Data storage pioneers Pure Storage Inc. and Nutanix Inc. failed to move the needle much in after-hours trading, despite posting solid results in their latest financial reports today.

Both companies offered solid guidance for the current quarter too, but shares of Pure Storage were down slightly in the extended trading session, while Nutanix remained flat.

Pure Storage reported first-quarter earnings before certain costs such as stock compensation of 29 cents per share, higher than the 25-cent analyst target. Revenue for the period rose 12% from a year ago, to $778.5 million, above Wall Street’s forecast of $770.4 million. All told, the company notched up a net loss of $14 million, improving on a $35 million loss from a year earlier.

Chief Executive Charles Giancarlo (pictured) said the company’s strong results demonstrate the superiority of both its products and its strategy at a time of much economic uncertainty.

For the current quarter, Pure Storage said it’s eyeing revenue of $845 million. Wall Street analysts are modeling sales of $841.4 million. Looking to the full year, the company said it sees revenue of around $3.52 billion at the midpoint of its range, which would represent annual growth of 11%.

NAND Research Inc. analyst Steve McDowell said Pure Storage has been aggressive in its push to shift its business toward a more predictable subscription revenue model, and noted that it was progressing well, with subscription services up 17% year-over-year. “Subscriptions are now over 50% of its revenue with continued strong growth in this quarter,” he said.

According to McDowell, one of Pure Storage’s biggest strengths is its Evergreen//One storage-as-a-service business, which grew its total contract value by a “remarkable” 70% on an annual basis. He also pointed to strong adoption of its Pure Fusion and FlashBlade//EXA products. In addition, he said there are good reasons to think that the new Pure-Nutanix solution is about to start making a real impact on the company’s revenue.

“It won’t see significant revenue until the second half of the year, but I expect the Nutanix solution will be a very strong performer, because there’s lots of pent-up demand for external storage for Nutanix, and Pure is the only dedicated storage offering in the near-term,” he said. “The company’s high-profile deal with Meta is also a couple of quarters away from generating significant revenue, so there’s something else to look forward to.”

The slight after-hours drop means Pure Storage’s stock is now down 10% in the year to date.

Nutanix on cruise control

The data center infrastructure supplier Nutanix posted even better numbers, with earnings and revenue topping consensus estimates and guidance also edging past the Street’s views.

Nutanix reported third-quarter earnings before certain costs of 42 cents per share, surpassing the analyst’s call for a 38-cent-per-share profit. Revenue for the period rose by an impressive 22% from a year earlier to $639 million, trouncing the Street’s target of $626.1 million. All told, it delivered a net profit of $63.4 million, rising from a loss of $15.6 million in the year-ago quarter.

Nutanix President and CEO Rajiv Ramaswami (pictured, adjacent) hailed the latest numbers, saying they also came in above the high end of its own guidance, driven by the strength of the Nutanix Cloud Platform, which is seeing increased demand from enterprise customers. “Our recent announcements around support for external storage, modern applications and generative AI reflect our continued focus on driving innovation and broadening our partnerships to further enhance its value proposition,” Ramaswami told analysts.

Nutanix is not a direct rival to Pure Storage, because while it still sells storage hardware, these days it’s more focused on software that’s used by enterprises to manage their cloud-based networks, storage and server infrastructure. It also competes with Broadcom Inc.’s VMware in the virtualization software industry.

McDowell said Broadcom continues to be Nutanix’s best friend, with changes to VMware’s business model resulting in a significant number of companies migrating to Nutanix’s virtualization offerings. “This will be the gift that keeps giving, continuing over the next three-to-five years as long-term VMware contracts come up for renewal,” he added.

What’s encouraging is that it’s not just disgruntled VMware customers who are driving Nutanix’s growth, McDowell said. He pointed out that it also saw a significant number of greenfield deals involving new customers.

There was a slight setback for the company in terms of its annual recurring revenue from subscription services, which increased 18% to $2.14 billion. That was slightly below the Street’s forecast of $2.16 billion. However, McDowell said he was surprised to see Nutanix showing strength in its AI offerings, with its GPT-in-a-box and Enterprise AI platforms driving better-than-expected business in the quarter. He sees more growth coming in other areas, too.

“Its new external storage support with both Pure and Dell will drive more aggressive growth over the second half of the year,” McDowell predicted. “There’s strong demand, and Dell has a large amount of vxRail business that’ll be up for renewal over the next three years. Nutanix is poised to exploit that.”

For the current quarter, Nutanix is guiding for $640 million in revenue at the midpoint, just ahead of the Street’s target of $638 million. For the full year, it upped its forecast to $2.525 billion at the midpoint, also ahead of the Street’s consensus estimate, of $2.51 billion. “Investors will note that Nutanix raised its guidance, which is something that not many companies are doing these days, so that’s a strong signal,” McDowell said.

Although Nutanix’s shares were flat after-hours today, the company has outperformed most of its peers in recent months, and is currently up 29% in the year to date.

Photos: SiliconANGLE