Data storage rivals Pure Storage Inc. and NetApp Inc. reported financial results that beat expectations, sending their stocks higher in after-hours trading today.

The star of the show was Pure Storage, which reported a second-quarter loss before certain costs such as stock compensation of 16 cents per share on revenue of $496.8 million, up 23% from a year ago. Wall Street analysts were expecting a wider loss of 21 cents per share on revenue of just $471.1 million.

NetApp can’t be knocked for its performance either. It posted a fiscal first-quarter profit before certain costs of $1.15 per share on sales of $1.46 billion, up 12% from a year prior. Wall Street had forecast NetApp to report earnings of just 94 cents per share on revenue of $1.42 billion.

Pure Storage Chief Executive Charles Giancarlo (pictured above) said it’s clear from the company’s strong revenue growth that its long-term strategy of providing enterprises with modern data services is paying off. “We are in a great innovation cycle with our portfolio and our sales momentum and execution have never been stronger,” he said.

The company noted in its release that sales were a new second-quarter record. Subscription revenue rose 31% year-over-year, and Pure-as-a-service revenue almost doubled from a year ago.

Pure Storage also reported momentum with its top 10 customers, noting they spent more than $100 million in the quarter.

Analyst Steve McDowell of Moor Insights & Strategy told SiliconANGLE the as-a-service market is rapidly becoming a core piece of the overall enterprise storage market and that Pure Storage is benefiting from its early investment in the space.

“Apart from HPE, most of the rest of the storage vendors are still in early days of as-a-service,” McDowell said. “Investors are going to respond positively to this news, but it also signals that IT buyers like what Pure is selling.”

McDowell added he was most impressed by the way Pure Storage is balancing its business in a way that mirrors the segments where enterprises are spending their money.

“It has a nice blend of flash storage, cloud, as-a-service and containers and these are all things IT buyers want right now,” he said. “Enterprise IT accounts for more than 50% of its business, so that’s strong validation.”

Shareholders gave Pure Storage a pretty strong validation too, as the company’s stock gained more than 10% in after-hours trading.

“Charlie said on the earnings call Pure will grow at about 20% for the foreseeable future,” McDowell noted. “That’s a bold statement so it’s not surprising the market is reacting positively.”

During the quarter, Pure Storage expanded its as-a-service options to include its FlashStack converged infrastructure product. It also modified its Portworx cloud storage service to align costs to actual hours of usage, a move it said would allow customers to scale more affordably.

For its third quarter, Pure Storage said it expects revenue of $530 million, well ahead of Wall Street’s forecast of $496.6 million.

NetApp grows in public cloud, all-flash

While Pure Storage was dazzling Wall Street with its rapid gains, NetApp quietly knuckled down and made steady progress on its long transition from a traditional hardware supplier to a cloud storage provider.

NetApp Chief Executive George Kurian (pictured adjacent) pointed to strong revenue, gross margin and operating leverage as signs that the company is in good shape.

“Cloud and digital transformation initiatives remain top customer priorities and our results underscore the value we bring to customers in a hybrid, multi-cloud, data-driven world,” he said. “With focused execution and demonstrated leadership, we are reshaping the industry.”

McDowell said the most impressive number for NetApp was the 155% annual growth it saw in its public cloud business. He said this shows NetApp is doing the right things, though he noted the company still has a long way to go as public cloud revenue accounts for less than 6% of its total.

Another sweet spot for NetApp was its all-flash storage business.

“NetApp grew its all-flash business with a respectable 23% year-over-year,” McDowell continued. “My expectation is that this growth aligns with the market overall. I’ll be surprised if they’re outperforming the overall market on storage arrays.”

During the quarter, NetApp announced a major update to its ONTAP data management software. It added new capabilities and features that it said will centralize and simplify data administration across hybrid cloud environments. The company also announced updates to some of its key products powered by ONTAP, including its FlexPod converged infrastructure and its highly scalable object store, called StorageGRID.

For guidance, NetApp said it’s expecting second-quarter earnings of between $1.14 and $1.24 per share on revenue of $1.49 billion to $1.59 billion. Wall Street is targeting earnings of $1.14 per share on revenue of $1.52 billion.

Investors were satisfied, with NetApp’s stock rising more than 3% in extended trading.

Beyond the numbers, McDowell said it was a pretty quiet quarter by NetApp’s standards, with executives providing little to talk about.

“Overall I’m encourage by the growth in its public cloud business and its guidance for the remainder of the year is solid,” McDowell said.

Photos: SiliconANGLE