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Pure Storage Announces First Quarter Fiscal 2025 Financial Results

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Q1 total revenue growth of 18%, year-over-year

Subscription services ARR over $1.4 billion

SANTA CLARA, Calif., May 29, 2024 /PRNewswire/ — Today Pure Storage (NYSE: PSTG), the IT pioneer that delivers the world’s most advanced data storage technologies and services, announced financial results for its first quarter fiscal year 2025 ended May 5, 2024.

“Pure Storage is uniquely positioned to integrate fragmented data storage environments, which hinders enterprises from easily deploying artificial intelligence, hybrid cloud, and modern application deployment,” said Charles Giancarlo, Chairman and CEO, Pure Storage. “At our June Accelerate conference, global customers will see how our latest innovations enable enterprises to adapt to rapid technological change with a platform that fuses data centers and cloud environments.”

First Quarter Financial Highlights 

Revenue $693.5 million, an increase of 18% year-over-yearSubscription services revenue $346.1 million, up 23% year-over-yearSubscription annual recurring revenue (ARR) $1.4 billion, up 25% year-over-yearRemaining performance obligations (RPO) $2.3 billion, up 27% year-over-yearGAAP gross margin 71.5%; non-GAAP gross margin 73.9%GAAP operating loss $(41.8) million; non-GAAP operating income $100.4 millionGAAP operating margin (6.0%); non-GAAP operating margin 14.5%Q1 operating cash flow $221.5 million; free cash flow $172.7 millionTotal cash, cash equivalents, and marketable securities $1.7 billion

“We are pleased with the strong start to our year as Q1 revenue growth of 18 percent and profitability both outperformed,” said Kevan Krysler, Chief Financial Officer, Pure Storage. “We are well positioned with our highly differentiated data storage platform for substantial long-term growth.”

At the Pure//Accelerate annual customer event next month, the company will be delivering industry-first innovations in the Pure data storage platform to address the most pressing topics critical to customers, including AI and Cyber Resiliency.

First Quarter Company Highlights

Accelerating Enterprise AI: Through integrations with NVIDIA, Pure delivered new validated reference architectures for running generative AI use cases, including a new NVIDIA OVX-ready validated reference architecture, adding more options for customers in addition to the previously announced NVIDIA BasePod certification. As a leader in AI, Pure Storage, in collaboration with NVIDIA, is arming global customers with a proven framework to manage the high-performance data and compute requirements they need to drive successful AI deployments.

Subscription Services Innovation: New self-service capabilities across its Pure1® storage management platform and Evergreen® portfolio empower customers with more control over their data storage environment via a single management layer, simplifying end-to-end operations.

Awards and Accolades

Financial Times The Americas’ Fastest Growing Companies 2024Data Breakthrough Awards “Overall Data Storage Company of the Year”CRN AI 100 list in the Data Center and Edge category

Second Quarter and FY25 Guidance

Q2FY25

Revenue

$755M

Revenue YoY Growth Rate

9.6 %

Non-GAAP Operating Income

$125M

Non-GAAP Operating Margin

16.6 %

FY25

Revenue

$3.1B

Revenue YoY Growth Rate

10.5 %

TCV Sales for Evergreen//One & Evergreen//Flex
Subscription Service Offerings

$600M

TCV Sales for Evergreen//One & Evergreen//Flex 
Subscription Service Offerings YoY Growth Rate

Approximately 50%

Non-GAAP Operating Income

$532M

Non-GAAP Operating Margin

17 %

These statements are forward-looking and actual results may differ materially. Refer to the Forward Looking Statements section below for information on the factors that could cause our actual results to differ materially from these statements. Pure has not reconciled its guidance for non-GAAP operating income and non-GAAP operating margin to their most directly comparable GAAP measures because certain items that impact these measures are not within Pure’s control and/or cannot be reasonably predicted. Accordingly, reconciliations of these non-GAAP financial measures guidance to the corresponding GAAP measures are not available without unreasonable effort.

Pure//Accelerate 2024

Register for Pure//Accelerate® 2024 in Las Vegas from June 18-21, 2024 and discover how to embrace the new age of data. Be front and center as we make history, changing the future of storage and the industry. Pure Storage executives and world-leading experts – including Pure Storage CEO, Charles Giancarlo, and World Champion & Mental Health Advocate, Michael Phelps – will share insights, strategies, and their vision for the future.

Conference Call Information

Pure will host a teleconference to discuss the first quarter fiscal 2025 results at 2:00 pm PT today, May 29, 2024. A live audio broadcast of the conference call will be available on the Pure Storage Investor Relations website. Pure will also post its earnings presentation and prepared remarks to this website concurrent with this release.

A replay will be available following the call on the Pure Storage Investor Relations website or for two weeks at 1-800-770-2030 (or 1-647-362-9199 for international callers) with passcode 5667482.

Additionally, Pure is scheduled to participate at the following investor conferences:

Bank of America Global Technology Conference
Date: Tuesday, June 4, 2024
Time: 2:00 p.m. PT / 5:00 p.m. ET
Founder & Chief Visionary Officer John “Coz” Colgrove
Chief Financial Officer Kevan Krysler

William Blair Growth Stock Conference
Date: Thursday, June 6, 2024
Time: 9:20 a.m. PT / 12:20 p.m. ET
Chief Technology Officer Rob Lee

Product & Technology-Focused Meeting for Financial Analysts at Pure//Accelerate 2024
Date: Thursday, June 20, 2024
Time: 1:00 p.m. PT / 4:00 p.m. ET

The presentations will be webcast live and archived on Pure’s Investor Relations website at investor.purestorage.com.

About Pure Storage

Pure Storage (NYSE: PSTG) delivers the industry’s best platform to store, manage, and protect the world’s data. With a cloud experience across a unified storage operating environment, Pure empowers every organization with the agility to meet evolving data requirements at speed and scale, while reducing total cost of ownership. Pure believes it can make a meaningful impact in reducing data center emissions worldwide by providing a storage platform that enables customers to significantly reduce their carbon and energy footprint. Pure is proud to be a customer-first organization, as evidenced by the highest Net Promoter Score in the industry. For more information, visit www.purestorage.com.

Analyst Recognition
Leader in the 2023 Gartner Magic Quadrant for Primary Storage
Leader in the 2023 Gartner Magic Quadrant for Distributed File Systems & Object Storage

Connect with Pure 
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Pure Storage, the Pure P Logo, Portworx, and the marks on the Pure Trademark List at www.purestorage.com/legal/productenduserinfo.html are trademarks of Pure Storage, Inc. Other names are trademarks of their respective owners. 

Forward Looking Statements

This press release contains forward-looking statements regarding our products, business and operations, including but not limited to our views relating to future period financial and business results, demand for our products and subscription services, including Evergreen//One, our technology and product strategy, specifically customer priorities around sustainability, the benefits to our customers of using our products, our ability to perform during current macro conditions and expand market share, our sustainability goals and benefits, our ability to capture storage workloads for AI environments and hyperscalers, the timing and magnitude of large orders, the impact of inflation, economic or supply chain disruptions, our expectations regarding our product and technology differentiation, including the E//Family, new customer acquisition, and other statements regarding our products, business, operations and results. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.

Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption “Risk Factors” and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, which are available on our Investor Relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information is also set forth in our Annual Report on Form 10-K for the year ended February 4, 2024. All information provided in this release and in the attachments is as of May 29, 2024, and Pure undertakes no duty to update this information unless required by law.

Key Performance Metrics

Subscription ARR is a key business metric that refers to total annualized contract value of all active subscription agreements on the last day of the quarter, plus on-demand revenue for the quarter multiplied by four.

Total Contract Value (TCV) Sales, or bookings, of Pure’s Evergreen//One and Evergreen//Flex offerings is an operating metric, representing the value of orders received and/or expected to be received during the fiscal year.

Non-GAAP Financial Measures

To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, Pure uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses such as stock-based compensation expense, payments to former shareholders of acquired companies, payroll tax expense related to stock-based activities, amortization of debt issuance costs related to debt, amortization of intangible assets acquired from acquisitions, acquisition-related transaction and integration expenses, restructuring costs related to severance and termination benefits, and costs associated with the impairment and early exit of certain leased facilities that may not be indicative of our ongoing core business operating results. Pure believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned “Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures” and “Reconciliation from net cash provided by operating activities to free cash flow,” included at the end of this release.

PURE STORAGE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)

At the End of

First Quarter of
Fiscal 2025

Fiscal 2024

Assets

Current assets:

Cash and cash equivalents

$           900,615

$           702,536

Marketable securities

823,397

828,557

Accounts receivable, net of allowance of $965 and $1,060

423,454

662,179

Inventory

40,674

42,663

Deferred commissions, current

85,386

88,712

Prepaid expenses and other current assets

174,238

173,407

Total current assets

2,447,764

2,498,054

Property and equipment, net

368,153

352,604

Operating lease right-of-use-assets

126,435

129,942

Deferred commissions, non-current

211,240

215,620

Intangible assets, net

29,156

33,012

Goodwill

361,427

361,427

Restricted cash

9,595

9,595

Other assets, non-current

69,840

55,506

Total assets

$        3,623,610

$        3,655,760

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$             55,709

$             82,757

Accrued compensation and benefits

137,669

250,257

Accrued expenses and other liabilities

127,885

135,755

Operating lease liabilities, current

44,819

44,668

Deferred revenue, current

860,221

852,247

Total current liabilities

1,226,303

1,365,684

Long-term debt

100,000

100,000

Operating lease liabilities, non-current

120,709

123,201

Deferred revenue, non-current

741,255

742,275

Other liabilities, non-current

61,370

54,506

Total liabilities

2,249,637

2,385,666

Stockholders’ equity:

Common stock and additional paid-in capital

2,890,317

2,749,627

Accumulated other comprehensive loss

(5,584)

(3,782)

Accumulated deficit

(1,510,760)

(1,475,751)

Total stockholders’ equity

1,373,973

1,270,094

Total liabilities and stockholders’ equity

$        3,623,610

$        3,655,760

 

PURE STORAGE, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data, unaudited)

First Quarter of Fiscal

2025

2024

Revenue:

Product

$         347,384

$         308,963

Subscription services

346,095

280,344

Total revenue

693,479

589,307

Cost of revenue:

Product (1)

100,753

96,213

Subscription services (1)

97,020

79,747

Total cost of revenue

197,773

175,960

Gross profit

495,706

413,347

Operating expenses:

Research and development (1)

193,820

185,331

Sales and marketing (1)

250,972

232,446

General and administrative (1)

76,787

67,384

Restructuring and impairment (2)

15,901

Total operating expenses

537,480

485,161

Loss from operations

(41,774)

(71,814)

Other income (expense), net

14,091

11,749

Loss before provision for income taxes

(27,683)

(60,065)

Income tax provision

7,326

7,336

Net loss

$         (35,009)

$         (67,401)

Net loss per share attributable to common stockholders, basic and diluted

$             (0.11)

$             (0.22)

Weighted-average shares used in computing net loss per share attributable to common
stockholders, basic and diluted

322,589

305,863

(1) Includes stock-based compensation expense as follows:

Cost of revenue — product

$             2,782

$             2,655

Cost of revenue — subscription services

8,871

5,647

Research and development

50,294

38,232

Sales and marketing

23,519

17,181

General and administrative

27,528

14,115

Total stock-based compensation expense

$         112,994

$           77,830

(2) Includes expenses for severance and termination benefits related to workforce realignment and lease impairment and
abandonment charges associated with cease-use of our former corporate headquarters.

 

PURE STORAGE, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)

First Quarter of Fiscal

2025

2024

Cash flows from operating activities

Net loss

$              (35,009)

$              (67,401)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

33,943

29,690

Stock-based compensation expense

112,994

77,830

Lease impairment and abandonment charges

6,375

Other

2,343

(1,804)

Changes in operating assets and liabilities:

Accounts receivable, net

238,768

221,205

Inventory

2,406

308

Deferred commissions

7,707

(2,331)

Prepaid expenses and other assets

(9,219)

(6,095)

Operating lease right-of-use assets

8,122

11,001

Accounts payable

(26,581)

(3,993)

Accrued compensation and other liabilities

(116,716)

(89,082)

Operating lease liabilities

(10,587)

(6,100)

Deferred revenue

6,954

10,019

Net cash provided by operating activities

221,500

173,247

Cash flows from investing activities

Purchases of property and equipment (1)

(48,818)

(51,424)

Purchases of marketable securities and other

(165,123)

(128,788)

Sales of marketable securities

37,689

43,040

Maturities of marketable securities

127,857

288,373

Net cash provided by (used in) investing activities

(48,395)

151,201

Cash flows from financing activities

Net proceeds from exercise of stock options

13,223

4,630

Proceeds from issuance of common stock under employee stock purchase plan

25,328

21,219

Principal payments on borrowings and finance lease obligations

(1,099)

(576,780)

Proceeds from borrowing

100,000

Tax withholding on vesting of equity awards

(12,478)

(6,759)

Repurchases of common stock

(69,911)

Net cash provided by (used in) financing activities

24,974

(527,601)

Net increase (decrease) in cash, cash equivalents and restricted cash

198,079

(203,153)

Cash, cash equivalents and restricted cash, beginning of period

712,131

591,398

Cash, cash equivalents and restricted cash, end of period

$             910,210

$             388,245

(1) Includes capitalized internal-use software costs of $4.5 million and $5.3 million for the first quarter of fiscal 2025 and 2024.

Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures

The following table presents non-GAAP gross margins by revenue source before certain items (in thousands except percentages, unaudited):

First Quarter of Fiscal 2025

First Quarter of Fiscal 2024

GAAP

results

GAAP

gross

margin (a)

Adjustment

Non-

GAAP

results

Non-

GAAP

gross

margin (b)

GAAP

results

GAAP

gross

margin (a)

Adjustment

Non-

GAAP

results

Non-

GAAP

gross

margin (b)

$      2,782

(c)

$      2,655

(c)

296

(d)

147

(d)

20

(e)

3,306

(f)

3,306

(f)

Gross profit —
product

$  246,631

71.0 %

$      6,404

$ 253,035

72.8 %

$  212,750

68.9 %

$      6,108

$  218,858

70.8 %

$      8,871

(c)

$      5,647

(c)

867

(d)

338

(d)

309

(e)

13

(g)

Gross profit —
subscription
services

$  249,075

72.0 %

$    10,047

$ 259,122

74.9 %

$  200,597

71.6 %

$      5,998

$  206,595

73.7 %

$    11,653

(c)

$      8,302

(c)

1,163

(d)

485

(d)

329

(e)

3,306

(f)

3,306

(f)

13

(g)

Total gross
profit

$  495,706

71.5 %

$    16,451

$ 512,157

73.9 %

$  413,347

70.1 %

$    12,106

$  425,453

72.2 %

(a) GAAP gross margin is defined as GAAP gross profit divided by revenue.

(b) Non-GAAP gross margin is defined as non-GAAP gross profit divided by revenue.

(c) To eliminate stock-based compensation expense.

(d) To eliminate payroll tax expense related to stock-based activities.

(e) To eliminate expenses for severance and termination benefits related to workforce realignment.

(f) To eliminate amortization expense of acquired intangible assets.

(g) To eliminate payments to former shareholders of acquired company.

The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts and percentages, unaudited):

First Quarter of Fiscal 2025

First Quarter of Fiscal 2024

GAAP

results

GAAP

operating

margin (a)

Adjustment

Non-

GAAP

results

Non-

GAAP

operating

margin (b)

GAAP

results

GAAP

operating

margin (a)

Adjustment

Non-

GAAP

results

Non-

GAAP

operating

margin (b)

$    112,994

(c)

$     77,830

(c)

885

(d)

9,400

(e)

4,815

(e)

4,070

(f)

3,536

(g)

3,839

(g)

9,855

(h)

6,375

(i)

Operating
income (loss)

$  (41,774)

-6.0 %

$    142,160

$  100,386

14.5 %

$   (71,814)

-12.2 %

$     91,439

$  19,625

3.3 %

$    112,994

(c)

$     77,830

(c)

885

(d)

9,400

(e)

4,815

(e)

4,070

(f)

3,536

(g)

3,839

(g)

9,855

(h)

6,375

(i)

153

(j)

647

(j)

Net income
(loss)

$  (35,009)

$    142,313

$  107,304

$   (67,401)

$     92,086

$  24,685

Net income
(loss) per
share — diluted

$      (0.11)

$     0.32

$       (0.22)

$      0.08

Weighted-
average
shares used in
per share
calculation — 
diluted

322,589

15,959

(k)

338,548

305,863

11,134

(k)

316,997

(a) GAAP operating margin is defined as GAAP operating loss divided by revenue.

(b) Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue.

(c) To eliminate stock-based compensation expense.

(d) To eliminate payments to former shareholders of acquired company.

(e) To eliminate payroll tax expense related to stock-based activities.

(f) To eliminate duplicate lease costs during the transition of our corporate headquarters.

(g) To eliminate amortization expense of acquired intangible assets.

(h) To eliminate expenses for severance and termination benefits related to workforce realignment.

(i) To eliminate lease impairment and abandonment charges associated with cease-use of our former corporate headquarters.

(j) To eliminate amortization expense of debt issuance costs related to our debt.

(k) To include effect of dilutive securities (employee stock options, restricted stock, and shares from employee stock purchase plan).

Reconciliation from net cash provided by operating activities to free cash flow (in thousands except percentages, unaudited):

First Quarter of Fiscal

2025

2024

Net cash provided by operating activities

$               221,500

$             173,247

Less: purchases of property and equipment (1)

(48,818)

(51,424)

Free cash flow (non-GAAP)

$               172,682

$             121,823

(1) Includes capitalized internal-use software costs of $4.5 million and $5.3 million for the first quarter of fiscal 2025 and 2024.

 

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SOURCE Pure Storage

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