The News: Pure Storage, a data storage technology and services provider, announced its fiscal fourth quarter (Q4) and full year (FY) 2024 earnings on February 28. For details, check out the press release on the Pure Storage website.
By the numbers:
- Q4 Subscription Annual Recurring Revenue (ARR): $1.4 billion, up 25% year-over-year (YoY)
- Subscription Services Revenue: For Q4, $328.9 million, up 24% YoY; FY at $1.2 billion, up 26% YoY
- Total Revenue: Q4 revenue of $789.8 million, a decrease of 3% YoY; FY revenue of $2.8 billion, up 3% YoY
- GAAP Operating Income: For Q4, $57.4 million; FY at $53.6 million
- Non-GAAP Operating Income: For Q4, $157.8 million; FY at $458.4 million
- Operating Cash Flow: For Q4, $244.4 million; FY at $677.7 million
- Free Cash Flow: For Q4, $200.9 million; FY at $482.6 million
- Operating Margin: Q4 GAAP gross margin at 72.0% and non-GAAP gross margin at 73.7%; FY GAAP gross margin at 71.4%; non-GAAP gross margin at 73.2%
Pure Storage Q4 and FY 2024 Earnings Exceed Revenue Guidance
Analyst Take: Pure Storage, and the Portworx division focused on the data storage market, are simplifying complexities and setting a new standard for efficiency and innovation. It is evident that their combined approach fundamentally transforms how organizations manage and leverage their data assets, offering benefits that resonate across various industry sectors.
Pure Storage’s commitment to delivering a cloud-like experience is an advantage in modernization efforts. Organizations can realize the full potential of their data while simultaneously streamlining the management of underlying infrastructure, Pure Storage effectively eliminates the barriers that traditionally impede data-driven initiatives. This approach not only enhances operational agility but also drives significant cost savings by minimizing the complexities associated with traditional storage solutions.
One of Pure’s key differentiators is to provide true storage as a service, enabling customers to dynamically adapt to evolving data requirements with unprecedented speed and scalability. Whether for traditional workloads, modern applications, or containerized environments, Pure Storage equips organizations with the tools they need to thrive in an increasingly data-centric landscape.
Pure’s commitment to environmental sustainability underscores its broader impact beyond technological advancements. By designing products and solutions that enable customers to reduce their carbon and energy footprint, Pure Storage is actively contributing to global efforts aimed at mitigating data center emissions—an imperative in today’s environmentally conscious world.
Additionally, Pure Storage’s industry-leading Net Promoter Score speaks volumes about its customer satisfaction levels, with an ever-expanding roster of delighted customers worldwide. This unwavering commitment to customer-centricity not only solidifies Pure Storage’s position as a market leader but also highlights its ability to deliver tangible value and drive meaningful business outcomes for its clients.
In essence, Pure Storage and Portworx are leading a shift in data storage, uncomplicating complexities and redefining industry standards. Through relentless innovation, steadfast commitment to sustainability, and unwavering dedication to customer success, Pure Storage continues to set the benchmark for excellence in the ever-evolving landscape of data management and storage.
Future Outlook
Pure Storage’s strong fiscal performance, characterized by notable growth in subscription services ARR, revenue, and operating cash flow, highlights its continued dominance in the highly differentiated data storage platform market. The 25% annual growth in subscription ARR, which reached $1.4 billion in Q4, and the 26% growth in full subscription revenue, reaching $1.2 billion, showcase Pure Storage’s capacity to cater to the changing storage requirements of organizations globally. The YoY in operating cash flow, reaching $244.4 million in Q4 and $677.7 million for the full year, and the free cash flow, reaching $482.6 million, indicates Pure Storage’s financial health and ability to drive innovation for its customers.
In FY 2024, Pure Storage achieved significant momentum in subscription services, offering eight service level agreements (SLAs) across its Evergreen portfolio, including innovative commitments such as Paid Power & Rack for Evergreen//One and Evergreen//Flex, as well as guarantees for energy efficiency and ransomware recovery. The company also led in platform innovation by launching the cost-optimized E//Family with FlashBlade//E and FlashArray//E, catering to various workloads. Pure Storage introduced major performance, efficiency, and security enhancements with the next generation FlashArray//X and FlashArray//C, expanded its partnership with Microsoft through Pure Cloud Block Store for Azure VMware Solution, and launched File Services for FlashArray, offering a unified block and file experience. Notably, Pure Storage made strides in AI by obtaining the NVIDIA DGX BasePOD certification, collaborating with key alliance partners, and expanding its customer base in various AI use cases, such as self-driving cars, financial services, genomics, gaming, and manufacturing.
Looking Ahead
Pure Storage provided Q1 and FY 2025 guidance reflecting continued performance and increased momentum in Evergreen//One storage as a service. The revenue and revenue growth rates projected for Q1 and FY 2025 indicate the company’s strong performance in this area. Pure Storage has not reconciled its guidance for non-GAAP operating income and non-GAAP operating margin to its most directly comparable GAAP measures due to certain uncontrollable factors and uncertainties affecting these measures. As a result, reconciliations of these non-GAAP financial measures guidance to corresponding GAAP measures are not available without unreasonable effort.
Nevertheless, the company’s audit committee has approved additional share repurchases of up to $250 million under its stock repurchase program, supplementing the $145 million remaining under the existing program authorization to focus on organizational growth. The authorization enables Pure to repurchase shares of its Class A common stock using available working capital. Repurchases may occur through various channels such as open market transactions, privately negotiated transactions, block purchase techniques, 10b5-1 trading plans, or a combination thereof. Notably, the repurchase program lacks an expiration date, does not bind Pure to acquire any common stock, and may be halted or terminated by the company at any time without prior notice indicating acceleration of business growth. Overall, Pure Storage remains focused on delivering value to its shareholders while navigating market dynamics and seizing growth opportunities in the storage as a service sector.
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:
Where We are Headed with Data Storage Technology – Infrastructure Matters Insider
Pure Storage Revenue Beats Expectations, as Gen AI Adds to Growth
Pure Storage Portworx Enterprise – Product Review
Author Information
At The Futurum Group, Paul Nashawaty, Practice Leader and Lead Principal Analyst, specializes in application modernization across build, release and operations. With a wealth of expertise in digital transformation initiatives spanning front-end and back-end systems, he also possesses comprehensive knowledge of the underlying infrastructure ecosystem crucial for supporting modernization endeavors. With over 25 years of experience, Paul has a proven track record in implementing effective go-to-market strategies, including the identification of new market channels, the growth and cultivation of partner ecosystems, and the successful execution of strategic plans resulting in positive business outcomes for his clients.
Camberley brings over 25 years of executive experience leading sales and marketing teams at Fortune 500 firms. Before joining The Futurum Group, she led the Evaluator Group, an information technology analyst firm as Managing Director.
Her career has spanned all elements of sales and marketing including a 360-degree view of addressing challenges and delivering solutions was achieved from crossing the boundary of sales and channel engagement with large enterprise vendors and her own 100-person IT services firm.
Camberley has provided Global 250 startups with go-to-market strategies, creating a new market category “MAID” as Vice President of Marketing at COPAN and led a worldwide marketing team including channels as a VP at VERITAS. At GE Access, a $2B distribution company, she served as VP of a new division and succeeded in growing the company from $14 to $500 million and built a successful 100-person IT services firm. Camberley began her career at IBM in sales and management.
She holds a Bachelor of Science in International Business from California State University – Long Beach and executive certificates from Wellesley and Wharton School of Business.
