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Pure Storage Announces Third Quarter Fiscal 2021 Financial Results

Subscription Services recurring revenue growing 29% year-over-year

1Pure Storage Announces Third Quarter Fiscal 2021 Financial ResultsSubscription Services recurring revenue growing 29% year-over-yearAcquired Portworx in Q3; creating most complete Kubernetes data services platform Record sales quarter for FlashBlade and FlashArray//CMOUNTAIN VIEW, Calif.,November24, 2020 –Pure Storage (NYSE: PSTG), the IT pioneer that delivers storage as-a-service in a multi-cloud world, today announced financial results for its third quarter ended November1, 2020.“Our strategy and vision to deliver hybrid and multi-cloud data services is exciting the industry, our customers and developers alike," said Charles Giancarlo, Chairman and CEO of Pure Storage. “Pure made bold moves in the quarter to deliver on our strategy with the acquisition of Portworx and the addition of Dominick Delfino to lead our sales organization.”Third Quarter Financial Highlights•Revenue $410.6 million, down 4% year-over-year•Subscription services revenue $136.1 million, up 29% year-over-year•GAAP gross margin 67.3%; non-GAAP gross margin 69.1%•GAAP operating loss $(65.2) million; non-GAAPoperating income $3.4 million•Operating cash flow was $32.8 million•Free cash flow was $7.9 million•Total cash and investments of $1.2 billion•Deferred revenue $762.8million, up 19% year-over-year•Remaining performance obligations (RPO) exceeding$1.0billion, up 25% year-over-year“We are pleased with our financial performance and execution during the quarter which slightly exceeded our expectations at the beginning of the quarter,” said Kevan Krysler, CFO of Pure Storage. “Key highlights include consecutive quarters of strong sales of our Subscription Services, and record sales during a quarter for our FlashBlade and FlashArray//C solutions.”Third Quarter Company HighlightsPure continued setting the pace in the industry by changing expectations for data and storage management. The technology momentum in Q3 across the portfolio includes:•Subscription Services momentum-Pure’s Subscription Services, including Evergreen and unified Pure as-a-Service offerings, grew 29% year-over-year. Selecting Pure as-a-Service in Q3, leading organizations, including ME Bank in Australia and The University of Texas Health Science Center, recognize the flexibility and choice that these offerings provide. Our unified subscription, Pure-as-a-Service, which includes Cloud Block Store, enables customers to subscribe to storage in their data center and the cloud, paying for only what they consume, making migration to the public cloud possible at any time without worrying about stranded assets.•Advancing Pure as-a-Service offerings -Today marks another milestone and industry first for the Pure as-a-Serviceoffering with the announcement of the Pure Service Catalog, which includes a number of new service tiers. The new service tiers deliver increased transparency and flexibility for customers, allowing them to choose the right storage service level for each workload. Pure is also making Pure as-a-Service more accessible by offering lower cost service tiers. •Acquisition of Portworx, market leader in Kubernetes storage-In Q3, Pure acquired Portworx, the leading Kubernetes data services platform that enterprises trust to run mission-critical applications in containers in production. By combining Portworx with Pure’s industry-leading data platforms and Pure Service Orchestrator software, Pure provides a comprehensive suite of data services that can be deployed in-cloud, on bare metal, or on enterprise arrays, all natively orchestrated in Kubernetes.

2•FlashArray//C Momentum-FlashArray//C, well into its second generation, continues to grow at an accelerated pace and this month, received the Best of Show Award at the Flash Memory Summit for Most Innovative Flash Memory Technology. The performance and financial efficiencies delivered by FlashArray//C enable customers to reduce the cost of running capacity-oriented workloads so significantly it eliminates the need for hybrid disk arrays.•Strong FlashBlade momentum and AWS Outposts Designation -FlashBlade’s unified fast file and object capabilities to consolidate and modernize unstructured data across a number of use cases including technical computing, analytics, backup and rapid restore is validated by strong customer momentum this quarter. Customers such as The First National Bankers Bank, Louisiana Office of Technology Services and Sinai Health System demonstrate that FlashBlade continues to be the leading choice to enable rapid recovery and defend against ransomware. Also in Q3, FlashBlade achieved theAWS Outposts Ready designation, delivering a hybrid cloud solution with all-flash performance, cloud scalability, and operational simplicity to accelerate modern applications and break down IT silos. GuidanceConsistent with the prior quarter, Pure is sharing its internal expectations of Q4 business outlook, but will not provide formal guidance due to the resurgence and continued uncertainty of COVID-19.Pure’s current internal view of fiscal Q4 outcomes, which should not be viewed as guidance, is thattotal revenue for Q4 will be $480 million, a decline of two percent year-over-year. With the current view of revenue, Pure believes non-GAAP operating profit will be approximately $26 million in Q4.Conference Call InformationPure will host a teleconference to discuss the third quarter fiscal 2021 results at 2:00 p.m. PT on November24, 2020. A live audio broadcast of the conference call will be available at the Pure Storage Investor Relations website at investor.purestorage.com. Pure will also post its supplemental earnings presentation and prepared conference call remarks to the Investor Relations website in advance of the call for reference. A replay will be available following the call on the Pure Storage Investor Relations website or for two weeks at (855) 859-2056 (or 404-537-3406 for international callers) with passcode 2343447.Upcoming IR Events•Pure will be presenting at the Credit Suisse 24th Annual Technology Virtual Conference on November 30 at 10:40 a.m. PT. •WellsFargo Technology, Media and Telecom Virtual Summit on December 2 at 9:00 a.m. PT.•Barclays Global Technology, Media and Telecommunications Virtual Conference on December 9 at 1:00 p.m. PT.The presentations from these events will be webcast live, and all information will be available on the Investor Relations website at investor.purestorage.com.About Pure StoragePure Storage (NYSE: PSTG) gives technologists their time back. Pure delivers a Modern Data Experience that empowers organizations to run their operations as a true, automated, storage as-a-service model seamlessly across multiple clouds. One of the fastest-growing enterprise IT companies in history, Pure helps customers put data to use while reducing the complexity and expense of managing the infrastructure behind it. And with a certified customer satisfaction score in the top one percent of B2B companies, Pure's ever-expanding list of customers are among the happiest in the world.Analyst Recognition: Pure Storage has been named a Leader inthe 2019 Gartner Magic Quadrant for Primary Storage.Forward Looking StatementsThis press release contains forward-looking statements regarding our products, business and operations, including but not limited to our views relating to future period outcomes, the scope and duration of the COVID-19 pandemic and its impact on our business operations, liquidity and capital resources, employees, customers, supply chain, financial results and the economy, our expectations regarding product and technology differentiation, including our new offerings, strategy and