Data center storage company Pure Storage Inc. saw its stock lose almost 5% of its value in after-hours trading today despite posting third-quarter revenue and profit that edged past analysts’ expectations.

The company, best known for its flash memory-based hardware and software storage products, reported a profit before certain costs such as stock compensation of a penny a share on revenue of $410.6 million, down 4% from a year ago.

That came in ahead of expectations, with Wall Street modeling break-even earnings on revenue of $407 million. Pure had actually pre-announced top-line revenue of “approximately $410 million” earlier this month, so the revenue beat was not a surprise.

“Our strategy and vision to deliver hybrid and multi-cloud data services is exciting the industry, our customers and developers alike,” said Pure Chairman and Chief Executive Charles Giancarlo (pictured).

In its earnings release, Pure said that its subscription revenue offerings — which include its “Pure-as-a-service” storage service and Evergreen, which is a cloudlike service for on-premises storage — saw sales increase 29% year-over-year.

Moor Insights & Strategy analyst Steve McDowell told SiliconANGLE that Pure credited its strong performance to increased demand from enterprise customers that are finally beginning to recover from COVID-19. He said this is noteworthy and bodes well for Pure, as it remains unclear if the rest of the industry has seen a similar uptick in enterprise sales.

He said Pure’s subscription services growth was a bright spot, and one that’s in-line with a broader trend within the storage industry.

“We’re seeing enterprise customers responding to infrastructure-as-a-service across the board, and it doesn’t surprise me to see Pure benefiting from this,” McDowell said.

Pure may well benefit even more, as it said today in a separate announcement that it’s extending its as-a-service portfolio with a new offering called “Service Catalog” that it says will provide clear per-gigabyte pricing for its various storage services. Pure said its decision to provide “true storage investment transparency” is a novelty for the storage industry that will make it much easier for customers to choose the right storage service level they need for each workload.

Another bright spot in the quarter was Pure’s QLC-based FlashArray//C product. McDowell said it continues to be a standout performer as it enables flash storage to be applied beyond just high-performance workloads, into tier-two storage applications. He said Pure has enjoyed a monopoly in this space for quite some time, though that could be coming to an end soon, since rivals such as NetApp Inc. and IBM Corp. have both announced similar products.

Pure made a big splash in September when it announced its $370 million acquisition of Portworx Inc., a company that specializes in providing cloud-native and Kubernetes-based storage services. It’s expected that Portworx will have a big impact on Pure’s business as there’s no overlap with the products it offers, and in a call with analysts Pure said the unit had outperformed its internal targets.

For the current quarter, Pure once again declined to provide any forecasts, citing ongoing global uncertainty amid the ongoing COVID-19 pandemic.

“The market remains very competitive, and Pure is still straddling break-even, so its success and growth depend as much on operational and fiscal discipline as it does managing the right product mix,” McDowell said. “It’s making smart moves, so I remain optimistic.”

Photo: SiliconANGLE