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01/10 19:45
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance with revenue and EPS growth, robust subscription services, and significant shareholder returns through buybacks. The guidance is optimistic, predicting double-digit revenue growth and a solid operating margin. Despite supply chain challenges and macroeconomic uncertainties, the Q&A section reveals steady progress with hyperscalers and no significant changes in customer sentiment. The company’s strong cash position and ongoing strategic initiatives, such as new product launches and market expansion, further support a positive outlook for the stock price over the next two weeks.
EPS $0.29, up from $0.2458 year-over-year, reflecting strong operational performance.
Revenue $531 million in the U.S., growing 9% year-over-year; $248 million internationally, growing 21% year-over-year, driven by strong demand for differentiated data storage solutions.
Operating Profit $83 million, with an operating margin of 10.6%, reflecting sustained demand for the data storage portfolio.
Total Contract Value (TCV) Sales for Storage as a Service $95 million, up 70% year-over-year, fueled by large Evergreen//One deals and higher velocity transactions.
Subscription Services Revenue $406 million, up 17% year-over-year, representing over half of total revenue.
Annual Recurring Revenue (ARR) $1.7 billion, growing 18% year-over-year.
Remaining Performance Obligations (RPO) $2.7 billion, up 17% year-over-year, reflecting robust renewals and new commitments.
Gross Margin 70.9%, with subscription services margin at 77.2%, indicating improved operational efficiency.
Operating Cash Flow $284 million, demonstrating strong cash generation capabilities.
Capital Investments $72 million, focused on Evergreen//One deployments and Fusion 2.0 development.
Share Repurchases $120 million returned to shareholders through 2.5 million shares repurchased.
Cash and Investments $1.6 billion, indicating a strong balance sheet.
New Product Launch: Launched FlashBlade//EXA, the industry's highest performing storage platform for AI and high performance computing, expected to deliver later this quarter.
Software Update: Introduced Fusion 2.0, which has received positive feedback with nearly 100 customers using or testing it.
Market Expansion: Announced a major agreement with Nutanix to integrate their cloud platform with Pure Storage, expected to be available later this year.
Customer Acquisition: Added 235 new customers, increasing penetration to 62% of the Fortune 500.
Operational Efficiency: Achieved a total gross margin of 70.9% in Q1, with subscription services margin at 77.2%.
Cost Management: Evergreen//One solution absorbs incremental tariff costs, maintaining customer subscription rates.
Strategic Shift: Transitioning customers from legacy systems to modern virtualization solutions, enhancing customer relationships and market share.
Partnership Development: Collaborating with SK Hynix and other NAND technology partners to meet growing hyperscale demand.
Competitive Pressures: Pure Storage is navigating increased uncertainty in the macro environment, which may impact its competitive position.
Regulatory Issues: The company is aware of tariff-related changes that could affect pricing, but they have stated that their Evergreen portfolio pricing will remain unaffected.
Supply Chain Challenges: The company has previously navigated supply chain crises, indicating ongoing challenges in this area.
Economic Factors: There are elevated macroeconomic uncertainties expected to persist in the second half of the fiscal year, which could impact overall business performance.
Fusion 2.0 Introduction: The introduction of Fusion 2.0 has received positive feedback, with nearly 100 customers using or testing it to manage their data infrastructure.
FlashBlade//EXA Launch: The new FlashBlade//EXA is set to be the highest performing storage platform for AI and high performance computing, expected to be delivered later this quarter.
Nutanix Partnership: A major agreement with Nutanix was announced to integrate their Cloud Platform with Pure Storage, aimed at modernizing virtualization solutions.
Collaboration with Meta: Production validation testing with Meta is on schedule, with plans to deliver 1 to 2 exabytes of solutions in the second half of the year.
Collaboration with SK Hynix: A new collaboration with SK Hynix aims to deliver flash storage optimized for energy-efficient demands in hyperscale environments.
Q2 FY'26 Revenue Guidance: Anticipated revenue of $845 million, representing a 10.6% year-over-year increase.
Q2 FY'26 Operating Profit Guidance: Expected operating profit of $125 million with an operating margin of 14.8%.
FY'26 Revenue and Operating Margin Guidance: Reiterating guidance for FY'26 revenue and operating margin, confident in growth drivers despite macroeconomic uncertainties.
Product Gross Margin Expectation: Expect product gross margin to settle in the mid-60s, aligned with long-term expectations of 65% to 70%.
Share Repurchase Program: In Q1, Pure Storage returned $120 million to shareholders through 2.5 million share repurchases and currently has $152 million of buyback authorization remaining.
The earnings call summary shows strong revenue and operating profit guidance, significant subscription services growth, and positive feedback on new product offerings. The Q&A section highlights strategic engagements with hyperscalers and potential growth in high-margin areas. Despite some uncertainties, the overall sentiment is positive, with increased guidance and optimistic future growth prospects.
The earnings call summary shows strong revenue and subscription growth, robust free cash flow, and high-margin opportunities with Meta. The Q&A section reinforces confidence with improved macroeconomic conditions, better pipeline visibility, and strong demand for large deals. The Nutanix partnership and Fusion 2.0 introduction are additional positives. Despite some lack of detail in responses about hyperscaler engagements, the overall sentiment remains positive due to strong financial metrics and optimistic guidance.
The earnings call reflects strong financial performance with revenue and EPS growth, robust subscription services, and significant shareholder returns through buybacks. The guidance is optimistic, predicting double-digit revenue growth and a solid operating margin. Despite supply chain challenges and macroeconomic uncertainties, the Q&A section reveals steady progress with hyperscalers and no significant changes in customer sentiment. The company’s strong cash position and ongoing strategic initiatives, such as new product launches and market expansion, further support a positive outlook for the stock price over the next two weeks.
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