way of pull-ins and by way of pricing. what we indicated as far as the first quarter is concerned is that only a third of our growth came in by way of pull-ins and by way of pricing The rest is volume. the rest is volume The volume is there because the demand is there. the volume is there because the demand is there Now the question is how long does that last in a context where the whole industry participants are testing price levels that were unprecedented before? For the second half of the year, we have no reason to believe that shipment volumes will drop to the extent that you highlighted. Now the question is how long does that last in a context where the whole industry participants are testing price levels that were unprecedented before? now the question is how long does that last in a context where the whole industry participants are testing price levels that were unprecedented before For the second half of the year, we have no reason to believe that shipment volumes will drop to the extent that you highlighted. for the second half of the year we have no reason to believe that shipment volumes will drop to the extent that you highlighted

Speaker 17: Matt, just to throw one more variable in there. As you might imagine, we've given you some numbers about average price increases. The price increases varied across the portfolio. As you might imagine, in an elevated pricing environment, the value of our high-performance solutions becomes even more magnified. We do see an expected mix shift within the portfolio that is baked into some of the numbers in there. Matt, just to throw one more variable in there. matt just to throw one more variable in there As you might imagine, we've given you some numbers about average price increases. as you might imagine we've given you some numbers about average price increases The price increases varied across the portfolio. the price increases varied across the portfolio As you might imagine, in an elevated pricing environment, the value of our high-performance solutions becomes even more magnified. as you might imagine in an elevated pricing environment the value of our high-performance solutions becomes even more magnified We do see an expected mix shift within the portfolio that is baked into some of the numbers in there. we do see an expected mix shift within the portfolio that is baked into some of the numbers in there

Speaker 15: Thank you, Matt. Next question, please. Thank you, Matt. thank you matt Next question, please. next question please

Speaker 13: Our next question comes from Asiya Merchant from Citigroup. Please go ahead. Your line is open. Our next question comes from Asiya Merchant from Citigroup. our next question comes from asiya merchant from citigroup Please go ahead. please go ahead Your line is open. your line is open

Speaker 3: Great. Thank you very much. Could you just highlight how to think about subscription margins? What drove the delta here? Was it the increased CapEx investment that you guys talked about? I think you talked about product growth margins operating maybe perhaps towards the lower end of your range, excluding hyperscalers. Could you help us understand about subscription margins going forward? I would think that as you have more evergreen subscription services, those margins would improve. If you could just help clarify that would be great. Thank you. Great. great Thank you very much. thank you very much Could you just highlight how to think about subscription margins? could you just highlight how to think about subscription margins What drove the delta here? what drove the delta here Was it the increased CapEx investment that you guys talked about? was it the increased capex investment that you guys talked about I think you talked about product growth margins operating maybe perhaps towards the lower end of your range, excluding hyperscalers. i think you talked about product growth margins operating maybe perhaps towards the lower end of your range excluding hyperscalers Could you help us understand about subscription margins going forward? could you help us understand about subscription margins going forward I would think that as you have more evergreen subscription services, those margins would improve. i would think that as you have more evergreen subscription services those margins would improve If you could just help clarify that would be great. if you could just help clarify that would be great Thank you. thank you

Speaker 20: Yeah. First of all, for the first part of your question on subscription gross margins, there was a sequential quarterly gross margin drop by about 1.4 points for our subscription services. This is really driven by a mix and a shift away from Evergreen//One as part of our subscription revenue. This is temporary, and the reason why I want to highlight this to you, it's because if you really look at our ARR growth, it has accelerated by 300 basis points to 19%, and our remaining performance obligations remains extremely strong in growth terms. We grew our RPO by 41%. I'm sorry, could you repeat, Asiya, the second part of your question? Yeah. yeah First of all, for the first part of your question on subscription gross margins, there was a sequential quarterly gross margin drop by about 1.4 points for our subscription services. first of all for the first part of your question on subscription gross margins there was a sequential quarterly gross margin drop by about 1.4 points for our subscription services This is really driven by a mix and a shift away from Evergreen//One as part of our subscription revenue. this is really driven by a mix and a shift away from evergreen//one as part of our subscription revenue This is temporary, and the reason why I want to highlight this to you, it's because if you really look at our ARR growth, it has accelerated by 300 basis points to 19%, and our remaining performance obligations remains extremely strong in growth terms. this is temporary and the reason why i want to highlight this to you it's because if you really look at our arr growth it has accelerated by 300 basis points to 19% and our remaining performance obligations remains extremely strong in growth terms We grew our RPO by 41%. we grew our rpo by 41% I'm sorry, could you repeat, Asiya, the second part of your question? i'm sorry could you repeat asiya the second part of your question

Speaker 3: Just how do I think about these margins going ahead if it's temporary like you highlighted? Just how do I think about these margins going ahead if it's temporary like you highlighted? just how do i think about these margins going ahead if it's temporary like you highlighted

Speaker 20: Oh, right. Yeah. Oh, right. oh right Yeah. yeah

Speaker 3: Yeah. Mm-hmm. Yeah. yeah Mm-hmm. mm-hmm

Speaker 20: Yeah. Yeah. yeah

Speaker 3: for subscriptions. Yeah. for subscriptions. for subscriptions Yeah. yeah

Speaker 20: The product gross margins we flagged at the beginning of the fiscal year that product revenue gross margins, excluding the contribution from hyperscalers, would be at the bottom end of our range, 65%-70%, which is our long-term target. In this first quarter, we came at 65.5%, right where we thought it would be. Moving forward, you have to think about product gross margins as being, again, another mix effect between revenue that is catching up with the underlying costs. We feel good about what we guided, which is 65%-70% gross margin with a progressive recovery of product gross margins to the upper end of that range in the upcoming quarters. The product gross margins we flagged at the beginning of the fiscal year that product revenue gross margins, excluding the contribution from hyperscalers, would be at the bottom end of our range, 65%-70%, which is our long-term target. the product gross margins we flagged at the beginning of the fiscal year that product revenue gross margins excluding the contribution from hyperscalers would be at the bottom end of our range 65%-70% which is our long-term target In this first quarter, we came at 65.5%, right where we thought it would be. in this first quarter we came at 65.5% right where we thought it would be Moving forward, you have to think about product gross margins as being, again, another mix effect between revenue that is catching up with the underlying costs. moving forward you have to think about product gross margins as being again another mix effect between revenue that is catching up with the underlying costs We feel good about what we guided, which is 65%-70% gross margin with a progressive recovery of product gross margins to the upper end of that range in the upcoming quarters. we feel good about what we guided which is 65%-70% gross margin with a progressive recovery of product gross margins to the upper end of that range in the upcoming quarters

Speaker 17: I would just say with respect to the services gross margin, as Tarek mentioned, that was a temporary decline. We expect those to continue to increase over time. I would just say with respect to the services gross margin, as Tarek mentioned, that was a temporary decline. i would just say with respect to the services gross margin as tarek mentioned that was a temporary decline We expect those to continue to increase over time. we expect those to continue to increase over time

Speaker 20: Yeah. Yeah. yeah

Speaker 15: Thank you, Asiya. Next question, please. Thank you, Asiya. thank you asiya Next question, please. next question please

Speaker 13: Our next question comes from Eric Martinuzzi from Lake Street Capital Markets. Please go ahead. Your line is open. Our next question comes from Eric Martinuzzi from Lake Street Capital Markets. our next question comes from eric martinuzzi from lake street capital markets Please go ahead. please go ahead Your line is open. your line is open

Speaker 7: Yeah, I wanted to talk a little bit about the 1touch pipeline, just the receptivity to Everpure as kind of the advanced data management provider of choice. Is there the strategic verticals where it's kind of a slam dunk, your low-hanging opportunity? Yeah, I wanted to talk a little bit about the 1touch pipeline, just the receptivity to Everpure as kind of the advanced data management provider of choice. yeah i wanted to talk a little bit about the 1touch pipeline just the receptivity to everpure as kind of the advanced data management provider of choice Is there the strategic verticals where it's kind of a slam dunk, your low-hanging opportunity? is there the strategic verticals where it's kind of a slam dunk your low-hanging opportunity

Speaker 4: I would say that it's very early. We'll be going into much greater detail on this at our Accelerate conference next month. I would say that it's very early. i would say that it's very early We'll be going into much greater detail on this at our Accelerate conference next month. we'll be going into much greater detail on this at our accelerate conference next month 1touch now gives us and our customers the opportunity to really map all of their data across all of their data sources. Not just what's on our product, but what's on competitive products, but what's also in the cloud, what's on their SaaS platforms, and to map it in several respects. One is just to know where all their data is, which is a major cybersecurity problem, and that's exactly where 1touch started its business. They go further than that, which allows them to understand the semantics of the data, which means they can also map the context of the data between the different data sources, which means you can get a full knowledge graph of how their different data sources relate to one another. 1touch now gives us and our customers the opportunity to really map all of their data across all of their data sources. 1touch now gives us and our customers the opportunity to really map all of their data across all of their data sources Not just what's on our product, but what's on competitive products, but what's also in the cloud, what's on their SaaS platforms, and to map it in several respects. not just what's on our product but what's on competitive products but what's also in the cloud what's on their saas platforms and to map it in several respects One is just to know where all their data is, which is a major cybersecurity problem, and that's exactly where 1touch started its business. one is just to know where all their data is which is a major cybersecurity problem and that's exactly where 1touch started its business They go further than that, which allows them to understand the semantics of the data, which means they can also map the context of the data between the different data sources, which means you can get a full knowledge graph of how their different data sources relate to one another. they go further than that which allows them to understand the semantics of the data which means they can also map the context of the data between the different data sources which means you can get a full knowledge graph of how their different data sources relate to one another We think this is going to be very powerful in a world of AI, where now with AI, it's the old phrase, garbage in, garbage out. If the quality of your data source is poor, the quality of your answer is poor. What 1touch will allow customers to do is really rationalize and get a better understanding of their data sources, rationalize those data sources, and be able to have a better source for their AI agents and their analytics. We think this is going to be very powerful in a world of AI, where now with AI, it's the old phrase, garbage in, garbage out. we think this is going to be very powerful in a world of ai where now with ai it's the old phrase garbage in garbage out If the quality of your data source is poor, the quality of your answer is poor. if the quality of your data source is poor the quality of your answer is poor What 1touch will allow customers to do is really rationalize and get a better understanding of their data sources, rationalize those data sources, and be able to have a better source for their AI agents and their analytics. what 1touch will allow customers to do is really rationalize and get a better understanding of their data sources rationalize those data sources and be able to have a better source for their ai agents and their analytics

Speaker 17: Eric, just to add on to that, as Charlie said, our strategic interest in 1touch really is driven by a lot of the capabilities that they will help add to the portfolio in terms of data intelligence. Between those capabilities as well as their current product in data security posture management, this is driving a lot of initial interest in a lot of enterprise accounts in typical verticals that we're strong in, such as financial services. That said, early days, we just closed the acquisition earlier this month. Early signs of interest and demand are positive. Eric, just to add on to that, as Charlie said, our strategic interest in 1touch really is driven by a lot of the capabilities that they will help add to the portfolio in terms of data intelligence. eric just to add on to that as charlie said our strategic interest in 1touch really is driven by a lot of the capabilities that they will help add to the portfolio in terms of data intelligence Between those capabilities as well as their current product in data security posture management, this is driving a lot of initial interest in a lot of enterprise accounts in typical verticals that we're strong in, such as financial services. between those capabilities as well as their current product in data security posture management this is driving a lot of initial interest in a lot of enterprise accounts in typical verticals that we're strong in such as financial services That said, early days, we just closed the acquisition earlier this month. that said early days we just closed the acquisition earlier this month Early signs of interest and demand are positive. early signs of interest and demand are positive

Speaker 15: Thank you, Eric. We have time for one more question, so the next question will be the last. Thank you, Eric. thank you eric We have time for one more question, so the next question will be the last. we have time for one more question so the next question will be the last

Speaker 13: Our last question comes from David Vogt from UBS. Please go ahead, your line is open. Our last question comes from David Vogt from UBS. Please go ahead, your line is open. our last question comes from david vogt from ubs. please go ahead, your line is open

Speaker 5: Great. Thanks, guys. Appreciate all the color, given the difficult operating backdrop. Maybe, Tarek, can I come back to you with regards to the second half? I guess what I'm trying to think through is presumably your outlook three months ago included the benefit of some pricing dynamics and the lag effect, as well as some pull forwards in the quarter. Can you help us understand, obviously you took the guide up by about $100 million+ for the full year, but you benefited probably from $90 million in Q1. Can you share with us how you're thinking about what the impact of pull forward and the lag effect in Q2 and the rest of the year looks like? Great. great Thanks, guys. thanks guys Appreciate all the color, given the difficult operating backdrop. appreciate all the color given the difficult operating backdrop Maybe, Tarek, can I come back to you with regards to the second half? maybe tarek can i come back to you with regards to the second half I guess what I'm trying to think through is presumably your outlook three months ago included the benefit of some pricing dynamics and the lag effect, as well as some pull forwards in the quarter. i guess what i'm trying to think through is presumably your outlook three months ago included the benefit of some pricing dynamics and the lag effect as well as some pull forwards in the quarter Can you help us understand, obviously you took the guide up by about $100 million+ for the full year, but you benefited probably from $90 million in Q1. can you help us understand obviously you took the guide up by about $100 million+ for the full year but you benefited probably from $90 million in q1 Can you share with us how you're thinking about what the impact of pull forward and the lag effect in Q2 and the rest of the year looks like? can you share with us how you're thinking about what the impact of pull forward and the lag effect in q2 and the rest of the year looks like By my math, it looks like then core storage is going to be a bit of a challenging second half backdrop. I get the uncertainty. Just trying to get a sense for how you're thinking about the underlying demand for the business, given the uncertainty in the second half of the year. Thanks. By my math, it looks like then core storage is going to be a bit of a challenging second half backdrop. by my math it looks like then core storage is going to be a bit of a challenging second half backdrop I get the uncertainty. i get the uncertainty Just trying to get a sense for how you're thinking about the underlying demand for the business, given the uncertainty in the second half of the year. just trying to get a sense for how you're thinking about the underlying demand for the business given the uncertainty in the second half of the year Thanks. thanks

Speaker 20: Let's put things a little bit in perspective here. First of all, demand continues to be robust across all business segments, enterprise and commercial alike. We've raised prices significantly since the beginning of fiscal year 2027. We raised prices later and lower than the competition. To the extent that you continue to have price increases and perception by market participants that there will continue to be price increases, there will be pull-ins. In our first quarter of this fiscal year, we said on the call that about a third of our growth can be attributed to price increases and pull-ins. This will continue. The question is to what degree in the second half, and that is a big unknown because no one will truly be able to point out at what point will customers stop buying and wait for prices to come down over time. Let's put things a little bit in perspective here. let's put things a little bit in perspective here First of all, demand continues to be robust across all business segments, enterprise and commercial alike. first of all demand continues to be robust across all business segments enterprise and commercial alike We've raised prices significantly since the beginning of fiscal year 2027. we've raised prices significantly since the beginning of fiscal year 2027 We raised prices later and lower than the competition. we raised prices later and lower than the competition To the extent that you continue to have price increases and perception by market participants that there will continue to be price increases, there will be pull-ins. to the extent that you continue to have price increases and perception by market participants that there will continue to be price increases there will be pull-ins In our first quarter of this fiscal year, we said on the call that about a third of our growth can be attributed to price increases and pull-ins. in our first quarter of this fiscal year we said on the call that about a third of our growth can be attributed to price increases and pull-ins This will continue. this will continue The question is to what degree in the second half, and that is a big unknown because no one will truly be able to point out at what point will customers stop buying and wait for prices to come down over time. the question is to what degree in the second half and that is a big unknown because no one will truly be able to point out at what point will customers stop buying and wait for prices to come down over time Our guide has to be looked at over the long term, and it's important to understand that in the beginning of last fiscal year, we were growing at 11%. We guided midway through last year at 16% growth, and now we're guiding for this fiscal year north of 22% growth on a full year basis. They are quarterly dynamics, but there's no question our growth is accelerating year-over-year because of the quality of our products and our value proposition. Our guide has to be looked at over the long term, and it's important to understand that in the beginning of last fiscal year, we were growing at 11%. our guide has to be looked at over the long term and it's important to understand that in the beginning of last fiscal year we were growing at 11% We guided midway through last year at 16% growth, and now we're guiding for this fiscal year north of 22% growth on a full year basis. we guided midway through last year at 16% growth and now we're guiding for this fiscal year north of 22% growth on a full year basis They are quarterly dynamics, but there's no question our growth is accelerating year-over-year because of the quality of our products and our value proposition. they are quarterly dynamics but there's no question our growth is accelerating year-over-year because of the quality of our products and our value proposition

Speaker 15: Before we conclude, I think Charlie has final comment. Before we conclude, I think Charlie has final comment. before we conclude i think charlie has final comment

Speaker 4: Before we close, first of all, thank you all for your time. Before we close, I also want to thank our customers for their trust and our employees for their dedication, our partners and suppliers for their collaboration, and our investors for continued confidence. We also look forward to seeing many of you and certainly many of our customers and partners at our Accelerate Conference next month. Hopefully many of you all at our investor conference on September 23rd. Thanks all for listening. See you next quarter. Before we close, first of all, thank you all for your time. before we close first of all thank you all for your time Before we close, I also want to thank our customers for their trust and our employees for their dedication, our partners and suppliers for their collaboration, and our investors for continued confidence. before we close i also want to thank our customers for their trust and our employees for their dedication our partners and suppliers for their collaboration and our investors for continued confidence We also look forward to seeing many of you and certainly many of our customers and partners at our Accelerate Conference next month. we also look forward to seeing many of you and certainly many of our customers and partners at our accelerate conference next month Hopefully many of you all at our investor conference on September 23rd. hopefully many of you all at our investor conference on september 23rd Thanks all for listening. thanks all for listening See you next quarter. see you next quarter

Speaker 13: That concludes the Everpure first quarter fiscal 2027 financial results conference call. Thank you for your participation. You may now disconnect your line. That concludes the Everpure first quarter fiscal 2027 financial results conference call. that concludes the everpure first quarter fiscal 2027 financial results conference call Thank you for your participation. thank you for your participation You may now disconnect your line. you may now disconnect your line