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Intangible Assets and Amortization Expenses
In the first quarter of fiscal year (FY) 2024, Pure Storage, Inc. (PSTG) reported a net carrying amount value of $45.064 million for intangible assets. The company’s future expected amortization expense for these assets is also $45.064 million, suggesting a strong return on investment in technology patents, developed technology, customer relationships, and trade name.
In the first quarter of FY 2024, the technology patents, developed technology, customer relationships, and trade name had net carrying amounts of $3.979 million, $36.539 million, $4.062 million, and $484,000, respectively. The weighted-average remaining amortization period for these assets was 1.4 years for technology patents, 2.8 years for developed technology, 4.4 years for customer relationships, and 0.4 years for trade name. Pure Storage recorded amortization expenses of $4.1 million and $4.2 million for the first quarters of fiscal years 2023 and 2024, respectively.
Remaining Performance Obligations and Deferred Commissions
According to Pure Storage’s quarterly report, the total remaining performance obligations (RPO) at the end of the first quarter of FY 2024 was $1.8 billion. RPO represents contracted but not recognized revenue and includes both deferred revenue and non-cancelable amounts expected to be invoiced and recognized as revenue in future periods. The company anticipates recognizing approximately 47% of its RPO over the next 12 months, with the remainder to be recognized thereafter.
Deferred commissions increased from $230.998 million in the first quarter of fiscal 2023 to $248.188 million in the first quarter of fiscal 2024. Pure Storage expects to recognize about 28% of the total deferred commissions balance as commission expenses over the next 12 months, with the remainder to be recognized later.
Deferred Revenue and Revenue Recognition
Additionally, Pure Storage’s report shows total deferred revenue balances of $1.112 billion in the first quarter of fiscal 2023 and $1.396 billion in the first quarter of fiscal 2024. Revenue from deferred revenue in the first quarter of fiscal 2023 and 2024 was $197.1 million and $244.7 million, respectively.
In conclusion, Pure Storage’s quarterly report highlights the company’s strong position regarding intangible assets, future amortization expenses, and remaining performance obligations. The net carrying value of $45.064 million for intangible assets demonstrates the company’s significant investment in technology and innovation. Furthermore, the $1.8 billion in remaining performance obligations reflects anticipated future revenue, indicating stable growth potential for Pure Storage.
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