Pure Storage: Fiscal 2Q22 Financial Results

(in $ million)	2Q21	2Q22	6 mo. 21	6 mo. 22
Revenue	403.7	496.8	770.8	909.5
*Growth*		23%		*18%*
Net income (loss)	(65.0)	(45.3)	(155.6)	(129.5)

Pure Storage, Inc. announced financial results for its fiscal second quarter ended August 1, 2021.

“With revenue growth exceeding 23%, and the highest 2Q operating profit in our history, it’s clear that our long-term strategy to provide customers with modern data services is working,” said Charles Giancarlo, chairman and CEO. “We are in a great innovation cycle with our portfolio and our sales momentum and execution have never been stronger.”

2Q22 Financial Highlights

Revenue $496.8 million, up 23% Y/Y
Subscription services revenue $171.9 million, up 31% Y/Y
GAAP gross margin 68.4%; non-GAAP gross margin 70.5%
GAAP operating loss $(33.9) million; non-GAAP operating income $46.6 million
GAAP operating margin (6.8)%; non-GAAP operating margin 9.4%
Operating cash flow $123.4 million; free cash flow $95.7 million
Total cash and investments $1.3 billion
Deferred revenue $909.8 million, up 26% Y/Y
Remaining performance obligations $1.2 billion, up 25% Y/Y

“Our outstanding financial performance this quarter reflected strong sales execution and our long standing practice of providing leading edge solutions and best-in-class services to our customers,” said Kevan Krysler, CFO. “We saw strength from both our enterprise and commercial customers across our entire solutions portfolio.”

2FQ22 Company Highlights and Achievements

Industry Accolades: FlashArray was named a Gartner Peer Insights Customers’ Choice for Primary Storage Arrays. Pure was named a Kubernetes storage leader in 2 GigaOm Radar Reports and recognized as leader in enterprise flash array storage and object storage categories by TrustRadius for the second consecutive year.
It achieved the highest total sales for any second quarter in the history of the company, growing more than 30% Y/Y.
It saw continued strength and momentum in subscription services revenue, up 31% Y/Y with strong growth in Pure as-a-Service, which almost doubled revenues compared to the prior year.
Success in the large enterprise segment continues to grow, comprising over 50% of sales, with the top 10 customers spending more than $100 million in total.

3FQ22 guidance: revenue of $530 million

FY22 guidance: $2.04 billion

Comments

As usual, the company, now with 3,900 employees, is always growing quarterly (but in 3FQ21) but also always with losses (but diminishing) since inception. (see below)

Sales, revenue and profitability were above expectations with highest operating profit in company's history.

Revenue growth was 23% this quarter (up 32% excluding cancelable orders) at $497 million vs. $470 million expected, and product revenue had its highest Y/Y growth rate compared to the previous 7 quarters.

As a result, share was up 9.9% after these financial announcements to $23.

Concerning Covid-19, CEO said: "We believe that the Delta variant has slowed a return to the office environment only temporarily, and that large-scale global vaccinations will do much to enable a full 'return to normal' by spring of next year."

Subscription services revenue grew 31% Y/Y and represents 35% of total revenue, with strong growth in Pure as-a-Service which nearly doubled revenues compared to prior year. Pure as-a-Service and Portworx were approximately tripling Y/Y. All subscription sales taken together, including Portworx, Pure as-a-Service and Evergreen, increased almost 50% during the most recent quarter, and is approaching half of total sales.

FlashBlade sales established a new record high.

FlashArray//C sales more than tripled Y/Y remaining the fastest growing new product in company's history.

Pure Storage Fiscal 2q22 Financial Results F1

Pure, now with 9,000 global customers, acquired 380 new ones during 2FQ22 representing 10% Y/Y growth, and it saw particular strength with new enterprise customers this quarter.

Revenue in $ million
(FY ended in January)

Period

Revenue

Y/Y growth

Loss

FY13

6.1

(23.4)

FY14

42.7

603%

(78.6)

FY15

174.5

308%

(183.2)

FY16

440.3

152%

(213.8)

FY17

728.0

65%

(245.1)

FY18

1,023

41%

(159.9)

FY19

1,360

33%

(178.4)

1Q20

326.7

28%

(100.3)

2Q20

396.3

28%

(66.2)

3Q20

428.4

15%

(28.2)

4Q20

492.0

17%

(4.7)

FY20

1,643

21%

(201.0)

1F21

367.1

12%

(90.6)

2F21

403.7

(65.0)

3F21

410,.6

-4%

(74.2)

4F21

502.7

(52.2)

FY21

1,684

(282.1)

1F22

412.7

12%

(84.2)

2F22

496.8

23%

(45.3)

3F22*

530

29%

FY22*

2,040

21%