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Pure Storage (PSTG) Q1 Earnings & Revenues Beat Estimates
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Pure Storage (PSTG - Free Report) reported non-GAAP earnings per share (EPS) of 32 cents in first-quarter fiscal 2024, which beat the Zacks Consensus Estimate by 45.5%. The company reported non-GAAP EPS of 8 cents in the prior-year quarter.
Total revenues surged 18% from the year-ago quarter to $693.5 million and beat the Zacks Consensus Estimate by 1.8%.
The top-line performance was driven by higher sales to new and existing enterprise customers across the data storage platform. Robust demand for FlashBlade solutions, including FlashBlade//E and subscription-based offerings, acted as catalysts amid macroeconomic weakness.
Management reiterated guidance for fiscal 2025. PSTG continues to expect fiscal 2025 revenues to be $3.1 billion, indicating a rise of 10.5% from the year-earlier levels. The company expects strengthening demand trends to drive performance but remains wary of the volatile macroeconomic conditions.
The non-GAAP operating margin is projected at 17%. Total contract value or TCV sales for Evergreen//One & Evergreen//Flex subscription service offerings are forecast at $600 million, implying 50% growth from a year ago.
For second-quarter fiscal 2025, Pure Storage expects revenues to be $755 million, representing an increase of 9.6% from a year ago. The Zacks Consensus Estimate is pegged at $754.9 million.
The non-GAAP operating income for the fiscal second quarter is expected at $125 million. The non-GAAP operating margin is expected at 16.6%.
Following better-than-expected results, shares of PSTG are up 9.8% in the pre-market trading on May 30. In the past year, shares have gained 118.8% compared with sub-industry’s growth of 128.7%.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Product revenues (contributing 50.1% to total revenues) amounted to $347.4 million, up 12.4% on a year-over-year basis.
Subscription services revenues (49.9%) of $346.1 million rose 23.5% on a year-over-year basis.
We expected product and subscription services revenues to be $333.6 million and $346.4 million, respectively, for the fiscal first quarter.
Subscription annual recurring revenues (ARR) amounted to nearly $1.45 billion, up 25% on a year-over-year basis. Subscription ARR includes the annualized value of all active subscription contracts as of the last day of the quarter, along with annualized on-demand revenues.
Total revenues in the United States and internationally were $489 million and $204 million, respectively.
Image Source: Zacks Investment Research
Margin Highlights
The non-GAAP gross margin expanded 170 basis points (bps) year over year to 73.9%.
The non-GAAP product gross margin expanded 200 bps year over year to 72.8%. The non-GAAP subscription gross margin was 74.9%, which expanded 120 bps on a year-over-year basis.
Non-GAAP operating expenses, as a percentage of total revenues, were 59.4% compared with 68.9% in the prior year quarter.
Pure Storage reported a non-GAAP operating income of $100.4 million compared with $19.6 million in the year-ago quarter. The non-GAAP operating margin was 14.5% compared with 3.3% in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the fiscal first quarter that ended on May 5 with cash, cash equivalents and marketable securities of $1.7 billion, up from $1.5 billion as of Feb 4, 2024.
Cash flow from operations amounted to $221.5 million in the fiscal first quarter compared with $173.3 million in the prior-year quarter. Free cash flow was $172.7 million compared with $121.8 million in the prior-year quarter.
In the fiscal first quarter, the company did not repurchase any shares due to trading restrictions. It has $395 million left under its authorization plan.
Deferred revenues increased 14.7% year over year to $1.6 billion in the quarter under review.
The remaining performance obligations at the end of the fiscal first quarter totaled $2.3 billion, up 27% year over year. The metric represented total committed non-cancelable future revenues.
Zacks Rank and Stocks to Consider
Pure Storage currently has a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for BMI’s 2024 EPS is pegged at $3.89, up 9.9% in the past 60 days. BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.7%. The long-term earnings growth rate is 15.6%. Shares of BMI have risen 38.2% in the past year.
The Zacks Consensus Estimate for Oracle’s fiscal 2025 EPS is pegged at $6.15. The long-term earnings growth rate is 9.7%. Oracle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 3.6%. Shares of ORCL have grown 16.8% in the past year.
The Zacks Consensus Estimate for Intuit’s fiscal 2024 EPS has increased 0.3% in the past 60 days to $16.46. INTU’s earnings beat the Zacks Consensus Estimate in all the last four quarters, with the average surprise being 16.2%. Shares of INTU have risen 42.8% in the past year.
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Pure Storage (PSTG) Q1 Earnings & Revenues Beat Estimates
Pure Storage (PSTG - Free Report) reported non-GAAP earnings per share (EPS) of 32 cents in first-quarter fiscal 2024, which beat the Zacks Consensus Estimate by 45.5%. The company reported non-GAAP EPS of 8 cents in the prior-year quarter.
Total revenues surged 18% from the year-ago quarter to $693.5 million and beat the Zacks Consensus Estimate by 1.8%.
The top-line performance was driven by higher sales to new and existing enterprise customers across the data storage platform. Robust demand for FlashBlade solutions, including FlashBlade//E and subscription-based offerings, acted as catalysts amid macroeconomic weakness.
Management reiterated guidance for fiscal 2025. PSTG continues to expect fiscal 2025 revenues to be $3.1 billion, indicating a rise of 10.5% from the year-earlier levels. The company expects strengthening demand trends to drive performance but remains wary of the volatile macroeconomic conditions.
The non-GAAP operating margin is projected at 17%. Total contract value or TCV sales for Evergreen//One & Evergreen//Flex subscription service offerings are forecast at $600 million, implying 50% growth from a year ago.
For second-quarter fiscal 2025, Pure Storage expects revenues to be $755 million, representing an increase of 9.6% from a year ago. The Zacks Consensus Estimate is pegged at $754.9 million.
The non-GAAP operating income for the fiscal second quarter is expected at $125 million. The non-GAAP operating margin is expected at 16.6%.
Following better-than-expected results, shares of PSTG are up 9.8% in the pre-market trading on May 30. In the past year, shares have gained 118.8% compared with sub-industry’s growth of 128.7%.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Pure Storage, Inc. price-consensus-eps-surprise-chart | Pure Storage, Inc. Quote
Quarter in Detail
Product revenues (contributing 50.1% to total revenues) amounted to $347.4 million, up 12.4% on a year-over-year basis.
Subscription services revenues (49.9%) of $346.1 million rose 23.5% on a year-over-year basis.
We expected product and subscription services revenues to be $333.6 million and $346.4 million, respectively, for the fiscal first quarter.
Subscription annual recurring revenues (ARR) amounted to nearly $1.45 billion, up 25% on a year-over-year basis. Subscription ARR includes the annualized value of all active subscription contracts as of the last day of the quarter, along with annualized on-demand revenues.
Total revenues in the United States and internationally were $489 million and $204 million, respectively.
Image Source: Zacks Investment Research
Margin Highlights
The non-GAAP gross margin expanded 170 basis points (bps) year over year to 73.9%.
The non-GAAP product gross margin expanded 200 bps year over year to 72.8%. The non-GAAP subscription gross margin was 74.9%, which expanded 120 bps on a year-over-year basis.
Non-GAAP operating expenses, as a percentage of total revenues, were 59.4% compared with 68.9% in the prior year quarter.
Pure Storage reported a non-GAAP operating income of $100.4 million compared with $19.6 million in the year-ago quarter. The non-GAAP operating margin was 14.5% compared with 3.3% in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the fiscal first quarter that ended on May 5 with cash, cash equivalents and marketable securities of $1.7 billion, up from $1.5 billion as of Feb 4, 2024.
Cash flow from operations amounted to $221.5 million in the fiscal first quarter compared with $173.3 million in the prior-year quarter. Free cash flow was $172.7 million compared with $121.8 million in the prior-year quarter.
In the fiscal first quarter, the company did not repurchase any shares due to trading restrictions. It has $395 million left under its authorization plan.
Deferred revenues increased 14.7% year over year to $1.6 billion in the quarter under review.
The remaining performance obligations at the end of the fiscal first quarter totaled $2.3 billion, up 27% year over year. The metric represented total committed non-cancelable future revenues.
Zacks Rank and Stocks to Consider
Pure Storage currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth consideration in the broader technology space are Badger Meter (BMI - Free Report) , Oracle (ORCL - Free Report) and Intuit (INTU - Free Report) . While BMI sports a Zacks Rank #1 (Strong Buy), ORCL and INTU carry a Zacks Rank of 2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BMI’s 2024 EPS is pegged at $3.89, up 9.9% in the past 60 days. BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.7%. The long-term earnings growth rate is 15.6%. Shares of BMI have risen 38.2% in the past year.
The Zacks Consensus Estimate for Oracle’s fiscal 2025 EPS is pegged at $6.15. The long-term earnings growth rate is 9.7%. Oracle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 3.6%. Shares of ORCL have grown 16.8% in the past year.
The Zacks Consensus Estimate for Intuit’s fiscal 2024 EPS has increased 0.3% in the past 60 days to $16.46. INTU’s earnings beat the Zacks Consensus Estimate in all the last four quarters, with the average surprise being 16.2%. Shares of INTU have risen 42.8% in the past year.