We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pure Storage (PSTG) Q2 Earnings Beat Estimates, Shares Up
Read MoreHide Full Article
Pure Storage Inc. (PSTG - Free Report) reported non-GAAP earnings of 14 cents per share for second-quarter fiscal 2022, which beat the Zacks Consensus Estimate by 180% and increased 133% on a year-over-year basis.
Total revenues increased 23% from the year-ago quarter’s level to $497 million. Moreover, the top line surpassed the Zacks Consensus Estimate by 5.5%.
The upside can be attributed to growth in subscription services, led by momentum in Pure as-a-Service and Evergreen offerings.
Following the better-than-expected results, shares of Pure Storage are up more than 13.1% in the pre-market trading on Aug 26. The stock has gained 42.3% in the past year compared with the industry’s rally of 75.1%.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Product revenues (contributed 65.4% to total revenues) amounted to $324.9 million, up 19% on a year-over-year basis.
Subscription services revenues (34.6%) of $171.9 million surged 31% on a year-over-year basis. The upside can be attributed to ongoing support contracts and robust adoption of Evergreen subscription services and Pure as-a-Service subscription, which includes Cloud Block Store. Pure as-a-Service revenues almost doubled on a year-over-year basis, noted management.
Management reported that total revenues in the United States were up 25% and International revenues saw 18% year-over-year growth.
Pure Storage is also gaining from growing clout of its latest second-generation FlashArray//C, a cost-effective storage array solution. This provides customers with higher performance capabilities and enables them to run complex cloud workloads on a single platform. In the quarter under review, FlashArray//C sales more than tripled on a year-over-year basis.
Solid pipeline and synergies from Portworx acquisition, which strengthened capabilities for containerized and cloud-native applications, favored performance.
Pure Storage reported 10% increase (or 380 new customers) in new customer acquisition in the reported quarter, driven primarily by strength in new enterprise customers.
Margin Highlights
Non-GAAP gross margin expanded 70 basis points (bps) from the year-ago quarter’s level to 70.5%.
Non-GAAP Product gross margin expanded 20 bps from the year-ago quarter’s level to 70.3%. Non-GAAP Subscription gross margin came in at 70.7%, which expanded 150 bps on a year-over-year basis.
Non-GAAP operating expenses, as a percentage of total revenues, came in at 61.1% that contracted 590 bps on a year-over-year basis.
Pure Storage reported a non-GAAP operating income of $46.6 million in fiscal second quarter compared with non-GAAP income of 11.2 million reported in the year-ago quarter. Non-GAAP operating margin stood at 9.4% compared with 2.8% reported in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the quarter ended Aug 1, 2021, with cash, cash equivalents and marketable securities of $1.285 billion compared with $1.234 billion as of May 2, 2021. As of Aug 2, long-term debt stood at $771 million compare with long-term debt of $763 million as of May 2, 2021
Cash flow from operations were $123.4 million compared with $21.4 million in the prior quarter. Free cash flow was $95.7 million compared with free cash outflow of $6.4 million in the previous quarter.
During fiscal second quarter, the company returned $44 million to shareholders via share repurchases of more than 2.3 million shares, as part of the $200-million share repurchase authorization.
Deferred revenues increased 26% to $909.8 million in the quarter under review.
Remaining performance obligations (RPO) at the end of fiscal second quarter were $1.2 billion, up 25% on a year-over-year basis. The metric represents total committed non-cancelable future revenues.
Guidance
Pure Storage expects third-quarter fiscal 2022 revenues to be $530 million, indicating year-over-year growth of 30%. The Zacks Consensus Estimate is pegged at $496.3 million, suggesting year-over-year growth of 20.9%.
Non-GAAP operating income for fiscal third quarter is expected to be $40 million.
For fiscal 2022, Pure Storage expects revenues to be $2.04 billion, indicating year-over-year growth of 21%. The Zacks Consensus Estimate is pegged at $1.96 billion, suggesting year-over-year growth of 16.5%.
Non-GAAP operating income is expected to be $150 million.
Zacks Rank and Stock to Consider
Pure Storage currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Pure Storage (PSTG) Q2 Earnings Beat Estimates, Shares Up
Pure Storage Inc. (PSTG - Free Report) reported non-GAAP earnings of 14 cents per share for second-quarter fiscal 2022, which beat the Zacks Consensus Estimate by 180% and increased 133% on a year-over-year basis.
Total revenues increased 23% from the year-ago quarter’s level to $497 million. Moreover, the top line surpassed the Zacks Consensus Estimate by 5.5%.
The upside can be attributed to growth in subscription services, led by momentum in Pure as-a-Service and Evergreen offerings.
Following the better-than-expected results, shares of Pure Storage are up more than 13.1% in the pre-market trading on Aug 26. The stock has gained 42.3% in the past year compared with the industry’s rally of 75.1%.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Pure Storage, Inc. price-consensus-eps-surprise-chart | Pure Storage, Inc. Quote
Quarter Details
Product revenues (contributed 65.4% to total revenues) amounted to $324.9 million, up 19% on a year-over-year basis.
Subscription services revenues (34.6%) of $171.9 million surged 31% on a year-over-year basis. The upside can be attributed to ongoing support contracts and robust adoption of Evergreen subscription services and Pure as-a-Service subscription, which includes Cloud Block Store. Pure as-a-Service revenues almost doubled on a year-over-year basis, noted management.
Management reported that total revenues in the United States were up 25% and International revenues saw 18% year-over-year growth.
Pure Storage is also gaining from growing clout of its latest second-generation FlashArray//C, a cost-effective storage array solution. This provides customers with higher performance capabilities and enables them to run complex cloud workloads on a single platform. In the quarter under review, FlashArray//C sales more than tripled on a year-over-year basis.
Solid pipeline and synergies from Portworx acquisition, which strengthened capabilities for containerized and cloud-native applications, favored performance.
Pure Storage reported 10% increase (or 380 new customers) in new customer acquisition in the reported quarter, driven primarily by strength in new enterprise customers.
Margin Highlights
Non-GAAP gross margin expanded 70 basis points (bps) from the year-ago quarter’s level to 70.5%.
Non-GAAP Product gross margin expanded 20 bps from the year-ago quarter’s level to 70.3%. Non-GAAP Subscription gross margin came in at 70.7%, which expanded 150 bps on a year-over-year basis.
Non-GAAP operating expenses, as a percentage of total revenues, came in at 61.1% that contracted 590 bps on a year-over-year basis.
Pure Storage reported a non-GAAP operating income of $46.6 million in fiscal second quarter compared with non-GAAP income of 11.2 million reported in the year-ago quarter. Non-GAAP operating margin stood at 9.4% compared with 2.8% reported in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the quarter ended Aug 1, 2021, with cash, cash equivalents and marketable securities of $1.285 billion compared with $1.234 billion as of May 2, 2021. As of Aug 2, long-term debt stood at $771 million compare with long-term debt of $763 million as of May 2, 2021
Cash flow from operations were $123.4 million compared with $21.4 million in the prior quarter. Free cash flow was $95.7 million compared with free cash outflow of $6.4 million in the previous quarter.
During fiscal second quarter, the company returned $44 million to shareholders via share repurchases of more than 2.3 million shares, as part of the $200-million share repurchase authorization.
Deferred revenues increased 26% to $909.8 million in the quarter under review.
Remaining performance obligations (RPO) at the end of fiscal second quarter were $1.2 billion, up 25% on a year-over-year basis. The metric represents total committed non-cancelable future revenues.
Guidance
Pure Storage expects third-quarter fiscal 2022 revenues to be $530 million, indicating year-over-year growth of 30%. The Zacks Consensus Estimate is pegged at $496.3 million, suggesting year-over-year growth of 20.9%.
Non-GAAP operating income for fiscal third quarter is expected to be $40 million.
For fiscal 2022, Pure Storage expects revenues to be $2.04 billion, indicating year-over-year growth of 21%. The Zacks Consensus Estimate is pegged at $1.96 billion, suggesting year-over-year growth of 16.5%.
Non-GAAP operating income is expected to be $150 million.
Zacks Rank and Stock to Consider
Pure Storage currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Avnet (AVT - Free Report) , Paycom Software (PAYC - Free Report) and Silicon Motion Technology (SIMO - Free Report) . All the three stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Long-term earnings growth rate of Avnet, Paycom and Silicon Motion is pegged at 25.4%, 25% and 8%, respectively.