Thank you. Good afternoon, everyone, and welcome to Pure's Fourth Quarter and Fiscal Year 2024 Earnings Conference Call.

On the call, we have Charlie Giancarlo, Chief Executive Officer; Kevan Krysler, Chief Financial Officer; and Rob Lee, Chief Technology Officer. Following Charlie's and Kevan's prepared remarks, we will take questions.

Our press release was issued after close of market and is posted on our website with us being simultaneously webcast. The slides that accompany this webcast can be downloaded at investor.purestorage.com.

On this call today, we will make forward-looking statements, which are subject to risks and uncertainties. These include statements regarding our financial outlook and operations, our strategy, technology and its advantages our current and new product offerings and competitive industry and economic trends.

Any forward-looking statements that we make today are based on facts and assumptions as of today, and we undertake no obligation to update them. Our actual results may differ materially from the results forecasted, and reported results should not be considered as an indication of future performance.

A discussion of some of the risks and uncertainties relating to our business is contained in our filings with the SEC and we refer you to these public filings. All financial metrics and associated growth rates are non-GAAP measures other than revenue, remaining performance obligations or RPO and cash and investments.

Reconciliations to the most directly comparable GAAP measures are provided in our earnings [indiscernible] and slides. This call is being broadcast live on the Pure Storage Investor Relations website and is being recorded for playback purposes.

An archive of the webcast will be available on the IR website and is the property of Pure Storage. Our first quarter fiscal 2025 quiet period begins at the close of business, Friday, April 19, 2024.

With that, I'll turn it over to Charlie.

Thank you, Paul. Good afternoon, everyone, and welcome to our Q4 and fiscal 2024 earnings call.

We had a solid Q4 performance and ended the year with increasing sales momentum and balanced performance across our theaters and product portfolio. This momentum and growing customer interest in our platform strategy provides us with increased confidence for the coming year.

This year, we expanded our Evergreen portfolio and increased subscription services revenue now to over 40% of total revenue. FY '24 total contract value sales for Evergreen/One and Evergreen/Flex grew to over $400 million, more than doubling over the prior year.

product and platform innovation was strong as evidenced by FlashBlade now exceeding $2 billion in total sales since launch. FlashBlade continues to serve as the leading platform for customers' modern file and object data requirements for both high performance and low-cost applications.

Launched just 9 months ago, our new E-family of products achieved the fastest sales growth of any pure product, presaging that flash will soon replace all disk. Our data storage platform strategy and vision is working and continues to succeed with large enterprises and managed service providers, Pure's strategy to consolidate data storage using a single operating and management environment for the majority of storage requirements just makes more sense than managing multiple different and disparate system environments.

Pure's direct reliability and economics continue to be unmatched and customers appreciate our Evergreen guarantee of no application downtime with system upgrades. Pure's platform strategy incorporating Pure Fusion, which enables Pure systems to operate as a distributed storage cloud combines the best features of enterprise storage with cloud agility and programmability.

It enables customers to manage their data environment as unified storage pools, seamlessly spanning across data centers and public cloud platforms, all within a single operating and management framework. Pure allows customers to organize their data infrastructure efficiently and optimize their data environment.

Our platform vision was a major factor in several strategic enterprise deals in Q4. In one example, a major Fortune 500 financial services firm selected Pure based on our platform strategy, our proven reliability, and our ability to satisfy the majority of their diverse storage needs with a consistent environment and cloud-like operation and efficiency.

This high 8-figure deal comprised almost all of Pure's products and services and represents our growing success in large enterprise. A second notable 8-figure deal this past quarter with an Evergreen/One deal with one of the largest specialized GPU cloud providers for artificial intelligence, offering highly differentiated AI infrastructure solutions to their customers.

Pure is excited to partner with this company to deliver one of the most powerful and fastest AI training environments in the world. However, what truly excites me about AI confirmed through conversations with customers and partners is the focus that it is bringing to customers fragmented data environments.

Customers are beginning to realize that their current fragmented data storage environment will significantly hinder their ability to leverage AI to unlock the full potential of their data. Current data storage environments inhibit AI deployments in 2 ways.

First, existing data storage arrays were selected to provide just enough performance for their primary function, leaving little performance left for AI access. Second, existing storage arrays are not networked, limiting access to AI apps not provisioned directly on their primary compute stack.

The Pure Storage platform solves both of these issues. Pure's E-family delivers flash reliability and efficiency at prices now comparable to traditional hard disk systems and with plenty of performance there for AI access.

And the single operating and management environment of the pure platform across protocols and price performance ranges makes accessing data easier. We are also seeing increased numbers of Portworx deployments in AI environments for data management preparation.

Portworx had a record year and accelerated growth based on customers increasingly graduating their container-based development projects to production scale. Portworx saw strong sales in the financial sector this past quarter.

A leading global financial institution significantly improved the efficiency and lower the cost of critical Tier 0 applications by automating its internal cloud infrastructure with Portworx. Portworx industry leadership was recognized by IDC, which positioned Portworx as an industry leader in their new and latest Kuganetes container data management category.

As we reported all year, Evergreen/One consistently experienced breakout growth. Customers appreciate the simplicity of Evergreen's/One SaaS model.

The Evergreen One service offers always improving data services, always modern infrastructure and a world-class customer experience with contractually guaranteed service level agreements. Now with Evergreen/One, Pure pays customers for power and rack space when hosting the service in their data centers.

Adding to our SLA industry leadership, Pure introduced 3 new SLA guarantees this past year. One, no data migration; two, 0 data loss; and three, power and space efficiency across our Evergreen family, Evergreen/Forever, Evergreen/One and Evergreen/Flex offerings.

Our commitment to offering the most sustainable storage solutions in the industry continues to drive competitive advantage for customers focused on their environmental reporting. Furthermore, the energy demands of AI is outstripping the availability of power in many data center environments.

Pure Flash Solutions can reduce data center power usage, space and e-waste by approximately 20%, and this is proving critical in an environment driven by artificial intelligence and the world's growing demand for data. We are increasingly confident in our platform strategy and our opportunity to lead this market.

Our evergreen technology and programs are changing the industry of allowing customers to eliminate the need to continually rebuy and disruptively replace outdated hardware. Most importantly, to enterprises, sure reduces risk.

Eliminating application downtime due to infrastructure updates and upgrades while dramatically improving system reliability. Our confidence is bolstered by our 4 sustainable competitive advantages.

This includes our ability to deliver a single operating and management environment for the majority of enterprise data storage needs. Our Evergreen technology, which guarantees an always modern environment without application disruption, our management, which enables both performance and cost leadership.

And finally, our cloud operating model, which allows customers to manage all of their data across data centers and clouds as unified pools of data. While we remain cautious about the economy, we are beginning to see some encouraging signs of improvement in the macro environment.

As the industry's most performant consistent and sustainable storage solution we are well positioned to serve both the energy and data-intensive demands of artificial intelligence. Additionally, after 18 months of steep declines, NAND market pricing has stabilized, which should improve storage market growth.

Looking forward to FY '25, a I have high confidence of returning to double-digit revenue growth, given our platform strategy, our growing product portfolio, our cloud operating model, and strong customer demand for our Evergreen and Fort Works subscription offerings. With that, I'd like to turn it over to Kevan now.

Thank you, Charlie. We are pleased with our Q4 financial performance, exceeding guidance for both revenue and operating profit.

As we were expecting, customer demand for our consumption and subscription-based offerings was very strong, especially for Evergreen/One, our Storage as a Service offering and Portworx. Annual sales for both offerings grew over 100% in FY '24 and total contract value or TCV sales for Evergreen/One and Evergreen/Flex exceeded $400 million.

Remaining performance obligations, or RPO, associated solely with our subscription service offerings at the end of Q4 was very strong, growing 29%. Our subscription services net dollar retention, or MDR at the end of the year was 120%.

For the year, revenue grew 2.8%. As a reminder, our annual revenue growth expectations at the beginning of FY '24, assumed that Evergreen/One and Evergreen/Flex TCV sales would grow approximately 50%.

When adjusting for the substantial growth above our expectations at the beginning of the year for Evergreen/One and Evergreen/Flex TCV sales and a noncancelable product sale with a telco customer we mentioned last quarter that is expected to be shipped in FY '25, revenue growth for the year would have been over 7%. As a reminder, revenue from our Evergreen/One and Evergreen/Flex consumption and subscription service offerings are recognized over time.

Whereas product revenue related to sales of our products across our data storage platform is recognized upon shipment. Operating margin for FY '24 was approximately 16% above our original guide of 15% at the beginning of the year.

Key contributors of our operating margin strength were strong gross margins across our data storage platform reflecting the value of our solutions and disciplined investing. Total RPO, which also includes product orders grew 31% year-over-year in Q4, exceeding $2.3 billion.

Product orders included in total RPO at the end of Q4, including a noncancelable telco order that we mentioned last quarter, and orders relating to a significant win in Q4 with a major Fortune 500 financial services company. In Q4, subscription services annual recurring revenue or ARR grew 25% to approximately $1.4 billion, highlighting the strong traction for our consumption and subscription-based service offerings.

As we mentioned previously, subscription services ARR excludes noncancelable Evergreen subscription contracts where the effective service date has not started. Including noncancelable subscription contracts where the effective service date has not started, Subscription Services ARR at the end of Q4 grew 27%.

Subscription services revenue during Q4 was $329 million, growing 24% and comprising 42% of total revenue. U.S.

revenue for Q4 was $522 million, and international revenue was $268 million. Our new customer acquisition grew by 349 customers during Q4, including 6 new Fortune 500 customers.

We now serve slightly over 60% of the Fortune 500. Product and subscription services gross margin both contributed to total gross margin strength of 73.7% in Q4 and 73.2% for the year.

In Q4, product gross margin was 73.4% and subscription services gross margin was 74.1%. Our headcount increased slightly to nearly 5,600 employees at the end of the quarter.

Pure's balance sheet and liquidity remains very strong, including approximately $1.5 billion in cash and investments at the end of Q4. Cash flow from operations during the quarter was approximately $244 million and approximately $678 million for FY '24.

Capital expenditures during the year were nearly $200 million. Representing approximately 6.9% of revenue for FY '24.

Factors driving our higher capital expenditures during the year included sales growth of our Evergreen/One Storage as a Service offering, our new headquarters and test equipment supporting our engineering team for new product innovations. In Q4, we repurchased 585,000 shares of stock returning approximately $21.4 million to our shareholders.

For the year, we repurchased nearly 4.7 million shares, returning nearly $136 million in capital to our shareholders. Consistent with our remarks last quarter, our share repurchases represent a lower level of repurchase activity as a result of the fixed trading parameters that were in place throughout the quarter.

We have approximately $145 million remaining on our existing $250 million repurchase authorization, and we are announcing today a new share repurchase authorization of $250 million. Now turning to our guidance for FY '25.

We expect to return to double-digit revenue growth in FY '25, growing 10.5% to $3.1 billion. We expect demand across our entire data storage platform will strengthen while also remaining cautious of the macro spending environment.

Our annual revenue guide of 10.5% growth also contemplates approximately 50% growth in TCV sales for our collective Evergreen/One and Evergreen/Flex service offerings, which are expected to be $600 million. To help better understand the short-term impact that growth of our consumption and subscription offerings have on our annual revenue growth rate we estimate that our forecasted FY '25 revenue growth would be in the mid-teens when adjusting for the expected growth of both our Evergreen/One and Evergreen/Flex service offerings.

Slightly offset by expected additional revenue arising from past TCV sales in FY '24. Consistent with our philosophy in driving profitable growth, we expect FY '25 operating profit to be $532 million, and operating margin to be 17%.

Margin for FY '25 is in line with our longer-term goal of expanding operating margin by a percentage point or 2 each year and represents a 2-point increase from our FY '24 guide that we communicated at the beginning of the year. We are pleased with our expectations of getting back to double-digit revenue growth and continuing strong growth from our nev Storage as a Service, and Evergreen/Flex offerings.

Pure's data storage platform and Evergreen architecture delivers substantial business value to our customers by reducing complexity, while increasing reliability, flexibility and unparalleled power and cost efficiencies. With that, I'll turn it back to Paul for Q&A.

Thanks, Kevan. [Operator Instructions].

If you have additional questions, we kindly ask that you please rejoin the queue and we'll be happy to take those additional questions if time allows. Operator, let's get started.

Thanks a lot. Good afternoon, everyone, and congrats on a nice print here.

I guess, Charlie, the question for you really is it looks like Evergreen/One sales should continue to grow at a really robust rate again into fiscal '25 after what you did in '24. Can you just touch on what do you think is resonating so well from a value proposition basis with customers when it comes to Evergreen/One offering.

And then is there a framework to think about how much of your revenue base kind of your shipment base, if you may, could actually move to a subscription model over time?

Yes. Thanks, Amit.

Hope you're doing well. So actually, I think I could answer the question in really two ways.

The economic and then the noneconomic, and I'll start with the noneconomic first. What's very exciting about Evergreen/One is that it really is a SaaS-like model.

And I think just like you and probably everybody else on this call, no longer use external hard drives on their on their PCs or laptops, but use some type of cloud-based service. Because of the ease, it's managed for you.

You don't have to worry about it failing, you're able to easily just subscribe to more capacity if that's what you need without worrying about having to go out and buy and configure a new system. The same is true with our Evergreen/One service.

That is it really is storage as a service, whether that is deployed in the cloud, in a colo or actually on the customer's premise. And now it's deployed on the customer's premise, we pay them for hosting it for us.

So from the customer standpoint, it has all of the attributes of a SaaS service. They manage entirely through the cloud.

We manage it otherwise. We're constantly looking at it from a capacity and performance standpoint.

Upgraded as necessary, mostly remotely. And so it's a very easy service and completely managed.

And of course, that's the way that the modern world is operating now and the reason why many customers are they attracted to the service. Of course, the economic elements of it are that they only pay for what they use when they use it, they don't need to buy a system that is sized at the rate that they think they'll need 4 or 5 years, hence, that they're able to just pay for what they -- as I said, and what they use when they use it.

So it's compelling from both economic and noneconomic purposes. Lastly, 2% in terms of total subscription.

And so I think easily, with any continued growth in this environment, we certainly see our way clear to a majority of revenue over time being in the subscription category.

Yes. And also congrats on the quarter.

I wanted to ask about the numbers a little bit. The RPO balance at $2.3 billion stands out, but I think even more notably is the unbilled component of that at about $709 million.

That's up about 90% year-over-year. I know, Kevan, you talked about the $41 million from the telco sitting in that number this last quarter, but you also alluded to -- it sounds like a very large significant win with a major financial services company.

I think if we unpack that, that might give us a little bit more insight into the subscription growth that you're seeing. So I'm wondering if you could help us bridge that growth in the unbilled RPO number ex those big product contributions in the quarter?

And just any help would be useful.

That's great, Aaron, you I will give you some of the bridging discussion. But before we get into it, yes, we're really excited about this Fortune 500 win.

Let me have Charlie explain that a little bit, and then I'll provide some bridging information for you.

Yes, the wind came in a bit late in the quarter. So it's obvious that you will be deploying that through this new fiscal year.

Very exciting. They really -- it was a deal that covered really the majority, if not most of Pure's services, our products.

And frankly, it was all based on them buying into and fully understanding the ramifications of having a single operating environment to unify their data storage environment. So really pleased with that win.

And then, Aaron, from a bridging standpoint, our total RPO, which would include product orders. And again, that's the telco order and that's the significant win with the Fortune 500.

And you're exactly right. Both of those would be unbilled because we haven't shipped the product yet.

So as we ship that product, you'll see more billings come through. as it relates to that RPO.

But the other large piece of it is going to be the significant growth of our Evergreen/One and Evergreen/Flex subscription offerings. And again, we build for that either annually, quarterly, depending on what the customers' preferences are.

So that will be a large piece of the end build that you're seeing as well.

Great. Maybe on the AI discussion, I think a lot of the conversations we've been having with investors is just trying to figure out the timing of when you would expect some of these storage investments versus -- is that in the data preparedness time as you're getting ready for inference.

Just any kind of patterns that you're seeing just in terms of timing when enterprises or other customers are considering these investments? And then maybe just as a second question, there's been a lot of talk about volatility in NAND pricing, hammer on -- from some of the disk vendors, is there even a conversation about are we at a different crossover point this year?

Or has the conversation really moved on to, okay, I'm moving my infrastructure eventually to all-flash let's not be concerned about a quarter-on-quarter price differential?

Meta, this is Paul. I'm sorry, I'm going to be the bad guy so that the others don't get upset with us.

We'll take your first question. And at the end, we'll pick back up on your last question.

Sorry, I had to follow that. So let's talk about AI.

And you're right. I'm sort of looking at the AI market in three categories.

One is the modeling area, that's a super high-performance GPUs, super high-performance storage, everything to go along with it. The inference market, which involves perhaps some GPUs but -- and good performance, but not necessarily the supercharged performance.

And then just the data -- the general data or the uplift to data storage that needs to take place so that customers can get access to data that's right now in silos. Obviously, the market has been transfixed with the modeling side of things.

And I think appropriately so, but I do think out of all of them, it's probably the smallest in terms of total market size. And of course, the world is going dog on that, and we're tracking a lot of different entities and activities on that in the modeling part of the market.

I think inference is only just beginning. Customers trying to figure out what they're going to do there.

I think what's really impressed me over the last 6 months as I've spoken to both customers and large integrators and channels that work with customers is everybody starting to recognize that their current data environment is not really up to the task of being able to even offer the data, let alone do it at high performance to the AI environments that they'll want to create. So that's -- I view that as a very large opportunity.

So I would say we're still very early in this. I think that's the other part of your question.

I think we're very early in this, and I think it's going to take some time for it to to work its way through the enterprise -- through enterprises planning horizons.

Yes. And Meta, this is Rob.

Just to jump in on that. I would definitely agree echoing Charlie's comments.

For my own discussions with customers, I think we're early in cycle in terms of customers, really understanding how do they transition from breaking down the silos that are fragmenting their data today, moving away from physical limitations to being able to connect data access through automation and policy certainly bringing performance to all areas of their data. I think the other discussion that we're having is customers that are navigating this space are realizing the importance of future proofing their technology decisions, especially as it pertains to infrastructure investments.

If you're investing in building out infrastructure to modernize and prepare your environment for AI, it's absolutely critical that you're making choices that are going to be utmost flexibility just because of the speed that the space is moving in. And so when you kind of map that, you got to step back from that and map that down to the Pure portfolio, very pleased with our position, right?

You can see where our single consistent software and hardware operating environment with Fusion, really helping customers emerge from that fragmented data storage position. Certainly, what we're doing with in terms of bringing performance, much needed performance to an area storage that frankly has been lacking that for quite some time.

And then certainly with Evergreen, bringing that future proofing and optionality.

I wanted to follow back up on margins and leverage a little bit here. Kind of as it pertains to the company becoming a little bit more of a subscription service based.

So maybe kind of a 2-parter here. Just talk about the gross margin line.

It does look like that's probably guided a little bit lower. It's been a pretty high level.

What are the levers on the gross margin line? And then maybe, Kevan, can you just talk a little bit about the kind of OpEx investment in an environment where more of the revenues is going to be pulling off of the subscription line?

Tim, I'll jump in and be the bad guy again. Kevan, please go ahead and take the gross margin question, and we'll come back to the OpEx later.

Yes. And I'll do that in the context of FY '25, and we can go into some more detail if needed.

But look, pleased with both gross margin and operating margin performance as we think about it in '24, and it really is consistent with our philosophy of driving profitable growth. And as we look to FY '25, we're again expecting to expand our operating margin to 17% while also returning to double-digit revenue growth.

And this assumes that our operating expenses will grow at a slightly lower rate than what we saw in FY '24 as we continue to invest in our sales capacity and in innovation. And you're right, Tim, this would then imply a slight decline in gross margins, which we expect to be derived principally within product gross margins as we continue to penetrate the disk market and scale our E-family.

So hopefully, that's helpful for you.

My question is for Kevan. Kevan, based on the customer data you have so far, on average, how much smaller does the TCV for an OpEx deal start compared to a CapEx deal?

And what is the crossover point. And just on a related note, I think it would be helpful for us if you could comment on the range of scenarios where an OpEx deal might start smaller or maybe much smaller than then a CapEx deal and scenarios where an OpEx deal might start at the same size of the CapEx deal.

Yes, it's a great question, Howard, and I'll let Charlie and Rob jump into as they see fit. But when we think about.

Obviously, we have a lot of variation in terms of sizing between our CapEx offerings as well as Evergreen/One. And frankly, when we pull out the on-demand billings and then do a straight comparison, on average deal size, we're actually pretty close.

When you take a step back between value at the order level between CapEx and Evergreen One. But again, our data points are principally around FY '24.

Still a lot more time to see how that evolves. And Charlie, do you have any other points you'd want to raise?

Yes. Howard, it's a great question, and we're trying to actually dig down into ourselves in a number of different ways because rarely do we have a situation where the customer is deciding for the same -- exactly the same environment, one versus the other.

And because of that, as Kevan mentioned, we have average numbers. Average numbers, if you look across the entire customer base and all the deals in the quarter are coming out about the same, but that may not be true on an individual deal-by-deal basis.

My gut tells me that that the average TCV of Evergreen/One deal is somewhat lower than the CapEx, but that's got level reaction not yet bolstered by data. We're hoping to get a better handle of that over the next couple of quarters.

What I will say, we do know, though, the breakeven. The breakeven is approximately 2.5 years.

That would be the revenue breakeven.

Sorry, the revenue breakeven or the same amount of capacity. And that -- what you're asking about is not necessarily the same level of capacity, and we're still trying to figure that out.

Great. Thanks for taking the question and congrats on the quarter.

Just one question for Kevan. Kevan, I'm trying to understand the guidance and kind of the assumption around your TCV bookings for Evergreen/One last year -- or fiscal '24 when you guided, we obviously -- you had to raise the assumption on Evergreen/One bookings contribution through the year, and that led to a headwind to top line growth, what gives you confidence that 50% is kind of the right number and that at the end of the year or through half the year, it's not going to be 100%.

I understand the numbers are a little bigger and you're assuming kind of the similar dollar additions. But I'm trying to understand just the risk to the top line guide.

Yes, I appreciate the question, Pinjalim. And look, when we're coming up with our guide for both the TCV sales of Evergreen/One and Evergreen/Flex as well as our revenue guide, you have to imagine a lot of work in terms of modeling, looking at pipeline, looking at opportunities are involved as part of that process.

And look, that then informs our best view, if you will, of guide, which is 10.5% for revenue and the 50% growth rate that we gave for TCV sales for Evergreen/One and Evergreen/Flex. And -- but you really -- your question is, hey, what if we see significant changes in mix and what's the impact?

And how do we think about that similar to the impact we saw in FY '24. And look, if our sales mix results in less TCV sales growth of our subscription and consumption offerings, we would expect that our FY '25 revenue growth would increase.

That would be our expectation as we sit here today. Now on the reverse side, if TCV sales of Evergreen/One and Evergreen/Flex grow significantly and well outperforms our assumption of 50% growth that would have an impact on our revenue growth rate.

And as we progress through the year, we'll continue to update sales performance across sales of Evergreen/One and Flex to give you that visibility.

This is Eddy for Chris. I'd like to ask about the 8-figure deal with major GPU cloud provider you guys talked about.

Can you talk about where pure systems are being used for and there like are your systems directly feeding the GPUs for training or inference or are they being used in backup and archive for example? Also wondering if you can discuss the FlashBlade versus FlashArray mix in there and whether there is some E-Series I think investors would like to understand where your systems sit within these AR workloads so they can better understand the opportunity there?

Yes, Eddy, this is Rob. Thanks for the question.

I'll take that one. So Charlie mentioned, very excited about this win.

The customer here is one of the largest GPU cloud providers. What's interesting and kind of exciting about the usage and use cases in this environment is it's really a mix of a number of use cases, all involved in AI training workflow.

So a portion of it is being used for data preparation, pre and post processing. A large portion is being used for direct AI training.

That is, as you said, directly feeding training data into and out of GPU servers, a lot of model experimentation is being done in these environments. As well, this environment is supporting a large number of users doing -- kind of going through these workflows and doing this development and performing these tasks.

I think the second part of your question was to better understand the product mix as part of the sale. I will remind you, this was a large Evergreen/One deal, which is I think speaks to the dynamic nature of a lot of the work in this space.

as a lot of the AI workflows expand beyond just high-speed training into the broader set of data preparation, all the elements that I just walked you through Evergreen/One creates a lot of flexibility in that model for the service provider, the cloud provider, in this case, to deploy the right service levels for the right usages. That said, [indiscernible] environment is being served with the FlashBlade product set.

So hopefully, that gives you a little bit more color to think about our opportunity and really the points of validation in the space.

Just wanted to ask if and when you might be willing to give us revenues from Evergreen/One and Flex.

Jason, great question. Let us work through the transparency we're giving you on TCV sales for the time being and the conversion of those TCV sales in terms of normalized revenue, and you'll see that in the slides we presented, I think that is a level of bridging we'll want to do at this point in time in terms of where we're sitting.

And Kevan, I'm going to come back to that prior question. If I -- I'm just trying to think through all of the different disclosures that you gave for '24 and '25, and trying to normalize for the traditional model historically, product and/or services.

I mean just based on my math, it looks like your revenue over the last couple of years would have compounded at roughly 9%. Is that a reasonable framework when I make all the adjustments for the model transition and the telco customers push out from '24 and '25.

And if that's the case, what's the core underlying sort of storage demand that you think underpins that over the last couple of years? And how did your share during those periods?

Charlie, do you want to hit storage demand and market share first and then I'll hit the modeling question.

Yes. I think the core, David, of your question really relates to are we picking up market share at what rate?

We feel pretty confident that we're in the still -- we remain in the 15% market share pickup rate for a variety, which is not necessarily reported by the reporting agencies mainly because they do not incorporate our Evergreen/Forever subscription, which, as you know, means that we don't resell the same storage when an array becomes obsolete because in our case, arrays don't become obsolete. So with that, I can't -- I think the team is taking a good look at the -- we know what it would have been -- and Kevan stated it in his preamble that it would have been around 7 -- a little over 7% this year.

I don't have the numbers for the prior year. Do you have that, Kevan?

No. We love to get back to you on that.

But your basic premise that the market is under accounting, what we believe is -- would be our growth if our Evergreen/One sales were actually in standard product sales is absolutely correct.

The other thing too, David, is you can kind of do back of the envelope calculation to estimate the amount of revenue that's coming off Evergreen/One and Evergreen/Flex given that average duration of these contracts is around 3 years, and obviously, we've given you the TCV sales for FY '24, growing in excess of 100% as well as our expectations for TCV sales for Evergreen/One and Evergreen Flex for FY '25.

Across your products, Charlie, could you just maybe talk about the FER and straight-up product sales kind of like exit rates in fiscal 4Q and what you're kind of seeing in fiscal 1Q to maybe even and get some insight into the level of possible conservatism in your guide there on the product side.

As we indicated, I think, at the end of our -- in our Q3 call and now in Q4, we are seeing strong indications of improving demand both, I think, in the actual results as well as in pipeline as we go forward and in our conversations with customers overall. So that's what's giving us confidence.

I think, Kevan, in terms of -- we generally don't provide direct exit rates, but...

Yes, we don't. But I think we've taught it directionally.

And obviously, the strength we're seeing, both in FY '24 and FY '25 is really being driven from a growth perspective. Buyer subscription services and subscription services revenue.

And when we think about it directionally next year, but to Charlie's point, he's right, we don't guide specifically on product revenue and subscription revenue. I think it's a good way to think about product revenue being flattish to maybe slightly down and really that growth being driven by our subscription services overall for FY '25.

Earlier in the Q&A, Charlie broke down the AI opportunities into sort of the 3 buckets, and I found that helpful. And what I really wanted to see if we could unpack a bit is the item described as data uplift.

In other words, I'm trying to get a better sense of what you're assuming for really the timing of when that becomes material and how you expect it to manifest itself in terms of -- is it sales to enterprises as opposed to needing to break into hyperscalers or the operators of the AI platform. Just a little bit more impacting if that would help.

Absolutely, Simon. So I think your instinct on this is absolutely correct.

What the concept is that, of course, regardless of the manner in which enterprises want to build, whether they want to build their own data environment for AI or do their own modeling or do their own inference or not. They do have to make their data available for analysis by the AI engine.

In order to do that, their data today is largely trapped, I say, trapped in silos. It's on storage environments that were largely purchased very much -- storage is bought with economics in mind.

And they are purchased at the performance level and at the capacity level necessary for their primary job, which generally means there's not a lot of performance left over to be able to serve up data for analytics of any type, let alone AI. And even if they had that performance, they're not networked.

Traditional storage arrays are not networked at the array level. You have to go through the application environment.

which is not terribly useful and very indirect. That would mean that customers would generally have to copy that data and buy new arrays anyway.

And in our case, what our platform allows them to do is replace those arrays for their primary purpose going from disk to flash and have plenty of performance left over for the AI environment. So they get to modernize their environment reduce their power spacing cooling by a factor of 10, have much higher reliability, lower labor associated with it.

And at the same time now update their data environment so that it is available for AI analysis.

And just to build on that a little bit. Charlie mentioned a lot of these silos and fragmented pools of data storage really aren't network today.

Let me take it from a customer and a procurement lens. If you look at a lot of these environments, data storage has historically been purchased and configured application by application, department by department completely independently.

And in a world where that data is really only being used for a single purpose, that worked okay. But the whole power of AI technology is being able to connect all these data sets and glean from them in unison greater insights in order to do that, you've got to actually connect all of these things.

And so when we step back and we think about our position with our platform strategy, being able to pull all these pools of data together, that's what we really see as the larger opportunity set here.

And then when you think about timing, what I'm seeing is it's the most -- it's the companies that are the most advanced in their thinking and analysis of what they might do with that are just beginning to realize, oh my gosh, regardless of how many GPUs we buy or lease or rent, at our data governance is very poor. Our ability to get access to that data is very poor.

So I think it's going to take time for the general market to come to full grips with this. So I see it more late this year, early next year.

In the meantime, we have -- there's plenty of economic reasons why customers would want to use our e family to replace disc when that's coming up anyway. So as I see it, the e-family kills two birds with one stone.

It's a better replacement and it prepares them for AI.

Yes. Thank you and congrats on your results, and thank you for that detail on what the Evergreen run bookings does to your overall revenue.

That's great. I want to double click on the major one with the -- on the major GPU cloud provider.

Specifically, I'd like to understand how penetrated are you within that opportunity as well as if you're not -- if that deal does not put you up 100% penetration than what is being utilized alternatively at that particular GPU provider?

Yes, Nehal, I'll take that one. This is Rob.

We're -- it's not 100%, so I'll tell you that. Look, we're very pleased with the win.

I think, as I mentioned before, what's particularly exciting is the mix of use cases being deployed on our footprint there. And look, I think as we mentioned, it's one of the largest GPU cloud providers out there.

Our focus at this point really is in ramping that Evergreen One consumption driving those initial project deployments to success, and we'll see where that takes us.

I was just wondering can Rob describe what is alternately being utilized in before [indiscernible]?

I really can't speak to that. I don't know that we have the visibility into that.

Yes. So you had a small workforce realignment charge in Q4.

I was curious to know what the goal of the realignment was. And are we done with that?

Yes. We have restructured to some extent, inside the organization to focus much more on customer segments, enterprise commercial and hyperscaler and putting specialized teams focused on driving business process to fit those 3 models in a very coordinated way across across the company.

And based on that, we've moved people and moved roles to different areas. And that also meant that there were some roles that were being eliminated, and that's what really caused the restructuring.

And no, we don't -- I mean, that was limited really to the reorganization that we put in place.

Thank you, Eric. I think this next question is a person who got back in line.

So I think this will be the last question.

All right. Just because it has not been asked, I'm curious, given the AI discussion and the narrative around the pure, just where we're at with regard to Meta and that deployment, AIRE, I know there's been a lot of discussion about the expansion of Meta's GPU footprint.

I'm just curious of where you currently see yourself at and whether or not there's any assumptions of opportunity at Meta baked into your guide this year.

Thanks, Aaron. This is Rob.

Welcome back for round 2. Our relationship with Meta is stronger than ever.

We're working with them on almost a continuous basis. And as we said before, they continue to realize incredible value from our solutions in place.

I think specific to your question, just asking about did we see additional sales to the RSC environment. We -- as we've said before, we have sales to Meta in almost every quarter, including in other AI environments.

We didn't have sales into RSC. But as we've mentioned, we typically wouldn't be updating or commenting on sales into other environments, including other AI deployments there.

Thank you, Aaron. Charlie, before you give concluding remarks, maybe you could comment on Meta's second really excellent question about whether we're at a different crossover point now to the all-flash data center.

Yes, Meta, I think that it's a great question. I still believe we're early in that process.

I started saying last year that I expected the last disk storage array to be sold in about 5 years' time. We're now 4 years in front of that.

I'm going to stick with that timetable. I think customers -- the growth of our e-family has been really tremendous this year, but it's early -- still early days.

We're expecting even greater growth, obviously, this year ahead. But considering how much disk is out there, it will take a bit of time.

I am very bullish on this, and I'll stick with it, that I think the next 3 to 4 years, we're going to see the decline of Disc Systems.

And then you had some concluding statement.

Well, I do want to thank everyone for joining us today, as always, on today's earnings call. The platform strategy that we've built is now leading the data storage industry's transformation.

We are seeing just incredible response to really unifying the way that data operates within the enterprise environment. With this unified and modern storage platform, enterprises now can really uniquely tackle their fragmented data environments.

And that's what's going to allow them to unleash the full potential of their artificial intelligence. I do want to thank our customers, our employees, our partners investors and suppliers, your dedication, your collaboration, your trust are really the driving forces behind our progress.

Thank you all.