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Q3 2019 Quarterly Report

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1Pure Storage Announces Third Quarter Fiscal 2018 Financial ResultsMOUNTAIN VIEW, Calif., November 28, 2017– Pure Storage (NYSE: PSTG) today announced financial results for itsthirdquarter ended October 31, 2017.Key quarterly business and financial highlights include: Record quarterly revenue: $278 million, up 41%Y/Y, 2% ahead of midpoint of guidanceQuarterly gross margin: 65.5% GAAP; 66.4% non-GAAPQuarterly operating margin: -15.1% GAAP; -0.7% non-GAAP, up 24.6 ppts and 9.1 pptsY/Y, respectivelyRaising full-year fiscal 2018 revenue guidance to between $1.012 billion and $1.020 billion and non-GAAPoperating margin guidance to between -4.9% and -3.5%“Pure has built a platform that allows customers to build a better world with data,” said Pure Storage CEO Charlie Giancarlo. “Pure offers a simpler, more effective and agile solution for data-rich applications like artificial intelligence.”In the quarter, more than 300 new customers joined Pure Storage, increasing the total to more than 4,000 organizations, including more than 25% of the Fortune 500. Afew new customer wins in the quarter include: NASAGoddard, Krispy Kreme, John Lewis PLC, Movado Group, Weave Communications, Comodo Group, and Pronto Software. “We had an excellent quarter, highlighted by strong revenue growth, positive free cash flow, and a continued march toward profitability,” said Pure Storage CFO Tim Riitters. “We are excited to be fast approaching the $1 billion annual revenue mark and our first profitable quarter on a non-GAAPbasis.”Third Quarter Fiscal 2018 Financial HighlightsThe following tables summarize our consolidated financial results for the fiscal quarters ended October 31, 2017and 2016(in millions except percentages and per share amounts, unaudited):GAAP Quarterly Financial InformationThree Months EndedOctober 31, 2017Three Months EndedOctober 31, 2016Y/Y ChangeRevenue$277.7$197.041%Gross Margin65.5%64.8%0.7 pptsProduct Gross Margin66.2%65.9%0.3 pptsSupport Gross Margin62.4%59.9%2.5 pptsOperating Loss-$41.8-$78.2$36.4Operating Margin-15.1%-39.7%24.6 pptsNet Loss-$41.6-$78.8$37.2Net Loss per Share-$0.20-$0.40$0.20Weighted-Average Shares (Basic and Diluted)213.3195.8N/A
2Non-GAAP Quarterly Financial InformationThree Months EndedOctober 31, 2017Three Months EndedOctober 31, 2016Y/Y ChangeGross Margin66.4%65.5%0.9 pptsProduct Gross Margin66.3%66.0%0.3 pptsSupport Gross Margin67.0%63.2%3.8 pptsOperating Loss-$2.1-$19.4$17.3Operating Margin-0.7%-9.8%9.1 pptsNet Loss-$1.9-$20.0$18.1Net Loss per Share-$0.01-$0.10$0.09Areconciliation between GAAPand non-GAAPinformation is provided at the end of this release.Financial OutlookPure Storage's fourth quarter fiscal 2018 guidance is as follows:Revenue in the range of $327 million to $335 millionNon-GAAPgross margin in the range of 63.5% to 66.5%Non-GAAPoperating margin in the range of 3.0% to 7.0%Pure Storage's full year fiscal 2018 guidance is as follows:Revenue in the range of $1.012 billion to $1.020 billionNon-GAAPgross margin in the range of 65.6% to 66.6%Non-GAAPoperating margin in the range of -4.9% to -3.5%All forward-looking non-GAAPfinancial 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-GAAPgross margin and non-GAAPoperating margin to their most directly comparable GAAPmeasures because such items that impact these measures are not within our control and/or cannot be reasonably predicted. Accordingly, a reconciliation of the non-GAAPfinancial measure guidance to the corresponding GAAPmeasures is not available without unreasonable effort.Conference Call InformationPure Storage will host a teleconference to discuss the third quarter fiscal 2018 results at 2:00 p.m. (PT) on November 28, 2017. Pure Storage will post its supplemental earnings presentation to the investor relations website at investor.purestorage.comfollowing the conference call. Teleconference details are as follows:To Listen via Telephone: (833) 245-9656 or (647) 689-4543 (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: Atelephone playback of this conference call is scheduled to be available two hours after the call ends on Tuesday, November 28, 2017, through December 12, 2017. The replay will be accessible by calling (800) 585-8367 or (416) 621-4642 (for international callers), with conference ID 2498308. The call runs 24 hours per day, including weekends.Upcoming Investor EventsPure Storage will be participating in upcoming financial Q&Adiscussions at industry events on December 5th at 1:15 p.m. MSTin Deer Valley, UTand December 7th at 2:30 p.m. PSTin San Francisco, CA. Pure Storage will post a link to the live webcast on the investor relations website at investor.purestorage.com for both live and archived events.
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