Pure Storage, Inc. (PSTG): Business Model Canvas [Dec-2025 Updated]

You're digging into Pure Storage, Inc.'s business model to see if the shift to services is truly working, and honestly, the numbers from late 2025 tell a compelling story of transformation. Forget just selling hardware; the real engine now is recurring revenue, with Subscription ARR hitting a solid $1.8 billion by Q3 FY26, meaning subscriptions alone accounted for 45% of their total revenue stream. This recurring growth, built on their proprietary DirectFlash tech and key AI partnerships, underpins their entire strategy, which helped them post $3.17 billion in revenue for full-year FY25 while keeping about $1.5 billion in cash on the books. I've mapped out the full nine blocks below-from their Evergreen//One service to their customer penetration, which hit 63% of the Fortune 500-so you can see the precise mechanics driving their Enterprise Data Cloud vision. Dive in to see the full, unflinching breakdown.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Key Partnerships

You're looking at the critical alliances that underpin Pure Storage, Inc.'s growth strategy, especially as the market shifts hard toward AI infrastructure and cyber resilience. These partnerships aren't just marketing fluff; they translate directly into design wins and revenue streams. Here's the data on the key players supporting the Pure Storage Enterprise Data Cloud architecture as of late 2025.

Co-engineering with Meta for Hyperscale Data Center Deployments

The deal with one of the top-four hyperscalers, widely understood to be Meta, signals a massive validation for Pure Storage's DirectFlash Module (DFM) technology as a replacement for traditional hard disk drives (HDDs) in hyperscale environments. This market segment is responsible for 60-70 percent of all HDDs purchased globally. Pure Storage expects to deploy 1-2 exabytes of storage for Meta by the end of fiscal 2026, with potential to exceed that target. This is a licensing deal for Purity OS and DFM technology, not hardware sales, with cash flow expected to begin from fiscal 2027. The projected gross margins on the Meta deal are stated to exceed 90%. The stock price surged 28% following the announcement, pushing the market cap to $26 billion as of August 2025. The scale of the technology is evident: DFMs deliver 300 TB of capacity per unit and reduce rack space by up to 80% compared to HDDs. Pure Storage management anticipates reaching double-digit exabyte deployments with Meta in the next fiscal year (FY2027). This momentum is reflected in the Q3 FY2026 results, where total revenue hit $964.5 million, a 16% year-over-year increase, and non-GAAP operating margin reached 20.3%.

Strategic Alliance with CoreWeave for AI Cloud Environments

Pure Storage's strategic investment in CoreWeave, a major player in GPU cloud services for AI, embeds its storage platform directly into high-demand AI compute environments. Joint solutions are already deployed in production at supercomputing scale across thousands of GPUs. CoreWeave itself reported record first-quarter 2025 revenues of $981.6 million, marking a 420% year-over-year increase, though they posted an adjusted net loss of $149.6 million for that quarter due to aggressive expansion. CoreWeave also secured an $11.9 billion multi-year strategic partnership with OpenAI. This alliance helps Pure Storage capture a share of the AI cloud market, building on Pure Storage's own robust gross profit margin of 71.66% as of Q2 2025.

Microsoft for Pure Storage Cloud Azure Native Development

The joint development with Microsoft resulted in Pure Storage Cloud Azure Native, the industry's first fully managed, enterprise-grade block volume as a service, integrated directly into the Azure portal. Pure Storage has been recognized as a leader in Enterprise Storage Systems by Gartner for 12 consecutive years. This native integration allows for significant customer cost savings; for instance, customers on AV36 nodes can realize 20%-40% reductions in cloud storage costs in the first year, with potential to reach up to 50% in year five. One manufacturer reportedly cut cloud storage costs by 50%. Furthermore, for specific workloads like database restores, migration time was cut from eight hours to just five minutes, achieving a 12:1 data reduction ratio.

Technology Integration with NVIDIA (DGX SuperPOD) and Cisco (FlashStack)

The collaboration with Cisco and NVIDIA focuses on creating AI-ready infrastructure via the FlashStack Cisco Validated Design (CVD), which is a key module within the Cisco Secure AI Factory with NVIDIA. Pure Storage was among the first enterprise storage vendors to achieve NVIDIA DGX BasePOD certification. This integrated platform combines compute, storage, networking, and software to help enterprises move from AI pilot projects to large-scale deployment. Pure Storage supports over 100 customers across various AI use cases. Cisco, a key networking partner in this stack, has a market capitalization of approximately $286.35 billion and reported a gross margin of 64.94% in late 2025. The new FlashStack CVD is slated for general availability in Q1 2026.

Cyber Resilience Partnerships with Veeam, CrowdStrike, and Rubrik

Pure Storage is positioned as a leader in the evolving Cyber Resilience market, ranked 6th among the most popular vendors for 2025. The strategy involves turning the storage layer into an active participant in threat detection and response. The integration with CrowdStrike's Falcon Next-Gen SIEM is scheduled for general availability in Q3 FY26. The Cyber Resilience delivered as a Service offering, created with Veeam, is set for general availability in Q4 FY26. This focus on resilience is resonating, as more than 80% of Pure Storage's installed base employs the Enterprise Data Cloud (EDC) architecture. Rubrik is recognized as a Leader in Zero Trust Data Security for 2025 within this space.

Partner	Integration/Focus Area	Key Metric/Data Point
Meta (Hyperscaler)	Licensing Purity OS/DFM for standard storage	Expected deployment scale of 1-2 exabytes by end of FY2026
CoreWeave	AI Cloud Services Integration	Joint solutions deployed across thousands of GPUs
Microsoft	Pure Storage Cloud Azure Native (Block Volume as a Service)	Potential cloud storage cost reduction up to 50% in year five
NVIDIA/Cisco	FlashStack CVD for AI Factory	Pure Storage is NVIDIA DGX BasePOD certified
Veeam	Cyber Resilience as a Service	Service generally available in Q4 FY26
CrowdStrike	Real-Time Security/SIEM Integration	Integration generally available in Q3 FY26
Rubrik	Cyber Resilience/Zero Trust Data Security	Recognized as a Leader in Zero Trust Data Security for 2025

The adoption of the Enterprise Data Cloud architecture is strong, with over 80% of Pure Storage's installed base employing it in some form.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Key Activities

You're looking at the core engine room of Pure Storage, Inc. as of late 2025. These aren't abstract concepts; these are the operational levers driving the numbers we see in the financials. The focus is clearly on software differentiation and shifting the revenue mix to subscriptions.

Research and development (R&D) of DirectFlash technology and Purity OS

The R&D activity centers on maintaining the advantage in the flash module and the operating system that manages it. This foundational work directly supports the shift away from traditional disk. A key outcome of this R&D effort in the preceding period was the achievement of an industry-first design win with a top-four hyperscaler, integrating Pure Storage's DirectFlash software into massive-scale environments. The Purity Operating Software supports always-on data-reduction, data protection, and encryption across block, file, and object workloads.

Continuous innovation of the Enterprise Data Cloud (EDC) platform

Innovation here is about turning the platform into a true cloud operating model. The introduction of Pure FusionTM v2 in the fourth quarter of fiscal 2025 transformed legacy architectures by virtualizing data management into a unified, cloud-like experience. Furthermore, the company expanded its portfolio with FlashBlade//EXA in March 2025, a platform aimed at the most demanding specialty GPU clouds and High-Performance Computing environments, with general availability expected in mid-fiscal 2026.

Here are some platform highlights reflecting this activity:

• Achieved an industry-first design win with a top-four hyperscaler for DirectFlash software.
• Released Pure FusionTM v2, enabling customers to create their own EDC.
• Introduced FlashBlade//EXA in March 2025 for demanding GPU clouds.

Global channel partner enablement and sales support

The go-to-market strategy remains heavily reliant on the channel. In February 2025, Pure Storage unveiled an updated Reseller Partner Program designed to significantly increase partner profitability. This involved substantial investment in simplifying and refreshing enablement content for both account executives (AEs) and systems engineers (SEs).

The financial scale supported by this activity, based on the most recent reported quarter (Q3 FY2026, ended November 2, 2025), shows total revenue hitting $964.5 million, up 16.1 percent year-over-year.

Scaling the Storage-as-a-Service (SaaS) subscription model

This is a critical activity, as subscription revenue growth outpaces total revenue growth. For the full fiscal year 2025, subscription services revenue reached $1.5 billion, marking a 22% year-over-year increase. The momentum continued into the most recent reported quarter (Q3 FY2026), where subscription services revenue was $429.7 million, up 14% year-over-year. Subscription Annual Recurring Revenue (ARR) hit $1.8 billion in Q3 FY2026, representing a 17% year-over-year increase.

The financial performance reflecting this scaling activity is detailed below:

Metric	Fiscal Year 2025 (Full Year)	Q3 Fiscal 2026 (Ended Nov 2, 2025)
Total Revenue	$3.2 billion	$964.5 million
Subscription Services Revenue	$1.5 billion (up 22% YoY)	$429.7 million (up 14% YoY)
Subscription ARR	Not explicitly stated for full year 2025	$1.8 billion (up 17% YoY)

Manufacturing and supply chain management for flash arrays

Managing the physical product involves maintaining a resilient supply chain to meet demand, especially given the focus on AI and high-performance workloads. The CEO confirmed that Pure Storage is well prepared with a resilient supply chain, a broad global supplier base, and manufacturing sites on three continents. However, management noted that rising commodity costs are expected to create new pressure on global supply chains. The company also saw continued momentum in hyperscale shipments, exceeding its full-year goal of 2 exabytes of shipments in the fiscal third quarter.

The split between product and subscription revenue in the most recent quarter (Q3 FY2026) shows the ongoing importance of hardware delivery:

• Product Revenue (Q3 FY2026): $534.8 million.
• Subscription Services Revenue (Q3 FY2026): $429.7 million.

Finance: review the Q4 FY2026 supply chain buffer inventory levels by end of next week.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Key Resources

You're looking at the core assets Pure Storage, Inc. (PSTG) relies on to run and grow its business as of late 2025. These aren't just line items on a balance sheet; they are the proprietary engines and human capital driving their market position.

The foundation of the value proposition rests heavily on intellectual property. The Proprietary DirectFlash technology and all-flash array IP is cited as the major differentiator, with the lion's share of the intellectual property residing in the DirectFlash software that manages the physical modules. This approach, which bypasses commodity SSDs for Pure-designed DirectFlash Modules (DFMs), provides structural advantages in efficiency. For instance, their DFMs deliver storage density two to three times better and consume between 39% and 54% fewer watts per terabyte compared to their closest competitors. Furthermore, the roadmap shows a clear progression, with 48TB DFMs currently shipping and plans for 300TB DFMs by 2026.

The software layer is equally critical, comprising the Purity operating system and Pure Fusion automation software. The Purity Operating Environment is what makes the Data Platform software-defined, enabling Tier 1 data services across block, file, and object storage. The company is also pushing its automation capabilities, with Pure Fusion being a key part of the strategy to simplify workload expansion.

Financially, the company maintains a strong balance sheet with approximately $1.5 billion in cash, cash equivalents, and marketable securities as of the end of Q3 FY26. This liquidity supports ongoing strategic investments, as management signaled plans to make 'significant incremental investments' in R&D and sales and marketing to secure long-term growth.

The go-to-market strength is built on a global network of channel partners and system integrators, supported by significant traction with large enterprises. Pure Storage, Inc. has penetrated 63% of the Fortune 500, and its total global customer count is over 14,000+. The company also highlights deep engagement with neo-cloud providers and achieved General Availability (GA) of Pure Storage Cloud with Microsoft. The hyperscaler business itself is a key resource, with year-to-date shipments in Q3 FY26 already exceeding the full annual forecast of 1 to 2 exabytes.

Quantifying the highly skilled R&D and engineering talent involves looking at investment and scale. For the full year 2025, Pure Storage, Inc. reported research and development expenses of $0.804B, which represented roughly 25% of its $3.2 billion in revenue for that fiscal year. The company consistently reinvests over 20% of annual revenue into R&D. In terms of personnel, the headcount stood at approximately 6,200 employees exiting Q3 FY26, following a sequential increase of 104 employees.

Here's a quick look at the scale of these key resources:

Resource Category	Specific Metric/Data Point	Value (Late 2025)
Financial Strength	Total Cash, Cash Equivalents, and Marketable Securities (Q3 FY26)	$1.5 billion
Intellectual Property	DirectFlash DFM Watt/TB Efficiency vs. Competitors	39% to 54% fewer watts
Talent Scale	Total Employee Headcount (Q3 FY26)	Approximately 6,200
R&D Investment	R&D Expenses (FY2025)	$0.804B
Market Reach	Fortune 500 Customer Penetration	63%
Subscription Momentum	Subscription Annual Recurring Revenue (ARR) (Q3 FY26)	$1.8 billion

The commitment to R&D is a cultural mandate, with the company putting over 20% of its revenue back into engineering to maintain its technological lead. This investment supports the development across their three global R&D centers in the US, Prague, and Bangalore.

You should track the pace of adoption for their newer software-centric offerings, as this is where the IP investment translates most directly into future value:

• Subscription Services Revenue (Q3 FY26): $429.7 million.
• Subscription Services Revenue YoY Growth (Q3 FY26): 14%.
• Storage-as-a-Service TCV Sales Growth (Q3 FY26): 25%.
• Total Remaining Performance Obligations (RPO) (Q3 FY26): $2.9 billion.

Finance: draft 13-week cash view by Friday.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Pure Storage, Inc. in late 2025-it's about eliminating trade-offs, especially as AI workloads demand more from infrastructure. The value proposition centers on delivering cloud-like simplicity with enterprise-grade control and guaranteed outcomes.

Evergreen//One: Genuine non-disruptive Storage-as-a-Service

Evergreen//One is the consumption-based service that wraps the entire Pure Storage Platform, delivering a true hybrid cloud experience by unifying on-premises and public-cloud data storage services. This offering is built on outcome-oriented Service Level Agreements (SLAs) that guarantee performance, capacity, efficiency, availability, and durability, all without requiring data migration for non-disruptive upgrades. Honestly, the guarantees are what set this apart from other models.

For subscriptions commencing after August 18th, 2025, the guaranteed performance tiers under the Evergreen//One Product Guide look like this:

Subscription Tier	Minimum Guaranteed Performance (IOPS/TiB or MB/s per TiB)	Latency Goal
//Unified Block & File Performance	1500 IOPS/TiB or 24 MB/s per TiB	1ms
//Unified Block & File Ultra	3000 IOPS/TiB or 48 MB/s per TiB	1ms
//Unified Block & File Capacity	100 IOPS/TiB or 1.6 MB/s per TiB	5ms

Furthermore, Pure Storage backs this with specific data protection SLAs:

• No Data Migrations SLA: Guarantees non-disruptive infrastructure upgrades.
• Zero Data Loss SLA: Guarantees no data loss within the Service Infrastructure.

Enterprise Data Cloud: Unified, automated data management via Pure Fusion

The Enterprise Data Cloud (EDC) vision is realized through Pure Fusion, which transforms traditional storage architectures by virtualizing data management into a unified, cloud-like experience, often delivered as a non-disruptive software upgrade. This means you stop managing individual arrays and start managing data via policy across your entire estate, on-premises and in the cloud. Here's the quick math on automation improvement: Pure Fusion aims to reduce manually written storage automation by up to 90%.

Key capabilities delivered by Pure Fusion v2 include:

• Fleet-wide management, federating arrays into a fleet non-disruptively.
• Remote provisioning from any array in the fleet.
• Built-in automation and workflows for policy-based provisioning.

High performance and efficiency for AI/ML and mission-critical workloads

The platform is engineered to run both latency-sensitive enterprise applications and high-bandwidth, high-concurrency AI/ML pipelines on the same foundation. For AI inference, the integration of Key Value Accelerator software with NVIDIA Dynamo delivers speedups of up to 20 times. This is critical when you consider the competitive landscape for AI infrastructure.

Specific performance enhancements in the latest hardware include:

• FlashArray//XL R5: Doubles Input/Output Operations Per Second (IOPS) per rack unit and increases maximum raw capacity by 50 per cent over prior models.
• FlashArray//ST: Delivers over 10 million IOPS per five rack units for latency-sensitive workloads.
• FlashBlade//S: Controller blades boost performance by up to 30 per cent in AI-driven analysis tasks.

Guaranteed cyber resilience and data protection integration

Pure Storage is actively turning the storage layer into an active participant in threat detection and response, moving beyond passive storage. This involves deep integration with the security ecosystem to proactively detect threats and enable rapid recovery. The platform includes robust data protection via immutable snapshots that cannot be altered or deleted.

Key cyber resilience initiatives rolling out include:

• Integration with CrowdStrike Falcon Next-Gen SIEM for real-time visibility (Generally available Q3 FY26).
• Cyber Resilience as a Service, a partnership with Veeam (Generally available Q4 FY26).
• Pure Protect Recovery Zones for isolated recovery environments (Generally available Q1 FY27).

Full-year FY25 revenue of $3.17 billion, showing clear market traction

The company achieved a major financial milestone in fiscal year 2025, surpassing the $3 billion revenue mark for the first time, which signals strong market acceptance of the Evergreen model and platform innovation. Full-year FY25 revenue reached $3.2 billion, representing a 12% year-over-year growth, though some reports cite the figure as $3.17 billion with an 11.92% increase. Subscription services revenue for the full year was $1.5 billion, growing 22% year-over-year, demonstrating the success of the shift to recurring revenue.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Customer Relationships

You're looking at how Pure Storage, Inc. (PSTG) builds and maintains its connection with customers, which is heavily weighted toward long-term service agreements rather than one-time hardware sales. This focus on recurring relationships is central to their financial stability.

Long-term, recurring engagement via the Evergreen subscription model.

The Evergreen model is the core driver of customer stickiness, turning capital expenditure into operational expenditure for the client. This structure is clearly reflected in the revenue mix as of late 2025. Subscription services are now a majority component of the business's financial foundation.

Here's the quick math on the subscription business based on the third fiscal quarter of 2026 results:

Metric	Value (Q3 FY2026)	Context/Comparison
Subscription Services Revenue	$429.7 million	Up 14% year-over-year
Subscription Services Revenue Share	45% of Total Revenue	Total Revenue was $964.5 million
Subscription Services Gross Margin	75.5%	Reflects high-value service component
Annual Recurring Revenue (ARR)	$1.8 billion	Up 17% year-over-year
Total Remaining Performance Obligations (RPO)	$2.9 billion	Up 24% year-over-year

The company also noted that capital investments of $63 million in Q3 FY2026 included funding for Evergreen//One subscription growth, showing direct investment into this relationship engine. What this estimate hides is the future value locked in the RPO, which is a strong indicator of future committed revenue streams.

Proactive, 24/7 remote diagnostic and maintenance services.

Customer relationship quality is supported by high-touch service, which is validated by external assessments. Pure Storage, Inc. maintained its position as a Leader in the 2025 IDC MarketScape on worldwide hardware support services. The service model is designed to be proactive, using the Pure1 Cloud monitoring system to reach out to customers when an alert signals a problem before the customer might even notice it.

The service structure includes:

• 24 x 365 availability across all three support levels.
• A 15-minute response time commitment for Severity 1 cases.
• A world-class Net Promoter Score (NPS) of 81, achieved for nine consecutive years.

Customer sentiment, as captured by Gartner Peer Insights as of August 2025, shows an overall rating of 4.9 out of 5, with 98% of reviewers indicating a willingness to recommend based on 689 reviews.

Dedicated enterprise sales force for large accounts.

The focus on large accounts is evident in the customer penetration metrics. The sales force targets the largest enterprises, which are key to driving the high-value subscription adoption.

Customer base statistics as of late 2025:

• Total customer count surpassed 14,000, adding 258 in the most recent quarter.
• 63% of the Fortune 500 are included as customers.

The company is clearly focused on deepening relationships within the largest enterprise segments, which is typically managed by a dedicated enterprise sales team.

Direct executive engagement at events like Pure//Accelerate 2025.

Executive visibility is used to reinforce the platform vision and build community trust. Pure//Accelerate 2025 was held from June 17-19, 2025, in Las Vegas. CEO and Chairman Charles Giancarlo led the opening keynote, setting the tone for the event. The event itself offered attendees up to $6,300 in free training and certification exams.

Partner Central for streamlined deal registration and self-service.

While specific financial metrics for the Partner Central portal aren't detailed in the latest reports, the channel strategy is actively managed. Pure Storage, Inc. unveiled a revamped Reseller Partner Program in February 2025, designed to improve partner profitability and autonomy. This indicates ongoing investment in the partner ecosystem to streamline the go-to-market motion.

Finance: draft next quarter's sales capacity utilization report by end of month.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Channels

You're looking at how Pure Storage, Inc. gets its products and services into the hands of customers, which is heavily weighted toward partners, even as direct engagement with the largest accounts remains critical.

The foundation of the Pure Storage, Inc. go-to-market strategy is its partner ecosystem. Historically, this was a 100% channel-led model, with partners driving approximately 40% of new business around the 2013-2014 timeframe. As of February 2025, Pure Storage, Inc. unveiled a revamped Reseller Partner Program designed to increase partner profitability and autonomy, supporting the shift from hardware sales to consumption-based models like Evergreen//One.

The direct sales team focuses on the largest logos, specifically targeting Fortune 500 and major enterprise accounts for strategic, large-scale platform deployments. This direct engagement supports the overall scale of the business, which achieved full-year fiscal 2025 revenue of $3.2 billion.

For hybrid cloud solutions, Pure Storage, Inc. utilizes cloud marketplaces. They announced seamless VMware-to-Azure migration solutions and the expansion of the Enterprise Data Cloud platform through Pure Storage Cloud Azure Native, a fully-managed, enterprise-grade block volume as a service developed in partnership with Microsoft.

Managed Service Providers (MSPs) are key to delivering the Storage-as-a-Service (STaaS) experience, particularly through offerings like Evergreen//One. The focus on subscription services revenue, which reached $1.5 billion for the full fiscal year 2025, underscores the importance of partners who can deliver and manage these recurring service contracts.

Here's a look at the scale of the business and recent performance metrics relevant to channel effectiveness:

Metric	Value (Latest Available)	Period/Context
Full Year Revenue	$3.2 billion	Fiscal Year 2025 (ended Feb 2, 2025)
Subscription Services Revenue	$1.5 billion	Full Fiscal Year 2025
Q3 FY2026 Revenue	$964.5 million	Quarter Ended Nov 2, 2025
Q3 FY2026 Subscription ARR	$1.8 billion	As of Q3 FY2026
Total Customer Count	13,000	As of early 2025
Net Promoter Score (NPS)	81	Nine consecutive years achieving 80+ NPS as of early 2025

The channel strategy is reinforced by specific strategic wins and program enhancements:

• Unveiled a revamped Reseller Partner Program in February 2025.
• Achieved an industry-first design win with a top-four hyperscaler.
• New tools like enhancements to Pure partner intelligence to identify expansion opportunities.
• Partnerships supporting cyber resilience, including integration with Rubrik and CrowdStrike LogScale.
• Focus on enabling partners to deliver platform value proposition over point products.

The success in the hyperscale segment is a key channel focus area, especially with the DirectFlash software integration. The company also noted initial hyperscaler collaborations and a co-engineering partnership with Meta, with initial revenue recognized from that project.

Finance: review Q4 FY2026 channel revenue contribution against the historical 40% benchmark by next Tuesday.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Customer Segments

You're looking at the core buyers for Pure Storage, Inc. (PSTG) as of late 2025. This base is global, spanning from mid-sized organizations needing to modernize their infrastructure to the largest corporations running mission-critical workloads. By the close of fiscal year 2024, Pure Storage, Inc. had amassed a global customer base exceeding 12,500 organizations. In Q3 of fiscal year 2026 alone, the company added 258 new customers, showing continued acquisition momentum.

Here's a quick look at the scale of their customer penetration and recent activity:

Metric	Value as of Q3 FY26 (or latest reported)	Context
Fortune 500 Penetration	63%	As of Q3 FY26.
Total Customers (FY2024 End)	Over 12,500	Global customer count.
New Customers Added (Q3 FY26)	258	New logos acquired in the quarter.
Hyperscaler Shipments (YTD FY26)	Exceeded 1 to 2 exabytes forecast	Full-year target surpassed by Q3.

The hyperscale cloud service provider segment represents a significant strategic focus, and the company secured an industry-first design win with one of the top-four hyperscalers. This win involved bringing Pure Storage, Inc.'s DirectFlash software into massive-scale environments. Shipments to these hyperscalers for the year-to-date in fiscal 2026 already surpassed the full annual forecast of between one and two exabytes by the end of Q3.

The customer base is heavily concentrated in sectors where data performance and reliability are non-negotiable. These organizations are actively re-architecting for the future, which is driving demand for Pure Storage, Inc.'s platform. You'll find their technology deeply embedded with:

• Organizations adopting AI/ML initiatives for real-time analysis.
• Financial services firms requiring stringent performance and reliability.
• Healthcare providers managing sensitive, high-volume data.
• Government entities needing secure, modern infrastructure.
• Companies embracing cloud-native architectures via Evergreen//One and Portworx.

Finance: draft 13-week cash view by Friday.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Cost Structure

You're looking at the major expenses Pure Storage, Inc. (PSTG) incurs to keep its Enterprise Data Cloud platform running and growing as of late 2025. Honestly, the cost structure reflects a company betting heavily on future recurring revenue, which means spending now to lock in long-term contracts.

Significant investment in R&D for platform innovation is a non-negotiable cost. For the third quarter of fiscal year 2026, R&D expenses hit $63.6 million. That's a substantial 29.2 percent rise compared to the $49.2 million spent in the same quarter last year, showing the commitment to innovation like Fusion and the expansion of the Enterprise Data Cloud.

Driving that enterprise adoption requires a high Sales and Marketing (S&M) spend, though the growth rate here was more measured in Q3 FY26. S&M costs were $26.3 million for the quarter, representing a 7.8 percent rise from the $24.4 million reported the prior year. Management indicated plans to continue making significant incremental investments in sales and marketing to capture additional profitable growth opportunities beyond fiscal year 2026.

The Cost of Goods Sold (COGS) is managed through strong gross margins, which speaks to the efficiency of the flash media and hardware component sourcing, even with tariff-related pricing adjustments on some hardware sales. For Q3 FY26, the company reported a GAAP gross margin of 72.3% and a non-GAAP gross margin of 74.1%. This high margin is critical because it directly impacts the profitability of every dollar of revenue, whether product or subscription.

Operating expenses, outside of COGS, show where the company is allocating resources for scale and administration. Here's a quick look at the key operating expense categories for Q3 FY26:

Expense Category	Q3 FY26 Amount (Millions USD)	Year-over-Year Change
Research and Development (R&D)	$63.6	Up 29.2%
Sales and Marketing (S&M)	$26.3	Up 7.8%
General and Administrative (G&A)	$26.3	Up 88.1%
Total Increase in these three costs	$26.2	N/A

These operating expenses led to a strong profitability metric for the quarter. Pure Storage achieved a non-GAAP operating income of $196 million in Q3 FY26, which translated to a non-GAAP operating margin of 20.3%. That's a record operating profit for the company.

Costs associated with expanding data center infrastructure for Evergreen//One are captured within capital expenditures, which directly fund the growth of the Storage-as-a-Service (STaaS) offerings. In Q3 FY26, capital investments totaled $63 million. This figure specifically included test and infrastructure equipment needed to support data center expansion and to fund the growth of the Evergreen//One subscription base. Furthermore, the company is absorbing certain operational costs for customers under its commitment structure:

• Pure Storage commits to paying customers' power and rack space costs after the initial subscription period for Evergreen//One.
• This commitment is based on fixed rates for kilowatt per hour and rack unit space.
• The Total Contract Value (TCV) sales for Evergreen//One and similar consumption offerings grew 25% year-over-year in Q3 FY26.

Finance: draft 13-week cash view by Friday.

Pure Storage, Inc. (PSTG) - Canvas Business Model: Revenue Streams

You're looking at how Pure Storage, Inc. converts its technology into cash flow as of late 2025. The story here is a clear pivot toward recurring revenue, which is what investors really like to see, so let's break down the numbers from the Q3 FY26 results.

The core revenue generation still involves selling the physical gear, the FlashArray and FlashBlade hardware, but the growth engine is clearly the subscription side. For the third quarter of fiscal year 2026, the product sales component, which primarily covers the hardware, was reported at $534 million.

The shift is evident when you look at the subscription portion. Subscription services revenue for Q3 FY26 hit $429.7 million, representing 45% of the total revenue for that quarter. This recurring revenue stream is the foundation of their current valuation narrative.

Also driving that subscription number is the Storage-as-a-Service offering, Evergreen//One. Total Contract Value (TCV) sales for Evergreen//One and similar consumption-based offerings in Q3 FY26 reached $120 million, showing a strong 25% year-over-year growth in customer commitment to that model.

To track the ongoing health of this recurring model, you look at the Subscription Annual Recurring Revenue (ARR), which stood at $1.8 billion as of Q3 FY26, marking a 17% year-over-year increase. Honestly, that ARR growth rate tells you more about future stability than the current quarter's total revenue.

Beyond the main hardware and subscription buckets, revenue also comes from software licensing and support for specialized products like Portworx and Cloud Block Store. These add-on and platform-specific revenues contribute to the overall top line, though they aren't separately itemized in the primary revenue breakdowns.

Here is a quick look at the key revenue figures from Q3 FY26:

Revenue Component	Q3 FY26 Amount	Notes
Total Revenue	$964.5 million	Overall top line for the quarter.
Product Sales (Hardware)	$534 million	FlashArray and FlashBlade sales.
Subscription Services Revenue	$429.7 million	Represents 45% of total revenue.
Subscription Annual Recurring Revenue (ARR)	$1.8 billion	Annualized recurring contract value.
Evergreen//One TCV Sales	$120 million	Storage-as-a-Service bookings.

You should also note the total backlog, or Remaining Performance Obligations (RPO), which was $2.9 billion, up 24% year-over-year, confirming strong contracted future revenue.

The revenue streams are clearly segmented, but the focus for management and investors is definitely on growing that subscription slice of the pie, which is what drives the ARR.

Finance: draft 13-week cash view by Friday.