Kevan Krysler: Yes. So, I’ll touch on the financial comparison and Nehal I hope you’re doing well. When you think about the economics of our Phase 2 shipments to Meta, when comparing that to our Phase 1 shipments back in Q3 of last year, without getting into specifics, we did make some modifications to the deal structure of Phase 2, which actually resulted in less revenue and improved product gross margins, because obviously, you see the strength of our product gross margins this quarter, especially compared to Q3 of last year. If we’d use the same deal structure for Phase 2 that we used in, in Phase 1 revenue growth, frankly, would have been aligned with the remarks I made earlier in the year. Also, our product gross margin profile would have been similar to what we saw in Q3 of FY ’22. So hopefully, that’s helpful for you, Nehal in terms of how we’re thinking about it.
Operator: Our next question comes from the line of Simon Leopold with Raymond James. Simon, your line is now open.
Simon Leopold: I wanted to see how you’re thinking about product gross margins in light of the idea that memory prices appear to have come down and look like they’ll be down meaningfully over at least the next several quarters, and I appreciate the fact that there are other inputs but I imagine that’s a pretty significant contributor to your bill of materials. So, I’m just wondering, if you’re expecting maybe some price deflation or responses from others in your competitive space, cutting prices. What are you assuming in terms of the inputs for product gross margin?
Charlie Giancarlo: Yes, I mean a great, but complex question. As you know, we have a lot of experience in this now, especially and frankly, probably, for me, especially not coming in and not originally being in this market. I’ve had now five years experience of how this operates. And of course, as you well know, costs and prices operate on different timeframes, and they’re not 100% connected to one another. We compete with companies that utilize SSDs, and therefore don’t yet, are not exposed specifically, to the raw, the costs of raw Flash whereas we are. Our point of view on this is that as always, we tend to have advanced opportunity with a lower costs compared to our competitors, which doesn’t mean that they won’t discount in the market.
So I suppose that we believe that we will see pricing come down sometime in the future, maybe not right away, we’ll see prices start to come down. Overall a good thing for us, it allows us to go after more of the disk market. One of the things that’s very different this time around is that these, this round of NAND reductions is going to make Flash especially with our products on the QLC side with FlashArray//C and S, much more competitive with Pure disk based products. And to be direct, we’re going to use any cost reductions we see to go after that market. So, it’s always hard to predict gross margins with any level of exactitude, but you should expect us to stay within the range that we identified, and use cost savings that we have there to focus on the disk side.
Kevan Krysler: And if I could jump in, I think it’s really important here to you know, just again, emphasize, the sustained and structural advantages that Pure has and being able to use the raw NAND Flash versus really being limited to enterprise SSDs such as most of our larger competitors are, especially in terms of navigating some of the near-term cost of volatility. And these advantages really go back to our direct Flash technology, which is the result of over a decade of software and hardware IP, and it gives us a sustained, structural advantages over the competitive set in terms of will A, being able to source a raw commodity NAND versus the higher priced enterprise SSDs, which don’t always travel in line with one another in terms of the short-term.
Number two, to be able to make much more efficient use of that NAND have faster time to market and just realize and deliver to customers significant reliability and performance advantages. And so, you’ll add it all up, I think this set of advantages was a huge benefit in the early days. But as we look at today’s technology set, QLC the roadmaps beyond QLC in terms of cost effective NAND, it’s just absolutely requisite to be able to deliver that technology to customers and reliable performance efficient manner.
Operator: Our next question comes from the line of Matt Sheerin with Stifel. Matt, your line is now open.
Matt Sheerin: As we think about modeling for next year. It looks like you’re going to come up against some tough comps with Meta and so, are their expectations for contributions from that customer next year? And then, as related to that in terms of other hyperscale opportunities, could you update us on what that pipeline looks like?
Charlie Giancarlo: Absolutely. So on Meta, as we’ve identified, we ship Phase 2, by Meta’s own blog, they had indicated an exabyte to be shipped in total. So, there’s still more to be completed in that project for the RSC. There’s no further guidance we can give you on the timing of that right now. We just don’t have that for certain. So unfortunately, we’re not able to provide additional insight into that. And in terms of other hyperscalers conversations continue, where we’re optimistic that we will see realizable opportunities there, but again too early to be able to put any real guidance on that.
Operator: Our next question comes from a line of Krish Sankar with Cowen. Krish, your line is now open.
