SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

	

FORM 8-K

	

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2017

	
 	
Pure Storage, Inc.
(Exact name of Registrant as Specified in Its Charter)

	

 

					
Delaware	 	001-37570	 	27-1069557	
 	 	 	 	 	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer Identification No.)	
 
650 Castro Street, Suite 400
Mountain View, California 94041
(Address of Principal Executive Offices)
 
(800) 379-7873
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

	

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

		
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

		
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

		
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

		
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Item 2.02. Results of Operations and Financial Condition.
 
On March 1, 2017, Pure Storage, Inc. (“Pure Storage”) issued a press release regarding its financial results for the quarter and fiscal year ended January 31, 2017 . A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K. Pure Storage issued a blog post in connection with the press release, the full text of which is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated under this Item 2.02 by reference.
 
This information, including the exhibits hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Pure Storage is making reference to non-GAAP financial information in the press release, the blog and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.  These non-GAAP financial measures are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
 
Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
The following exhibits are furnished herewith:

	
			
Exhibit No.	  	Description	
99.1
99.2	  	Press Release entitled “Pure Storage Announces Record Fourth Quarter and Fiscal Year 2017 Financial Results”
Blog Post entitled “Dietz on the Day: Delivering the Data Platform for the Cloud Era”

SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	
				
 	Pure Storage, Inc.	
 	(Registrant)	
 	 	 	
 	By:	 	/s/ SCOTT DIETZEN	
 	 	 	Scott Dietzen	
 	 	 	Chief Executive Officer	
March 1, 2017

Exhibit Index

	
			
Exhibit No.	  	Description	
99.1
99.2	  	Press Release entitled “Pure Storage Announces Record Fourth Quarter and Fiscal Year 2017 Financial Results”
Blog Post entitled “Dietz on the Day: Delivering the Data Platform for the Cloud Era”

Exhibit 99.1
 
Pure Storage Announces Record Fourth Quarter and Fiscal Year 2017 Financial Results

MOUNTAIN VIEW, Calif., March 1, 2017 -- Pure Storage (NYSE: PSTG) today announced financial results for its fourth quarter and fiscal year ended January 31, 2017 .

Key quarterly business and financial highlights include:

•	Record quarterly revenue of $227.9 million, up 52% Y/Y, 2.2% above midpoint of guidance	
		
•	Record full year revenue of $728.0 million, up 65% Y/Y, 3.3% above midpoint of guidance	
		
•	Record quarterly operating leverage, GAAP margin of -18.6%, 10.0 ppts improvement Y/Y and non-GAAP margin of -1.9%, 12.0 ppts improvement Y/Y	
		
•	Positive momentum in unstructured data market with FlashBlade now generally available	

“Pure Storage is delivering the data platform for the cloud era, helping customers put data to work for their businesses,” said Pure Storage CEO Scott Dietzen. “This year, Pure expects to reach $1 billion in revenue - a remarkable achievement and evidence that we’re only just getting started. We could not be more excited about the opportunities ahead.”

“Q4 was a solid quarter and a strong end to our fiscal 2017 with consistent year-over-year revenue growth and a strong improvement in our operating leverage,” said Pure Storage CFO Tim Riitters. “We are confident in our outlook for fiscal 2018 and remain focused on executing steadily on our business model for continued growth and industry leadership.”

A record 450 new customers joined Pure Storage this quarter, increasing the total to more than 3,000 organizations, including more than 20% of the Fortune 500. New customer wins in the quarter include: Hulu, KONAMI, Optus Business, Royal Philips, Phreesia and Subway. New FlashBlade customer wins include: the National Hockey League, law firm Keker, Van Nest & Peters and geoscience solutions provider ION.

Fourth Quarter Fiscal 2017 Financial Highlights

The following tables summarize our consolidated financial results for the fiscal quarters ended January 31, 2016 and 2017 (in millions except per share amounts, unaudited):

							
GAAP Quarterly Financial Information	
 	 	Three Months Ended January 31, 2016	 	Three Months Ended January 31, 2017	 	Y/Y Change	
Revenue	 	$150.2	 	$227.9	 	52%	
Gross Margin	 	65.3%	 	65.3%	 	0.0 ppts	
Product Gross Margin	 	68.2%	 	66.5%	 	-1.7 ppts	
Support Gross Margin	 	49.5%	 	59.6%	 	10.1 ppts	
Operating Loss	 	-$42.9	 	-$42.5	 	$0.4	
Operating Margin	 	-28.6%	 	-18.6%	 	10.0 ppts	
Net Loss	 	-$44.3	 	-$42.9	 	$1.4	
Net Loss per Share	 	-$0.24	 	-$0.21	 	$0.03	
Weighted-Average Shares (Basic and Diluted)	 	187.4	 	201.0	 	13.6	

1

	
							
Non-GAAP Quarterly Financial Information	
 	 	Three Months Ended January 31, 2016	 	Three Months Ended January 31, 2017	 	Y/Y Change	
Gross Margin	 	66.0%	 	66.1%	 	0.1 ppts	
Product Gross Margin	 	68.3%	 	66.6%	 	-1.7 ppts	
Support Gross Margin	 	53.4%	 	63.6%	 	10.2 ppts	
Operating Loss	 	-$20.9	 	-$4.4	 	$16.5	
Operating Margin	 	-13.9%	 	-1.9%	 	12.0 ppts	
Net Loss	 	-$22.3	 	-$4.8	 	$17.5	
Net Loss per Share	 	-$0.12	 	-$0.02	 	$0.10	
Weighted-Average Shares (Basic and Diluted)	 	187.4	 	201.0	 	13.6	
Free Cash Flow	 	$32.1	 	$25.3	 	-$6.8	
 
A reconciliation between GAAP and non-GAAP information is provided at the end of this release.

 Financial Outlook

Full Year Fiscal 2018 Guidance:

•	Revenue in the range of $975 million to $1,025 million	
		
•	Non-GAAP gross margin in the range of 63.5% to 66.5%	
		
•	Non-GAAP operating margin in the range of -9% to -5%	

First Quarter Fiscal 2018 Guidance:

•	Revenue in the range of $171 million to $179 million	
		
•	Non-GAAP gross margin in the range of 63.5% to 66.5%	
		
•	Non-GAAP operating margin in the range of -27% to -23%	

All forward-looking non-GAAP financial measures contained in this section titled “Financial Outlook” exclude stock-based compensation expense, payroll tax expense related to stock-based activities and, as applicable, other special items. We have not reconciled guidance for non-GAAP gross margin and non-GAAP operating margin to their most directly comparable GAAP measures because such items that impact these measures are not within our control and/or cannot be reasonably predicted. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort.

 Conference Call Information

Pure Storage will host a teleconference to discuss the fourth quarter and fiscal year 2017 results at 2:00 p.m. (PT) on March 1, 2017. Pure Storage will post its supplemental earnings presentation to the investor relations website at investor.purestorage.com following the conference call. Teleconference details are as follows:

•	To Listen via Telephone: 877-201-0168 or 647-788-4901 (for international callers).	
		
•	To Listen via the Internet: A live and replay audio broadcast of the conference call with corresponding slides will be available at investor.purestorage.com .	
		
•	Replay:A telephone playback of this conference call is scheduled to be available two hours after the call ends on March 1, 2017, through March 8, 2017. The replay will be accessible by calling 1-800-585-8367 or 1-416-621-4642 (for international callers), with conference ID 59578076. The call runs 24 hours per day, including weekends.	

CEO Commentary

Pure Storage has posted a blog from its CEO discussing fourth quarter and fiscal year 2017 results at investor.purestorage.com and blog.purestorage.com .

2

About Pure Storage

Pure Storage (NYSE: PSTG) helps companies push the boundaries of what's possible. The company's all-flash based technology, combined with its customer-friendly business model, drives business and IT transformation with Smart Storage that is effortless, efficient and evergreen. Pure Storage offers two flagship products: FlashArray//M, optimized for structured workloads, and FlashBlade, ideal for unstructured data. With Pure's industry leading Satmetrix-certified NPS score of 83.5, Pure customers are some of the happiest in the world, and include organizations of all sizes, across an ever-expanding range of industries.

Connect with Pure Storage:
Read the blog
Converse on Twitter
Follow on LinkedIn

 Analyst Recognition :
Gartner Magi c Quadrant for Solid-State Arrays
IDC MarketScape for All-Flash Arrays

Pure Storage, Evergreen, FlashBlade and the "P" Logo mark are trademarks of Pure Storage, Inc. All other trademarks or names referenced in this document are the property of their respective owners.

 Forward Looking Statements

This press release contains forward-looking statements regarding our products, business and operations, including our expectations regarding technology differentiation,including momentum with FlashBlade, our opportunity and ability to execute for continued growth and industry leadership, and our outlook for the first quarter and full year fiscal 2018 and statements regarding our products, business, operations and results, including progress toward profitability. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions "Risk Factors" and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, including, but not limited to, our Quarterly Report on Form 10-Q for the quarter ended October 31, 2016, which are available on our investor relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017. All information provided in this release and in the attachments is as of March 1, 2017, and we undertake no duty to update this information unless required by law.

 Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow, and free cash flow as a percentage of revenue. In computing these non-GAAP financial measures, we exclude the effects of stock-based compensation expense and payroll tax expense related to stock-based activities. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

3

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to free cash flow," included at the end of this release.

Michael Pak – IR contact, Pure Storage
Tel: (650) 243-0486
ir@purestorage.com

Liz Allbright – media contact, Pure Storage
Tel: (415) 671-7676
pr@purestorage.com 

4

PURE STORAGE, INC.
Condensed Consolidated Balance Sheets
(in thousands)

	
									
 	 	January 31, 2016	 	January 31, 2017	
 	 	(unaudited)	
Assets	 	 		 	 		
Current assets:	 	 		 	 		
Cash and cash equivalents	 	$	604,742		 	$	183,675		
Marketable securities	 	—		 	362,986		
Accounts receivable, net of allowance of $944 and $2,000	 	126,324		 	168,978		
Inventory	 	20,649		 	23,498		
Deferred commissions, current	 	15,703		 	15,787		
Prepaid expenses and other current assets	 	20,652		 	25,157		
Total current assets	 	788,070		 	780,081		
Property and equipment, net	 	52,629		 	81,695		
Intangible assets, net	 	6,980		 	6,560		
Deferred income taxes, non-current	 	536		 	844		
Other assets, non current	 	22,568		 	30,565		
Total assets	 	$	870,783		 	$	899,745		
 	 	 	 	 	
Liabilities and stockholders' equity	 	 		 	 		
Current liabilities:	 	 		 	 		
Accounts payable	 	$	38,187		 	$	52,719		
Accrued compensation and benefits	 	32,995		 	39,252		
Accrued expenses and other liabilities	 	14,076		 	21,697		
Deferred revenue, current	 	94,514		 	158,095		
Liability related to early exercised stock options	 	4,760		 	1,362		
Total current liabilities	 	184,532		 	273,125		
Deferred revenue, non-current	 	121,690		 	145,031		
Other liabilities, non-current	 	1,207		 	3,159		
Total liabilities	 	307,429		 	421,315		
 	 	 	 	 	
Stockholders’ equity:	 	 		 	 		
Common stock and additional paid-in capital	 	1,118,689		 	1,281,472		
Accumulated other comprehensive loss	 	—		 	(562	)	
Accumulated deficit	 	(555,335	)	 	(802,480	)	
Total stockholders' equity	 	563,354		 	478,430		
Total liabilities and stockholders' equity	 	$	870,783		 	$	899,745		

5

PURE STORAGE, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)

	
																	
 	 	Three Months Ended January 31,	 	Twelve Months Ended January 31,	
 	 	2016	 	2017	 	2016	 	2017	
 	 	(unaudited)	
Revenue:	 	 		 	 		 	 		 	 		
Product	 	$	127,350		 	$	186,820		 	$	375,733		 	$	590,001		
Support	 	22,881		 	41,040		 	64,600		 	137,976		
Total revenue	 	150,231		 	227,860		 	440,333		 	727,977		
 	 	 	 	 	 	 	 	 	
Cost of revenue:	 	 		 	 		 	 		 	 		
Product (1)	 	40,522		 	62,532		 	132,870		 	194,150		
Support (1)	 	11,544		 	16,598		 	35,023		 	58,129		
Total cost of revenue	 	52,066		 	79,130		 	167,893		 	252,279		
 	 	 	 	 	 	 	 	 	
Gross profit	 	98,165		 	148,730		 	272,440		 	475,698		
 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 		 	 		 	 		 	 		
Research and development (1)	 	53,710		 	72,632		 	166,645		 	245,817		
Sales and marketing (1)	 	68,927		 	97,962		 	240,574		 	360,035		
General and administrative (1) (2)	 	18,461		 	20,631		 	75,402		 	84,652		
Legal settlement (3)	 	—		 	—		 	—		 	30,000		
Total operating expenses	 	141,098		 	191,225		 	482,621		 	720,504		
 	 	 	 	 	 	 	 	 	
Loss from operations	 	(42,933	)	 	(42,495	)	 	(210,181	)	 	(244,806	)	
Other income (expense), net	 	(757	)	 	500		 	(2,002	)	 	1,627		
Loss before provision for income taxes	 	(43,690	)	 	(41,995	)	 	(212,183	)	 	(243,179	)	
Provision for income taxes	 	604		 	920		 	1,569		 	1,887		
Net loss	 	$	(44,294	)	 	$	(42,915	)	 	$	(213,752	)	 	$	(245,066	)	
 	 	 	 	 	 	 	 	 	
Net loss per share attributable to common
   stockholders, basic and diluted	 	$	(0.24	)	 	$	(0.21	)	 	$	(2.59	)	 	$	(1.26	)	
Weighted-average shares used in computing net
   loss per share attributable to common
   stockholders, basic and diluted	 	187,365		 	201,024		 	82,460		 	194,714		
 
(1) Includes stock-based compensation expense as follows:

	
																	
Cost of revenue -- product	 	$	137		 	$	176		 	$	276		 	$	601		
Cost of revenue -- support	 	877		 	1,657		 	2,388		 	5,639		
Research and development	 	12,511		 	22,620		 	31,135		 	63,495		
Sales and marketing	 	6,427		 	9,598		 	16,966		 	34,317		
General and administrative	 	2,075		 	3,488		 	7,460		 	12,616		
Total stock-based compensation expense	 	$	22,027		 	$	37,539		 	$	58,225		 	$	116,668		
 
(2) Includes a one-time charge of $11.9 million for an equity grant to the Pure Good Foundation in the twelve months ended January 31, 2016.

(3) Represents a one-time charge for our legal settlement with Dell, Inc.

6

PURE STORAGE, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)

	
																	
 	 	Three Months Ended January 31,	 	Twelve Months Ended January 31,	
 	 	2016	 	2017	 	2016	 	2017	
 	 	(unaudited)	
Cash flows from operating activities	 	 		 	 		 	 		 	 		
Net loss	 	$	(44,294	)	 	$	(42,915	)	 	$	(213,752	)	 	$	(245,066	)	
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:	 	 		 	 		 	 		 	 		
Depreciation and amortization	 	9,136		 	14,225		 	32,254		 	50,203		
Stock-based compensation expense	 	22,027		 	37,539		 	58,225		 	116,668		
Contribution of common stock to Pure Good Foundation	 	—		 	—		 	11,900		 	—		
Other	 	(1,093	)	 	533		 	(1,093	)	 	1,584		
Changes in operating assets and liabilities:	 	 		 	 		 	 		 	 		
Accounts receivable, net	 	(14,198	)	 	(5,863	)	 	(67,292	)	 	(44,049	)	
Inventory	 	4,901		 	(3,587	)	 	1,481		 	(3,776	)	
Deferred commissions	 	(4,549	)	 	(2,584	)	 	(13,021	)	 	(740	)	
Prepaid expenses and other assets	 	(6,639	)	 	(6,172	)	 	(8,704	)	 	(6,133	)	
Accounts payable	 	14,677		 	7,005		 	24,901		 	10,644		
Accrued compensation and other liabilities	 	7,494		 	12,595		 	24,710		 	19,381		
Deferred revenue	 	54,548		 	26,742		 	142,535		 	86,922		
Net cash provided by (used in) operating activities	 	42,010		 	37,518		 	(7,856	)	 	(14,362	)	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities	 	 		 	 		 	 		 	 		
Purchases of property and equipment	 	(9,861	)	 	(12,171	)	 	(39,355	)	 	(76,773	)	
Purchases of intangible assets	 	—		 	—		 	—		 	(1,000	)	
Purchases of marketable securities	 	—		 	(43,159	)	 	—		 	(526,717	)	
Sales of marketable securities	 	—		 	34,539		 	—		 	114,354		
Maturities of marketable securities	 	—		 	10,300		 	—		 	48,513		
Net increase in restricted cash	 	—		 	—		 	(2,485	)	 	(5,600	)	
Net cash used in investing activities	 	(9,861	)	 	(10,491	)	 	(41,840	)	 	(447,223	)	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities	 	 		 	 		 	 		 	 		
Proceeds from initial public offering, net	 	—		 	—		 	459,425		 	—		
Net proceeds from exercise of stock options	 	1,298		 	4,187		 	6,008		 	14,912		
Proceeds from issuance of common stock under employee stock purchase plan	 	—		 	—		 	—		 	25,606		
Payments of deferred offering costs	 	(2,012	)	 	—		 	(3,702	)	 	—		
Net cash provided by (used in) financing activities	 	(714	)	 	4,187		 	461,731		 	40,518		
Net increase (decrease) in cash and cash equivalents	 	31,435		 	31,214		 	412,035		 	(421,067	)	
Cash and cash equivalents, beginning of period	 	573,307		 	152,461		 	192,707		 	604,742		
Cash and cash equivalents, end of period	 	$	604,742		 	$	183,675		 	$	604,742		 	$	183,675		

7

Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures
The following table presents non-GAAP gross margins by revenue source before certain items (in thousands, unaudited):

	
																																								
 	Three Months Ended January 31, 2016	 	Three Months Ended January 31, 2017	
 	GAAP
results	 	GAAP
gross
margin (a)	 	Adjustment	 	 	 	Non-
GAAP
results	 	Non-
GAAP
gross
margin (b)	 	GAAP
results	 	GAAP
gross
margin (a)	 	Adjustment	 	 	 	Non-
GAAP
results	 	Non-
GAAP
gross
margin (b)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	$	137		 	(c)	 	 	 	 	 	 	 	 	 	$	176		 	(c)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1		 	(d)	 	 	 	 	
Gross profit --
   product	$	86,828		 	68.2	%	 	$	137		 	 	 	$	86,965		 	68.3	%	 	$	124,288		 	66.5	%	 	$	177		 	 	 	$	124,465		 	66.6	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 		 	 		 	$	877		 	(c)	 	 		 	 		 	 		 	 		 	$	1,657		 	(c)	 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	22		 	(d)	 	 	 	 	
Gross profit --
   support	$	11,337		 	49.5	%	 	$	877		 	 	 	$	12,214		 	53.4	%	 	$	24,442		 	59.6	%	 	$	1,679		 	 	 	$	26,121		 	63.6	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 		 	 		 	$	1,014		 	(c)	 	 		 	 		 	 		 	 		 	$	1,833		 	(c)	 	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	23		 	(d)	 	 	 	 	
Total gross profit	$	98,165		 	65.3	%	 	$	1,014		 	 	 	$	99,179		 	66.0	%	 	$	148,730		 	65.3	%	 	$	1,856		 	 	 	$	150,586		 	66.1	%	
 
(a) GAAP gross margin is defined as gross profit divided by revenue.
(b) Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue.
(c) To eliminate stock-based compensation expense.
(d) To eliminate payroll tax expense related to stock-based activities.

8

The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts, unaudited):

	
																																				
 	Three Months Ended January 31, 2016	 	Three Months Ended January 31, 2017	
 	GAAP
results	 	GAAP
operating
margin (a)	 	Adjustment	 	Non-
GAAP
results	 	Non-
GAAP
operating
margin (b)	 	GAAP
results	 	GAAP
operating
margin (a)	 	Adjustment	 	Non-
GAAP
results	 	Non-
GAAP
operating
margin (b)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	$	22,027		(c)	 	 	 	 	 	 	 	 	$	37,539		(c)	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	601		(d)	 	 	 	
Loss from
   operations	$	(42,933	)	 	-28.6	 %	 	$	22,027		 	$	(20,906	)	 	-13.9	 %	 	$	(42,495	)	 	-18.6	 %	 	$	38,140		 	$	(4,355	)	 	-1.9	 %	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 		 	 		 	$	22,027		(c)	 		 	 		 	 		 	 		 	$	37,539		(c)	 		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	601		(d)	 	 	 	
Net loss	$	(44,294	)	 	 		 	$	22,027		 	$	(22,267	)	 	 		 	$	(42,915	)	 	 		 	$	38,140		 	$	(4,775	)	 	 		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share --
   basic and diluted	$	(0.24	)	 	 		 	 		 	$	(0.12	)	 	 		 	$	(0.21	)	 	 		 	 		 	$	(0.02	)	 	 		
Weighted-average shares used in per share calculation -- basic and diluted	187,365		 	 		 	 		 	187,365		 	 		 	201,024		 	 		 	 		 	201,024		 	 		
 
(a) GAAP operating margin is defined as loss from operations divided by revenue.
(b) Non-GAAP operating margin is defined as non-GAAP loss from operations divided by revenue.
(c) To eliminate stock-based compensation expense.
(d) To eliminate payroll tax expense related to stock-based activities.
Reconciliation from net cash provided by operating activities to free cash flow (in thousands, unaudited):

	
									
 	 	Three Months Ended January 31,	
 	 	2016	 	2017	
Net cash provided by operating activities	 	$	42,010		 	$	37,518		
Less: purchases of property and equipment	 	(9,861	)	 	(12,171	)	
Free cash flow	 	$	32,149		 	$	25,347		
Free cash flow as % of revenue	 	21.4	%	 	11.1	%	

9

Exhibit 99.2
 
Dietz on the Day: Delivering the Data Platform for the Cloud Era

At Pure, we are building a uniquely fast and cloud-capable data storage platform. The 25-year-old mainframe and client/server era technology we compete against simply can’t cope with the explosive growth in data and the need for real-time analysis. Cloud computing demands a new data platform, one that supports today’s volume and velocity of data and the increasing performance required for predictive analytics and machine learning. Our customers use Pure to accelerate new data-driven applications, mining novel insights about their businesses, while substantially reducing costs and complexity - Pure helps them put data to work for their businesses.

As a result of our innovations, Pure just wrapped up another outstanding year of growth. Q4 revenues were $228 million, up 52% from the year earlier quarter, and above the high end of our guidance range. For our fiscal year, Pure delivered $728 million in revenues, up 65% from the previous year. In fact, Pure’s business has grown 2.7 times over the six quarters we have reported since our IPO in 2015. This year, the eighth since our founding and our sixth of selling, we expect to reach $1 billion in revenues.

At the same time, we continue to progress toward profitability with Q4 non-GAAP operating margin of -2%, a 12 point improvement year over year and more than 5 points ahead of the mid-point of our guidance range, while driving $25 million* in free cash flow. We are guiding that the business will crossover to sustained positive free cash flow in this year’s second half. Meanwhile, our balance sheet remains strong, with $547 million in cash and zero debt - we have everything we need to continue to drive market share gains as the secular shifts to cloud computing and all-silicon storage gain momentum.

Pure added 450 customers in Q4, boosting the total to more than 3,000 customers worldwide. Among the notable Q4 additions:

•	Hulu , a leading premium video streaming service, uses Pure to drive its business-critical analytics, and handle intense workloads and customer demands faster.	
		
•	Subway , the world’s largest restaurant chain, chose Pure to support the growth of its new online platform for customer orders.	
		
•	Royal Philips , a leading technology company focused on innovation in healthcare, lighting and consumer products, is using Pure as the core of its mission critical production, providing effortless management, increased performance and the scalability to grow its business.	

		
•	Other new customers include the Australian enterprise services company Optus Business ; Japanese entertainment producer KONAMI ; and cloud based healthcare SaaS company Phreesia .	
		
•	Among new FlashBlade customers in the quarter were the National Hockey League , which uses Pure’s technology to help produce original content including online videos and advanced player analytics; law firm Keker, Van Nest & Peters; and geoscience company ION. For ION, FlashBlade helped collapse its storage footprint by nearly 100:1.	

* Includes $8.1 million of cash impact related to our employee stock purchase plan

We could not be more excited about the road ahead for Pure, for multiple reasons:

1.	Data growth is exploding: By 2025, the world will have accumulated 180 Zettabytes (ZB) of data, up from 44 ZB in 2020 and 10 ZB in 2015, according to IDC . (To get a sense of scale, if a byte were an apple, 1 ZB would fill the Pacific Ocean.) Such ever larger data sets are needed for today’s predictive analytics, including machine learning.	

2.	Data stays at the edge: Big data is becoming bigger than wide-area networks are becoming faster, and this represents an interesting opportunity for Pure. With data growing at a ~33% CAGR (see above) while Internet bandwidth is only increasing ~20% per year , most new data will necessarily be stored in edge data centers rather than in centralized public clouds. IDC estimates that at least 40% of Internet of Things (IoT) created data will be stored, processed, analyzed and acted upon close to, or at the edge of, the network by 2019. Cisco estimates that the majority of database, analytics, big data, BI, ERP and other enterprise workloads stay in private data centers in 2020. These workloads are ideal for our data platform. We see an enormous opportunity across our customer base as IoT (alone a $6 billion opportunity in edge data centers by 2020 ), factory automation, healthcare/biotech, and logistics, as well as other real-time control systems, do not fit in the public cloud.	

3.	Secular shift to flash memory: In the most recent quarter, we had more than one customer running large scale simulations and analytics to replace over 20 racks (think 20 refrigerators of equipment) with a single FlashBlade (at 4 rack units, about the size of a microwave oven). Such dramatic consolidation depends on storage software that has been designed for silicon rather than mechanical disk. And estimates are that 90% of the inevitable transition from hard drives to solid-state memory is still in front of us.	

4.	Secular shift to cloud computing: More than 25% of our business to date has been selling to cloud customers, call that selling into clouds #4 through #4000. We now have over 500 Software as a Service (SaaS), Consumer Internet, and Infrastructure as a Service/Platform as a Service (IaaS/PaaS) customers. Pure’s architecture follows the model employed in the public cloud in that it is multi-tier (greater performance and efficiency), is fully automated, and is	

software-driven but accelerated by commodity silicon. Yet, as our cloud customers tell us, Pure Storage offers higher performance and higher quality of service at a lower cost.

5.	A $35 billion market opportunity: We have just started to disrupt our total addressable market of $35 billion . According to Pacific Crest Securities, the big three public cloud providers in AWS, Azure and Google Cloud will grow to about 15% of the overall IT market by 2020. While remarkable, that still leaves the lion’s share of the market available to Pure, most all of which we are convinced will move toward all-flash and cloud-capable storage.	

6.	Analytics as a key growth market: Pure’s business has long been focused on three key areas - databases/business applications (Oracle, Microsoft SQL Server, SAP); virtualization (VMware, HyperV, OpenStack); and VDI (VMware View and Citrix). In 2017, we see a massive growth opportunity in analytics, both classic and next-generation approaches. The combination of FlashBlade and FlashArray accelerate both traditional analytics such as Oracle OLAP, SAP Hana and SAS, as well as next-gen platforms like Splunk and Apache Spark. Analytics broadly is a $130 billion infrastructure market, and one that will be key to the Pure go-to-market engine in 2017.	

7.	Evergreen subscription business model: Unlike our competitors, Pure comes with an evergreen subscription to future innovation. We design our products with perpetual forward compatibility, so customers never find themselves at a dead end, forced to repurchase the same storage and disruptively migrate their data. Instead, Pure seamlessly evolves underneath customer data with no impact to the business other than improved performance and higher quality of service. This year’s transition to NVMe will be eye-opening for customers - many of whom have become accustomed to the painful repurchase and forklift cycles of their incumbent vendors.	

8.	Breaking down the application silos with a data platform: To thrive, businesses must mine their data for predictive insights, yet often it is the slowness, expense, fragility, and complexity of storage that holds them back. In legacy storage, data is often mapped to a single application rather than enabling data sharing across many applications. In enabling our customers to derive far more value from their data across many more applications, we have become indispensable. You can especially see that within the hundreds of customers that have spent more than $1 million with us.	

Let me close with thanks to all of the customers, partners, investors and employees that have joined Team Orange on our extraordinary journey. We look forward to Pure’s best year yet with compelling product innovations (across FlashArray, FlashBlade, Pure1 and FlashStack converged infrastructure) that will further distance us from the field and help us cross over the $1 billion in revenues threshold.

Forward Looking Statements. This post contains forward-looking statements regarding industry and technology trends, our unique strategy, positioning and opportunity, our products and related roadmaps (including for FlashArray and FlashBlade), the impact of NVMe, the benefits of our approach and cost advantages, competition, traction with partners, and our business and operations, including our future margins, growth prospects and operating model. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, including, but not limited to, our Quarterly Report on Form 10-Q for the quarter ended October 31, 2016, which are available on our investor relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the fiscal year ended January 31, 2017. All information provided in this release and in the attachments is as of March 1, 2017, and we undertake no duty to update this information unless required by law.

Non-GAAP Financial Measures . This post contains certain non-GAAP financial measures about the company’s performance. For the most directly comparable GAAP financial measures and a reconciliation of these non-GAAP financial measures to GAAP measures, please see our earnings release issued on March 1, 2017, which includes tables captioned “Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures” and “Reconciliation from net cash provided by operating activities to free cash flow.”