Pure Storage Stock Is Surging on Earnings. ‘We’re No Longer Just a Niche Player,’ CEO Says.
Pure Storage, a provider of enterprise-storage systems, beat earnings estimates.
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Pure Storage stock traded higher after the provider of flash-memory-based enterprise-storage systems posted better-than-expected results for the company’s fiscal fourth quarter ended Feb. 6, despite ongoing chip-supply constraints.
For the quarter, Pure (ticker: PSTG) posted revenue of $708.6 million, up 41% from a year ago, and well ahead of both the company’s target of $630 million and the Street consensus forecast for $629 million. On an adjusted basis, the company earned 36 cents a share, about a dime ahead of Street estimates. Under generally accepted accounting principles, the company earned $14.9 million, or 5 cents a share. Subscription-services revenue in the quarter were $216 million, up 42%.
In premarket trading Thursday, Pure stock rallied 10.5% to $29.28.
For the full fiscal year, Pure posted revenue of $2.18 billion, up 29%, including $738.5 million of subscription revenue, up 37%.
Pure CEO Charlie Giancarlo says in an interview that it was a “spectacular quarter,” with strength across all product categories and geographies. He noted that the company had 50% growth in the quarter in the U.S. and Canada market, with 20% growth in international markets.
“We’ve got a broad portfolio of products now,” Giancarlo says. “We’re no longer just a niche player.” He says the company had strong results from commercial, enterprise, government, and cloud customers. “We’ve now built out our brand where any company looking at updating their systems to invest in data—which is all companies—have to consider us as one of their suppliers,” he says.
Pure is projecting fiscal-first-quarter revenue of about $520 million, ahead of the Street consensus at $512 million. For the full-year ending January 2023, the company sees revenue of about $2.6 billion, up 19% to 20%, and ahead of the old Street forecast at $2.48 billion. The company sees full-year non-GAAP operating income of $300 million, up from $235 million the previous year.
Asked about how the company has been affected by the ongoing supply constraints in the chip sector, Giancarlo says it remains “extraordinarily” difficult.
“I’ve never seen anything like this before, with new challenges popping up multiple times a week,” he says. “And you have to navigate them.”
Giancarlo notes that the company has benefited from using raw NAND memory chips in its storage products, rather than prebuilt modules, giving Pure more flexibility on sourcing parts. He notes that the recent manufacturing issues in Japan affecting the NAND factories jointly owned by Western Digital (WDC) and Kioxia have put some additional pressure on the market, taking out about 5% of global annual supply. But he says Pure uses multiple sources, and that the company “feels secure in being able to support our customers.”
In announcing results, the company also announced a new $250 million stock-repurchase authorization.
Write to Eric J. Savitz at [email protected]
