Form 10-K 2024 | Pure Storage

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the fiscal year ended February 4, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the transition period from _______ to _______

Commission File Number 001-37570

Pure Storage, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware 27-1069557

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2555 Augustine Dr.

Santa Clara, California 95054

(Address of principal executive offices, including zip code)

(800) 379-7873

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per

PSTG New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange

Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing

requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the

Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Small reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new

or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit

report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect

the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of

the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of August 4, 2023, the last business day of the

registrant's most recently completed second fiscal quarter, was approximately $11.0 billion based upon the closing price reported for such date by the New York Stock

Exchange. Shares of the registrant's Class A common stock held by each executive officer, director and holder of 10% or more of the outstanding Class A common

stock have been excluded from this calculation because such persons may be deemed affiliates. This determination of executive officer or affiliate status is not

necessarily a conclusive determination for any other purpose.

As of March 26, 2024, the registrant had 324,910,308 shares of Class A common stock outstanding.

Documents Incorporated by Reference

Portions of the registrant’s proxy statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K

where indicated. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended February 4,

2024.

Table of Contents

Page

Note About Forward-Looking Statements

Where Investors Can Find More Information

PART I

Item 1. Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 1C. Cybersecurity

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accounting Fees and Services

PART IV

Item 15. Exhibits, Financial Statement Schedules

Item 16. Form 10-K Summary

Signatures

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of

the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of

1934, as amended (the Exchange Act), about us and our industry that involve substantial risks and uncertainties. All

statements other than statements of historical facts contained in this report, including statements regarding our

future results of operations and financial condition, business strategy and plans and objectives of management for

future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by

words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,”

“potentially,” “predict,” “project,” “should,” “will” or the negative of these terms or other similar expressions.

Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to,

statements regarding macroeconomic conditions, including, among other issues, high inflation, rising interest rates,

and a slowdown in demand, our ability to sustain or manage our growth and profitability, our expectations regarding

demand for our products and services, trends in the external storage market, our ability to expand market share, our

expectations that sales prices may decrease or fluctuate over time, our plans to expand and continue to invest

internationally, our plans to continue investing in marketing, sales, support and research and development, our shift

to subscription services, including as-a-Service offerings, our expectations regarding fluctuations in our revenue and

operating results, our expectations that we may continue to experience losses despite revenue growth, our ability to

successfully attract, motivate, and retain qualified personnel and maintain our culture, our expectations regarding

our technological leadership and market opportunity, including our ability to capture storage workloads for AI

environments, our ability to realize benefits from our investments, including development efforts and acquisitions,

our ability to innovate and introduce new or enhanced products, our expectations regarding technology and product

strategy and technology differentiation, specifically customer priorities around sustainability, our sustainability goals

and the benefits to our customers of using our products, our competitive position and the effects of competition and

industry dynamics, including alternative offerings from incumbent, emerging and public cloud vendors, the potential

disruptions to our contract manufacturers or supply chain, our expectations about the impact of, and trends relating

to, component pricing, our expectations concerning relationships with third parties, including our partners,

customers, suppliers, and contract manufacturers, the adequacy of our intellectual property rights, expectations

concerning potential legal proceedings and related costs, and the impact of adverse economic conditions on our

business, operating results, cash flows and/or financial condition.

We have based these forward-looking statements largely on our current expectations and projections about

future events and financial trends that we believe may affect our financial condition, results of operations, business

strategy, and financial needs. These forward-looking statements are subject to a number of known and unknown

risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors.” These risks are

not exhaustive. Other sections of this report include additional factors that could harm our business and financial

performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors

emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the

impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual

results to differ from those contained in, or implied by, any forward-looking statements.

Investors should not rely upon forward-looking statements as predictions of future events. We cannot assure

investors that the events and circumstances reflected in the forward-looking statements will be achieved or occur.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot

guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake

no obligation to update publicly any forward-looking statements for any reason after the date of this report or to

conform these statements to actual results or to changes in our expectations. Investors should read this Annual

Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed as

exhibits to this report with the understanding that our actual future results, levels of activity, performance and

achievements may be materially different from what we expect. We qualify all of our forward-looking statements by

these cautionary statements.

PART I

Item 1. Business.

Overview

Data is foundational to our customers’ business transformation, and we are focused on delivering an

innovative and disruptive data storage platform that enables customers to maximize the value of their data.

We are a global leader in data storage and management with a mission to redefine the storage experience

by simplifying how people consume and interact with data. Our vision of an all-flash data center integrates our

foundation of simplicity and reliability with four major market trends that are impacting all organizations large and

small: (1) increasing demand to consume data storage as a service; (2) the shift to modernizing today's data

infrastructure with all-flash; (3) the increase of modern cloud-native applications; and (4) increasing demand for data

storage to support the acceleration in artificial intelligence (AI) adoption while managing rising energy costs.

Our data storage platform supports a wide range of structured and unstructured data, at scale and across

any data workloads in hybrid and public cloud environments, and includes mission-critical production, test and

development, analytics, disaster recovery, backup and restore, AI and machine learning.

Our Strategic Growth Pillars

Our four strategic growth pillars, driven by the above four market trends, are as follows:

1. Grow our subscription services business and drive differentiation with as-a-Service and Cloud

operating model

We are leading in the storage as-a-service market by leveraging our Evergreen upgradable architecture that

brings the benefits of the cloud operating model to an on-premises storage purchase. Evergreen//One

extends the Evergreen architecture and subscription to deliver data storage to customers as capacity and

performance SLAs in a much more flexible, optimized and efficient manner. We are focused on providing

these services through our technology rather than merely creating a financial and professional services

construct.

2. Expand All-Flash into new use cases served by disk today

We continue to drive industry disruption by further expanding flash into historical disk use cases, leveraging

our flash software leadership, currently with quad-level cell (QLC) flash. We see a tremendous growth

opportunity as flash economics coupled with the growth in unstructured data disrupt the current hybrid and

mechanical disk market. For instance, our Pure//E family of products delivers flash reliability and efficiency at

prices now comparable to traditional hard disk systems.

Our extended advantage stems from three technology differentiators: Our leadership with direct-to-NAND

software, our integrated hardware/software direct flash modules, and our data reduction capabilities.

Because our highly sophisticated flash management software requires less NAND, we drive significant

efficiency advantages over SSDs by eliminating over-provisioning, extending endurance, requiring far less

common equipment and reducing environmental impact.

3. Deliver hybrid cloud architecture and data services for modern applications

We are extending our leadership position in delivering the cloud operating model and enabling cloud-native

applications. We are empowering our customers to run and operate storage as-a-service, for both traditional

and modern applications. We are committed to delivering a hybrid cloud architecture which includes

Portworx. Our Portworx software solution is the leader in the enterprise Kubernetes/container data space,

providing customers a secure solution for both their primary container storage needs, as well as their critical

data workflows like backup, disaster recovery and migration.

Portworx, along with Cloud Block Store, allows us to help customers operationalize their hybrid-cloud

environment by enabling them to run and deploy both traditional and cloud-native apps on-premise and in-

cloud with the same process and operations.

Pure Fusion and Portworx Data Services delivers a true hybrid cloud architecture to hybrid environments.

and Pure Fusion extends the cloud operating model by automating the delivery of our storage offerings with

a Kubernetes-delivered control plane. Portworx Data Services creates another first mover advantage as we

enable IT departments to provide and manage sophisticated data services with rapid deployment, scaling,

management and self-service onboarding for their line of business users.

4. Meet the customer demand for AI with our energy efficient Data Storage Platform

AI adoption is accelerating across industries, yet most organizations lack the necessary infrastructure to

handle the high-performance data demands and energy requirements essential for maximizing its benefits.

We deliver unrivaled efficiency and performance at every step of the AI process, from data curation to model

training to inference regardless of where customers sit in their AI adoption journey.

Data Storage Platform

Our data storage platform is revolutionizing the storage industry. We have built a unified data storage and

management platform (Platform) comprised of highly differentiated all-flash technology, products and subscription

services that helps organizations reduce the complexity, increase reliability, and reduce costs of their data

infrastructure. Key benefits achieved through the adoption of our Platform include:

• Simplified Infrastructure - Our Platform reduces the complexity and risks of traditional data infrastructure

as our Purity Operating Software enables our customers to unify the majority of their fragmented block, file

and object storage workloads onto a single storage and management environment that is simple to deploy,

run and manage. We use Purity Operating Software on all of our storage solutions and Cloud Block Store to

deliver a consistent experience whether deployed in a cloud, on-premises or hybrid cloud environment. This

single Platform environment makes accessing data easier and faster which is proving critical in an

environment driven by AI that requires infrastructure that can handle high-performance data demands.

• Operating like a Cloud - Powered by Purity, Pure1 cloud management, Evergreen architecture and Pure

Fusion, the Platform operates like a cloud, delivering on-demand, self-service storage and managed data

services backed by service level agreement (SLA) guarantees. Organizations can manage all of their data

types and workloads, from the data center to the cloud with our single, consistent platform, true data mobility,

and flexible consumption models.

• No Downtime - Our Platform delivers all-flash storage for data spanning from Tier-0 workloads to cost-

sensitive archives that is 10x more reliable than our all-flash competitors with our unique, vertically integrated

hardware, controller and software. Our Platform increases reliability by ending unexpected and planned

downtimes to keep an organization's data available 24/7 year-round through proactively managed SLAs that

ensure 99.9999% uptime with predictive integrated support.

• Never Obsolete - Our Platform provides scalable, on-demand storage through our Evergreen offerings that

is never obsolete, continuously improving and without disruptive forklift upgrades. Through continual

hardware and software upgrades that are delivered non-disruptively through our Evergreen program, our

Platform includes the latest technology and features.

• Cost Savings and Efficiency - Our Platform reduces storage costs, energy and labor by providing a range

of Evergreen as-a-service consumption models, from self-managed to fully-managed, that enable

organizations to choose how and when they consume and interact with their data. With a fully-managed

Evergreen//One or Evergreen//Flex subscription, organizations also enjoy the benefit of having their power

and rack space costs be paid by us. Our flash-optimized systems generally require 5-10x less labor to

operate, and use 2-5x less power and space compared to competitive all-flash storage configurations,

resulting in at least 50% lower total cost of ownership. This reduction in power usage and space is proving

critical in an environment driven by AI given the massive energy demands of AI.

• Sustainability - We continue to invest in and innovate for a low carbon global economy and are committed

to the continued delivery of an enterprise-grade storage platform and innovative services that empower our

customers to operate sustainably and efficiently in pursuit of their emissions reduction goals and transition to

greener data centers. Our technology differentiators such as DirectFlash, provide significant environmental

sustainability benefits by offering the most efficient and densest flash modules, leading to higher capacity

storage with a smaller hardware footprint. This not only lowers the costs of our systems but also their

environmental footprint.

Built upon a common architecture, a common operating system, and a single management plane, our

Platform allows customers to operate their storage like a public cloud experience. The following diagram depicts our

Platform and the underlying technology, storage systems and offerings.

We pioneered the use of solid-state, All-Flash technology in enterprise storage with a clean-slate approach to

building Flash-based systems and have continued to expand our leadership position and technology differentiation

across our tightly integrated software and hardware.

Purity Operating Software

Our Purity Software was designed from the ground-up to maximize the benefits of solid-state storage. By

focusing on All-Flash, our Purity software is able to deliver (1) superior performance by optimizing how data is

placed and accessed on Flash, (2) reliability through optimizing the use of Flash in our systems, (3) density via our

designed-for-flash algorithms, data structures and data reduction capabilities, and (4) environmental sustainability

efficiencies through our integrated hardware and software thereby enabling our systems to use the same amount of

data storage with significantly less power, space and e-waste.

Our Purity software is shared across our flash-optimized systems and provides leading enterprise-class data

services such as always-on data-reduction, data protection and encryption, as well as a wide range of storage

protocols such as block, file and object.

The advantages unlocked by our Purity software are significantly amplified by our integrated DirectFlash

hardware technology. With DirectFlash, we build Flash Modules designed to work directly with NAND Flash chips,

highly integrated and optimized for our Purity software. This deep integration of hardware and software allows us to

be a proven leader in all-flash performance, reliability and efficiency from mainstream triple-level cell (TLC) flash

and capacity-oriented QLC flash that delivers unparalleled density.

While QLC can make flash more economical, it requires significantly more sophisticated management,

optimization and tuning to use effectively. With DirectFlash, we deliver the performance and density benefits of QLC

flash, without compromising on efficiency, reliability or performance consistency. With DirectFlash, we are leading

the industry, and accelerating the transition of disk to flash by replacing low-cost hybrid-flash and disk arrays. In

close collaboration with key QLC flash partners, we intend to drive our density roadmap for DirectFlash from the

current 75TB to 300TB, building a 5x density advantage over our competition who leverage SSDs. Our increasing

density roadmap for DirectFlash also substantially expands our cost and power efficiency advantages when

compared to both disk and SSDs.

Integrated Hardware Systems

• FlashArray provides solutions for block-oriented storage, addressing database, application, virtual machine

and other traditional workloads. FlashArray was the industry’s first all-flash array and is driving the industry-

wide transition from disk to Flash. FlashArray pioneered the approach of software designed from the ground-

up for Flash and set the stage for industry leading simplicity, reliability, and rich data services. FlashArray has

evolved through seven generations of controllers, a 100x increase in density, and a transition to all-NVMe

flash - all delivered to customers non-disruptively through our Evergreen service.

• FlashArray//X delivers next-gen performance for mission critical workloads. Through unified block

and file storage designed to be powerful and simple to use, FlashArray//X supports everything from

Tier 1 databases to large-scale virtualized and cloud-native applications, with a non-disruptive

upgrade path. Based on TLC flash, our latest R4 edition released in June 2023 delivers up to 40%

higher performance and over 80% increased memory speeds to support greater workload

consolidation, a 30% inline compression boost to stretch storage capacity further, and new

ransomware protection capabilities.

• FlashArray//C delivers the benefits of NVMe flash, performance and consolidation to simplify Tier-2

application and storage estates. FlashArray//C extends the core technology of FlashArray and

DirectFlash technology to incorporate QLC flash to modernize and replace hybrid-flash and Tier-2

disk arrays. The benefits of QLC delivered by FlashArray//C are only achievable through our

DirectFlash integrated hardware and software approach, and places us in a unique and

differentiated position to accelerate the transition from disk to flash. In June 2023, we released our

latest R4 edition that delivers up to 40% higher performance, a 30% inline compression boost to

stretch storage capacity further, and new ransomware protection capabilities.

• FlashArray//XL sets a new bar of higher performance, scale and capacity for the most demanding

workloads and mission critical data-based applications.

• FlashArray//E, released in November 2023, extends the Pure//E family, to deliver the simplicity and

efficiency of flash for all file and block data repositories for up to 4 petabytes (PB) of data, from

content libraries to backup sets to active archives. FlashArray//E enables customers to benefit from

an 80% reduction in power and space, 60% lower operational costs, and 85% less e-waste

compared to disk.

• FlashArray File Services delivers enterprise level multi-protocol file storage on FlashArray. As part

of an unified approach to block and file data management, File Services reduces operational

overhead by giving storage administrators policy driven automated management at the director,

share, or virtual machine (VM) level. File Services delivers simplicity of management to a broad set

of scale-up file data workloads including user data and department shares, content repositories

such as Picture Archiving and Communication System (PACS) and video data, file-based

applications, and now Network File System (NFS) datashares for virtual infrastructure.

• FlashBlade provides solutions for managing and processing unstructured data workloads of all types - from

the most demanding modern "big data'' applications such as real-time log analytics and commercial High

Performance Computing (HPC) to data protection and recovery. Further, FlashBlade can manage and

process the massive amounts of data created for large scale AI training environments as well as support AI-

connected applications. FlashBlade was the industry's first all-flash array optimized for modern unstructured

file and object applications, and enables performance at multi-Petabyte scale. FlashBlade is a scale-out

system built on Purity and DirectFlash Modules, combining integrated software-defined networking that

delivers revolutionary performance and simplicity. FlashBlade's scale, simplicity, and multiple protocols

allows customers to consolidate a diverse set of modern workloads while benefiting from cost-effective all-

flash performance.

• FlashBlade//S, a flexible all-QLC system that delivers scalable and sustained high performance to

handle the most demanding workloads including computational analytics and AI, image search and

recognition, electronic design automation, media special effects, high performance computing and

data protection.

• FlashBlade//E, released in April 2023 as the first product in our Pure//E family, is a scale-out

unstructured data repository for 4 PB or more of data that makes the management of unstructured

data growth more efficient, reliable, and sustainable with an user experience and economics that

enable organizations to eliminate the last remnants of disk in their data center. FlashBlade//E

provides the benefits of all-flash at an acquisition cost that is comparable to disk-based alternatives

with lower operational costs, including up to five times less power consumption.

Cloud-Native Storage

• Portworx by Pure Storage is the market leader in cloud-native Kubernetes data management. As most

modern and new software development is shifting to cloud-native architectures, Portworx is the only data

management platform that is able to provide robust enterprise-grade container storage, coupled with data-

protection workflows such as Kubernetes backup, disaster recovery and migration, and enable portability

between on-premise, hybrid cloud and multi-cloud environments. The entire Portworx suite, inclusive of

Portworx Enterprise, PX-Backup, and Portworx Data Services, is available as-a-service.

• Portworx Data Services is the industry’s first Database-as-a-Service Platform for Kubernetes. Today's

applications are composed of dozens or even hundreds of microservices, often supported by multiple data

services. Managing each of these data services in a dynamic, Kubernetes world is complex and time-

consuming. With Portworx Data Services, DevOps engineers can deploy managed, production-grade data

services with the click of a button, on and across private and public clouds. With deployment options from

the industry’s broadest catalog of databases for SQL, NoSQL, search, streaming, and more, Portworx Data

Services helps developers get started faster. Portworx Data Services also fully automates Day-2 operations,

including monitoring, backups, high availability, disaster recovery, migration, auto-scaling, and security.

Cloud Operating Model

We deliver modern cloud-oriented services, management and automation to customers across their on-

premises, private and public cloud environments. These elements form what we call the Cloud Operating Model

delivered through our Pure Fusion, Evergreen architecture and Pure1 cloud management plane.

• Pure Fusion

Pure Fusion brings the simplicity of the cloud operating model anywhere with on-demand consumption and

back-end provisioning, delivering an autonomous storage-as-code management platform. Pure Fusion is

delivered through a Software-as-a-Service (SaaS) management plane and enables storage administrators to

unify storage arrays and optimize storage pools. Pure Fusion allows administrators to offer storage through

customized storage service classes providing storage consumers on-demand API-access to storage

services, while automating previously complex tasks, such as storage provisioning, workload placement,

workload mobility, and fleet rebalancing.

• Evergreen Architecture

Our differentiated Evergreen architecture enables our hardware storage systems to not become obsolete or

require wholesale replacement like traditional systems. Our architecture includes several key technology

elements that allow our arrays to be upgraded non-disruptively, which is a critical underpinning of delivering a

full as-a-service experience:

• Future-proof Hardware - We design and build each component (e.g. storage controllers, flash

modules) of our hardware systems to be independently replaceable and upgradable, allowing our

flash-optimized hardware to be more reliable and with longer service lifetimes.

• Non-Disruptive Upgrades - We have the ability to upgrade both hardware and software

completely non-disruptively, resulting in continuous online improvement, without creating disruption

or affecting running production systems.

• Telemetry and Pure1 - Continuous telemetry collection coupled with AI-driven intelligent analytics

supported by machine learning models allows us deliver both predictive and proactive

recommendations, targeted assessments, and workload planning based on knowledge

accumulated across our entire fleet. Pure1, our AI-driven cloud-based management platform, allows

us to target and focus the most relevant innovation and improvements to our customers, delivered

through Evergreen.

• Evergreen//One

Evergreen//One offering delivers data storage services based on service-level-agreements (SLAs).

Evergreen//One unifies on-premises and public-cloud data storage services in a single storage subscription

service that delivers a true hybrid cloud experience. With Evergreen//One, customers have flexibility to

choose performance and capacity needs as well as where they consume and pay for their storage needs.

In October 2023, we introduced a first-of-its-kind commitment to pay power and rack space costs for

customers that activate an Evergreen//One or Evergreen//Flex subscription.

• Evergreen//Flex

Evergreen//Flex is a fleet-level Evergreen architecture that offers users the advantage of data storage

hardware ownership with a lower upfront cost and a flexible pay-as-you-go subscription. Evergreen//Flex

provides the flexibility and adaptability to move performance and stranded capacity to where data and

applications need it most, with the security and control that comes from ownership of the solution.

• Cloud Block Store is an enterprise-grade, virtual block storage array that provides customers the flexibility

to operate a hybrid cloud model with seamless data mobility across on-premises and public cloud

environments. Cloud Block Store is software-delivered, requires no dedicated hardware running in the public

cloud or internet colocation data centers, and is designed to be multi-cloud, supporting Amazon Web

Services and Microsoft Azure. Cloud Block Store is based upon the same Purity software that powers

FlashArray in on-premise environments, enabling customers to easily implement hybrid cloud workflows.

• Cloud Block Store for Azure VMware Solution (AVS) - In August 2023, we expanded our

strategic partnership with Microsoft with the introduction of Cloud Block Store for AVS. Cloud Block

Store running in Azure delivers the same cloud-like experience as public clouds built on VMware for

storage by extending the data services and user experience of the Purity operating environment to

AVS, simplifying cloud data mobility and help organizations optimize their AVS data storage costs.

Our Customers

Our global customer base is over 12,500 at the end of fiscal 2024. Both large enterprises and smaller

organizations with limited IT expertise or budgets benefit from using our technology. We have deployed our products

and subscription services to customers across multiple industry verticals and geographies. We define a customer as

an entity that purchases our products and services either from one of our channel partners or from us directly.

Our enterprise business model supports the largest global organizations, including hyperscalers and

managed service providers (MSPs). Today, we are in approximately 60% of Fortune 500 companies, and the loyalty

of our customers is reflected in our market-leading, certified customer Net Promoter Score (NPS) of 82 as of

December 31, 2023.

Sales and Marketing

Sales. We sell our products and subscription services using a direct sales force and our channel partners.

Our sales organization is supported by sales engineers with deep technical expertise and responsibility for pre-sales

technical support, solutions engineering and technical training. Our channel partners sell and market our products

and subscription services in partnership with our direct sales force. This joint sales approach provides us with the

benefit of direct relationships with our customers and expands our reach through the relationships of our channel

partners. In certain geographies, we sell through a two-tier distribution model. We also sell to service providers that

deploy our products and offer cloud-based storage services to their customers. We intend to continue to invest in

our channel partners.

Technology Alliances. We work closely with technology partners that help us deliver an ecosystem of

world-class solutions to our customers and ensure the efficient deployment and support of their environments. Our

technology partners include application partners such as VMWare, Microsoft, Oracle and SAP, cloud partners such

as Microsoft Azure, AWS, Google, and IBM, data protection partners such as Commvault and Veeam, and

infrastructure partners such as Cisco and NVIDIA. In addition, we work closely with our technology partners through

co-marketing and lead-generation activities in an effort to broaden our marketing reach and help us win new

customers and retain existing ones.

Marketing. Our marketing is focused on building our brand reputation and market awareness,

communicating our Platform advantages and demand generation for our sales force and channel partners. Our

marketing effort consists primarily of product, field, channel, solutions, digital marketing and public relations.

Research and Development

Our research and development efforts are focused on innovation, building new features and functionality for

our existing products and subscription services, developing software, and building new solutions. Our Platform

integrates both software and hardware innovations, and accordingly, our research and development teams employ

both software and hardware engineers in the design, development, testing, certification and support of our products.

Our research and development teams are primarily based in Santa Clara, California, Prague, Czech Republic,

Bangalore, India, Bellevue, Washington, and Vancouver, Canada. We also design, test and certify our products to

ensure interoperability with a variety of third-party software, servers, operating systems and network components.

We plan to continue investing globally in significant resources for our ongoing research and development efforts.

Manufacturing

Our contract manufacturers manufacture, assemble, test and package our products in accordance with our

specifications. We provide our contract manufacturers with a rolling forecast for anticipated orders, which our

contract manufacturers use to build finished products. The products mix and volumes are adjusted based on

anticipated demand and actual sales and shipments in prior periods. We work closely with our contract

manufacturers to meet our products delivery requirements and to manage the manufacturing process and quality

control. We also utilize a range of training and assessment tools from the Responsible Business Alliance to support

continuous improvement in the social, environmental and ethical responsibility of our supply chain.

Seasonality

We generally experience seasonality as sales of our products and subscription services are usually lower

during the first quarter of our fiscal year and highest during the last quarter of our fiscal year. As a result, we expect

that our business and results of operations will fluctuate from quarter to quarter.

Competition

We operate in the intensely competitive data storage market that is characterized by constant change and

innovation. Changes in the application requirements, data center infrastructure trends and the broader technology

landscape result in evolving customer requirements for capacity, performance scalability and enterprise features of

storage systems. Our main competitors include legacy vendors, such as Dell EMC, Hitachi Vantara, HP Enterprise,

IBM, and NetApp, each of which offer a broad range of systems targeting various use cases and end markets and

have the technical and financial resources to bring competitive products to market.

In addition, we compete against cloud providers and vendors of hyperconverged products. Some large-scale

cloud providers, known for developing storage systems internally, offer alternatives to our data storage solutions for

a variety of customer workloads. Our market attracts new startups and more highly specialized vendors, as well as

other vendors that may continue to acquire or bundle products that compete with our offerings. All of our

competitors utilize a broad range of competitive strategies.

We believe the principal competitive factors in the storage market are as follows:

• Product and service innovation, features and enhancements, including ease of use, performance,

reliability, scalability, and security;

• Product and service pricing and total cost of ownership;

• Product interoperability with customer networks and backup software;

• Product designs that help customers reduce their carbon footprint and contribute to meeting their

environmental sustainability and savings goals;

• Global sales and distribution capability, including an ability to build and maintain incumbent customer

relationships;

• Ability to take advantage of improvements in industry standard components; and

• Customer support and service.

We believe we compete favorably with our competitors on these factors as we continue to take market share.

However, many of our competitors have substantially greater financial, technical and other resources, greater name

recognition, larger sales and marketing budgets, broader distribution and larger and more mature intellectual

property portfolios.

Intellectual Property

Our success depends in part upon our ability to protect our core technology and intellectual property. To

establish and protect our proprietary rights, we rely on a combination of intellectual property rights, including

patents, trademarks, copyrights, trade secret laws, license agreements, confidentiality procedures, employee

disclosure and invention assignment agreements and other contractual rights.

We have over 2,500 issued patents and patent applications in the United States and foreign countries. We

also license technology from third parties when we believe it will facilitate our product offerings or business.

Human Capital Resources

Our People and Organization

We are committed to demonstrating our core values — customer-first, persistence, creativity, teamwork, and

ownership — and we believe that the interplay of strategy, organization, talent, and culture enables us to achieve

outstanding results for all of our stakeholders.

We employ nearly 5,600 employees globally - approximately 3,500 in the U.S. and over 2,000 internationally

as of the end of fiscal 2024. Our workforce is distributed across over 30 countries and we continue to expand our

location strategy to ensure we can obtain the right skills and have a global mindset with diversity of thinking. Our

business growth presents us with the opportunity to attract talent and provide competitive employee value

propositions in terms of work environment, pay, benefits, professional development and career growth opportunities

that help meet the varying needs of our workforce.

Our human capital strategy is developed by our executive committee and led by our Chief Administrative and

Legal Officer (CALO). The CALO delivers human capital reports to our Board of Directors and compensation and

talent committee on a quarterly basis.

Attracting, Developing and Retaining Talent

In fiscal 2024, we grew headcount to advance our innovation, customer experience, and sales coverage.

To foster our employees' and our success, we seek to create an environment where people can thrive and

do their best work. We strive to maximize our employees' potential by creating a respectful, inclusive work

environment with training and development programs that enable our global employees to create products and

services that furthers their career goals and our corporate mission. We also have global performance management

and internal mobility programs to enable employee development, growth and performance.

Diversity, Equity, and Inclusion (DEI)

We continue to make strides to advance DEI. We believe that "walking the talk" on DEI is not only the right

thing to do, but it results in stronger innovation, improved workplace culture and a stronger bottom line. Our DEI

initiatives include:

• Advancing DEI from the top. Through our Inclusive Leadership Index (ILI) we recognize role

model behaviors among our leaders at the VP level and above using several defined DEI factors. Quarterly

our leaders review results, and develop actions, as needed, to improve their DEI metrics.

• Supporting employee community and connection. Our Employee Resource Groups (ERGs) are

a critical way to advance inclusion and belonging through building strong community, connection and

opportunities for development among our employees.

• Driving equitable talent processes, pay and promotions. Our talent management processes

include specific steps that ensure our performance reviews are equitable by level. We review pay equity

twice a year. In addition, we strive to ensure appropriate representation in candidate slates and interviewer

panels during the hiring process. We also monitor the career progression ratio of female and

underrepresented groups (URGs) versus the overall workforce to ensure equitable promotion practices.

We report on the metrics and progress in the areas mentioned above with our Board of Directors.

Total Rewards

We provide competitive and fair compensation and inclusive benefit offerings. We regularly benchmark our

programs against the market to ensure we are delivering competitive salaries, variable pay and equity awards as

well as health and welfare benefits to employees. We offer a comprehensive and tailored set of benefits to

employees and their families. Our total rewards efforts include:

• Support for all stages of life. From early career to retirement, we offer comprehensive and

inclusive benefits to employees and their families for all stages including parental and adoption leave.

• Wellness benefits and programs. We encourage employees to practice self-care and proactively

manage their mental and physical health. We support employee wellness through customizable programs

and offerings ranging from mental health coaching, therapy, as well as nutrition and exercise programs.

Employee wellness is also supported through our flexible time off policy.

• Pay for performance. Managers differentiate rewards based on business impact and how our

employees model our values. We also have resources available for our employees to share our

compensation philosophy.

Our Culture as a Competitive Advantage

Our customer-first culture and commitment to innovation create a thriving company that customers, partners,

employees and investors love. Employee listening tools and data sources indicate that our high employee

engagement is a key enabler of the positive customer experience and strong net promoter scores. Our employee

Pulse of Pure Survey is implemented and assessed through a third party vendor. It focuses on measuring employee

engagement, organization, team and manager effectiveness, equity, inclusion and belonging, career development

and mental health. Our employee NPS has been consistently high since we started surveying employees years ago.

A key tenant of our culture is our commitment to integrity, respect and a safe work environment which is

supported by our Speak Up Policy, Code of Conduct, and annual Pure Ethics and Compliance Pulse survey. We

continually remind our employees that they are empowered to report concerns without fear of retaliation through our

anonymous speak-up hotline and web portal or through their management chain, HR business partner, or Legal

team.

Environmental, Social and Governance (ESG)

We are committed to advancing our responsible ESG practices and impact across four key pillars: our

technology, environmental, social, and governance.

Our ESG governance model is structured to ensure the appropriate amount of oversight, assessment, and

management of ESG risks and opportunities across our organization and supply chain. Our Board of Directors

provides ESG oversight through its committees, with the Audit and Risk Committee overseeing environmental, the

Compensation and Talent Committee overseeing social and the Nominating and Corporate Governance Committee

overseeing governance. In addition, our Board of Directors receives an annual update on our ESG policies,

programs and year over year progress towards our goals.

Our ESG executive sponsors are the Chief Financial Officer, Chief Administrative and Legal Officer and Chief

Technology Officer. They meet at least quarterly and work through VP and director level leaders who lead our

internal ESG committees responsible for assessing, managing and progressing the integration of ESG principles

and practices throughout our business operations and supply chain.

In fiscal 2024, we released our FlashBlade//E and FlashArray//E family of products, that significantly reduce

power consumption compared to other flash and disk based alternatives. We also are leveraging renewable

electricity for our Santa Clara headquarters campus. Our Life Cycle Analysis (LCA) is conducted across our data

storage platform and is used in identifying opportunities to reduce the environmental impact of our solutions, and

adhering to International Organization for Standardization (ISO) 14040 and 14044 standards.

In fiscal 2024, we joined the Value Balancing Alliance, an organization focused on redefining corporate value

creation where the value of a company is measured not only by financial performance but also by contributions to

society, nature, and the economy. As part of our membership we are piloting the impact accounting methodology

that reflects our first steps toward accounting for the environmental costs across our value chain, including GHG,

product materials, water, waste and land use.

To deliver on our 2022 commitment to set science based targets through the Science Based Targets Initiative

(SBTi), a global collaboration that guides companies in setting scientifically grounded greenhouse gas emission

(GHG) reduction targets to combat climate change, we began developing our targets for Scope 1, 2, and 3 GHG

emissions reduction which included updating and verifying our GHG inventory through fiscal 2023 and collaborating

with a leading global sustainability consultancy to identify reduction strategies with the latest climate science

methodologies approved by the SBTi.

For more information about our ESG priorities, alignment to Sustainability Accounting Standards Board

(SASB), Global Reporting Initiative (GRI), United Nations Sustainable Development Goals, and our planned

alignment to the Task Force on Climate-related Financial Disclosures (TCFD), please see our fiscal 2023 ESG

report at www.purestorage.com/ESG. The contents of our ESG report website are not incorporated by reference

into this Annual Report on Form 10-K or any other report or document we file with the SEC, and any reference to

our ESG website is intended to be an inactive textual reference only.

Available Information

Our website address is www.purestorage.com. Information contained on or accessible through our website is

not a part of this report and the inclusion of our website address in this report is an inactive textual reference only.

We make available, free of charge through our website, our annual reports on Form 10-K, quarterly reports

on Form 10-Q and current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to

Sections 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably

practicable after they have been electronically filed with, or furnished to, the SEC. In addition, the SEC maintains an

internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information

regarding issuers that file electronically with the SEC.

Trademark Notice

Pure Storage, the “P” logo and other trade names, trademarks or service marks of Pure Storage appearing

in this report are the property of Pure Storage. Trade names, trademarks and service marks of other companies

appearing in this report are the property of their respective holders.

Item 1A. Risk Factors.

Investing in our Class A common stock, which we refer to as our "common stock", involves a high degree of

risk. Investors should carefully consider the risks and uncertainties described below, together with all of the other

information contained in this report, including our consolidated financial statements and the related notes appearing

in this annual report, before deciding to invest in our common stock. If any of the following risks actually occur, it

could harm our business, prospects, operating results and financial condition. In such event, the trading price of our

common stock could decline and investors might lose all or part of their investment.

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties, many of which are beyond our control. Some of

the principal risks associated with our business include the following:

• Our business, operating results, and cash flows may be adversely impacted by uncertain macroeconomic

conditions and the uncertain geopolitical environment.

• Our sales cycles can be long, unpredictable and expensive, particularly during a global economic

slowdown, making it difficult for us to predict future sales.

• We face intense competition from established companies and others.

• If we do not manage the supply of our products and their components efficiently, our results of operation

could be adversely affected.

• If we fail to develop and introduce new or enhanced storage offerings successfully, our ability to attract and

retain customers could be harmed.

• If we fail to execute our transition to subscription offerings successfully, our revenues and results of

operation may be harmed.

• We expect sales of our Evergreen//One and Evergreen//Flex subscription and consumption offerings will

continue to grow and represent a larger percentage of our total sales. With a traditional CapEx sale, a large

portion of revenue is recognized as product revenue as the order is fulfilled. Revenue for our Evergreen//

One and Evergreen//Flex offerings is recognized over a period of time, and the majority of revenue is

included in subscription services revenue. As such, we expect the sales growth of our Evergreen//One and

Evergreen//Flex offerings to have a near-term downward impact on both product and total revenue growth.

• If our security measures are compromised, or the security, confidentiality, integrity or availability of our

information technology or data is compromised, our business could experience a material adverse impact.

• Our gross margins are impacted by a variety of factors and vary from period to period, making them difficult

to predict with certainty.

• Our operating results may fluctuate significantly, which could make our future results difficult to predict and

could cause our operating results to fall below expectations.

• The sales prices of our products and services may fluctuate or decline, which may reduce our gross profits,

revenue growth, and adversely impact our financial results.

Risks Related to Our Business and Industry

Our business, operating results, and cash flows may be adversely impacted by uncertain macroeconomic

conditions and the uncertain geopolitical environment.

Our operations and performance depend in part on worldwide economic conditions and the economic health

of our current and prospective customers. Recent macroeconomic and geopolitical events, including inflation, rising

interest rates, supply chain constraints, labor shortages, geopolitical tensions such as those involving China and

Israel, and political and fiscal challenges in the United States and abroad, have, and may continue to have, an

adverse effect on the budgets, confidence and demand of our customers, particularly in the United States where we

derive the majority of our revenue. These pressures create a great deal of uncertainty and affect customer demand

and our margins, costs and operations. Macroeconomic conditions can and do further exacerbate other risks

discussed in this “Risk Factors” section, such as risks related to our sales and marketing efforts. If we are unable to

successfully manage the effects of these pressures, our business, operating results, cash flows and financial

condition may be adversely affected.

Our sales cycles can be long, unpredictable and expensive, particularly during a global economic

slowdown, making it difficult for us to predict future sales.

Our sales efforts involve educating our customers about the use and benefits of our Platform and often

involves an evaluation process that can result in a lengthy sales cycle, particularly for larger customers and

especially in an economic slowdown. We spend substantial time and resources on our sales efforts without any

assurance that our efforts will produce any sales. Macroeconomic concerns and the pandemic have impacted our

sales efforts, such as by shifting customer priorities and reducing in-person meetings and events. In addition,

purchases are frequently subject to our customers' budget constraints, multiple approvals and unplanned

administrative and other delays. Some of our customers make large concentrated purchases to complete or

upgrade specific data storage deployments. As a result, our revenue and operating results have and may continue

to fluctuate from quarter to quarter. A substantial portion of our quarterly sales typically occurs during the last

several weeks of the quarter, which we believe largely reflects customer buying patterns of products similar to ours

and other technology products generally.

Since revenue from a product sale is not recognized until performance obligations are satisfied, a substantial

portion of our sales late in a quarter may negatively impact the recognition of the associated revenue. Furthermore,

our products come with a 30-day money back guarantee, allowing a customer to return a product within 30 days of

receipt if the customer is not satisfied with its purchase for any reason. These factors, among others, make it difficult

for us to predict when customers will purchase our products, which may adversely affect our operating results and

cause our operating results to fluctuate. In addition, if sales expected from a specific customer for a particular

quarter are not realized in that quarter or at all, our operating results may suffer.

Our business may be harmed by trends in the overall data storage market.

Despite ongoing data growth, the data storage market in which we compete has not experienced substantial

growth in the past few years due to a combination of technology transitions, increased storage efficiency,

competitive pricing dynamics and changing economic and business environments. Some customers are shifting

spending toward the public cloud and software as a service, as well as other storage deployment models. If we fail

to accurately predict trends, successfully update our product offerings or adapt our sales programs to meet

changing customer demands and priorities, our business, operating results and financial condition could be harmed.

The impact of these trends on future growth of the overall data storage market is uncertain. Reductions in the

overall data storage market or the specific markets in which we compete would harm our business and operating

results.

The evolving market for data storage products makes it difficult to forecast demand for our Platform.

The market for data storage products is rapidly evolving. Changes in the application requirements, data

center infrastructure trends and the broader technology landscape result in evolving customer requirements for

capacity, scalability and other enterprise features of storage systems. Our future financial performance depends on

our ability to adapt to competitive dynamics and emerging customer demands and trends. We continue to expand

and evolve our Platform to compete directly with hard disk systems, and that strategy may take longer than we

anticipate or may not succeed due to unforeseen factors. We may be unable to continue capturing significant

storage workloads for AI environments. The enhancement of all-flash storage products by incumbent vendors and

changes or advances in alternative technologies or adoption of cloud storage offerings that do not utilize our

Platform could adversely affect the demand for our Platform.

Offerings from large public cloud providers are expanding quickly and serve as alternatives to our Platform for

a variety of customer workloads. Since these providers are known for developing storage systems internally, this

trend reduces the demand for storage systems developed by original equipment manufacturers, such as us. It is

difficult to predict customer adoption rates of new offerings, customer demand for our Platform or the future growth

rate and size of our addressable market. Reduced demand for our Platform caused by technological challenges,

alternative technologies and products or any other reason would result in a lower revenue growth rate or decreased

revenue, either of which would negatively impact our business and operating results.

We face intense competition from established companies and others.

We face intense competition from a number of established companies that sell competitive storage products,

including Dell EMC, HP Enterprise, Hitachi Vantara, IBM, and NetApp. Our competitors may have:

• greater name and brand recognition and longer operating histories;

• larger sales and marketing and customer support budgets and resources;

• broader distribution and established relationships with distribution partners and customers;

• the ability to bundle storage products with other products and services to address customers’ requirements;

• greater resources to make acquisitions;

• larger and more mature product and intellectual property portfolios; and

• substantially greater financial, technical and other resources.

We also compete against cloud providers and vendors of hyperconverged products, which combine compute,

networking and storage. These providers are growing and expanding their product offerings, potentially displacing

some demand for our products. In addition, some of our competitors offer bundled products and services in order to

reduce the initial cost of their storage products. Further, some of our competitors offer their storage products either

at significant discounts or even for free in competing against us.

Many of our competitors have developed or acquired storage technologies with features or data reduction

technologies that directly compete with our Platform or have introduced business programs designed, among other

things, to compete with our innovative programs, such as our Evergreen Storage model. We expect our competitors

to continue to improve their products, reduce their prices and introduce new offerings that may, or may claim to,

offer greater value compared to our Platform. These developments may render our products or technologies

obsolete or less competitive. These and other competitive pressures may prevent us from competing successfully

against our competitors.

Many of our competitors have long-standing relationships with key decision makers at current and

prospective customers, which may inhibit our ability to compete.

Many of our competitors benefit from established brand awareness and long-standing relationships with key

decision makers at our current and prospective customers. Our competitors often leverage these existing

relationships to discourage customers from evaluating or purchasing our Platform. Additionally, most of our

prospective customers have existing storage products supplied by our competitors who have an advantage in

retaining the customer because, among other things, the incumbent vendor already understands the customer’s IT

infrastructure, user demands and needs, or the customer is concerned about actual or perceived costs of switching

to a new vendor and technology. If we are unable to sell our Platform to new customers or persuade existing

customers to continue purchasing our Platform, we will not be able to maintain or increase our market share and

revenue, which would adversely affect our business and operating results.

We rely on contract manufacturers to manufacture our products, and if we fail to manage our relationships

with our contract manufacturers successfully, our business could be negatively impacted.

We rely on a limited number of contract manufacturers to manufacture our products, which reduces our

control over the assembly process and exposes us to risks, such as reduced control over quality assurance, costs

and product supply. If we fail to manage our relationships with these contract manufacturers effectively, or if these

contract manufacturers experience delays, disruptions, capacity constraints or quality control problems, our ability to

timely ship products to our customers will be impaired, potentially on short notice, and our competitive position,

reputation and financial results could be harmed. If we are required, for whatever reason, to change contract

manufacturers or assume internal manufacturing operations, we may lose revenue, incur increased costs and

damage our customer relationships. Qualifying a new contract manufacturer and commencing production is

expensive and time-consuming. We may need to increase our component purchases, contract manufacturing

capacity and internal test and quality functions if we experience increased demand. The inability of our contract

manufacturers to provide us with adequate supplies of high-quality products could exacerbate other risk factors and

cause a delay in our order fulfillment, and our business, operating results and financial condition may be harmed.

We rely on a limited number of suppliers, and in some cases single-source suppliers, and any disruption or

termination of our supply arrangements could delay shipments of our products and could harm our

relationships with current and prospective customers.

We rely on a limited number of suppliers and, in some cases, on single-source suppliers, for several key

components of our products, and we have not generally entered into agreements for the long-term purchase of

these components. If we are unable to obtain components from our existing suppliers, we may need to obtain these

components through secondary sources or markets. Our reliance on a limited number of suppliers and the lack of

any guaranteed sources of supply exposes us to several risks, including:

• the inability to obtain, or delay in obtaining, an adequate supply of key components, including flash;

• price volatility for the components of our products;

• failure of a supplier to meet our quality or production requirements;

• failure of a supplier of key components to remain in business or adjust to market conditions; and

• consolidation among suppliers, resulting in some suppliers exiting the industry, discontinuing the

manufacture of components or increasing the price of components.

Further, we source some of our product components from suppliers outside the United States, including from

China, which subjects us to additional logistical risks and risks associated with complying with local rules and

regulations in foreign countries. Significant changes to existing international trade agreements could result in import

delays or the imposition of increased tariffs on our sourcing partners, which could lead to sourcing or logistics

disruptions to our business. For example, there have been, and may continue to be, significant changes to U.S.

trade policies, legislation, treaties and tariffs, including announcements of import tariffs and export restrictions. As

new legislation and/or regulations are implemented, existing trade agreements are renegotiated or terminated, and

trade restrictions and tariffs are imposed on foreign-sourced or U.S. goods, it may be inefficient and expensive for

us to alter our business operations in order to adapt to or comply with such changes. Such operational changes

could have a material adverse effect on our business, financial condition, results of operations or cash flows.

As a result of these risks, we cannot assure investors that we will be able to obtain a sufficient supply of key

product components in the future or that the cost of these components will not increase. If our component supply is

disrupted or delayed, or if we need to replace our suppliers, there can be no assurance that additional components

will be available when required or that components will be available on favorable terms, which could extend our

manufacturing lead times, increase the costs of our components and harm our business, operating results and

financial condition. We may not be able to continue to procure components at reasonable prices, which may impact

our business negatively or require us to enter into longer-term contracts to obtain components. Any of the foregoing

disruptions could exacerbate other risk factors, increase our costs and decrease our gross margins, harming our

business, operating results and financial condition.

If we do not manage the supply of our products and their components efficiently, our results of operation

could be adversely affected.

Managing the supply of our products and underlying components is complex and has become increasingly

difficult, in part, due to supply chain constraints, component quality and inflationary pressure. Our third-party

contract manufacturers procure components and build our products based on our forecasts, and we generally do

not hold inventory for a prolonged period of time. Our forecasts are based on estimates of future demand for our

products, which are in turn based on historical trends and analyses from our sales and marketing organizations,

adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate

component supply, we may issue orders for components and products that are non-cancelable and non-returnable.

Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to

make accurate forecasts and effectively manage the supply of our products and components. If we have excess

supply, we may reduce our prices and write down or write off excess or obsolete inventory, which in turn could result

in lower gross margins. Alternatively, insufficient supply levels may lead to shortages that exacerbate other risk

factors and result in delayed revenue, reduced product margins or lost sales opportunities altogether. If we are

unable to effectively manage our supply and inventory, our results of operations could be adversely affected.

If we fail to successfully maintain or grow our relationships with partners, our business, operating results

and financial condition could be harmed.

Our future success is highly dependent upon our ability to establish and maintain successful relationships with

our partners, including value-added resellers, service providers and systems integrators. In addition to selling our

Platform, our partners may offer installation, post-sale service and support in their local markets. In markets where

we rely on partners more heavily, we have less contact with our customers and less control over the sales process

and the quality and responsiveness of our partners. As a result, it may be more difficult for us to ensure the proper

delivery and installation of our Platform or the quality or responsiveness of the support and services being offered.

Any failure on our part to effectively identify, train and manage our channel partners and to monitor their sales

activity, as well as the customer support and services provided to our customers, could harm our business,

operating results and financial condition.

Our partners may choose to discontinue offering our Platform or may not devote sufficient attention and

resources toward selling our Platform. We typically enter into non-exclusive, written agreements with our channel

partners. These agreements generally have a one-year, self-renewing term, have no minimum sales commitment

and do not prohibit our channel partners from offering competing products and services. Additionally, our

competitors may provide incentives to our existing and potential channel partners to use, purchase or offer their

products and services or to prevent or reduce sales of our products and services. The occurrence of any of these

events could harm our business, operating results and financial condition.

Our brand name and business may be harmed by our competitors' marketing strategies.

Building and maintaining brand recognition and customer goodwill is critical to our success. On occasion, our

competitors' marketing efforts have included negative or misleading statements about us and our Platform. If we are

unable to effectively respond to our competitors' marketing efforts and protect our brand and customer goodwill now

or in the future, our business will be adversely affected.

Sales to governments are subject to a number of challenges and risks that may adversely impact our

business.

Sales to governmental agencies may in the future account for a significant portion of our revenue and sales to

governmental agencies pose additional challenges and risks to our sales efforts. Governments have and may

continue to impose restrictions or requirements that must be complied with in order for us to sell to certain

governmental customers. Government demand and payment for our Platform may be impacted by public sector

budgetary cycles and funding reductions or delays, such as an extended federal government shutdown, which may

adversely affect public sector demand for our Platform. We sell our offerings to governmental agencies through our

channel partners, and these agencies may have statutory, contractual or other legal rights to terminate contracts

with our distributors and resellers for convenience or due to a default, and any such termination may adversely

impact our results of operations. Governments routinely investigate and audit government contractors’

administrative processes, and any unfavorable audit could result in the government refusing to continue buying our

Platform, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal

liability if the audit uncovers improper or illegal activities. Finally, governments may require certain products to be

manufactured in the United States and other relatively high-cost manufacturing locations, and we may not

manufacture all products in locations that meet these requirements, affecting our ability to sell to certain

governmental agencies.

Risks Related to Our Platform

If we fail to develop and introduce new or enhanced storage offerings successfully, our ability to attract and

retain customers could be harmed.

We operate in a dynamic environment characterized by rapidly changing technologies and industry standards

and technological obsolescence. To compete successfully, we must design, develop, market and sell new or

enhanced storage offerings that provide increasingly higher levels of performance, capacity, functionality and

reliability and meet our customers' expectations, which is a complex and uncertain process. We believe that we

must continue to dedicate significant resources to our research and development efforts and innovate business

models such as Evergreen//One to improve our competitive position. We continue to expand our large capacity data

storage offerings to compete directly with hard disk systems. Our investments may take longer to generate revenue

or may generate less revenue than we anticipate. The introduction of new storage offerings by our competitors, or

the emergence of alternative technologies or industry standards could render our Platform obsolete or less

competitive.

As we introduce new or enhanced Platform offerings, we must successfully manage their launch and

customer adoption. If we are not able to successfully manage the development and release of new or enhanced

Platform offerings, our business, operating results and financial condition could be harmed. Similarly, if we fail to

introduce new or enhanced Platform offerings, such as new or improved software features, that meet our customers'

needs in a timely or cost-effective fashion, we may lose market share and our operating results could be adversely

affected.

If we fail to execute our transition to subscription offerings successfully, our revenues and results of

operation may be harmed.

We offer our Platform on a subscription basis, including our hardware and software products through

Evergreen//One and Cloud Data Services. Our subscription offerings are relatively new to the storage market and

will continue to evolve, and we may not be able to compete effectively, drive continued revenue growth or maintain

profitability with these business models. Our subscription offerings require different accounting of our customer

transactions, such as changing how we recognize revenue and capitalize commissions, among other things. In

addition, our subscription offerings require compliance with additional regulatory, legal and trade licensing

requirements in some countries and entail incremental operational, technical, legal and other costs. Continued

market acceptance of subscription offerings depends on our ability to create a seamless customer experience and

optimally price our offerings in light of market conditions, our costs and customer demand. Additionally, subscription

models may unfavorably impact the pricing of and demand for our on-premise offerings, which could reduce our

revenues and profitability. If we do not successfully execute our subscription offering strategy, our financial results

could be negatively impacted.

Our Platform is highly technical and may contain defects or bugs, which could cause data unavailability,

loss, breach or corruption that might, in turn, result in liability and harm to our reputation and business.

Our products and software are highly technical and complex and are often used to store information critical to

our customers’ business operations. Our Platform may contain errors, defects or security vulnerabilities that could

result in data unavailability, loss, corruption or other harm to our customers. Some errors in our Platform may only

be discovered after they have been installed and used by customers. We have, from time to time, identified

vulnerabilities in our Platform. Despite our efforts to detect and remediate actual and potential vulnerabilities in our

systems, we cannot be certain that we will be able to address any such vulnerabilities, in whole or part, and there

may be delays in developing and deploying patches and other remedial measures to adequately address

vulnerabilities. We may also incur unexpected costs replacing defective hardware or ensuring that hardware

remains interoperable and upgradable. Any of these errors, defects, bugs or security vulnerabilities may leave us,

our products and our customers susceptible to exploitation, including by malicious actors. Any errors, defects or

security vulnerabilities in our Platform could result in a loss of revenue, injury to our reputation, loss of customers or

increased service and warranty costs, which could adversely affect our business and operating results. In addition,

errors or failures in the products of third-party technology vendors may be attributed to us and may harm our

reputation.

We could face claims for product liability, tort or breach of warranty. We may not be able to enforce provisions

in our contracts relating to warranty disclaimers and liability limitations. Defending a lawsuit, regardless of its merit,

would be costly and could divert management’s attention and adversely affect the market’s perception of us. Our

business liability insurance coverage may be inadequate with respect to a claim and future coverage may not be

available on acceptable terms or at all. Any of these issues could result in claims against us, and our business,

operating results and financial condition could be harmed.

If we are unable to ensure that our products interoperate with third party operating systems, software

applications and hardware, we may lose or fail to increase our market share.

Our products must interoperate with our customers’ infrastructure, specifically networks, servers, software and

operating systems, which are offered by a wide variety of vendors. When new or updated versions of these

operating systems or applications are introduced, we may need to develop updated versions of our software so that

our products continue to interoperate properly. We may not deliver or maintain interoperability quickly, cost-

effectively or at all as these efforts require capital investment and engineering resources. If we fail to maintain

compatibility of our products with these infrastructure components, our customers may not be able to fully utilize our

Platform, and we may, among other consequences, lose or fail to increase our market share and experience

reduced demand for our Platform, which may harm our business, operating results and financial condition.

Our Platform must conform to industry standards in order to be accepted by customers.

Generally, our products comprise only a part of an IT environment. The servers, network, software and other

components and systems deployed by our customers must comply with established industry standards in order to

interoperate and function efficiently together. We depend on companies that provide other systems in this

ecosystem to conform to prevailing industry standards. These companies are often significantly larger and more

influential in driving industry standards than we are. Some industry standards may not be widely adopted or

implemented uniformly and competing standards may emerge that our customers prefer. If larger companies do not

conform to the same industry standards that we do, or if competing standards emerge, sales of our Platform could

be adversely affected, which may harm our business.

Our ability to successfully market and sell our Platform is dependent in part on ease of use and the quality

of our customer experience, and any failure to offer high-quality technical services and support could harm

our business.

Once our customers deploy our Platform, they depend on our customer experience organization to drive non-

disruptive upgrades and resolve technical issues. Our ability to provide effective technical services is largely

dependent on our ability to attract, train and retain qualified personnel, as well as to engage with qualified support

partners that provide a similar level of customer support. In addition, our sales process is highly dependent on our

reputation and on recommendations from our existing customers. Although our Platform is designed to be

interoperable with existing servers and systems, we may need to provide customized installation and configuration

services to our customers before our Platform is fully operational in their environments. Any failure to maintain or a

market perception that we do not maintain, high-quality technical services and support could harm our reputation,

our ability to sell our Platform to existing and prospective customers and our business.

Risks Related to Our Operating Results or Financial Condition

We intend to continue focusing on revenue growth and increasing our market penetration and international

presence by investing in our business, which may put pressure on near-term profitability.

Our operating expenses largely are based on anticipated revenue, and a high percentage of our expenses

are, and will continue to be, fixed in the short term. If we fail to adequately increase revenue and manage costs, we

may not achieve or maintain profitability in the future. As a result, our business could be harmed, and our operating

results could suffer.

Our strategy is to continue investing in marketing, sales, support and research and development. We believe

continuing to invest heavily in our business is critical to our future success and meeting our growth objectives. We

anticipate that our operating expenses will continue to increase in absolute terms. Even if we achieve or maintain

significant revenue growth, we may experience losses, forgoing near-term profitability on a U.S. GAAP basis.

Our gross margins are impacted by a variety of factors and vary from period to period, making them

difficult to predict with certainty.

Our gross margins fluctuate from period to period due primarily to product costs, customer mix and product

mix. A variety of factors may cause our gross margins to fluctuate and make them difficult to predict, including, but

not limited to:

• sales and marketing initiatives, discount levels, rebates and competitive pricing;

• changes in customer, geographic or product mix, including mix of product configurations;

• the cost of components, including flash and DRAM, and freight;

• new product introductions and enhancements with higher product costs;

• excess inventory levels or purchase obligations as a result of changes in demand forecasts or product

transitions;

• an increase in product returns, product warranty, order rescheduling and cancellations;

• the timing of technical support service contracts and contract renewals;

• inventory stocking requirements to mitigate supply chain constraints, accommodate unforeseen demand or

support new product introductions; and

• inflation and other adverse economic pressures.

If we are unable to manage these factors effectively, our gross margins may decline, and fluctuations in gross

margins may make it difficult to manage our business and achieve or maintain profitability, which could materially

harm our business, operating results and financial condition.

Our operating results may fluctuate significantly, which could make our future results difficult to predict

and could cause our operating results to fall below expectations.

Our operating results may fluctuate due to a variety of factors, a portion of which are outside of our control. As

a result, comparing our results on a period-to-period basis may not be meaningful. Factors that are difficult to

predict and that could cause our operating results to fluctuate include:

• the timing and magnitude of orders, shipments and acceptance of our products in any quarter, including

product returns, order rescheduling and cancellations by our customers;

• the impact on timing and amount of revenue recognized resulting from the cancellation of unfulfilled orders

by our customers or our inability to fulfill orders;

• fluctuations or seasonality in demand and prices for our products;

• our ability to control the costs of the components we use or to timely adopt subsequent generations of

components;

• disruption in our supply chains, shipping logistics, component availability and related procurement costs;

• reductions in customers’ budgets for IT purchases;

• changes in industry standards in the data storage industry;

• our ability to develop, introduce and ship new Platform offerings that meet customer requirements and to

effectively manage product transitions;

• changes in the competitive dynamics of our markets, including new entrants or price discounting;

• our ability to control or mitigate costs, including our operating expenses, to support business growth and our

continued expansion;

• the impact on our revenue mix from changes in our customers' purchasing behavior due to their cost of

capital;

• the impact of inflation on labor and other costs, other adverse economic conditions and the impact of public

health epidemics or pandemics; and

• future accounting pronouncements and changes in accounting policies.

The occurrence of any one of these factors could negatively affect our operating results in any particular

quarter.

The sales prices of our Platform offerings may fluctuate or decline, which may adversely affect our gross

margins and operating results.

The sales prices of our offerings may fluctuate or decline for a variety of reasons, including competitive pricing

pressures, discounts, the introduction of competing products or services or promotional programs, a change in our

mix of products and services, cost of components, supply chain constraints, inflation and other adverse economic

conditions. Competition continues in the markets in which we participate, and we expect competition to increase in

the future, thereby leading to increased pricing pressures. Larger competitors may reduce the price of products or

services that compete with ours or may bundle them with other products and services. Additionally, although we

price our offerings predominantly in U.S. dollars, currency fluctuations in certain countries and regions may

negatively impact actual prices that partners and customers are willing to pay in those countries and regions.

Furthermore, we anticipate that the prices for our products will decrease over product life cycles. If we are required

to decrease our prices to be competitive and are not able to offset this decrease by increases in the volume of sales

or the sales of new products with higher margins, our gross margins and operating results could be adversely

affected.

We have experienced growth in prior periods, and we may not be able to sustain future growth effectively or

at all.

We have significantly expanded our overall business, customer base, headcount, channel partner

relationships and operations in prior periods, and we anticipate that we will continue to expand and experience

growth in future periods. Our future operating results will depend to a large extent on our ability to successfully

sustain our growth and manage our continued expansion. To sustain and manage our growth successfully, we

believe that we must, among other things, effectively allocate resources and operate our business across a wide

range of priorities.

We expect that our future growth will continue to place strain on our managerial, administrative, operational,

financial and other resources. We will incur costs associated with this future growth prior to realizing the anticipated

benefits, and the return on these investments may be lower than, or develop slower than, we expect or may never

materialize. Investors should not consider our revenue growth in prior periods as indicative of our future

performance. In future periods, we may not achieve similar percentage revenue growth rates as we have achieved

in some past periods. If we are unable to maintain adequate revenue or revenue growth, our stock price could be

volatile, and it may be difficult to achieve and maintain profitability. If we are unable to manage our growth

successfully, we may not be able to take advantage of market opportunities or release new Platform offerings in a

timely manner, and we may fail to satisfy customer expectations, maintain product quality, execute on our business

plan or adequately respond to competitive pressures, each of which could adversely impact our growth and affect

our business and operating results.

If we are unable to sell renewals of our subscription services to our customers, our future revenue and

operating results will be harmed.

Existing customers may not renew their subscription services agreements after the initial period and, given

changing customer purchasing preferences, we may not be able to accurately predict our renewal rates. Our

customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their available budget

and the level of their satisfaction with our Platform, customer support and pricing compared to our competitors. If

our customers renew their contracts, they may renew on terms that are less economically beneficial to us. If our

customers do not renew their agreements or renew on less favorable terms, our revenue may grow more slowly

than expected, if at all.

We expect that sales from our Evergreen//One and Evergreen//Flex subscription and consumption offerings

will increase as a percentage of our total sales over time and will have a near-term downward impact on

both product and total revenue growth.

Our sales from our Evergreen//One and Evergreen//Flex subscription and consumption offerings have been

increasing as a percentage of total sales, and we expect this trend to continue. With a traditional CapEx sale, a

large portion of revenue is recognized as product revenue when the order is fulfilled. By contrast, revenue for our

Evergreen//One and Evergreen//Flex subscription and consumption offerings is recognized over the term of the

relevant contract period and the majority of revenue is included in subscription services revenue. As our Evergreen//

One and Evergreen//Flex subscription and consumption offerings grow, it may negatively impact both quarter-over-

quarter and year-over-year product and total revenue growth rate comparisons.

We may require additional capital to support business growth, and this capital might not be available on

acceptable terms, or at all.

We intend to continue investing in our business growth and may require additional funds to support business

initiatives, including the need to develop new Platform offerings or enhance our existing Platform offerings, enhance

our operating infrastructure and acquire complementary businesses and technologies. Accordingly, we may need to

engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances

of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity

securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any debt financing we undertake in the future could involve additional restrictive covenants relating to our capital

raising activities and other financial and operational matters, which may make it more difficult for us to obtain

additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to

obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or

financing on terms satisfactory to us, when we require it, our ability to support our business growth and to respond

to business challenges could be significantly limited and our prospects and financial condition could be harmed.

We are exposed to the credit risk of some of our customers, which could harm our business, operating

results and financial condition.

Most of our sales are made on an open credit basis. We monitor individual customer payment capability when

we grant open credit arrangements and may limit these open credit arrangements based on perceived

creditworthiness. We also maintain allowances we believe are adequate to cover exposure for doubtful accounts.

Although we have programs in place that are designed to monitor and mitigate these risks, we cannot assure

investors these programs will be effective in managing our credit risks, especially as we expand our business

internationally. If we are unable to adequately control these risks, our business, operating results and financial

condition could be harmed.

Risks Related to Our Operations

If our security measures, or those maintained on our behalf, are compromised, or the security,

confidentiality, integrity or availability of our information technology, software, services, networks,

products, communications or data is compromised, limited, or fails, our business could experience a

material adverse impact, including without limitation, a material interruption to our operations, harm to our

reputation, a loss of customers, significant fines, penalties and liabilities, or breach or triggering of data

protection laws, privacy policies or other obligations.

In the ordinary course of our business, we collect, store, transmit and otherwise process proprietary,

confidential and sensitive data, including by using our internal systems, networks and servers, which may include

intellectual property, our proprietary business information and that of our customers, suppliers and business

partners and sales data, which may, on occasion, include personally identifiable information. Additionally, we design

and sell products that allow our customers to store their data. The security of our own networks and the intrusion

protection features of our products are both critical to our operations and business strategy.

Cyberattacks, malicious internet-based activity and online and offline fraud are prevalent and continue to

increase. These threats are becoming increasingly difficult to detect. The threats to information systems and

information may include: traditional computer “hackers,” social engineering schemes (for example, attempts to

induce fraudulent invoice payments or divert money from us), software bugs, malicious code (such as viruses and

worms), personnel misconduct or error, faulty password management, theft, denial-of-service attacks (such as

credential stuffing), advanced persistent threat intrusions, as well as attacks from nation-state and nation-state

supported actors. We may also be the subject of phishing attacks, malware installation, server malfunction, software

or hardware failures, loss of data or other computer assets, adware and other similar issues. Additionally,

ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported

actors, are becoming increasingly prevalent and severe and could lead to significant interruptions, delays, or

outages in our operations, disruptions in our services, loss of data, loss of income, significant extra expense to

restore data or systems, reputational loss and the diversion of funds. To alleviate the financial, operational and

reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be

unwilling or unable to do so (including, for example, if applicable laws or regulations prohibit such payments).

Similarly, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties

and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or

bugs that could result in a breach of or disruption to our platform, systems and network or the systems and networks

of third parties that support us and our business.

We devote significant resources to network security, authentication technologies, data encryption and other

security measures designed to protect our systems and data, including to secure the transmission and storage of

data and prevent third-party access to our data or accounts, but there can be no assurance that our security

measures or those of our service providers, partners and other third parties upon whom we rely will be effective in

protecting against a security incident or the materially adverse impacts that may arise from a security incident. Any

destructive or intrusive breach of our internal systems could result in the information stored on our networks,

including, without limitation, source code for our products and services or the networks and systems of third parties

upon whom we rely being accessed, publicly disclosed, lost or stolen.

Additionally, an effective attack on our products could disrupt the proper functioning of our products, allow

unauthorized access to sensitive, proprietary or confidential information of ours or our customers, disrupt or

temporarily interrupt our and our customers’ operations or cause other destructive outcomes, including the theft of

information sufficient to engage in fraudulent transactions. The risk that these types of events could seriously harm

our business is likely to increase as we expand our network of channel partners, resellers and authorized service

providers and operate in more countries. The economic costs to us to eliminate or alleviate cybersecurity risks and

vulnerabilities could be significant and may be difficult to anticipate or measure because the damage may differ

based on the identity and motive of the programmer or hacker, which are often difficult to identify. If any of these

types of security incidents occurs and we are unable to protect our products, systems and data, or if we are

perceived to have such a security incident, our relationships with our business partners and customers could be

materially damaged, our reputation and brand could be materially harmed, use of our products could decrease and

we could be exposed to a risk of loss or litigation, including, without limitation, class action litigation, and other

possible liabilities. A security incident could also result in government enforcement actions that could include

investigations, fines, penalties, audits and inspections, additional reporting requirements and/or oversight,

temporary or permanent bans on all or some processing of personal information.

Moreover, applicable data protection laws, contracts, policies and other data protection obligations may

require us to notify relevant stakeholders of security incidents, including affected individuals, customers, regulators,

and credit reporting agencies. Such disclosures are costly and the disclosures or the failure to comply with such

requirements could lead to material adverse impacts such as negative publicity, loss of customer confidence in our

services our security measures, investigations and private or government claims. Security incidents that impact our

information technology systems could also result in breaches of our contracts (some of which may not have liability

limitations and/or require us to indemnify affected parties) and could lead to litigation with customers, partners or

other relevant stakeholders. These proceedings could force us to spend money in defense or settlement, divert

management’s time and attention, increase our costs of doing business and adversely affect our reputation or

otherwise adversely affect our business.

If we are unable to attract, motivate and retain sales, engineering and other key personnel, including our

management team, we may not be able to increase our revenue and our business, operating results and

financial condition could be harmed.

Our ability to increase our revenue depends on our ability to attract, motivate, and retain qualified sales,

engineering and other key employees, including our management. These positions may require candidates with

specific backgrounds in software and the storage industry, and competition for employees with such expertise is

intense. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and

retaining highly skilled employees with appropriate qualifications. To the extent that we are successful in hiring to fill

these positions, we may need a significant amount of time to train new employees before they are effective and

efficient in performing their jobs. Further, we face new challenges regarding workforce planning, employee

expectations regarding the ability to work from home or remotely and maintaining employee productivity, as well as

higher employee turnover and slower hiring rates. If we are unable to adequately address these challenges, our

ability to recruit and retain employees and to ensure employee productivity could be negatively affected. From time

to time, there may be changes in our management team, which could create short term uncertainty. All of our

employees, including members of our management team and executive officers, are generally employed on an at-

will basis, which means that they could terminate their employment with us at any time. If we are unable to attract,

motivate and retain qualified sales, engineering and other key employees, including our management or if they are

unable to work effectively, our business and operating results could suffer.

If we fail to adequately expand and optimize our sales force, our growth will be impeded.

We need to continue to expand and optimize our sales organization in order to grow our customer base and

our business. We plan to continue to expand and train our sales force, both domestically and internationally. We

must design and implement effective sales incentive programs, and it can take time before new sales

representatives are fully trained and productive. We must adapt our sales processes for new sales and marketing

approaches, including those required by our shift to subscription services and the changes resulting from evolving

economic and budgetary constraints. If we are unable to hire, develop and retain qualified sales personnel or if new

sales personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able

to realize the expected benefits of these investments or increase our revenue and our business and operating

results could suffer.

Our company culture has contributed to our success, and if we cannot maintain this culture as we grow, we

could lose the innovation, creativity and teamwork fostered by our culture, and our business may be

harmed.

We believe that our company culture has been a critical contributor to our success. Our culture fosters

innovation, creativity, teamwork, passion for customers and focus on execution, and facilitates critical knowledge

sharing. In particular, we believe that the difference between our sales, support and engineering cultures and those

of incumbent vendors, is a key competitive advantage and differentiator for our customers and partners. As we grow

and change or are required to adapt to changes in business operations, including expectations around work

location, we may find it difficult to maintain these important aspects of our company culture, which could limit our

ability to innovate and operate effectively. Any failure to preserve our culture could also negatively affect our ability

to retain and recruit personnel, continue to perform at current levels or execute on our business strategy.

Our long-term success depends, in part, on sales outside of the United States, which subjects us to costs

and risks associated with international operations.

We maintain operations outside of the United States, which we have been expanding and intend to continue

to expand in the future. As a company headquartered in the United States, conducting and expanding international

operations subjects us to costs and risks that we may not face in the United States, including:

• exposure to foreign currency exchange rate risk;

• difficulties in collecting payments internationally;

• managing and staffing international operations;

• establishing relationships with channel partners in international locations;

• increased travel, infrastructure and legal compliance costs associated with international locations;

• requirements to comply with a wide variety of laws and regulations associated with international operations,

including taxes, customs and licensing requirements;

• significant fines, penalties and collateral consequences if we or our partners fail to comply with anti-bribery

laws;

• heightened risk of improper, unfair or corrupt business practices in certain geographies;

• potentially adverse tax consequences, including repatriation of earnings;

• increased financial accounting and reporting burdens and complexities;

• political, social and economic instability abroad, terrorist attacks, war (such as the conflicts in Israel and

Ukraine) and security concerns in general; and

• reduced or varied protection for intellectual property rights in some countries.

The occurrence of any of these risks could negatively affect our international operations and, consequently,

our business, operating results and financial condition generally.

Our international operations, as well as tax law changes, could expose us to potentially adverse tax

consequences.

Changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate

and our operating results. We generally conduct our international operations through wholly owned subsidiaries and

report our taxable income in various jurisdictions worldwide based upon our business operations in those

jurisdictions. Given proposed tax legislation and other global tax developments, we continue to evaluate our

corporate structure and intercompany relationships.

Many countries around the world are beginning to implement legislation and other guidance to align their

international tax rules with the Organization for Economic Co-operation and Development (OECD)’s Base Erosion

and Profit Shifting (BEPS) recommendations and related action plans that aim to standardize and modernize global

corporate tax policy, including changes to cross-border tax, transfer-pricing documentation rules and nexus-based

tax incentive practices. The OECD issued model rules for a global minimum tax framework known as Pillar Two,

which imposes a global minimum corporate tax rate of 15%. Certain countries in which we operate have enacted

legislation to adopt the Pillar Two framework and several other countries are also considering changes to their tax

laws to implement this framework. Future developments could change our current assessment, and it is possible

that the Pillar Two rules could adversely impact our effective tax rate, operating results, financial condition and cash

flows in future periods.

The Tax Cuts and Jobs Act of 2017 amendments to Internal Revenue Code (IRC) Section 174 require that

specific research and experimental expenditures be capitalized and amortized over five years if incurred in the U.S.

or fifteen years if incurred in a foreign jurisdiction beginning in our fiscal 2023. Although Congress is considering

legislation that would defer, modify or repeal this capitalization and amortization requirement, the possibility that this

will happen is uncertain. If this requirement is not deferred, modified or repealed, we may continue to incur

additional cash taxes.

Our intercompany relationships are, and after the implementation of any changes to our corporate structure

will continue to be, subject to complex transfer pricing regulations administered by taxing authorities in various

jurisdictions. The relevant taxing authorities may disagree with our determinations as to the income and expenses

attributable to specific jurisdictions. If such a disagreement were to occur, and our position were not sustained, we

could be required to pay additional taxes, interest and penalties, which could result in tax charges, higher effective

tax rates, reduced cash flows and lower overall profitability of our operations.

Third-party claims that we infringe their intellectual property rights could be costly and harm our business.

There is a substantial amount of intellectual property litigation in the data storage industry, and we may

become party to, or threatened with, litigation or other adversarial proceedings regarding our intellectual property

rights. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified

in advance. We have been, and may in the future be, subject to claims that we infringe upon the intellectual property

rights of other intellectual property holders, particularly as we grow and face increasing competition.

Any intellectual property rights claim against us or our customers, suppliers, and channel partners, with or

without merit, could be time-consuming and expensive to litigate or settle, divert management’s resources and

attention from operating our business and force us to acquire intellectual property rights and licenses, which may

involve substantial royalty payments. Further, a party making such a claim, if successful, could secure a judgment

that requires us to pay substantial damages, including treble damages and attorneys’ fees if we are found to have

willfully infringed a patent. An adverse determination also could invalidate our intellectual property rights, prevent us

from manufacturing and selling our products and may require that we procure or develop substitute products that do

not infringe, which could require significant effort and expense.

We may not be able to re-engineer our products to avoid infringement, and we may have to seek a license for

the infringed technology, which may not be available on reasonable terms or at all, may significantly increase our

operating expenses or may require us to restrict our business activities in one or more respects. Even if we were

able to obtain a license, it could be non-exclusive, which may give our competitors access to the same technologies

licensed to us. Claims that we have misappropriated the confidential information or trade secrets of third parties

could have a similar negative impact on our business. Any of these events could harm our business and financial

condition.

We currently have a number of agreements in effect with our customers, suppliers and channel partners

pursuant to which we have agreed to defend, indemnify and hold them harmless from damages and costs which

may arise from claims of infringement by our products of third-party patents, trademarks or other proprietary rights.

The scope of these indemnity obligations varies but may, in some instances, include indemnification for damages

and expenses, including attorneys’ fees. Our insurance may not cover intellectual property infringement claims. A

claim that our products infringe a third party’s intellectual property rights could harm our relationships with our

customers, deter future customers from purchasing our products and expose us to costly litigation and settlement

expenses. Even if we are not a party to any litigation between a customer and a third party relating to infringement

claims by our products, an adverse outcome in any such litigation could make it more difficult for us to defend our

products against intellectual property infringement claims in any subsequent litigation in which we are a named

party. Any of these results could harm our brand, business and financial condition.

The success of our business depends in part on our ability to protect and enforce our intellectual property

rights.

We rely on a combination of patent, copyright, service mark, trademark and trade secret laws, as well as

confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights, all of which

provide only limited protection. We have over 2,500 issued patents and patent applications in the United States and

foreign countries. We cannot assure investors that future patents issued to us, if any, will give us the protection that

we seek, if at all, or that any patents issued to us will not be challenged, invalidated, circumvented or held to be

unenforceable. Our issued and future patents may not provide sufficiently broad protection or may not be

enforceable. Further, the laws of certain foreign countries do not provide the same level of protection of corporate

proprietary information and assets such as intellectual property, trademarks, trade secrets, know-how and records,

as the laws of the United States. For instance, the legal systems of certain countries, particularly certain developing

countries, do not favor the enforcement of patents and other intellectual property protection. As a result, we may

encounter significant problems in protecting and defending our intellectual property or proprietary rights abroad.

Changes to the intellectual property law in the United States and other jurisdictions could also diminish the

value of our patents and patent applications or narrow the scope of our patent protection, among other intellectual

property rights. We cannot be certain that the steps we have taken will prevent theft, unauthorized use or the

reverse engineering of our proprietary information and other intellectual property, including technical data,

manufacturing processes, data sets or other sensitive information. Moreover, others may independently develop

technologies that are competitive to ours or that infringe our intellectual property. Furthermore, any of our

trademarks may be challenged by others or invalidated through administrative process or litigation.

Protecting against the unauthorized use of our intellectual property, products and other proprietary rights is

expensive and difficult. Litigation may be necessary in the future to enforce or defend our intellectual property rights

or to determine the validity and scope of the proprietary rights of others. Any such litigation could result in

substantial costs and diversion of management’s resources and attention, either of which could harm our business,

operating results and financial condition. Further, many of our current and potential competitors have the ability to

dedicate substantially greater resources than us to defend intellectual property infringement claims and enforce their

intellectual property rights. Accordingly, we may not be able to prevent third parties from infringing upon or

misappropriating our intellectual property. Effective patent, trademark, service mark, copyright and trade secret

protection may not be available in every country in which our products are available. An inability to adequately

protect and enforce our intellectual property and other proprietary rights could harm our business and financial

condition.

Our use of open source software could impose limitations on our ability to commercialize our Platform.

We use open source software in our Platform and expect to continue to use open source software in the

future. Although we monitor our use of open source software, the terms of many open source licenses have not

been interpreted by U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that

imposes unanticipated conditions or restrictions on our ability to market our Platform. From time to time, we may

face claims from third parties claiming ownership of, or demanding release of, the open source software or

derivative works that we have developed using such software, which could include our proprietary source code, or

otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation

and could require us to make our software source code freely available, seek licenses from third parties in order to

continue offering our Platform for certain uses or cease offering the implicated solutions unless and until we can re-

engineer them to avoid infringement. This re-engineering process could require significant additional research and

development resources, and we may be required to discontinue providing some of our software if re-engineering

cannot be accomplished on a timely basis, any of which could harm our business, operating results and financial

condition.

Failure to comply with governmental laws and regulations could harm our business.

Our business is subject to regulation by various federal, state, local and foreign governmental agencies,

including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product

safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, federal securities

laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent

than in the United States. For example, the European Union has adopted certain directives to facilitate the recycling

of electrical and electronic equipment sold in the European Union, including the Restriction on the Use of Certain

Hazardous Substances in Electrical and Electronic Equipment directive and the Waste Electrical and Electronic

Equipment directive.

Changes in applicable laws, regulations and standards could harm our business, operating results and

financial condition. For example, we have been subject to the EU General Data Protection Regulation, or GDPR,

since May 2018 and to the California Consumer Privacy Act (CCPA) since January 2020. Additionally, the California

Privacy Rights Act (CPRA), which modifies the CCPA, became fully effective as of January 1, 2023, although

enforcement of CPRA regulations was delayed by a court order until March 2024. Other states have proposed, and

in certain cases enacted, similar laws. These and potentially other future privacy regulations may require us to make

further changes to our policies and procedures beyond what we have already done. Our business could be

impacted, to some extent, by the United Kingdom's exit from the European Union and related changes in law and

regulation. We have modified our data protection compliance program in response to data privacy regulations and

will continue to monitor the implementation and evolution of global data protection regulations, but if we are not

compliant with such privacy regulations, we may be subject to significant fines and our business may be harmed.

The potential effects of new or modified privacy laws may be far-reaching and require us to modify our data

processing practices and policies and to incur substantial costs and expenses. Customers may choose to

implement technological solutions to comply with such laws that impact the performance and competitiveness of our

Platform. Even the perception of privacy concerns, whether or not valid, may harm our reputation and inhibit

competitiveness and adoption of our Platform by current and future customers.

In addition, environmental, social and governance (ESG) reporting and disclosure requirements continue to

evolve, with increasing global regulation. Companies must develop an expanded set of metrics and measures, data

collection and processing, controls, and reporting processes in order to meet regulatory requirements. For example,

the European Union recently adopted the Corporate Sustainability Reporting Directive, which requires us to prepare

and provide disclosure on a variety of ESG topics; California recently enacted Senate Bill 261, which will, among

other things, require us to prepare and submit climate-related financial risk reports; and the SEC recently adopted

rules mandating climate-related reporting requirements. As global ESG regulatory requirements evolve, this could

lead to disruptions in our product manufacturing or distribution, increase our operating costs, and harm our

profitability. If we fail, or are seen as failing, to effectively respond to ESG regulatory requirements, our reputation

and brand could be harmed, demand for our offerings could decline, and our profitability could be adversely

impacted.

Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions,

mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties

or injunctions. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal

litigation, our business, operating results and financial condition could be harmed. In addition, responding to any

action will likely result in a significant diversion of management’s attention and resources and an increase in

professional fees. Enforcement actions and sanctions could harm our business, operating results and financial

condition.

Governmental regulations affecting the import or export of products could negatively affect our revenue.

The U.S. and various foreign governments have imposed controls, export license requirements and

restrictions on the import or export of some technologies, especially encryption technology, as well as laws relating

to forced labor and conflict minerals. From time to time, governmental agencies have proposed additional regulation

of encryption technology, such as requiring the escrow of imports or exports. If we fail to obtain required import or

export approval for our products or their various components, or to timely provide requested documentation, our

international and domestic sales could be harmed and our revenue may be adversely affected. In many cases, we

rely on vendors and channel partners to handle logistics associated with the import and export of our products, so

our visibility and control over these matters may be limited. In addition, failure to comply with such regulations could

result in penalties, costs and restrictions on export privileges, which could harm our business, operating results and

financial condition.

We may acquire other businesses which could require significant management attention, disrupt our

business, dilute stockholder value, and adversely affect our operating results.

We have completed acquisitions in the past and continue to evaluate and consider additional strategic

transactions, including acquisitions of, or investments in, businesses, technologies, services, products and other

assets in the future. We also may enter into relationships with other businesses in order to expand our product

offerings, which could involve preferred or exclusive licenses, additional channels of distribution or discount pricing

or investments in other companies. Negotiating these transactions can be time-consuming, difficult and expensive,

and our ability to close these transactions may be subject to third-party or government approvals, which are beyond

our control. Consequently, we can make no assurance that these transactions, once undertaken and announced,

will close.

These kinds of acquisitions or investments may result in unforeseen operating difficulties and expenditures. In

particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products,

personnel or operations of acquired companies, particularly if the key personnel of the acquired business choose

not to work for us, and we may have difficulty retaining the customers of any acquired business. Acquisitions may

also disrupt our ongoing business, divert our resources and require significant management attention that would

otherwise be available for development of our business. Any acquisition or investment could expose us to unknown

liabilities. We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast

the financial impact of an acquisition transaction. Moreover, we cannot assure investors that the anticipated benefits

of any acquisition or investment will be realized. In connection with these types of transactions, we may issue

additional equity securities that dilute our stockholders, use cash that we may need in the future to operate our

business, incur debt on terms unfavorable to us or that we are unable to repay, incur large charges or substantial

liabilities, encounter difficulties integrating diverse business cultures and become subject to adverse tax

consequences, substantial impairment or deferred compensation charges. These challenges related to acquisitions

or investments could harm our business and financial condition.

Risks Related to Our Credit Facility

Restrictive covenants in the agreement governing our senior secured revolving credit facility may restrict

our ability to pursue business strategies.

In August 2020, we entered into a Credit Agreement with a consortium of financial institutions and lenders that

provides for a five-year, senior secured revolving credit facility of $300.0 million (Credit Facility). We can borrow,

repay and re-borrow funds under this Credit Facility at any time, subject to customary borrowing conditions, for

general corporate purposes and working capital.

The agreement governing our Credit Facility limits our ability, among other things, to incur additional secured

indebtedness; sell, transfer, license or dispose of assets; consolidate or merge; enter into transactions with our

affiliates; and incur liens. In addition, our Credit Facility contains financial and other restrictive covenants that limit

our ability to engage in activities that may be in our long term best interest, such as, subject to permitted exceptions,

making capital expenditures in excess of certain thresholds, making investments, loans and other advances, and

prepaying any additional indebtedness while our indebtedness under our Credit Facility is outstanding. Our failure to

comply with financial and other restrictive covenants could result in an event of default, which if not cured or waived,

could result in the lenders requiring immediate payment of all outstanding borrowings or foreclosing on collateral

pledged to them to secure the indebtedness.

Risks Related to Our Common Stock

The trading price of our common stock has been and may continue to be volatile, and an active, liquid, and

orderly market for our common stock may not be sustained.

The trading price of our common stock has been, and will likely continue to be, highly volatile. Since shares

of our common stock were sold in our initial public offering in October 2015 at a price of $17.00 per share, our

closing stock price has ranged from $8.76 to $57.16, through March 26, 2024. Some of the factors, many of which

are beyond our control, affecting our volatility may include:

• price and volume fluctuations in the overall stock market from time to time;

• significant volatility in the market price and trading volume of technology companies in general and of

companies in our industry;

• actual or anticipated changes in our results of operations or fluctuations in our operating results;

• whether our operating results meet the expectations of securities analysts or investors;

• issuance or new or updated research or reports by securities analysts, including the publication of

unfavorable reports or change in recommendation or downgrading of our common stock;

• actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;

• litigation involving us, our industry or both;

• general economic conditions and trends, including the impact of interest rates on the overall stock market

and the market for technology company stocks;

• major catastrophic events;

• sales of large blocks of our stock; or

• departures of key personnel.

In several recent situations where the price of a stock has been volatile, holders of that stock have instituted

securities class action litigation against the issuer. If any of our stockholders were to bring a lawsuit against us, the

defense and disposition of the lawsuit could be costly and divert the time and attention of our management and

harm our business, operating results and financial condition.

We cannot guarantee that our share repurchase program will enhance shareholder value, and share

repurchases could affect the price of our common stock.

Our Board of Directors has periodically authorized share repurchases, funded from available working capital,

including up to $250.0 million authorized in February 2024. The repurchase authorization has no fixed end date.

Although our Board of Directors has authorized a share repurchase program, this program does not obligate us to

repurchase any specific dollar amount or number of shares. The share repurchase program could affect the price of

our common stock, increase volatility and diminish our cash reserves.

If securities analysts do not publish research or reports about our business, or if they downgrade our

stock, our stock price could decline.

The trading market for our common stock will likely be influenced by research and reports that securities or

industry analysts publish about us or our business. If one or more of these analysts downgrades our stock, lowers

their price target, or publishes unfavorable or inaccurate research about our business, our stock price would likely

decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand

for our stock could decrease, which could cause our stock price and trading volume to decline.

We have never paid dividends on our common stock and we do not anticipate paying any cash dividends in

the foreseeable future.

We have never declared or paid any dividends on our common stock. We intend to retain any earnings to

finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the

future. As a result, investors may only receive a return on their investment in our common stock if the market price

of our common stock increases.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and

under Delaware law might discourage, delay or prevent a change of control of our company or changes in

our management and, therefore, depress the price of our common stock.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions

that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of

control of our company or changes in our management that our stockholders may deem advantageous. These

provisions:

• establish a classified Board of Directors so that not all members of our Board of Directors are elected at one

time;

• authorize the issuance of “blank check” preferred stock that our Board of Directors could issue to increase

the number of outstanding shares to discourage a takeover attempt;

• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a

meeting of our stockholders;

• prohibit stockholders from calling a special meeting of our stockholders;

• provide that the Board of Directors is expressly authorized to make, alter or repeal our bylaws; and

• establish advance notice requirements for nominations for elections to our Board of Directors or for

proposing matters that can be acted upon by stockholders at stockholder meetings.

Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which generally

prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any

“interested” stockholder for a period of three years following the date on which the stockholder became an

“interested” stockholder and which may discourage, delay, or prevent a change of control of our company.

Any provision of our amended and restated certificate of incorporation, bylaws or Delaware law that has the

effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a

premium for their shares of our common stock, and could also affect the price that some investors are willing to pay

for our common stock.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of

Delaware will be exclusive forum for substantially all disputes between us and our stockholders, which

could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our

directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of

Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting

a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General

Corporation Law, our amended and restated certificate of incorporation or our bylaws; or any action asserting a

claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit a

stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors,

officers or other employees, which may discourage such lawsuits against us and our directors, officers and other

employees. If a court were to find the choice of forum provision contained in our amended and restated certificate of

incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with

resolving such action in other jurisdictions, which could harm our business and financial condition.

General Risk Factors

Our business is subject to the risks of earthquakes, fires, floods and other natural catastrophic events, and

to interruption by man-made factors such as war, computer viruses or terrorism or by the impact of public

health epidemics or pandemics.

We and our suppliers have operations in locations, including our headquarters in California, that are subject to

earthquakes, fires, floods and other natural catastrophic events, such as climate change, severe weather and

geological events, which could disrupt our operations or the operations of our customers and suppliers. Our

customers affected by a natural disaster could postpone or cancel orders of our products, which could negatively

impact our business. Moreover, should any of our key suppliers fail to deliver components to us as a result of a

natural disaster, we may be unable to purchase these components in necessary quantities or may be forced to

purchase components in the open market at significantly higher costs. We may also be forced to purchase

components in advance of our normal supply chain demand to avoid potential market shortages. Our business

interruption insurance may be insufficient to compensate us for losses due to a significant natural disaster or due to

man-made factors. Any natural catastrophic events may also prevent our employees from being able to reach our

offices in any jurisdiction around the world, and therefore impede our ability to conduct business as usual.

In addition, man-made factors, such as acts of war, terrorism or malicious computer viruses, and public health

epidemics or pandemics, could cause disruptions in our or our customers’ businesses or the economy as a whole.

To the extent that these disruptions result in delays or cancellations of customer orders or the deployment of our

products, our business, operating results and financial condition could be harmed.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 1C. Cybersecurity.

Risk Management and Strategy

We have implemented and maintain various processes to identify, assess, prioritize, manage, and report on

cybersecurity risks that could result in loss or other adverse consequences to Pure Storage. We maintain a variety

of channels designed to identify risks, including risks associated with our use of third-party service providers, such

as by conducting vulnerability assessments, reviewing audit findings, discussing with key stakeholders, and

analyzing security incidents and reports from our employees and others.

We maintain procedures and processes designed to evaluate and respond to certain identified risks. We

assess potential adverse impact across a variety of factors, such as financial, product roadmap, brand and

reputation, operational performance, and our ability to comply with applicable laws and regulations. Potential

responses for cybersecurity risks are:

• Avoiding activities or situations that could lead to harm.

• Engaging in preventative measures, safety protocols, and security enhancements.

• Allocating risk through contract or insurance.

• Developing contingency plans to address potential negative outcomes associated with cybersecurity risks if

they occur.

Our cybersecurity program is integrated into our broader enterprise risk management framework. For

example, certain members of our executive management evaluate material risks from cybersecurity threats against

our overall business objectives and report to our Audit and Risk Committee (Audit Committee) of the Board of

Directors, which evaluates our overall enterprise risk.

We use third-party service providers to assist us from time to time in an effort to identify, assess, and

manage material risks from cybersecurity threats. These service providers provide services such as threat

intelligence and dark web monitoring. In addition, we engage independent third parties (such as assessors or

consultants) to periodically assess the capability and maturity of our cybersecurity program.

Our Governance, Risk, and Compliance (GRC) team oversees our third-party cybersecurity risk

management program, which evaluates the security posture of certain third-party vendors. Our assessments may

include the collection and verification of various cybersecurity measures implemented by our third-party vendors.

Depending upon the third-party vendor as well as the data and information systems to which the vendor will have

access, the GRC team may review the vendor’s information security policies and standards, examine the vendor’s

certifications and attestations, and review vulnerability assessments or other evaluations.

For a description of the risks from cybersecurity threats that may materially affect our company and how

they may do so, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K,

including the risk factor entitled “If our security measures, or those maintained on our behalf, are compromised, or

the security, confidentiality, integrity or availability of our information technology, software, services, networks,

products, communications or data is compromised, limited, or fails, our business could experience a material

adverse impact, including without limitation, a material interruption to our operations, harm to our reputation, a loss

of customers, significant fines, penalties and liabilities, or breach or triggering of data protection laws, privacy

policies or other obligations."

Governance

Our Board of Directors addresses the company’s cybersecurity risk management as part of its general

oversight function. Our Audit Committee is responsible for overseeing the company’s cybersecurity risk

management program, including mitigation of risks from cybersecurity threats. In addition, we have established an

Executive Security Council (ESC). The ESC oversees and governs our cybersecurity program.

Our cybersecurity program is implemented and maintained by the Pure Security Office (PSO), a team of

security professionals responsible for developing and implementing an information security program designed to

protect our assets, including data, networks, applications and people, from cyber threats. The PSO includes

individuals with expertise in the following areas and who continue to leverage such expertise at the company in the

following manners:

• Governance, Risk & Compliance (GRC). Maintaining cybersecurity policies, standards, and processes in

place and providing training to our employees on them.

• Security Operations. Monitoring our critical systems and assets, and that we are able to identify and

respond to security incidents in a timely manner.

• Security Engineering & Architecture. Implementing risk-based security controls.

• Product Security. Supporting our product teams’ security objectives by providing design review,

certification management, penetration testing, and consulting services, as well as operating security

vulnerability management and reporting dashboard capabilities.

• Enterprise resiliency. Developing policies, procedures and practices for critical operations recovery and

business continuity in the event of a cybersecurity incident.

The PSO reports to our Audit Committee and ESC on cybersecurity risks. Our Chief Information Security

Officer (CISO) meets with the ESC and Audit Committee periodically in an effort to review the company’s

cybersecurity risks, the company’s prevention, detection and remediation efforts of cybersecurity incidents (as

appropriate), and key cybersecurity performance indicators. We also maintain procedures designed to escalate

certain cybersecurity risks and incidents to members of executive management and the board of directors, as

appropriate.

Item 2. Properties.

Our corporate headquarters are located in Santa Clara, California. We also maintain offices in multiple

locations in the United States and internationally in Africa, Asia, Australia, Europe, and North and South America.

We lease all of our facilities and do not own any real property. We believe that our facilities are adequate to meet

our needs for the immediate future, and that, should it be needed, suitable additional space will be available to

accommodate expansion of our operations.

Item 3. Legal Proceedings.

The information set forth under the "Legal Matters" subheading in Note 7 of our Notes to Consolidated

Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K is incorporated herein by reference.

In addition, we may from time to time, be involved in various legal proceedings arising from the normal

course of business, and an unfavorable resolution of any of these matters could materially affect our future results

of operations, cash flows or financial position.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities.

Market Information for Common Stock

Our Class A common stock, which we refer to as our "common stock", trades publicly on the New York Stock

Exchange (NYSE) under the ticker symbol “PSTG.”

Holders of Record

As of March 26, 2024, there were 36 holders of record of our common stock. This figure does not include a

substantially greater number of “street name” holders or beneficial holders of our common stock whose shares are

held of record by banks, brokers and other financial institutions.

Dividend Policy

We have never declared or paid cash dividends on our common stock. We currently intend to retain all

available funds and any future earnings for use in the operation of our business and do not anticipate paying any

dividends in the foreseeable future. Any future determination to declare dividends will be made at the discretion of

our Board of Directors, subject to applicable laws, and will depend on our financial condition, operating results,

capital requirements, general business conditions and other factors that our Board of Directors may deem relevant.

Purchases of Equity Securities by the Issuer

The following table summarizes our stock repurchase activity for the fourth quarter of fiscal 2024 (in

thousands except for price per share):

Period

Average Price Paid

per Share

Total Number of

Shares Purchased

as Part of Share

Repurchase

Program

(1)

Approximate Dollar Value of

Shares that May Yet Be

Purchased Under the Plans

or Program

(1)

November 6, 2023 - December 3, 2023 $ 32.96 15 $ 166,323

December 4, 2023 - December 31, 2023 $ 34.73 273 $ 156,838

January 1, 2024 - February 4, 2024 $ 38.67 296 $ 145,372

(1)

In March 2023, our Board of Directors authorized additional share repurchases of up to $250.0 million of our outstanding common stock. In

March 2024, our Board of Directors authorized additional share repurchases of up to $250.0 million of our outstanding common stock. See

"Liquidity and Capital Resources—Share Repurchase Program" included under Part II, Item 7 in this Annual Report.

The following table summarizes our shares of restricted common stock that were delivered by certain

employees to satisfy tax withholding requirements of equity awards for the fourth quarter of fiscal 2024 (in

thousands except for price per share):

Period

Average Price per

Share Delivered

Total Number of

Shares Delivered to

Satisfy Tax

Withholding

Requirements

Approximate Dollar Value

of Shares Delivered to

Satisfy Tax Withholding

Requirements

November 6, 2023 - December 3, 2023 $ — — $ —

December 4, 2023 - December 31, 2023 $ 36.71 133 $ 4,897

January 1, 2024 - February 4, 2024 $ 37.28 230 $ 8,504

Trading Plans

Our insider trading policy permits directors, officers, and other employees covered under the policy to

establish, subject to certain conditions and limitations set forth in the policy, written trading plans which are intended

to comply with Rule 10b5-1 under the Exchange Act, which permits automatic trading of our common stock or

trading of our common stock by an independent person (such as a stockbroker) who is not aware of material,

nonpublic information at the time of the trade.

Stock Performance Graph and Cumulative Total Return

This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of

Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to

be incorporated by reference into any filing of Pure Storage, Inc. under the Securities Act or the Exchange Act.

The following graph compares the cumulative total return to stockholders on our common stock relative to

the cumulative total returns of the NYSE Composite Index and NYSE Arca Tech 100 Index for the five years ended

February 4, 2024. The graph assumes that $100 (with reinvestment of all dividends) was invested in our common

stock and in each index on January 31, 2019 and assumes the reinvestment of any dividends. The returns shown

are based on historical results and are not intended to suggest future performance.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Investors should read the following discussion and analysis of our financial condition and results of

operations together with the consolidated financial statements and related notes included elsewhere in this Annual

Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that

involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-

looking statements as a result of various factors, including those discussed in the section titled” Risk Factors” and in

other parts of this Annual Report on Form 10-K. See also the section titled “Note Regarding Forward-Looking

Statements” in this report. Our fiscal year end is the first Sunday after January 30.

The following discussion of our financial condition and results of operations covers fiscal 2024 and fiscal

2023 items and year-over-year comparisons between fiscal 2024 and fiscal 2023. Discussions of fiscal 2022 items

and year-over-year comparisons between fiscal 2023 and 2022 that are not included in this Form 10-K can be found

in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our

Annual Report on Form 10-K for the fiscal year ended February 5, 2023, that was filed with the SEC on April 3,

2023.