NetApp Inc (NTAP) 2023 Q2 法說會逐字稿

Good day, and welcome to the NetApp Second Quarter Fiscal Year 2023 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

美好的一天，歡迎參加 NetApp 2023 財年第二季度收益電話會議。 （操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Kris Newton, Vice President of Investor Relations. Please go ahead.

我現在想將會議轉交給投資者關係副總裁 Kris Newton。請繼續。

Hi, everyone. Thanks for joining us. With me today are our CEO, George Kurian; and CFO, Mike Berry. This call is being webcast live and will be available for replay on our website at netapp.com.

大家好。感謝您加入我們。今天和我在一起的是我們的首席執行官 George Kurian；和首席財務官 Mike Berry。此電話會議正在進行網絡直播，可在我們的網站 netapp.com 上重播。

During today's call, we will make forward-looking statements and projections with respect to our financial outlook and future prospects, such as our guidance for third quarter and fiscal year 2023; our expectations regarding future revenue, profitability and shareholder returns; our alignment with industry megatrends and expectations regarding the future growth in the number of cloud customers and their usage of cloud services; our ability to deliver innovation and focus on strategic growth opportunities while optimizing our operating costs; and our ability to drive sustained growth in both our Hybrid Cloud and Public Cloud segments in a turbulent macroeconomic environment, all of which involve risk and uncertainty.

在今天的電話會議上，我們將就我們的財務前景和未來前景做出前瞻性陳述和預測，例如我們對第三季度和 2023 財年的指導；我們對未來收入、盈利能力和股東回報的預期；我們與行業大趨勢和對雲客戶數量及其對雲服務的使用的未來增長的期望保持一致；我們在優化運營成本的同時提供創新和專注於戰略增長機會的能力；以及我們在動蕩的宏觀經濟環境中推動混合雲和公共雲領域持續增長的能力，所有這些都涉及風險和不確定性。

We disclaim any obligation to update our forward-looking statements and projections. Actual results may differ materially for a variety of reasons, including macroeconomic and market conditions such as inflation, rising interest rates and foreign exchange volatility, the continuing impact and uneven recovery of the COVID-19 pandemic, including the resulting supply chain disruptions; and the IT capital spending environment, including the focus on optimization of cloud spending; as well as our ability to keep pace with the rapid industry technological and market trends and changes in the markets in which we operate, execute our evolved cloud strategy and introduce and gain market acceptance for our products and services, and manage our gross profit margins and generate greater cash flow.

我們不承擔任何更新我們的前瞻性陳述和預測的義務。實際結果可能因多種原因而存在重大差異，包括通貨膨脹、利率上升和外匯波動等宏觀經濟和市場狀況、COVID-19 大流行的持續影響和不均衡復甦，包括由此導致的供應鏈中斷； IT 資本支出環境，包括對雲支出優化的關注；以及我們跟上快速的行業技術和市場趨勢以及我們經營所在市場變化的能力，執行我們不斷發展的雲戰略並引入我們的產品和服務並獲得市場認可，以及管理我們的毛利率和產生更大的現金流。

Please also refer to the documents we file from time to time with the SEC, and available on our website, specifically our most recent Form 10-K and Form 10-Q, including in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections.

另請參閱我們不時向美國證券交易委員會提交的文件，以及我們網站上提供的文件，特別是我們最新的 10-K 表格和 10-Q 表格，包括管理層對財務狀況和經營業績的討論和分析和風險因素部分。

During the call, all financial measures presented will be non-GAAP unless otherwise indicated. Reconciliations of GAAP to non-GAAP estimates are posted on our website. I'll now turn the call over to George.

在電話會議期間，除非另有說明，否則所有提出的財務措施都將是非公認會計原則。 GAAP 與非 GAAP 估計的對賬已發佈在我們的網站上。我現在將電話轉給喬治。

Thanks, Kris, and welcome, everyone, to our Q2 FY '23 earnings call. Coming off a strong Q1, our team delivered a solid quarter with all-time highs for Q2 billings, revenue, gross profit dollars, operating income and EPS. We remain focused on disciplined operational management and the execution of our strategy, which is tightly aligned with customer priorities.

謝謝 Kris，歡迎大家參加我們的 23 財年第二季度財報電話會議。從強勁的第一季度開始，我們的團隊在第二季度的賬單、收入、毛利潤、營業收入和每股收益方面都創下了歷史新高。我們仍然專注於嚴格的運營管理和我們戰略的執行，這與客戶的優先事項密切相關。

On today's call, I will walk through 4 topics. One, we delivered a good quarter in a dynamic environment. However, we are disappointed with the deceleration of growth in our cloud services. Our conviction in the cloud opportunity and our ability to execute against it is unwavering. Two, we are aligned with the durable megatrends of data-driven digital and cloud transformations. We continue to deliver innovation that furthers our already strong position. Three, we believe strongly in the opportunity ahead, but have slightly tempered our revenue outlook for the remainder of the fiscal year due to near-term macro headwinds. Four, we understand the imperative to deliver shareholder value in a slowing environment and will focus on our strategic growth opportunities while continually optimizing our operating costs.

在今天的電話會議上，我將討論 4 個主題。第一，我們在充滿活力的環境中交付了一個良好的季度。然而，我們對雲服務增長放緩感到失望。我們對雲機會的信念和我們執行它的能力是堅定不移的。第二，我們與數據驅動的數字和雲轉型的持久大趨勢保持一致。我們繼續提供創新，進一步鞏固我們已經強大的地位。第三，我們堅信未來的機會，但由於近期的宏觀逆風，我們略微調整了本財年剩餘時間的收入前景。第四，我們理解在放緩的環境中為股東創造價值的必要性，並將專注於我們的戰略增長機會，同時不斷優化我們的運營成本。

Let's start with the first point: our performance in the quarter. Q2 public cloud segment revenue increased 63% year-over-year to $142 million and dollar-based net revenue retention rate remained healthy at 140%. However, Public Cloud ARR of $603 million fell short of our expectations.

讓我們從第一點開始：我們在本季度的表現。第二季度公共雲部門收入同比增長 63% 至 1.42 億美元，基於美元的淨收入保留率保持在 140% 的健康水平。然而，6.03 億美元的公有云 ARR 未達到我們的預期。

As our cloud partners discussed on their earnings calls, growth has slowed as customers look to optimize cloud spending. This macro-related optimization caused some slowing of growth in our cloud storage services, as well. Additionally, we had a few customers with very large project-based workloads, like chip design, that came to their natural conclusion, resulting in capacity reductions in those environments. We expect these customers to kick off new projects early next calendar year. As the number of cloud customers and their usage of our cloud services grows, the impact of this type of workload will be smoothed over a much broader customer base.

正如我們的雲合作夥伴在其財報電話會議上所討論的那樣，隨著客戶尋求優化雲支出，增長已經放緩。這種與宏觀相關的優化也導致我們的雲存儲服務增長有所放緩。此外，我們有一些客戶有非常大的基於項目的工作負載，比如芯片設計，他們自然而然地得出結論，導致這些環境中的容量減少。我們預計這些客戶將在明年年初啟動新項目。隨著雲客戶數量及其對我們雲服務的使用的增長，此類工作負載的影響將在更廣泛的客戶群中得到緩解。

In our cloud operations portfolio, Spot is benefiting from the same desire to optimize cloud spending that was a headwind to our cloud storage services. Spot's value proposition is a strong engine for new logo acquisition and Q2 saw an acceleration of new Spot customer additions from Q1. As we've discussed on past calls, we continue to refine our approach to Cloud Insights and are seeing early positive signs with the growth of new Cloud Insights customers in Q2.

在我們的雲運營組合中，Spot 受益於優化雲支出的同樣願望，這對我們的雲存儲服務來說是一個不利因素。 Spot 的價值主張是獲取新徽標的強大引擎，與第一季度相比，第二季度新 Spot 客戶的增加速度加快。正如我們在過去的電話會議上所討論的那樣，我們將繼續改進我們的 Cloud Insights 方法，並且隨著第二季度新 Cloud Insights 客戶的增長，我們看到了早期的積極跡象。

We continue to see healthy growth of new to NetApp customers and of existing NetApp enterprise customers adopting our cloud services. And those customers are growing in scale, as well. The number of customers with greater than $1 million in ARR has more than doubled from Q1 last year. Our Public Cloud Services are highly differentiated and create customer preference for NetApp. We have a multiyear advantage over our traditional competitors in this critical market, positioning us well to deliver sustained growth.

我們繼續看到採用我們的雲服務的 NetApp 新客戶和現有 NetApp 企業客戶的健康增長。這些客戶的規模也在不斷擴大。 ARR 超過 100 萬美元的客戶數量比去年第一季度增加了一倍多。我們的公有云服務具有高度差異化，並為 NetApp 創造了客戶偏好。在這個關鍵市場，我們比我們的傳統競爭對手有多年的優勢，使我們能夠很好地實現持續增長。

Compared to Q2 a year ago, Hybrid Cloud revenue grew 3% and our all-flash array business increased 2% to an annualized revenue run rate of $3.1 billion. Adjusting for the significant FX headwinds, Hybrid Cloud grew 8% and all-flash grew 7% in constant currency. All-flash penetration of our installed base grew to 33% of installed systems. Our lower-cost, capacity-oriented all-flash arrays and FAS hybrid flash arrays both performed well.

與一年前的第二季度相比，混合雲收入增長了 3%，我們的全閃存陣列業務增長了 2%，年化收入運行率為 31 億美元。針對重大的外匯逆風進行調整後，混合雲增長了 8%，全閃存增長了 7%（以固定匯率計算）。我們已安裝基礎的全閃存滲透率增長到已安裝系統的 33%。我們的低成本、以容量為導向的全閃存陣列和 FAS 混合閃存陣列都表現良好。

On to the second point: our alignment to the industry megatrends and our continued innovation. The world is moving faster than ever, raising data-driven digital and cloud transformations to business necessities. NetApp helps meet these objectives with a modern approach to hybrid, multi-cloud infrastructure and data management that we term the evolved cloud. We provide customers the ability to leverage data across their entire estate with simplicity, security and sustainability, which increases our relevance and value to our customers. We believe strongly in the sizable, durable and growing opportunity created by these megatrends.

關於第二點：我們順應行業大趨勢並持續創新。世界的發展速度比以往任何時候都快，數據驅動的數字化和雲轉型成為業務必需品。 NetApp 通過我們稱之為演進云的現代混合、多雲基礎架構和數據管理方法幫助實現這些目標。我們使客戶能夠以簡單、安全和可持續的方式利用整個資產的數據，這增加了我們對客戶的相關性和價值。我們堅信這些大趨勢所創造的巨大、持久和不斷增長的機會。

As many of you know, we bring significant value to customers running VMware environments on-premises. With a series of announcements made in conjunction with VMware, we are now able to bring that same value to customers in the cloud. Our native cloud storage services, integrated with VMware, helps customers quickly, easily and cost-effectively migrate enterprise workloads to the cloud and accelerate modern application development using Kubernetes. We are the only certified and supported third-party cloud storage solution for VMware Cloud, which creates significant new opportunity for us. As those VMware environments move to the cloud, we can capture the data that resides on competitors' on-premises systems.

眾所周知，我們為在本地運行 VMware 環境的客戶帶來了巨大的價值。通過與 VMware 聯合發布的一系列公告，我們現在能夠為雲中的客戶帶來同樣的價值。我們的原生雲存儲服務與 VMware 集成，可幫助客戶快速、輕鬆且經濟高效地將企業工作負載遷移到雲端，並使用 Kubernetes 加速現代應用程序開發。我們是 VMware Cloud 唯一經過認證和支持的第三方雲存儲解決方案，這為我們創造了重要的新機會。隨著這些 VMware 環境遷移到雲端，我們可以捕獲駐留在競爭對手本地系統上的數據。

At the start of November, we introduced BlueXP, the next big step in fulfilling our vision to give customers the simplicity, security, savings and sustainability needed for an evolved cloud. It delivers true hybrid, multi-cloud operations by bringing storage and data services together in a single unified control plane. BlueXP is a highly differentiated solution that enables customers to deploy, discover, manage and optimize not only infrastructure and data, but supporting business processes across multiple clouds and on-premises environments.

11 月初，我們推出了 BlueXP，這是實現我們為客戶提供演進云所需的簡單性、安全性、成本節約和可持續性這一願景的重要一步。它通過將存儲和數據服務整合到一個統一的控制平面中，提供真正的混合、多雲操作。 BlueXP 是一種高度差異化的解決方案，使客戶不僅可以部署、發現、管理和優化基礎設施和數據，還可以支持跨多個雲和本地環境的業務流程。

In addition to bringing forward technical capabilities, we are helping customers achieve their environmental goals by creating energy-efficient products. We've added power and temperature reporting in Cloud Insights to give customers a real-time view into energy expenditure, and our carbon footprint reports provide a reasonable estimate for the carbon impact of their NetApp systems. We enhanced our storage efficiency with a 4:1 efficiency guarantee for SAN workloads to help customers minimize their storage footprint and lower energy usage.

除了提高技術能力外，我們還通過創造節能產品幫助客戶實現他們的環保目標。我們在 Cloud Insights 中添加了功率和溫度報告，讓客戶可以實時了解能源消耗，我們的碳足跡報告可以合理估算其 NetApp 系統的碳影響。我們通過為 SAN 工作負載提供 4:1 的效率保證來提高存儲效率，以幫助客戶最大限度地減少存儲佔用空間並降低能源使用。

We not only help customers practice sound environmental stewardship, we practice it ourselves. I'm proud to announce that EcoVadis, the leading evidence-based ESG rating agency, awarded NetApp a gold ranking, placing us within the top 7% of evaluated companies.

我們不僅幫助客戶實踐良好的環境管理，我們自己也在實踐。我很自豪地宣布，領先的循證 ESG 評級機構 EcoVadis 授予 NetApp 金獎，使我們躋身受評公司前 7% 之列。

Now the third point: the macro environment and our business outlook. As we moved through the quarter, we saw increased budget scrutiny, requiring higher-level approvals, which resulted in smaller deal sizes, longer selling cycles and some deals moving out of the quarter. In Q2, we felt this most acutely in the Americas hi-tech and service provider sectors. We see no change to our underlying opportunity and are confident in our position. However, current economic realities and unprecedented FX headwinds are and will continue to impact IT spending, causing us to temper our revenue expectations for the second half.

現在第三點：宏觀環境和我們的經營前景。隨著本季度的推進，我們看到預算審查有所增加，需要更高級別的批准，這導致交易規模變小、銷售週期變長，並且一些交易移出本季度。在第二季度，我們在美洲高科技和服務提供商領域感受到了最強烈的感受。我們認為我們的潛在機會沒有變化，並且對我們的地位充滿信心。然而，當前的經濟現實和前所未有的外匯逆風正在並將繼續影響 IT 支出，導致我們下調對下半年的收入預期。

And finally, point 4: driving shareholder value. In response to the slowing top line, we are being agile and taking action to lower operating expenses. Already, we have implemented a broad-based hiring freeze and are reducing discretionary spending as well as further optimizing our real estate footprint. We will remain disciplined as we continue to shift resources away from lower-yield activities to our biggest opportunities.

最後，第 4 點：推動股東價值。為了應對收入放緩，我們正在採取敏捷行動來降低運營費用。我們已經實施了廣泛的招聘凍結，並正在減少可自由支配的支出，並進一步優化我們的房地產足跡。隨著我們繼續將資源從低收益活動轉移到我們最大的機會，我們將保持紀律。

In closing, we are clearly aligned with our customers' strategic priorities and remain confident in our long-term opportunity, despite the current external headwinds. By focusing on what we can control, we will aggressively seek to maximize the near-term return on our product and services portfolio while leveraging our leadership position in all-flash, cloud storage and cloud infrastructure optimization.

最後，儘管當前存在外部阻力，但我們顯然與客戶的戰略重點保持一致，並對我們的長期機會充滿信心。通過專注於我們可以控制的事情，我們將積極尋求最大限度地提高我們產品和服務組合的近期回報，同時利用我們在全閃存、雲存儲和雲基礎設施優化方面的領先地位。

I would like to thank the entire NetApp team for delivering a strong first half. In a challenging environment, we remain focused on innovation, execution and operational discipline. I'll now turn the call over to Mike.

我要感謝整個 NetApp 團隊在上半年表現出色。在充滿挑戰的環境中，我們仍然專注於創新、執行和運營紀律。我現在將電話轉給邁克。

Thank you, George. Good afternoon, everyone, and thank you for joining us. Before we go through the financial details, I think it would be valuable to walk you through the key themes for today's discussion.

謝謝你，喬治。大家下午好，感謝您加入我們。在我們討論財務細節之前，我認為帶您了解一下今天討論的關鍵主題是很有價值的。

Number 1, as George highlighted, we delivered a strong Q2 in a dynamic environment, with all-time Q2 company highs for billings, revenue, gross profit dollars, operating income and EPS. Number 2, we have adjusted our outlook for the second half of the fiscal year due to an increasingly challenging macroeconomic environment and unprecedented FX headwinds. Number 3, as we navigate through the current macro environment, we are laser-focused on driving operating margins and free cash flow generation. As George noted, we have taken actions to reduce our full year expense envelope and will remain fluid in assessing further opportunities to take costs out of the business. Number 4, as a result of these cost-saving measures, the entirety of the op margin and EPS guidance revision for the full year is being driven by the incremental 1 to 2 points from the deepening currency costs we have seen since our Q1 call. And number 5, we continue to expect to generate greater than $1.4 billion in operating cash flow and $1.1 billion in free cash flow for the full year. From a capital allocation perspective, we will continue to pause cloud operations acquisitions for the remainder of fiscal '23. We now plan to return more than 100% of fiscal '23 free cash flow to investors through dividends and incremental share repurchases.

第一，正如 George 強調的那樣，我們在充滿活力的環境中交付了強勁的第二季度，第二季度公司的賬單、收入、毛利潤美元、營業收入和每股收益均創下歷史新高。第二，由於日益嚴峻的宏觀經濟環境和前所未有的外匯逆風，我們調整了本財年下半年的展望。第三，在我們瀏覽當前的宏觀環境時，我們專注於推動營業利潤率和自由現金流的產生。正如 George 指出的那樣，我們已採取行動減少全年的支出範圍，並將在評估進一步降低業務成本的機會時保持流動性。第四，由於採取了這些成本節約措施，全年的營業利潤率和每股收益指導修訂都是由我們自第一季度電話會議以來看到的不斷加深的貨幣成本增加 1 到 2 個百分點推動的。第五，我們繼續預計全年將產生超過 14 億美元的運營現金流和 11 億美元的自由現金流。從資本配置的角度來看，我們將在 23 財年的剩餘時間內繼續暫停雲業務收購。我們現在計劃通過股息和增量股票回購將 23 財年自由現金流的 100% 以上返還給投資者。

Now to the details. As a reminder, I'll be referring to non-GAAP numbers unless otherwise noted. Q2 billings were $1.6 billion, up 3% year-over-year. Revenue came in at $1.66 billion, up 6% year-over-year. Adjusting for the 540 basis point headwind from FX, billings and revenue would have been up 9% and 12% year-over-year, respectively. Even with the challenging Q2, our cloud portfolio continues to positively impact the overall growth profile of NetApp, delivering 3.5 of the 6 points in revenue growth.

現在到細節。提醒一下，除非另有說明，否則我指的是非 GAAP 數字。第二季度的賬單額為 16 億美元，同比增長 3%。收入為 16.6 億美元，同比增長 6%。調整來自外彙的 540 個基點逆風，營業額和收入將分別同比增長 9% 和 12%。儘管第二季度充滿挑戰，但我們的雲產品組合繼續對 NetApp 的整體增長狀況產生積極影響，實現了 6 點收入增長中的 3.5 點。

Hybrid Cloud segment revenue of $1.52 billion was up 3% year-over-year. Product revenue of $837 million increased 3% year-over-year. Total Q2 recurring support revenue of $607 million increased 3% year-over-year, highlighting the health of our installed base.

混合雲部門收入為 15.2 億美元，同比增長 3%。產品收入為 8.37 億美元，同比增長 3%。第二季度經常性支持總收入為 6.07 億美元，同比增長 3%，凸顯了我們安裝基礎的健康狀況。

Public Cloud ARR exited Q2 at $603 million, up 55% year-over-year. Public Cloud revenue recognized in the quarter was $142 million, up 63% year-over-year and 8% sequentially.

公共雲 ARR 以 6.03 億美元退出第二季度，同比增長 55%。本季度確認的公有云收入為 1.42 億美元，同比增長 63%，環比增長 8%。

Recurring support and Public Cloud revenue of $749 million was up 11% year-over-year, or 16% in constant currency, constituting 45% of total revenue.

經常性支持和公共雲收入為 7.49 億美元，同比增長 11%，按固定匯率計算增長 16%，佔總收入的 45%。

We ended Q2 with $4.1 billion in deferred revenue, an increase of 5% year-over-year or, 10% in constant currency. Q2 marks the 19th consecutive quarter of year-over-year deferred revenue growth, which is the best leading indicator for recurring revenue growth.

我們以 41 億美元的遞延收入結束了第二季度，同比增長 5%，按固定匯率計算增長 10%。第二季度是遞延收入連續第 19 個季度同比增長，這是經常性收入增長的最佳領先指標。

Total gross margin was 66.3%, in line with our guidance. Total Hybrid Cloud gross margin was 66% in Q2, including a 2-point year-over-year headwind from FX. Within our Hybrid Cloud segment, product gross margin was 50%, including a 3-point year-over-year headwind from FX. Our growing recurring support business continues to be very profitable with gross margin of 93%.

總毛利率為 66.3%，符合我們的指引。第二季度混合云總毛利率為 66%，其中包括來自外彙的 2 個百分點的同比逆風。在我們的混合雲部門，產品毛利率為 50%，包括來自外彙的 3 個百分點的同比逆風。我們不斷增長的經常性支持業務繼續非常有利可圖，毛利率為 93%。

Public Cloud gross margin of 68% was accretive to the corporate average for the eighth consecutive quarter. We remain confident in our long-term Public Cloud gross margin goal of 75% to 80%, as the business scales and an increasing percentage of our Public Cloud revenue is driven by cloud and software solutions.

公共雲毛利率為 68%，連續第八個季度高於企業平均水平。我們對 75% 至 80% 的公共雲毛利率長期目標充滿信心，因為業務規模不斷擴大，而且我們的公共雲收入中越來越多的百分比是由雲和軟件解決方案驅動的。

Q2 highlighted the strong leverage in our business model, with operating margin of 24%, including 2 points of FX headwinds. EPS of $1.48 came in nicely ahead of guidance and included a $0.21 year-over-year FX headwind.

第二季度突出了我們業務模式中的強大槓桿作用，營業利潤率為 24%，包括 2 個外匯逆風點。每股收益 1.48 美元，遠超預期，其中包括 0.21 美元的同比外匯逆風。

Cash flow from operations was $214 million and free cash flow was $137 million. Q2 included our annual repatriation tax payment and continued cash outflows for certain inventory and premiums for constrained trailing-edge analog parts. Additionally, collections were lower than expected due to a back-end loaded quarter for invoicing linearity that you see in the higher accounts receivable balance.

運營現金流為 2.14 億美元，自由現金流為 1.37 億美元。第二季度包括我們的年度匯回稅支付和某些庫存的持續現金流出以及受限後緣模擬部件的溢價。此外，由於您在較高的應收賬款餘額中看到的發票線性的後端負載季度，收款低於預期。

Our component purchasing strategy allows us to meet as much customer demand as possible, but remains a clear headwind to cash flow and gross margins. We are seeing signs of relief in supply availability. The timing of a full supply recovery remains uncertain, however, as our inventory levels start to normalize, it will be a tailwind to free cash flow as we go through the second half of fiscal '23. During Q2, we repurchased $150 million in stock and paid out $108 million in cash dividends. In total, we returned $258 million to shareholders, representing 188% of free cash flow. Share count of 220 million was down 4% year-over-year. We closed Q2 with $3 billion in cash and short-term investments.

我們的組件採購策略使我們能夠滿足盡可能多的客戶需求，但對現金流和毛利率來說仍然是一個明顯的阻力。我們看到供應可用性有所緩解的跡象。供應全面恢復的時間仍然不確定，但是，隨著我們的庫存水平開始正常化，在我們度過 23 財年下半年時，這將成為自由現金流的順風。在第二季度，我們回購了 1.5 億美元的股票並支付了 1.08 億美元的現金股息。我們總共向股東返還了 2.58 億美元，佔自由現金流的 188%。股票數量為 2.2 億股，同比下降 4%。我們以 30 億美元的現金和短期投資結束了第二季度。

Now to guidance. As George discussed, we have seen softening in the macro backdrop, with customers taking a decidedly cautious approach to spending. Additionally, currency headwinds have only continued to increase. We now expect fiscal '23 revenue to grow 2% to 4% year-over-year, which includes 5 points of FX headwind versus the 4-point headwind assumed in our prior guidance. We now expect to exit fiscal '23 with Public Cloud ARR of approximately $700 million, which equates to our public cloud segment driving 3 points of total company revenue growth for the full year.

現在來指導。正如 George 所討論的那樣，我們看到宏觀背景正在走軟，客戶對支出採取了非常謹慎的態度。此外，貨幣逆風只會繼續增加。我們現在預計 23 財年的收入將同比增長 2% 至 4%，其中包括 5 個百分點的外匯逆風，而我們之前的指導假設為 4 個百分點的逆風。我們現在預計以大約 7 億美元的公共雲 ARR 退出 23 財年，這相當於我們的公共雲部門推動全年公司總收入增長 3 個百分點。

Three drivers are impacting the near-term growth rate of Cloud ARR. Number 1, in this macro environment, we project continued optimization of storage services as we help our customers manage their spending, which benefits Spot, but will offset some incremental near-term storage services ARR. Number 2, we expect that project-based workloads will grow in both number and scale. But as they ramp, it will take some time to materialize into sizable ARR. And number 3, we continue to tighten up the Cloud Insights sales motion, but we don't expect this meaningful cross-sell opportunity to materialize until we head into fiscal '24.

三個驅動因素正在影響 Cloud ARR 的近期增長率。第一，在這種宏觀環境中，我們計劃在幫助客戶管理支出時繼續優化存儲服務，這有利於 Spot，但會抵消一些增量的近期存儲服務 ARR。第二，我們預計基於項目的工作負載在數量和規模上都會增長。但隨著它們的發展，需要一些時間才能實現可觀的 ARR。第三，我們繼續收緊 Cloud Insights 銷售動議，但我們預計在進入 24 財年之前，這種有意義的交叉銷售機會不會實現。

In fiscal '23, we continue to expect gross margin to range between 66% and 67%, as elevated component costs and FX headwinds weigh on product margins. As you know, the vast majority of our bill of materials is procured in U.S. dollars. We are optimistic that supply constraints will ease further in the second half of our fiscal year, reducing our dependence on procuring parts at significant premiums. We should also see a benefit from declining NAND prices in Q4. While the timing is uncertain, we remain confident that our structural product margins will normalize back to the mid-50s in the fullness of time.

在 23 財年，我們繼續預計毛利率將在 66% 至 67% 之間，因為組件成本上升和外匯逆風對產品利潤率構成壓力。如您所知，我們絕大部分的材料清單都是以美元採購的。我們樂觀地認為，供應限制將在本財年下半年進一步緩解，從而減少我們對高價採購零部件的依賴。我們還應該看到第四季度 NAND 價格下降的好處。雖然時間不確定，但我們仍然相信我們的結構性產品利潤率將在適當的時候恢復正常，回到 50 年代中期。

For the full year, we expect operating margin of approximately 23%, which now includes approximately 2 points of FX headwind and EPS of $5.30 to $5.50, which now includes more than $0.70 of currency impacts. It's important to reiterate that we are offsetting the full year revenue adjustment with an extremely disciplined approach to our spending envelope. As a result, the entirety of the op margin and EPS guidance revision for the full year is being driven by the incremental 1 to 2 points from the deepening currency costs we have seen since our Q1 call.

對於全年，我們預計營業利潤率約為 23%，現在包括大約 2 個點的外匯逆風和 5.30 美元至 5.50 美元的每股收益，其中現在包括超過 0.70 美元的貨幣影響。重要的是要重申，我們正在通過對我們的支出範圍採取極其嚴格的方法來抵消全年收入調整。因此，自第一季度電話會議以來我們看到的不斷加深的貨幣成本增加了 1 到 2 個百分點，推動了全年營業利潤率和 EPS 指引的整體修訂。

We continue to expect to generate greater than $1.4 billion in operating cash flow and $1.1 billion in free cash flow for the full year. From a capital allocation perspective, we will continue to pause cloud operations acquisitions for the remainder of fiscal '23, as we sharpen our portfolio focus by refining the Cloud Insights value proposition and sales motion, accelerating the integration of Spot and CloudCheckr into a single FinOps suite, and driving the successful integration of Instaclustr. As I have said earlier, we now plan to return more than 100% of fiscal '23 free cash flow to investors through dividends and incremental share repurchases.

我們繼續預計全年將產生超過 14 億美元的運營現金流和 11 億美元的自由現金流。從資本配置的角度來看，我們將在 23 財年的剩餘時間內繼續暫停雲運營收購，因為我們通過完善 Cloud Insights 價值主張和銷售動議來加強我們的投資組合重點，加速將 Spot 和 CloudCheckr 整合到一個單一的 FinOps 中套件，並推動 Instaclustr 的成功集成。正如我之前所說，我們現在計劃通過股息和增量股票回購將 23 財年自由現金流的 100% 以上返還給投資者。

Now on to Q3 guidance. We expect Q3 net revenues to range between $1.525 billion and $1.675 billion which, at the midpoint, implies a 1% decrease year-over-year, or 4% growth in constant currency. We expect consolidated gross margin to be approximately 67% and operating margin to range between 22% and 23%. We anticipate our tax rate to be between 21% and 22%. And we expect earnings per share for Q3 to range between $1.25 and $1.35 per share. Assumed in our Q3 guidance is net interest income of $5 million and a share count of approximately 220 million.

現在進入第三季度的指導。我們預計第三季度淨收入在 15.25 億美元至 16.75 億美元之間，按中點計算，這意味著同比下降 1%，或按固定匯率計算增長 4%。我們預計綜合毛利率約為 67%，營業利潤率介於 22% 和 23% 之間。我們預計我們的稅率在 21% 到 22% 之間。我們預計第三季度每股收益在 1.25 美元至 1.35 美元之間。我們在第三季度的指導中假設淨利息收入為 500 萬美元，股票數量約為 2.2 億股。

In closing, I want to thank the entire NetApp team for their continued commitment in such a dynamic environment. I'll now hand the call back to Kris to open the call for Q&A. Kris?

最後，我要感謝整個 NetApp 團隊在這樣一個動態環境中的持續承諾。我現在將電話轉回給 Kris，以打開問答環節。克里斯？

Thanks, Mike. Operator, let's begin the Q&A.

謝謝，邁克。接線員，讓我們開始問答。

(Operator Instructions) And our first question will come from Amit Daryanani with Evercore.

（操作員說明）我們的第一個問題將來自 Evercore 的 Amit Daryanani。

This is [Abdullah], speaking in for Amit. So I think your guys' cloud ARR expectation is coming down by $100 million versus prior expectations. And I just wanted to ask whether you guys could perhaps touch on the softness there. Is this more on compute, storage or analytics? And maybe if there's one cloud provider where the ramps are more challenged versus not? I would appreciate any details here.

我是 [Abdullah]，代表 Amit 發言。所以我認為你們的雲 ARR 預期比之前的預期下降了 1 億美元。我只是想問問你們是否可以觸摸那裡的柔軟度。這更多是關於計算、存儲還是分析？也許如果有一家云供應商的斜坡比沒有斜坡更具挑戰性？我將不勝感激這裡的任何細節。

I think we expect to see the continuation of some of the trends that we saw in Q2, which is the consumption-oriented cloud offerings in our portfolio, which are cloud storage services were most impacted by customers wanting to reduce their spending. It could involve either them reducing the amount of capacity they use on our offerings or us proactively helping them migrate some of their workloads from a high-performance tier to a more cost-effective tier, so that they will continue to see value and benefit with us. That's one.

我認為我們希望看到我們在第二季度看到的一些趨勢的延續，這是我們產品組合中面向消費的雲產品，這些雲存儲服務受到希望減少支出的客戶的影響最大。這可能涉及他們減少他們在我們的產品上使用的容量，或者我們主動幫助他們將一些工作負載從高性能層遷移到更具成本效益的層，這樣他們將繼續看到價值並從中受益我們。那是一個。

Second, we saw in Q2 some project-based workloads, for example, large-scale semiconductor design that came to its natural conclusion. We anticipate some of those workloads coming back in the early part of next calendar year, but we are being cautious about that. And then finally, with our Cloud Insights product, we have continued to work to sharpen the focus on the use case of the products. We saw some early success in terms of new customer wins, new to Cloud Insights customer wins. But we're being cautious about the future growth rate of that product until we see further evidence of success.

其次，我們在第二季度看到了一些基於項目的工作量，例如，自然得出結論的大規模半導體設計。我們預計其中一些工作量會在明年年初恢復，但我們對此持謹慎態度。最後，通過我們的 Cloud Insights 產品，我們繼續努力加強對產品用例的關注。我們在贏得新客戶、贏得 Cloud Insights 新客戶方面看到了一些早期的成功。但在我們看到進一步的成功證據之前，我們對該產品的未來增長率持謹慎態度。

So I think those were the 3. I did not see anything materially different between the different cloud providers. Clearly, our relationship with Microsoft is the largest of the 3, given that we've worked with them for the longest, and so they saw the biggest impact this quarter.

所以我認為這些是 3。我沒有看到不同雲提供商之間有任何實質性差異。顯然，我們與微軟的關係是三者中最大的，因為我們與他們的合作時間最長，因此他們在本季度看到了最大的影響。

Our next question will come from Mehdi Hosseini with SIG.

我們的下一個問題將來自 SIG 的 Mehdi Hosseini。

Two follow-ups. George, if I just take your guidance commentary, you suggest that all-flash array revenues should show Q-over-Q and year-over-year decline in January quarter?

兩次跟進。 George，如果我只是接受你的指導評論，你建議全閃存陣列收入在 1 月季度應該顯示 Q-over-Q 和同比下降？

We don't -- we didn't guide anything specific in terms of all-flash array revenue. We have guided at the total company level. We're being cautious about our outlook given what we saw in the quarter and the continued macroeconomic environment. We are not guiding any specific product category, Mehdi.

我們沒有——我們沒有就全閃存陣列收入提供任何具體指導。我們在整個公司層面進行了指導。鑑於我們在本季度看到的情況和持續的宏觀經濟環境，我們對我們的前景持謹慎態度。 Mehdi，我們不指導任何特定的產品類別。

Just -- that's what I walked away with. Is that a realistic assumption for all-flash array, revenues were to decline?

只是 - 這就是我離開的原因。對於全閃存陣列，收入下降是否是一個現實的假設？

We're not guiding down to the product line, Mehdi. Sorry, that we can't help you with that.

Mehdi，我們不是在指導產品線。抱歉，我們無法幫助您。

Yes. That's fine. At least I tried. Just -- and then a follow-up to your comment about the chip design. There's obviously a product migration. They are expected to introduce new products for AI application. You also suggested that, that should help you with a rebound in the cloud data services.

是的。沒關係。至少我試過了。只是 - 然後跟進您對芯片設計的評論。顯然存在產品遷移。預計他們將推出用於人工智能應用的新產品。您還建議，這應該可以幫助您實現雲數據服務的反彈。

And I want to better understand whether your underlying assumption, do you think that product transition is going to ramp in early calendar year? Is it -- is your guide on cloud data services completely derisked given this transition? Sometimes these transitions take longer. And I'm just wondering what are the key assumptions there.

我想更好地了解您的基本假設，您是否認為產品轉型會在日曆年初加速？鑑於這種轉變，您的雲數據服務指南是否完全沒有風險？有時這些過渡需要更長的時間。我只是想知道那裡的關鍵假設是什麼。

I think with our cloud outlook, we've been cautious to address 3 topics, right? One is consumption services on the cloud are being impacted by customers reducing spend, either by optimizing the performance level that they use or the total capacity they use in our cloud storage services. That will happen for a period of time, and then we will see build back.

我認為在我們的雲前景中，我們一直謹慎地解決 3 個主題，對嗎？一是雲上的消費服務受到客戶減少開支的影響，無論是通過優化他們使用的性能水平還是他們在我們的雲存儲服務中使用的總容量。這將持續一段時間，然後我們將看到重建。

We don't see that yet in the outlook. I think with regard to project-based workloads, listen, there are lots of different customers with different projects. I think in this case, we saw a few large projects come off our environment. And we've been cautious about how many of those come back in terms of our outlook. It will take time for them to come back as new projects and new chip designs. We are the only option in the public cloud for semiconductor chip design technologies to be verified as a cloud service. So we expect, over time, more and more customers will use our cloud services. But that will take time.

我們在展望中還沒有看到這一點。我認為關於基於項目的工作量，聽著，有很多不同的客戶有不同的項目。我認為在這種情況下，我們看到一些大型項目脫離了我們的環境。就我們的前景而言，我們一直對其中有多少回歸持謹慎態度。他們需要時間作為新項目和新芯片設計回來。我們是公有云中半導體芯片設計技術驗證為雲服務的唯一選擇。所以我們預計，隨著時間的推移，會有越來越多的客戶使用我們的雲服務。但這需要時間。

And then I think in our CloudOps portfolio, as I said, we are pleased with the work that we've done so far. There's still more work to be done. And so we're being appropriately cautious about how fast that product portfolio, especially Cloud Insights, grows in the second half of this year.

然後我認為在我們的 CloudOps 產品組合中，正如我所說，我們對迄今為止所做的工作感到滿意。還有更多的工作要做。因此，我們對該產品組合（尤其是 Cloud Insights）在今年下半年的增長速度持謹慎態度。

Our next question will come from David Vogt with UBS.

我們的下一個問題將來自瑞銀集團的 David Vogt。

Maybe just a big picture question on macro and linearity and how you thought about the quarter as it progressed because obviously, you did a good job of cutting costs, managing the business to the economic backdrop. But all-flash arrays were relatively weaker in the quarter, suggesting that obviously, you probably knew early in the quarter that customers were looking for more maybe cost-conscious or cost-effective solutions.

也許只是一個關於宏觀和線性的大局問題，以及你如何看待本季度的進展，因為很明顯，你在削減成本、管理業務以適應經濟背景方面做得很好。但是本季度全閃存陣列相對較弱，這表明很明顯，您可能在本季度初就知道客戶正在尋找更具成本意識或成本效益的解決方案。

And you mentioned a lot of decisions were picked up to the CTO level or the CFO level. So can you kind of discuss what you saw as the quarter progressed from a demand perspective? Was there a pivot point? Or was it just sort of a gradual bleed as we walk through each of the months? And how did it relate to, let's say, 90 days ago when we had this conversation?

你提到很多決定都交給了 CTO 級別或 CFO 級別。那麼，您能否從需求的角度討論一下本季度的進展情況？有沒有一個支點？還是我們每個月都在逐漸流血？比方說，90 天前我們進行這次對話時，它與什麼有關？

I think it got progressively worse through the quarter. I think you see us being appropriately cautious in our guide as a result as well. I think that the rate increases getting compounded at a very fast clip certainly impacted customers' business confidence, and that got the range of customers that were affected with their business confidence grew through the quarter and the depth of the impact on spending grew.

我認為整個季度情況逐漸惡化。因此，我認為您也看到我們在指南中保持適當的謹慎。我認為加息以非常快的速度複合肯定會影響客戶的商業信心，並且受其商業信心影響的客戶範圍在本季度有所增加，對支出的影響深度也在增加。

I don't think we saw any particularly meaningful shifts between product mix in the quarter. Hybrid flash has performed well for a few quarters now and all-flash has been, as a percentage of our total mix, has been more steady than as a growing percentage of our mix. So I think -- I don't think that our view of the product portfolio affected as much as the view of the total business opportunity available in customers. I'll let Mike add any color.

我認為我們在本季度的產品組合之間沒有看到任何特別有意義的變化。混合閃存在幾個季度內表現良好，而全閃存在我們的總組合中所佔的百分比比在我們的組合中所佔百分比的增長更為穩定。所以我認為 - 我認為我們對產品組合的看法不會像對客戶可用的總商業機會的看法那樣受到影響。我會讓邁克添加任何顏色。

Yes. Thanks, George. So David, per George's comments, when we saw linearity in the quarter, month 1 was relatively consistent with what we've seen in, I'll call it, non-Q4 quarters. What we really saw was month 2 push into month 3. And typically, we will see, call it, mid-40% of transactions and invoices in month 3. That pushed to almost 60% this quarter. So what you saw was in the second month of the quarter really started to push into the third month. And that's what we saw, that really back-end linearity that I spoke about in my prepared remarks.

是的。謝謝，喬治。所以大衛，根據喬治的評論，當我們看到本季度的線性時，第 1 個月與我們在非第四季度看到的情況相對一致。我們真正看到的是第 2 個月推到第 3 個月。通常情況下，我們會看到，第 3 個月的交易和發票占 40% 左右。這在本季度推到了近 60%。所以你看到的是在本季度的第二個月真正開始推進到第三個月。這就是我們所看到的，我在準備好的發言中談到的真正後端線性。

Got it. And maybe just a quick follow-up for you, Mike. Just maybe on the currency headwinds, that incremental point or 2. I know your business is primarily denominated in dollars. But can you kind of help us understand that transition from negative 3 to negative 4 to negative 5, the U.S. dollar has weakened a bit as of late. Just kind of want to get a better understanding kind of what's under the surface there and what's kind of driving that incremental headwind from an FX perspective?

知道了。也許只是對你的快速跟進，邁克。也許只是在貨幣逆風中，那個增量點或 2。我知道你的業務主要以美元計價。但是你能不能幫助我們理解從負 3 到負 4 再到負 5 的轉變，美元最近有點走弱。只是想更好地了解表面之下的情況，以及從 FX 的角度來看，是什麼推動了這種漸進的逆風？

Yes. Sure, David, happy to. So the significant foreign currencies we have, like most international companies, it's euro, GBP, yen and Aussie dollar. And what we saw, again, across most of those is August and September was when the dollar was the strongest. So that's when the most significant impact hit. That stayed largely through October.

是的。當然，大衛，很高興。因此，與大多數國際公司一樣，我們擁有的主要外幣是歐元、英鎊、日元和澳元。我們再次看到，在其中大部分時間裡，8 月和 9 月是美元最強勁的時候。所以那是最重要的影響發生的時候。這主要持續到 10 月。

Now what we saw after our quarter ended, is, hey, it got a little bit better in November. The dollar weakened a little bit. Yes, we'll see if that holds. Everything we've put in front of you, we have used FX rates as of the end of October. So if it stays a little bit better, that will be good. But making our living betting on FX rates, we're not going to try that. So we use October rates for the rest of the year.

現在，我們在本季度結束後看到的是，嘿，11 月情況有所好轉。美元略微走弱。是的，我們看看這是否成立。我們擺在您面前的所有內容，我們都使用截至 10 月底的外匯匯率。因此，如果它保持更好一點，那將是一件好事。但是，我們以靠匯率為生，我們不會嘗試這樣做。因此，我們在今年剩餘時間使用 10 月份的匯率。

Yes, that's helpful. End of the month is great.

是的，這很有幫助。月底很棒。

Our next question will come from Samik Chatterjee with JPMorgan.

我們的下一個問題將來自摩根大通的 Samik Chatterjee。

This is Angela Jin, on for Samik Chatterjee. And my first question. So I think in your prepared remarks, you mentioned that customer weakness was concentrated in Americas' hi-tech and service provider sectors. Can we just dive more into the dynamics of each of your customer vertical or segment?. Were there certain ones that held up better, enterprise versus SMB, for example? And what types of specific behaviors or patterns that you see in each vertical?

我是 Angela Jin，代表 Samik Chatterjee。我的第一個問題。因此，我認為在您準備好的發言中，您提到客戶弱點集中在美洲的高科技和服務提供商領域。我們能否更深入地了解每個垂直客戶或細分市場的動態？是否有某些表現更好，例如企業與 SMB？您在每個垂直領域看到了哪些類型的特定行為或模式？

We don't have any specific vertical that is a material contribution to our revenue. Let me start there. I think the -- what we saw through the quarter was public sector did well both in the Americas and internationally. I thought that our European team performed exceptionally well to deliver a strong result in the face of increasing headwinds.

我們沒有任何特定的垂直領域對我們的收入做出重大貢獻。讓我從那裡開始。我認為 - 我們在本季度看到的是公共部門在美洲和國際上都表現良好。我認為我們的歐洲團隊在面對越來越大的逆風時表現出色，取得了優異的成績。

And in our outlook for the international markets, we are appropriately cautious about Germany, where our team did phenomenally well in Q2, but there's just growing pressure economically. I think with regard to the North American market, the midsized enterprise segment team did a good job. We saw good results there. We're cautious about the potential in that segment given their historic vulnerability to recession and macro exposure, but our team did well in Q2. I think the larger enterprise in those specific verticals were the ones where we saw the most substantive change in spending, and we expect them to be cautious go forward.

在我們對國際市場的展望中，我們對德國持適當謹慎態度，我們的團隊在德國第二季度表現出色，但經濟壓力越來越大。我認為關於北美市場，中型企業部門團隊做得很好。我們在那裡看到了很好的結果。鑑於他們在經濟衰退和宏觀風險方面的歷史脆弱性，我們對該領域的潛力持謹慎態度，但我們的團隊在第二季度表現良好。我認為那些特定垂直領域中的大型企業是我們看到支出變化最大的那些，我們希望他們在前進時保持謹慎。

Last year -- from a year-on-year compare, last year, public -- the hi-tech and service provider and the large enterprise segment did well for us. So this is a year-on-year compare as well that we are working through.

去年——與去年同期相比，上市——高科技和服務提供商以及大型企業部門為我們做得很好。所以這也是我們正在努力進行的同比比較。

Got it. And then for my follow-up, with the cloud ARR target lowered to $700 million, looking ahead to the out year, I'm not asking for you to predict how deep or long a potential downturn could be. But how are you thinking about risk to that $2 billion cloud ARR target by fiscal year '26? And what gives you confidence that you can accelerate ARR in those out years?

知道了。然後對於我的後續行動，隨著雲 ARR 目標降低到 7 億美元，展望未來一年，我並不是要你預測潛在的衰退可能有多深或多長時間。但是，您如何看待 26 財年實現 20 億美元雲 ARR 目標的風險？是什麼讓你有信心在那些年裡加速 ARR？

Angela, it's Mike. So as we both talked about, look, we still feel really good about the cloud business, both cloud storage and CloudOps. We have some things to work through this year. So even though Q2 was not where we would like, we still feel really good about the future. We will update our views of fiscal '24 and the $2 billion when we give you guidance for next year. So we'll ask you to wait until we update our fiscal '24 numbers in a couple of quarters.

安吉拉，是邁克。所以當我們談到時，看，我們仍然對雲業務感覺很好，包括雲存儲和 CloudOps。今年我們有一些事情要做。因此，即使第二季度不是我們想要的，我們仍然對未來感到非常滿意。當我們為您提供明年的指導時，我們將更新我們對 24 財年和 20 億美元的看法。因此，我們會要求您等到我們在幾個季度內更新我們的 24 財年數字。

I think where we are focused on at the moment with our cloud business is to make sure that we are a good partner to our customers so that we can optimize their spend where they need help doing that. We are going to be continuing to accelerate our focus on selling more of our cloud products to our installed base where today it's about 15% of our Hybrid Cloud customers have our cloud products. And we have grown the number of cloud customers and the number of them that are buying more than one cloud service. So there's lots of opportunity ahead. We're focused on blocking and tackling and executing on the opportunities in front of us.

我認為我們目前專注於雲業務的地方是確保我們成為客戶的良好合作夥伴，以便我們可以在他們需要幫助的地方優化他們的支出。我們將繼續加快我們的重點，將更多的雲產品銷售給我們的安裝基礎，今天大約有 15% 的混合雲客戶擁有我們的雲產品。我們已經增加了雲客戶的數量以及購買不止一種雲服務的客戶數量。所以前面有很多機會。我們專注於阻止、處理和執行擺在我們面前的機會。

Our next question will come from Krish Sankar with Cowen and Company.

我們的下一個問題將來自 Cowen and Company 的 Krish Sankar。

I have 2 of them. I'll ask both of them upfront to either George or Mike. Thanks for the color on the cloud customer scenario. I'm kind of curious, like one of your competitors just 2 weeks ago mentioned the storage demand is still pretty strong from cloud customers. I'm kind of curious, is the weakness you're seeing NetApp customer specific? Or is there any kind of share loss due to competitive threats? That's the first question.

我有 2 個。我會先向 George 或 Mike 詢問他們兩個。感謝雲客戶場景上的顏色。我有點好奇，就像您的一位競爭對手在 2 週前提到雲客戶對存儲的需求仍然非常強勁。我有點好奇，您看到的弱點是 NetApp 客戶特有的嗎？還是由於競爭威脅而導致任何類型的份額損失？這是第一個問題。

And then the follow-up is on the cloud ARR from $800 million to $700 million, yet we spoke about a high retention rate. So is the challenge now signing new customers with ANF? Is it the ramp of AWS FSx? Any color there would be helpful on the ARR cut.

然後後續是雲 ARR 從 8 億美元到 7 億美元，但我們談到了高保留率。那麼現在與 ANF 簽訂新客戶的挑戰是什麼？是 AWS FSx 的斜坡嗎？那裡的任何顏色都會對 ARR 剪輯有所幫助。

I think with regard to what we saw in the quarter was really we have unique cloud services, which are native, first-party cloud services. Those are consumption offerings that we give customers. They were the ones most impacted. None of our competitors have native, first-party consumption cloud services. They offer it through the marketplace. The marketplace business for us stayed relatively consistent. And so that is what you would expect. The subscription business is less susceptible to near-term changes in usage than the consumption business.

我認為就我們在本季度看到的情況而言，我們確實擁有獨特的雲服務，這些服務是本機的第一方雲服務。這些是我們為客戶提供的消費產品。他們是受影響最大的人。我們的競爭對手都沒有本地的第一方消費云服務。他們通過市場提供。我們的市場業務保持相對穩定。這就是您所期望的。與消費業務相比，訂閱業務不太容易受到近期使用情況變化的影響。

And so the benefits of consumption being you can turn it on and off also shows up when customers want to optimize spend. We want to be a good partner to the customers that want to do that. And so we are working with our hyperscaler partners to give them access to more options to be more cost-effective with their spend. Spot, which is the compute optimization platform, actually did well in the quarter. So while the storage consumption was impacted by spend, as I noted in my remarks, Spot was a -- which is a vehicle to optimize computing spend, did very well in the quarter. And so we continue to help our customers through that journey. With regard to growth opportunities, listen, as I said, we felt very good about the number of customer adds. We felt very good about the amount of cross-selling. We are starting to see dollar-based net retention rate has been strong. And so several good things in our cloud business.

因此，當客戶想要優化支出時，消費的好處是你可以打開和關閉它。我們希望成為想要這樣做的客戶的好夥伴。因此，我們正在與我們的超大規模合作夥伴合作，讓他們能夠獲得更多選擇，從而使他們的支出更具成本效益。計算優化平台 Spot 實際上在本季度表現良好。因此，儘管存儲消耗受到支出的影響，正如我在發言中指出的那樣，Spot 是一種優化計算支出的工具，在本季度表現非常好。因此，我們將繼續幫助我們的客戶度過這段旅程。關於增長機會，正如我所說，我們對增加的客戶數量感到非常滿意。我們對交叉銷售的數量感到非常滿意。我們開始看到以美元為基礎的淨保留率一直很高。在我們的雲業務中有幾件好事。

And on the ARR side?

在ARR方面？

So on the ARR point. So there's been a couple of questions about the $800 million down to the $700 million. So when we looked at that, originally, when we had given the $800 million, we expect it to be, call it, somewhere around $650 million as of the end of Q2. Taking a look at the second half now, we expect to grow about $100 million. That's all organic because we don't have any acquisitions baked in. And we expect that to continue to grow across cloud storage, specifically ANF, FSx and GCP, we all expect to see some good growth.

所以在ARR點上。因此，關於 8 億美元到 7 億美元，有幾個問題。因此，當我們看到這一點時，最初，當我們提供了 8 億美元時，我們預計到第二季度末它會達到 6.5 億美元左右。現在看看下半年，我們預計將增長約 1 億美元。這都是有機的，因為我們沒有任何收購。我們預計雲存儲將繼續增長，特別是 ANF、FSx 和 GCP，我們都希望看到一些良好的增長。

We have tried to be conservative, or cautious, I will say, around the consumption business because we do expect that to come back in the second half. We're just not really sure if it's going to be Q3 or Q4. So we feel really good about the $700 million, still a significant growth in that business. But stepping it down a little bit based on the Q2 results and also take a step back a little bit on Cloud Insights. So that's the -- and I'll call it, Krish, the product view of the rest of the year.

我會說，我們在消費業務方面試圖保持保守或謹慎，因為我們確實預計下半年會恢復。我們只是不確定是第三季度還是第四季度。所以我們對這 7 億美元感到非常滿意，這仍然是該業務的顯著增長。但是根據第二季度的結果將其降低一點，並且在 Cloud Insights 上也將降低一點。這就是 - 我稱之為 Krish，今年剩餘時間的產品視圖。

Our next question will come from Sidney Ho with Deutsche Bank.

我們的下一個問題將來自德意志銀行的 Sidney Ho。

Maybe a couple more on the public cloud side. So on the reported quarter, your public cloud revenue on an annualized basis was lower than your ARR exiting last quarter. Is it fair to say that there were some cancellations and maybe some restructuring of some of the deals based on the 3 dynamics that you guys talked about earlier? And if so, how do you feel comfortable about the future ARR would not be reduced from the churn level?

也許在公共雲方面還有更多。因此，在報告的季度，您的公共雲年化收入低於上個季度退出的 ARR。可以公平地說，根據你們之前談到的 3 種動態，有一些交易被取消，也許還有一些交易重組？如果是這樣，您如何看待未來的 ARR 不會從流失水平降低？

And maybe I'll just throw in the next question here. If you look at your revised ARR for the $700 million, if I exclude the inorganic growth and then make some certain assumptions about dollar-based net retention, you still need quite a bit of ARR coming from new customers. So in terms of new customers, which offerings are you seeing the most traction at this point?

也許我會在這裡提出下一個問題。如果您查看 7 億美元的修訂後 ARR，如果我排除無機增長，然後對基於美元的淨保留率做出一些特定假設，您仍然需要相當多的來自新客戶的 ARR。那麼就新客戶而言，您認為目前哪些產品最有吸引力？

Sidney, it's Mike. So let me do the first one. So great question. So we finished Q1 at $584 million in ARR. If you simply take -- divide that by 4, you get about $146 million that you'd expect to recognize in revenue. The revenue recognized in the quarter was $142 million. And the nuance here is that, typically, you can make -- you can do that calculation. It's going to flow very nicely because of the things that we talked about in terms of some of the consumption being reduced during the quarter, some of the project-based initiatives, especially the larger chip design wins. Those happened during the quarter. Thus, we did lose some revenue that was in the ARR as of the beginning of the quarter.

西德尼，是邁克。所以讓我做第一個。這麼好的問題。因此，我們以 5.84 億美元的 ARR 結束了第一季度。如果你簡單地把它除以 4，你會得到大約 1.46 億美元，你希望在收入中確認。本季度確認的收入為 1.42 億美元。這裡的細微差別是，通常，您可以進行 - 您可以進行計算。由於我們在本季度減少了一些消費，一些基於項目的計劃，特別是更大的芯片設計獲勝方面談到了一些事情，因此它會非常順利地流動。這些發生在本季度。因此，截至本季度初，我們確實損失了 ARR 中的一些收入。

So that's the nuance. We don't expect to see that happen in the future. It's a great question, but it was largely due to that. The third part is the back-ended linearity on some of the subscription business that follows the NetApp, I'll call it, core business as well. So it's really those 3 things attributed to that revenue coming in lower than simply taking the ARR divided by 4.

這就是細微差別。我們不希望在未來看到這種情況發生。這是一個很好的問題，但主要是因為這個問題。第三部分是 NetApp 之後的一些訂閱業務的後端線性，我也稱之為核心業務。因此，真正歸因於收入的那三件事比簡單地將 ARR 除以 4 還要低。

Great. And in terms of the new customers -- ARR from new customers?

偉大的。就新客戶而言——來自新客戶的 ARR？

Listen, we had a good quarter in terms of new customer additions. We have 2 major vehicles for new customer additions. The first being the native cloud services that we help our cloud provider partners, Amazon, Microsoft and Google, sell for us. Those continue to be good vehicles for new customer additions. And then Spot has continued to be a strong vehicle for new customer additions. So I feel good about the pace of net new customers.

聽著，我們在增加新客戶方面有一個很好的季度。我們有 2 種主要車輛用於增加新客戶。第一個是我們幫助我們的雲提供商合作夥伴亞馬遜、微軟和谷歌為我們銷售的原生雲服務。這些仍然是增加新客戶的好工具。然後 Spot 繼續成為吸引新客戶的強大工具。所以我對淨新客戶的增長速度感到滿意。

Next question will come from Simon Leopold with Raymond James.

下一個問題將來自 Simon Leopold 和 Raymond James。

This is Victor Chiu, in for Simon Leopold. You noted several customers that concluded several large projects and then drove capacity reductions. Can you help clarify what changed versus your expectations exactly because the way that you kind of described, the conclusions were kind of natural and then so we assumed it would have been somewhat expected. So either did they conclude earlier? I think you mentioned there was some chip design kind of timing-related issues. Can you just help us clarify why this dynamic was not expected?

這是西蒙利奧波德的 Victor Chiu。您注意到一些客戶完成了幾個大型項目，然後推動了產能削減。您能否幫助澄清是什麼與您的期望發生了變化，正是因為您描述的方式，結論有點自然，所以我們假設它在某種程度上是可以預期的。那麼他們是否更早得出結論？我想你提到有一些芯片設計與時序相關的問題。你能幫我們澄清一下為什麼沒有預料到這種動態嗎？

Listen, I think we have seen in the past projects get concluded in a quarter and other projects get started up within the same quarter or by other customers within the quarter. This time, we saw some particularly large projects that concluded in the quarter where the start of the next project is beyond the finish of the quarter and further out than we would like. So I think that was the nature of what happened in the quarter.

聽著，我想我們在過去已經看到項目在一個季度內完成，其他項目在同一季度內或由其他客戶在該季度內啟動。這一次，我們看到一些特別大的項目在本季度結束，而下一個項目的開始時間超過了本季度結束，而且比我們希望的更晚。所以我認為這就是本季度發生的事情的本質。

I think we would, honestly, want to get better visibility. We're working on that. I think this is when we have another partner selling the service to the end customer. Our sales teams are working to get better visibility into the end customers kind of priorities and spending time lines. So that's on us. We can do better on that, and I acknowledge that.

老實說，我認為我們希望獲得更好的知名度。我們正在努力。我認為這是我們有另一個合作夥伴向最終客戶銷售服務的時候。我們的銷售團隊正在努力更好地了解最終客戶的優先事項和支出時間線。所以這取決於我們。我們可以在這方面做得更好，我承認這一點。

Okay. And then just quickly, regarding your commentary on macro headwinds, are you observing explicit behavioral trends? Or are you having explicit discussions with customers that makes you confident that the slowing is specific to the macro environment versus a more secular shift like accelerating workload migrations to the public cloud?

好的。然後很快，關於你對宏觀逆風的評論，你是否觀察到明確的行為趨勢？或者您是否與客戶進行了明確的討論，使您確信放緩是宏觀環境特有的，而不是像加速工作負載遷移到公共雲這樣的更長期的轉變？

I think we are closely engaged with a large number of the enterprise customers through our direct sales force. In the midsized enterprise market, as you know, we go to market with the channel providers. In terms of the customer behavior we saw in the quarter, it is very reflective of a typical macro cycle, more approvals for deals, smaller deal sizes, projects being broken up into phases rather than one large purchase, and some deals moving out of the quarter. That did not mean that other customers did not start projects with us and move them forward. We know that those projects are -- that we did not lose share to somebody else because we are in ongoing dialogue around the other phases of the projects that are yet to come online.

我認為我們通過直銷團隊與大量企業客戶密切合作。如您所知，在中型企業市場，我們與渠道提供商一起進入市場。就我們在本季度看到的客戶行為而言，它非常反映了典型的宏觀週期、更多的交易批准、更小的交易規模、項目被分解成多個階段而不是一次大採購，以及一些交易移出四分之一。這並不意味著其他客戶沒有與我們一起啟動項目並推動他們向前發展。我們知道這些項目 - 我們並沒有失去其他人的份額，因為我們正在圍繞尚未上線的項目的其他階段進行持續對話。

Our next question will come from Meta Marshall with Morgan Stanley.

我們的下一個問題將來自摩根士丹利的 Meta Marshall。

I just wanted to get a sense of whether we could get -- just what the size of hi-tech and service provider is as a percentage of the cloud revenue or just kind of any vertical concentration that we should be mindful of. And then maybe last quarter, you had given kind of the storage services as a percentage of cloud ARR. If we could just have an update there, that would be helpful as well.

我只是想了解一下我們是否可以獲得 - 高科技和服務提供商的規模占云收入的百分比，或者我們應該注意的任何垂直集中度。然後也許在上個季度，你給出了某種存儲服務作為雲 ARR 的百分比。如果我們可以在那裡進行更新，那也會有所幫助。

Yes. Listen, Meta, we're not going to break out specific verticals. I would just say that we saw a broad-based -- hi-tech is quite a broad segment, and we saw a fairly conservative posture across that segment. Service provider could -- is also broadly defined. It could be telco. It could be hosting provider. It could be some form of cloud providers. So these are broader categories than a very specific definition. And then we saw fairly conservative postures across most of those customers.

是的。聽著，Meta，我們不會打破特定的垂直領域。我只想說，我們看到了一個基礎廣泛的——高科技是一個相當廣泛的細分市場，我們在該細分市場中看到了相當保守的姿態。服務提供商可以-- 也有廣泛的定義。可能是電信。它可能是託管服務提供商。它可能是某種形式的雲提供商。因此，這些是比非常具體的定義更廣泛的類別。然後我們看到大多數客戶的態度相當保守。

Meta, it's Mike. On your second question, so 2 data points for you. Cloud storage continues to be almost exactly 60% of the total, and that includes, as of the end of Q2, Instaclustr and CloudCheckr, which are in CloudOps. So there you see the great growth we've seen in cloud storage because overall, as a total number, it stayed right around 60%.

元，是邁克。關於你的第二個問題，為你提供 2 個數據點。雲存儲仍然幾乎佔總數的 60%，其中包括截至第二季度末的 CloudOps 中的 Instaclustr 和 CloudCheckr。所以你可以看到我們在雲存儲方面看到的巨大增長，因為總體而言，它保持在 60% 左右。

The other important number is we've talked about consumption versus subscription. As of the end of Q2, it's pretty close to 50-50 a little bit, a couple of percentage points higher for consumption. We do expect by the end of the year with that $700 million for that to get much closer to 60% because that's where we expect the growth across ANF, GCP and FSx, those products as well. So those are the 2 data points we gave you that break down that cloud ARR number.

另一個重要的數字是我們已經討論過消費與訂閱。截至第二季度末，它非常接近 50-50 一點點，消費高出幾個百分點。我們確實預計到今年年底，這 7 億美元將接近 60%，因為這也是我們預計 ANF、GCP 和 FSx 以及這些產品的增長點。所以這些是我們給你的 2 個數據點，它們分解了那個雲 ARR 數字。

Next question will come from Ananda Baruah with Loop Capital.

下一個問題將來自 Loop Capital 的 Ananda Baruah。

Two clarifications, if I could. Mike, just the remarks you made a couple of times in the prepared comments about, and this is really the clarification, FX driving sort of some portion of the guide down or whatever that context was. Could you clarify that? And then I have a quick follow-up clarification as well.

兩個澄清，如果可以的話。邁克，只是你在準備好的評論中發表了幾次評論，這實際上是澄清，FX 驅動指南的某些部分或任何上下文。你能澄清一下嗎？然後我也有一個快速的跟進說明。

Sure, Ananda, happy to. So that was in reference to on the Q1 call, we had given -- this is directly related to EPS. We've given $5.50 as the midpoint. Since that time, because of the continued strengthening of the dollar and the weakening of the FX situation, the $5.40 is actually above what that number would have been on an FX-adjusted basis, that's about $5.37. The point there being, hey, we're seeing even in the second half with the lower outlook around revenue, we're doing all we can around costs and other efficiencies to ensure that we continue to still drive that EPS number consistent with the number we gave you last time on the call.

當然，阿南達，很高興。所以這是關於我們給出的第一季度電話的參考 - 這與 EPS 直接相關。我們將 5.50 美元作為中點。從那時起，由於美元的持續走強和外匯形勢的疲軟，5.40 美元實際上高於外匯調整後的數字，即 5.37 美元左右。重點是，嘿，我們甚至在下半年看到收入前景較低，我們正在盡我們所能圍繞成本和其他效率確保我們繼續推動 EPS 數字與數字一致我們上次給你打電話了。

I got it. That's super helpful. And then the second clarification is. To one of the questions, you mentioned -- you gave some context around timing of pickup and something along -- well, it was sort of -- that was sort of the gist of it. But I think, Mike, the comments you made where you expect demand to come back in the second half, though you weren't sure if it was Q3 or Q4. Could you clarify that? And is it fiscal Q3, Q4? Or is it calendar '23 Q3, Q4, in addition to the clarification?

我知道了。這非常有幫助。然後是第二個澄清。對於其中一個問題，你提到了——你給出了一些關於取件時間的背景信息——好吧，這有點——這就是它的要點。但我認為，邁克，你在下半年預計需求會回升的地方發表的評論，儘管你不確定是第三季度還是第四季度。你能澄清一下嗎？是第 3 季度、第 4 季度嗎？還是日曆'23 Q3，Q4，除了澄清？

Sure. So I've been saying -- and I only talk about fiscal years, not calendar years. So this was second half fiscal, and that was directly related to the cloud ARR growth. So we finished at $603 million. We've guided end of year to $700 million. We are not going to guide Q3. We feel good about the second half because again, these are some of those -- these are large project-based as well as consumption. When does that flow in? Is it in our fiscal Q3 or Q4? We feel confident about the second half. There's a little bit of nuance around whether it's 3 or 4, hence, we're only doing the end of the year.

當然。所以我一直在說 - 我只談論財政年度，而不是日曆年。所以這是下半財年，這與雲 ARR 增長直接相關。所以我們完成了 6.03 億美元。我們已指導年底達到 7 億美元。我們不會指導 Q3。我們對下半年感覺很好，因為這些都是其中的一些——這些都是基於大型項目和消費的。什麼時候流入？是在我們的第三季度還是第四季度？我們對下半場充滿信心。是 3 還是 4 有點細微差別，因此，我們只在年底進行。

That's super helpful. And so was that the same, like, that anecdotally, you guys are experiencing, and George, feel free to jump in on this too, anecdotally, you guys are -- you're experiencing a little bit of a sideways here, call it, a pause. You anticipate that it's going to last, I guess, like a max -- it's a period of max 6 months -- 8 months. Let's say, started slowing mid-quarter, could last an additional 6 months. But you do expect sort of a, then, pickup in some context after that? Anecdotally, is that sort of the gist of what you guys are communicating?

這非常有幫助。同樣的，就像，你們正在經歷的，喬治，也可以隨意加入這個，有趣的是，你們在這裡經歷了一點橫向，稱之為，停頓。你預計它會持續，我猜，就像一個最大值——這是一個最長 6 個月——8 個月的時期。比方說，在季度中期開始放緩，可能會再持續 6 個月。但是您確實希望在那之後在某些情況下有所回升？有趣的是，這就是你們交流的要點嗎？

Well, keep in mind, Ananda, all this is related to the cloud ARR. This is not the Hybrid Cloud. And this is more of just us talking about when we expect it to come back in the second half. And again, because of the large project base. That's really the nuance on this more than anything versus us calling, "Hey, we expect to see things pick up after April."

好吧，請記住，Ananda，所有這些都與雲 ARR 有關。這不是混合雲。這更多的只是我們在談論我們預計它何時會在下半場回歸。再次，因為項目基數大。與我們打電話相比，這真的是最細微的差別，“嘿，我們希望在四月之後看到事情好轉。”

Our next question will come from Jim Suva with Citigroup.

我們的下一個問題將來自花旗集團的吉姆蘇瓦。

George, on your outlook and Mike, on your outlook, you mentioned about slowing economic comments, which is understood. Any thoughts around inventory digestion? Is there a sense that there's inventory digestion out there? And if so, how long or any double ordering? Or is it just purely kind of economic pausing and elongation of cycles?

喬治，關於你的前景，邁克，關於你的前景，你提到了經濟評論放緩，這是可以理解的。關於庫存消化有什麼想法嗎？是否有庫存消化的感覺？如果是這樣，多長時間或任何雙重訂購？或者它只是一種純粹的經濟暫停和周期延長？

We did not see any order cancellations or any of those things. As we have mentioned repeatedly, we have good line of sight into our customers' spending priorities and behaviors and are directly engaged with the largest of them. I think as we saw in this quarter, and we continue to be cautious about looking at the second half of the year. These are clearly related to IT budget revisions, right, where they are reducing deal sizes or scrutinizing projects and things. They will defer a portion of that project to a subsequent quarter or a subsequent part of the calendar year. So we have good visibility into the activities in our customers, and we did not see cancellations of orders because of prior orders or double ordering.

我們沒有看到任何訂單取消或任何此類情況。正如我們反复提到的，我們對客戶的支出優先事項和行為有很好的了解，並直接與其中最大的客戶進行接觸。我認為正如我們在本季度所看到的那樣，我們繼續對下半年持謹慎態度。這些顯然與 IT 預算修訂有關，對，他們正在減少交易規模或審查項目和事物。他們將該項目的一部分推遲到下一個季度或日曆年的下一個部分。因此，我們對客戶的活動有很好的了解，並且我們沒有看到由於先前的訂單或重複訂購而取消訂單。

Great. But on the inventory digestion, any thoughts of -- were there any inventory that's still being digested that may allow corporates or service providers to prolong these revisions? Or is any concern about inventory out there?

偉大的。但是關於庫存消化，是否有任何想法 - 是否有任何仍在消化的庫存可能允許公司或服務提供商延長這些修訂？還是擔心那裡的庫存？

Typically, during macro situations like these, we have seen customers sweat their assets, right? And so -- what we mean by that is they will drive a system to a higher level of utilization and so that they can defer either capacity augmentation or system upgrades for a period of time. Now that's not forever, right? Storage is consumed because data keeps growing. And so there's always that trade-off. We certainly see some of that behavior going on. Jim, I think, certainly in our service provider segment, we see that. And in some of the hi-tech verticals, we saw that as well.

通常，在這樣的宏觀情況下，我們會看到客戶揮霍他們的資產，對嗎？因此——我們的意思是，他們會將系統的利用率提高到更高水平，這樣他們就可以將容量增加或系統升級推遲一段時間。現在這不是永遠，對吧？存儲被消耗是因為數據不斷增長。所以總是要權衡取捨。我們當然會看到其中一些行為正在發生。吉姆，我認為，當然在我們的服務提供商領域，我們看到了這一點。在一些高科技垂直領域，我們也看到了這一點。

Our next question will come from Tim Long with Barclays.

我們的下一個問題將來自巴克萊銀行的 Tim Long。

It's actually George Wang, on for Tim Long. I have 2 questions. Firstly, George, maybe you can elaborate on the current state of deal integration in terms of Spot, Instaclustr. And any thought process behind the polling deal until FY '24?

實際上是 George Wang，代替 Tim Long。我有兩個問題。首先，George，也許你可以根據 Spot、Instaclustr 詳細說明交易整合的當前狀態。在 24 財年之前，投票協議背後的任何思考過程？

Listen, we have a good portfolio of technologies already. And what we are really focused on is sharpening the use cases that are best suited to the current macro environment and making those use cases easy for the customers to adopt, expand and renew, right? And that operational focus is our highest priority. There are some -- there's work to be done to integrate the CloudCheckr capabilities into the Spot suite so that it becomes one broader offering rather than 2 parallel offerings. We have made good progress along the way, but there's more work to be done.

聽著，我們已經有了很好的技術組合。我們真正關注的是改進最適合當前宏觀環境的用例，並使這些用例易於客戶採用、擴展和更新，對吧？運營重點是我們的首要任務。有一些 - 將 CloudCheckr 功能集成到 Spot 套件中需要完成一些工作，以便它成為一個更廣泛的產品，而不是 2 個並行產品。我們在此過程中取得了良好的進展，但還有更多工作要做。

In Instaclustr, there are 2 unique value adds that we bring. One is the integration of our cloud storage services and Spot services into Instaclustr. And the second is the fact that it is a truly open source data services platform. We have the first of those 2 being worked. And so we feel like there's a lot of value we already have in our portfolio. There's work to be completed, and we want to keep our teams focused on that work on the technology side. On the go-to-market side, we also have more broad enablement and training for our sales teams to be able to position Spot and Instaclustr and CloudCheckr into the account. So we feel good about the work we're doing. We got to finish it before we look at other things.

在 Instaclustr 中，我們帶來了 2 個獨特的附加值。一是將我們的雲存儲服務和 Spot 服務集成到 Instaclustr 中。其次是它是一個真正開源的數據服務平台。我們正在處理這兩個中的第一個。因此，我們覺得我們的投資組合中已經擁有很多價值。有工作需要完成，我們希望讓我們的團隊專注於技術方面的工作。在進入市場方面，我們還為我們的銷售團隊提供更廣泛的支持和培訓，以便能夠將 Spot、Instaclustr 和 CloudCheckr 定位到帳戶中。所以我們對我們正在做的工作感覺良好。在我們看其他事情之前，我們必須完成它。

Okay. Cool. Yes, a quick follow-up is on the cost cuts. Maybe you can elaborate on the kind of, disaggregate just components for the cost cuts, whether that's sales and marketing, the SG&A or kind of some of the R&D. Any color would be appreciated.

好的。涼爽的。是的，快速跟進是關於成本削減的。也許你可以詳細說明那種，分解成本削減的組成部分，無論是銷售和營銷，SG&A 還是某些研發。任何顏色將不勝感激。

George, it's Mike. And just I want to make sure your question was the -- what are we looking at for cost reductions in the second half? Was that the question?

喬治，是邁克。我只是想確定你的問題是——我們在下半年尋找什麼來降低成本？那是問題嗎？

Yes.

是的。

Perfect. Thank you. So there's several that I think you're going to see flow through the P&L. I'm going to start all the way at the top, which is we do expect to finally see some relief from our significant expenditures related to premiums. The supply chain is getting a little bit better. It gets better every day. So that's going to help the second half.

完美的。謝謝你。所以有幾個我認為你會看到通過損益表的流動。我將從頭開始，我們確實希望最終能從與保費相關的大量支出中看到一些緩解。供應鏈正在變得更好。它每天都在變得更好。所以這將有助於下半場。

In addition, NAND pricing will help us as well. Now we do have a little bit of inventory to work through. And you'll see that still in Q3, but we expect by Q4, you'll see that as well. On the OpEx side, we're -- George talked about we've already done a headcount freeze. We're taking a look at all discretionary spending, including travel, programs, outside services, just like everybody else who has embraced the hybrid work environment. We'll take a hard look at our facilities costs as well. So we've already started down the path on several of those as I talked about, hey, we'll continue to look at those as we go into the second half. So there's numerous areas for us to focus on.

此外，NAND 定價也將對我們有所幫助。現在我們確實有一些庫存需要處理。你會在第三季度看到這一點，但我們預計到第四季度，你也會看到。在運營支出方面，我們——喬治談到我們已經凍結了員工人數。我們正在審視所有可自由支配的支出，包括差旅、項目、外部服務，就像其他接受混合工作環境的人一樣。我們也會認真審視我們的設施成本。因此，正如我所說，我們已經開始了其中的幾項工作，嘿，我們將在進入下半場時繼續研究這些問題。因此，我們需要關注許多領域。

In addition, keep in mind, too, that in OpEx, there's a good bit of that cost structure related to incentive comp and commissions. And certainly, those will come down in the second half as well.

此外，還要記住，在 OpEx 中，有很多與激勵補償和佣金相關的成本結構。當然，這些也會在下半年下降。

Our next question will come from Nehal Chokshi with Northland Capital Markets.

我們的下一個問題將來自 Northland Capital Markets 的 Nehal Chokshi。

Yes. So -- the total revenue guidance is lowered by 400 basis points at current prices, 100 basis points due to incremental FX, another 100 basis points due to lower PCF ARR target, and then the remaining 200 basis points either due to weaker billings results on a constant currency basis during the quarter? Or is it a weaker billings result that has started to transpire during the third quarter, again, on a constant currency basis?

是的。因此 - 總收入指導按當前價格降低 400 個基點，100 個基點是由於外匯增加，另外 100 個基點是由於較低的 PCF ARR 目標，然後剩餘的 200 個基點是由於較弱的賬單結果本季度的固定貨幣基礎？還是第三季度開始出現較弱的賬單結果，再次以固定匯率為基礎？

So for the second half, Nehal, that is mostly related to product revenue, which would be largely booked and recognized in the quarter. So it's -- there's -- backlog is largely at the normal rates, the seasonal normal rates that we would expect. So that is going to be systems in the second half, I think, is the third part of your question.

因此，對於下半年，Nehal，這主要與產品收入有關，這將在本季度大部分入賬和確認。所以它 - 有 - 積壓基本上是正常的，我們預期的季節性正常率。所以我認為，這將是下半年的系統，這是你問題的第三部分。

Excellent. Okay. And then dollar-based net revenue retention rate declined quite significantly, 192 to 140. Is this largely because of the project-related stuff?

出色的。好的。然後基於美元的淨收入保留率大幅下降，從 192 下降到 140。這主要是因為與項目相關的東西嗎？

Dollar-based net revenue retention was 150 last quarter, and it's now 140. So step down as the base of customers expand, and we did see some churn in our consumption business, as we noted on our call, so we don't see that as materially different than what we would expect.

上個季度基於美元的淨收入保留率為 150，現在是 140。隨著客戶群的擴大，我們確實看到消費業務出現了一些變化，正如我們在電話會議上指出的那樣，所以我們沒有看到這與我們預期的有很大不同。

And to George's point, Nehal, we've been calling that for several quarters, which is, as that ARR number gets bigger, that dollar-based net retention percentage will come down. We like to call it the 120, 130, where we think it will land, but we have been calling that percentage to continue to decline as that number increases.

對於 George 的觀點，Nehal，我們已經呼籲了幾個季度，也就是說，隨著 ARR 數字越來越大，基於美元的淨保留百分比將會下降。我們喜歡稱它為 120、130，我們認為它將降落，但我們一直稱該百分比將隨著該數字的增加而繼續下降。

That you have. Okay. And then just finally, Mike, the PCF GM did come down both Q-on-Q and year-over-year. Why is that?

你有。好的。然後最後，邁克，PCF 總經理確實在 Q-on-Q 和同比下降。這是為什麼？

The PCF gross margin came down because of the revenue scale relative to the infrastructure that we have deployed. Note that the consumption business, some elements of those are based on our deployed systems, right, in the cloud provider environments. And when they have less scale, you see -- less utilization, you see less gross margin.

由於相對於我們部署的基礎設施的收入規模，PCF 毛利率有所下降。請注意，消費業務中的某些元素基於我們在雲提供商環境中部署的系統。當他們的規模較小時，你會看到 - 利用率較低，你會看到毛利率較低。

Yes. It came down from 69.7% to 68.3%, so down slightly. And to George's point, that's largely due to scale. We continue to feel good, as I mentioned in my notes, about the 75% to 80% as we drive that scale.

是的。它從 69.7% 下降到 68.3%，所以略有下降。在 George 看來，這主要是由於規模。正如我在筆記中提到的那樣，我們繼續感覺良好，因為我們推動了這一規模的 75% 到 80%。

Our next question will come from Wamsi Mohan with Bank of America.

我們的下一個問題將來自美國銀行的 Wamsi Mohan。

Yes. I appreciate the fiscal year guide. But George, you were talking earlier about IT budgets and some caution around that. I was wondering if you could share some color on what you're hearing from customers more around calendar '23 IT budgets. And what's your view on how you expect the storage market to grow in '23 and your growth relative to that? And I have a follow-up.

是的。我很欣賞財政年度指南。但是 George，你之前談到了 IT 預算和一些關於它的警告。我想知道你是否可以分享一些關於你從客戶那裡聽到的更多關於 23 年日曆 IT 預算的信息。您對存儲市場在 23 年的增長預期以及您的相關增長有何看法？我有一個後續行動。

I think with regard to '23, we're being cautious. We aren't guiding next fiscal year, but we are being cautious about the start to calendar year '23. We have seen, typically, these macro situations that new budget outlays to start a calendar year probably take longer than typical. So we've been cautious about the start of the new calendar year.

我認為關於 23 年，我們持謹慎態度。我們不會指導下一個財政年度，但我們對 23 年日曆年的開始持謹慎態度。通常，我們已經看到這些宏觀情況，即新預算支出開始一個日曆年可能需要比通常更長的時間。因此，我們對新日曆年的開始持謹慎態度。

With regard to the storage market overall, I think it's going to be paced by new workload deployments. I think there will be customers that will be forced to upgrade systems because their existing systems are coming to either end of useful life or end of they're just out of capacity or performance. But I think the majority will prioritize new workload deployments and/or system consolidation for cost and energy benefit use cases. We continue to see -- while the cloud migrations are slowing down a bit, we continue to see that as a long-term trend that customers are going to take on for a whole bunch of reasons.

關於整個存儲市場，我認為它將由新的工作負載部署來推動。我認為會有一些客戶將被迫升級系統，因為他們現有的系統要么使用壽命即將結束，要么容量或性能即將結束。但我認為大多數人會優先考慮新的工作負載部署和/或系統整合，以實現成本和能源效益用例。我們繼續看到 - 雖然雲遷移速度有所放緩，但我們繼續將其視為客戶將出於各種原因採取的長期趨勢。

And so I think cloud will outpace on-prem in the broader market. And in the on-prem world, we see NAND helping flash be a bigger part of the mix going forward. Our capacity flash products had a good quarter. Our hybrid flash products had a good quarter. They are typical about where customers are cost conscious.

因此，我認為雲計算將在更廣泛的市場中超過內部部署。在本地世界中，我們看到 NAND 幫助閃存成為未來組合中更大的一部分。我們的容量閃存產品有一個很好的季度。我們的混合閃存產品有一個很好的季度。他們是典型的客戶注重成本的地方。

Okay. That's helpful, George. And just a follow-up on your last comment about the NAND market. Every few years, you see the significant dislocation in pricing and this one is quite severe. You guys noted the benefit that you will recognize in gross margin terms. But can you just remind us on how you're thinking about the impact to revenues based on the NAND price decline? Are you expecting a deceleration in AFA revenues? Or are you expecting elasticity of demand to offset that?

好的。這很有幫助，喬治。只是跟進您對 NAND 市場的最後評論。每隔幾年，您就會看到定價的重大錯位，而這一次非常嚴重。你們注意到了您將在毛利率方面認識到的好處。但是您能否提醒我們您如何考慮 NAND 價格下跌對收入的影響？您是否預計 AFA 收入會下降？或者您是否期望需求彈性能夠抵消這一影響？

Customers' budget in dollars, the current macro environment has them spending less dollars, but they'll probably shift the mix to AFAs, if there's more value in the offering, right? So we see them budget in dollars, Wamsi.

客戶的美元預算，當前的宏觀環境讓他們花費更少的美元，但如果提供的產品有更多價值，他們可能會將組合轉向 AFA，對吧？所以我們看到他們以美元為單位進行預算，Wamsi。

Okay. But in aggregate terms, would you say that the customer budgets would be up or down, like in full, in aggregate, whether it's cloud, on-prem, all put together?

好的。但總的來說，你會說客戶預算會增加還是減少，比如全部，總體而言，無論是雲、本地還是全部放在一起？

I think overall, year-on-year, I think '23, we expect to be moderated and down relative to '22, certainly at the start of the year. '22 had a good start to the year. And so our start of the new calendar year, which is baked into our outlook for the second half of fiscal year, we think people are going to be more cautious overall, Wamsi.

我認為總體而言，與去年同期相比，我認為'23，我們預計相對於'22，肯定會在今年年初有所緩和和下降。 '22 這一年開局不錯。因此，新日曆年的開始已納入我們對下半財年的展望，我們認為人們總體上會更加謹慎，Wamsi。

Next question will come from Shannon Cross with Credit Suisse.

下一個問題將來自瑞士信貸的 Shannon Cross。

I was just wondering what you're hearing from customers on your Keystone offering. I think as a service offering, they're becoming a bit more attractive in an economic downturn. So I'm wondering what kind of traction you're seeing there?

我只是想知道您從客戶那裡聽到了什麼關於 Keystone 產品的信息。我認為作為一種服務產品，它們在經濟低迷時期變得更具吸引力。所以我想知道你在那裡看到了什麼樣的牽引力？

It's early, but good traction. We are focused with a few channel partners who are enabled on selling Keystone. We've had good customer wins, good momentum in terms of our offerings. We brought new innovation to market in the last quarter, both a unified control plane so that you can use either a Keystone-based consumption offering in your environment or our public cloud offerings, and you can move workloads and licenses across those. So a good amount of innovation. And you're correct, we'll continue to see opportunities to help customers around whatever their kind of buying model is in this environment.

現在還早，但牽引力很好。我們專注於一些能夠銷售 Keystone 的渠道合作夥伴。我們贏得了良好的客戶，在我們的產品方面勢頭良好。我們在上個季度為市場帶來了新的創新，既有一個統一的控制平面，這樣您就可以在您的環境中使用基於 Keystone 的消費產品或我們的公共雲產品，並且您可以在這些產品之間移動工作負載和許可證。大量的創新。你是對的，我們將繼續看到機會幫助客戶解決他們在這種環境下的任何購買模式。

Great, and thanks. And Mike, look forward to seeing you on Thursday at our conference.

太好了，謝謝。邁克，期待週四在我們的會議上見到你。

I as well. Look forward to seeing you on Thursday.

我也是。期待週四見到你。

Our final question will come from Kyle McNealy with Jefferies.

我們的最後一個問題將來自 Jefferies 的 Kyle McNealy。

You touched on this a bit earlier, but not directly. But does the budget scrutiny that you're seeing right now from some subset of customers impact their decisions for provisioning the mix that they're provisioning of all-flash versus hybrid arrays at least for new projects.

您之前提到過這一點，但不是直接提到的。但是，您現在從部分客戶那裡看到的預算審查是否會影響他們配置混合的決策，他們至少為新項目配置全閃存陣列與混合陣列。

And I know you mentioned that your all-flash portfolio has leading cost efficiency, but do you expect the mindset to change on how much customers are willing to embrace more all-flash? Will the pockets of slowdown that you're seeing potentially pull everything back and the mix stays relatively on the same trajectory?

我知道您提到過您的全閃存產品組合具有領先的成本效率，但您是否認為心態會改變，因為有多少客戶願意接受更多的全閃存？你看到的經濟放緩是否會把一切都拉回來，並且混合保持相對相同的軌跡？

I think -- thank you for the question. We didn't see customers sort of reevaluating technical decisions about what type of infrastructure to buy. I think they allowed the technical team to choose what was the most value, and they make decisions based on the relative cost effectiveness of disk versus flash, right?

我想——謝謝你的提問。我們沒有看到客戶在某種程度上重新評估有關購買哪種類型的基礎設施的技術決策。我認為他們允許技術團隊選擇最有價值的東西，並且他們根據磁盤與閃存的相對成本效益做出決策，對嗎？

I think what we saw was an approval level going up for the same deal what would have been approved by a director, now got taken up to a VP, what was approved by a VP, probably goes up to a CTO. That is what elongated deal cycles in the quarter and/or people shrinking how much they wanted to buy at one time and phasing projects into multiple phases.

我認為我們看到的是，同一筆交易的批准級別上升了，本來是由董事批准的，現在被帶到了副總裁，由副總裁批准的，可能上升到首席技術官。這就是延長本季度的交易週期和/或人們減少他們一次想要購買的數量並將項目分為多個階段的原因。

All right. Thanks, Kyle. I'm going to give it back to George for a couple of closing thoughts.

好的。謝謝，凱爾。我將把它還給喬治，讓他作一些總結。

While there are near-term economic challenges for every company, we know that our opportunity ahead is substantial, durable and growing. The fundamentals of our business are strong and the value we bring customers is undeniable. Our strategic growth opportunities all-flash arrays, cloud storage and cloud infrastructure optimization are tightly aligned to customers' top priority and represent the potential for long-term, sustained and profitable growth. We will continue to be disciplined stewards of the business, focusing on our strategic growth opportunities while continually optimizing our operating costs to drive shareholder value. Thank you.

雖然每家公司都面臨近期的經濟挑戰，但我們知道我們面前的機會是巨大的、持久的和不斷增長的。我們的業務基礎穩固，我們為客戶帶來的價值無可否認。我們的戰略增長機會全閃存陣列、雲存儲和雲基礎設施優化與客戶的首要任務緊密相關，代表了長期、持續和盈利增長的潛力。我們將繼續成為業務的紀律管理者，專注於我們的戰略增長機會，同時不斷優化我們的運營成本以推動股東價值。謝謝你。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。