UPDATED 20:18 EDT / MAY 28 2020

INFRA

Data storage provider Pure Storage beats earnings targets

Pure Storage Inc. saw its stock rise today after the data storage provider reported solid fiscal first-quarter results that topped expectations.

The company, which sells a range of flash memory-based data storage hardware and software products, reported a loss before certain costs such as stock compensation of 2 cents per share on revenue of $367.1 million, up 12% from a year ago.

That was better than expected. Wall Street forecast Pure Storage would report a much wider loss of 15 cents per share on revenue of $352.26 million.

“We are extremely proud of this quarter’s solid results and growth, especially during the current global crisis,” Pure Storage Chief Executive Charles Giancarlo (pictured) said in a statement. “The entire company adapted quickly and delivered the technology and services that our customers needed to keep their organizations up and running. Pure continues to deliver on the Modern Data Experience to enable customers to transform their storage operations to be simple, reliable, fast, and flexible.”

Subscription Services revenue, a key metric for investors, rose 37% from a year ago, to $120.2 million. Officials said the growth reflected the strength of its Evergreen, Pure-as-a-Service and Cloud Block Store businesses. Pure Storage’s stock rose about 2.5% in after-hours trading.

Analyst Steve McDowell of Moor Insights & Strategy told SiliconANGLE that Pure Storage has outperfomed the rest of the market for several quarters now, growing its topline 12% while competitors such as Dell Technologies Inc., NetApp Inc. and Hewlett-Packard Enterprise Co. all showed negative revenue. He identified a couple of reasons behind the company’s continued success.

“Pure entered the quarter with less supply-chain constraints from the early impact of COVID-19 on the Chinese suppliers than their competitors faced,” McDowell said. “They were able to ship systems when others couldn’t. This allowed Pure to step up and deliver product for critical infrastructure projects during the quarter, stealing some business from their competitors, while keeping their backlog under control.”

He also pointed to the success of Pure’s QLC-flash based FlashArray//C product, which has enjoyed strong momentum of late. “It’s serving a growing niche for mid-tier flash storage that has almost no competition,” he said.

As for many other tech companies, however, there was some discouraging news for investors as the company said it was withdrawing its previous full-year guidance, and declined to make a specific forecast for the next quarter. However, officials said they expect second-quarter sales to remain flat from a year ago and said the company would break even.

“I’m not surprised by the flat guidance for the current period,” McDowell said. “It’s important to keep in mind that this will be the first full fiscal quarter since the COVID-19 crisis brought unpredictability into the IT buying economy.”

“Given what’s happening in the economy, and what we’ve seen from the rest of the storage industry, I read the flat guidance as good news,” he added. “Nearly every infrastructure company is holding that line, and it makes sense. There’s simply too much uncertainty to predict what’s going to happen on a macro-level.”

Photo: SiliconANGLE

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