Pure Storage Inc. topped Wall Street’s forecasts as it delivered its second-quarter results today and offered a sales outlook for the current quarter that came in above forecast, sending its stock higher in the after-hours trading session.

The stock initially gained more than 3% in extended trading before retracting a bit for a 1% gain at the time of writing.

Pure Storage reported a net loss for the quarter of $7.1 million, compared to the profit of $10.9 million it delivered a year earlier. Earnings before certain costs such as stock compensation came to 34 cents per share, ahead of Wall Street’s target of 28 cents per share. Revenue for the period rose 7%, to $688.7 million, beating the consensus estimate of $682 million.

Pure Storage is a leading provider of enterprise-grade flash-based data storage hardware and software that’s designed to replace traditional hard drives. The company sells flash-based capacity storage, entry-level storage, and file and object storage systems. In addition, it offers cloud-based storage-as-a-service, as well as software for managing data storage.

Charles Giancarlo (pictured), chairman and chief executive of Pure Storage, said customers are responding enthusiastically to the company’s ability to satisfy their data storage needs with a single, consistent, flash data storage and management platform. “With the introduction of Pure’s Flashblade//E family of products, customers can now store cost sensitive bulk data with the benefits of all-flash,” he said.

For the third quarter, Pure Storage is targeting revenue of $760 million, ahead of Wall Street’s consensus target of $757 million.

Given the current macroeconomic environment and NetApp Inc.’s disappointing results last week, most analysts’ expectations of Pure Storage were pretty low, NAND Research founder and analyst Steve McDowell told SiliconANGLE. So the strong earnings beat and positive guidance were a nice surprise, he said.

The analyst explained that Pure Storage has done a good job in keeping its product lineup fresh, while introducing its new //E family of flash drives to compete against traditional hard-drive based systems in capacity storage.

“Those investments are starting to pay off, with revenue from the new products hitting the balance sheet this quarter,” McDowell said. “Customers like these products.”

McDowell said Pure Storage is also seeing some benefits from the boom in artificial intelligence, with its FlashBlade product line delivering record sales in the quarter.

“I expect the AI-driven momentum to continue for the next couple of quarters,” he said. “Pure’s subscription numbers are up nearly 25%, showing that its software story is resonating, including both its Portworx and Evergreen offerings. This is exactly what we want to see.”

Prior to today’s small uptick, Pure Storage’s stock had gained 36% in the year to date, more than double that of the broader S&P 500 Index, which is up 17%.

Photo: SiliconANGLE