The Six Five team discusses Pure Storage Q1 Earnings.
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Transcript:
Pat Moorhead: Good stuff, man. Hey, let’s jump into something very different from PCs and printers and workforce stuff. And that is Pure Storage. I mean Pure Storage nailed it. Their stock was up just gigantic. It was up, I don’t know, 15, 20%. And this is one-
Daniel Newman: Bigly, was it up bigly, Pat?
Pat Moorhead: It was. And I got to tell you, I just love what this team is doing at Pure because they focused on software and they focused on the experience. And in many cases in their architecture they came up with bladed architecture that allows you to kind of slot in what’s good and what’s not. Are you giving me the sign?
Daniel Newman: Well, no, I was going to kick this one off, but you can do it.
Pat Moorhead: Oh my gosh.
Daniel Newman: It’s all good. It’s all good. Look, I’ll jump in and we’ll kick it back to you. But we’re just off on the math, it’s an eight five.
Pat Moorhead: Sorry about that.
Daniel Newman: But the bottom line, Pat, is you hit it on the head, shared my sentiment. Look, revenue actually slowed. But again, against the guide, the company did extremely well. Huge beat on the bottom line expectation, solidly hit the revenue target, Pat. But 30%, almost 30% growth on ARR. Their net promoter score, which is something they’ve focused on for a long time, is their customers love working with Pure Storage, 81.4. It’s like distantly farther.
Pat Moorhead: Like iPhone or something.
Daniel Newman: They are a customer obsessed culture and that’s really yielding them a lot of value. And Pat, every quarter they continue to knock off pieces of the Fortune 500. So over the last, they went from 49% two quarters of ago to 54% last quarter to 58%. So over the next five or six quarters, this company could very realistically have 70, 75% of the Fortune 500 using Pure Storage. So that’s been a big talking point for them. They’re doing it right. They’re making the move to the cloud, they’re playing in the multi-cloud era with what they’re doing with containers and Portworx.
But this is a company, like I said, that’s really just been hyper focused on happy customers. And in the world that we’re in, you cannot understate the value of being customer obsessed. So as I watched their earnings, I listened through, you and I regularly talked to Charlie Giancarlo, their CEO, this company is just doing it right quarter on quarter on quarter. And this was another really, really great result for the company. Like I said, despite slowing revenue, they’re outperforming expectations and keeping their customers happy in the process. So strong numbers, strong results. And Pat, as all this AI stuff kicks off, by the way, they had that kind of story, storage is going to also be a beneficiary, especially any storage and technology that can make that data more accessible for inference.
Pat Moorhead: Yeah, everybody likes to talk about, “It’s the CPU and the GPU game.” Which it is, it’s big. But when you look at you can’t do any of that without storage and some incredible networking, as we talked about with Marvell and we’re going to talk about with Broadcom coming up. So 29% growth in subscription ARR, record subscriptions with Evergreen and One. Flashblade//E, which by the way, Charlie talked a lot on the call about literally the hard drive is dead. Now I’ve heard that the hard drive was dead for 20 years and it keeps kicking out with some of their new technologies. But with the type of algorithms they’ve put in to make SLC last longer, this is as good a shot as possible. Now Charlie talked a lot on the call about AI, but the reason the stock flew was not because he talked about AI, but it’s because he knocked the ball off the covers.
But I knew very early on with a large social media company, essentially anything that you had to do fast, that was high performance computing, they leaned on with them. Who was the early storage partner with NVIDIA on DGX? Oh, it was Pure. Right on the call, Charlie said they support more than 10 autonomous vehicle development companies doing machine learning. Okay, they did come out and cite Meta, okay? Meta and their AI research super cluster that I wrote about on Forbes where they’re connecting 160,000 GPU. So good to see them driving across there.
The irony here is they’re hitting low cost with E and they’re hitting highest performance with their highest performance products. And that’s hard to do, man. So if anything, drive scale. Company did not disappoint on its crawl charts. I love its crawl charts. Customers up to 11,500 and they showed four years of crawl. They showed three years of crawl and RPOs, which of course is up and to the right. And of course subscription ARR up and to the right, and they showed three years of that. So a company that is not afraid to share details, it’s good to see.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
