Pure Storage Q1 FY 2024 Results: Subscription and All-Flash Breakthroughs Boost Performance

The News: Pure Storage (NYSE: PSTG), a provider of data storage technology and services, announced financial results for the first (Q1) fiscal quarter 2024 ended May 7, 2023. Read the full Press Release from Pure Storage here.

Pure Storage Q1 FY 2024 Results: Subscription and All-Flash Breakthroughs Boost Performance

Analyst Take: For Q1 fiscal 2024, Pure Storage reported subscription services annual recurring revenue (ARR) of $1.2 billion, up 29% year-over-year (YoY), record Evergreen//One subscriptions, and the shipment of the company’s first FlashBlade//E systems. Additional Q1 fiscal 2024 highlights include:

  • Revenue $589.3 million, a decrease of 5% YoY, and an increase of 5% YoY, when excluding the impact of $60 million of Q1 fiscal 2023 product revenue that was contemplated in the second half of last year
  • Subscription services revenue $280.3 million, up 28% YoY
  • Subscription annual recurring revenue (ARR) $1.2 billion, up 29% YoY
  • Remaining performance obligations (RPO) $1.8 billion, up 26% YoY
  • GAAP gross margin 70.1%; non-GAAP gross margin 72.2%
  • GAAP operating loss $(71.8) million; non-GAAP operating income $19.6 million
  • GAAP operating margin (12.2)%; non-GAAP operating margin 3.3%
  • Operating cash flow $173.2 million; free cash flow $121.8 million
  • Total cash, cash equivalents, and marketable securities $1.2 billion
  • Returned approximately $70 million in Q1 to stockholders through share repurchases of 2.9 million shares
  • Repaid $575 million of outstanding convertible senior notes

We find Pure Storage’s Q1 fiscal 2024 financial results to be compelling, particularly as the company’s all-flash portfolio continues to expand its influence across the data storage ecosystem as spotlighted by Chairman and CEO Charles Giancarlo. Pure demonstrated gains against competitive hard-disk and SSD-based solutions by prioritizing improved economics, performance, and operational and environmental efficiencies. For instance, Pure gained approximately 275 new customers during Q1 fiscal 2024.

From our perspective, Pure Storage attained its YoY breakthroughs in subscription service revenues, subscription ARR, and RPO by providing flash at disk economics through the scale-out of unstructured data repository capabilities within FlashBlade//E and delivering its FlashArray Unified Block and File Platform to assure storage services access to unified block and file.

Our view is that FlashArray is well positioned as a platform to consolidate separate file and block solutions onto a single, all-flash system. The unified file services are available across the various FlashArray X, C, and XL models supporting a wide range of performance and capacity levels. Additionally, Pure’s Evergreen Forever program, which provides controller refreshes, alongside continuous development of dense flash devices, present FlashArray as a single unified storage platform with substantial potential to continuously scale and upgrade.

We see Pure Storage’s ongoing AI initiatives as further solidifying and expanding the company’s presence across key verticals such as media & entertainment, pharma, healthcare, aerospace, transportation, and financial services. The new alliance between Portworx by Pure Storage and MongoDB attests to the company’s partnership and ecosystem acumen by combining its Database-Platform-as-a-Service (DBPaaS), Portworx Data Services (PDS) and MongoDB in driving developer build of modern applications. The partnership brings MongoDB Enterprise Advanced into PDS. Enterprise Advances is MongoDB’s proprietary self-managed commercial database for enterprises.

Now enterprises can deploy fault-tolerant MongoDB applications on-premise and in hybrid environments with just a few clicks to save setup and configuration time through PDS. Customers can manage MongoDB Enterprise Advanced and all other data services through the PDS interface. The goal is to give developers a self-service DPaaS that IT operations can keep highly available and secure as instances scale to hundreds or even thousands of clusters.

Key Takeaways: Pure Storage Q2 and FY24 Guidance on Solid Track

Taken altogether, we believe Pure Storage is demonstrating the portfolio-wide innovation in key areas such as AI, partnership dexterity, and data storage ecosystem momentum to fulfill its Q2 and FY24 guidance including revenue of $680M in Q2 FY24 and mid to high single digital YoY revenue growth across FY24. Pure is firmly positioned to deliver the modern data experience that puts data to use and enables customers to run their operations on an automated, storage as-a-service model throughout the multi-cloud realm.

Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed Pure Storage Q1 earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Other insights from The Futurum Group:

Pure Storage adds MongoDB Enterprise Advanced into Portworx Data Services

Pure Storage Adds New File Services to FlashArray

Pure Storage Announces Q4 and FY 2023 Results: Data Storage Portfolio Innovations Help Drive Performance Beat

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.

Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.

He is a recognized authority at tracking the evolution of and identifying the key disruptive trends within the service enablement ecosystem, including a wide range of topics across software and services, infrastructure, 5G communications, Internet of Things (IoT), Artificial Intelligence (AI), analytics, security, cloud computing, revenue management, and regulatory issues.

Prior to his work with The Futurum Group, Ron worked with GlobalData Technology creating syndicated and custom research across a wide variety of technical fields. His work with Current Analysis focused on the broadband and service provider infrastructure markets.

Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.


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