Analyst(s): Camberley Bates
Publication Date: December 6, 2024
Pure Storage’s third-quarter fiscal 2025 results highlight steady financial growth and impactful innovations. Key developments include a breakthrough hyperscale partnership, advancements in AI infrastructure, and their new enterprise storage solutions.
What is Covered in this Article:
- Key financial metrics for Q3 FY25, including revenue and subscription growth
- Details on the hyperscale design win and collaboration with Kioxia
- AI-focused advancements such as FlashBlade//S500 and GenAI Pod
- Enterprise storage updates, including Pure Fusion v2.0 and cloud migration tools
- Industry recognition, sustainability efforts, and strategic outlook
The News: Pure Storage reported revenue of $831.1 million for the third quarter of fiscal 2025, marking a 9% year-over-year increase. The company achieved significant milestones, including a design win for its DirectFlash with a top-four hyperscaler and the certification of FlashBlade//S500 with NVIDIA DGX SuperPOD. Additionally, Pure launched the GenAI Pod and expanded its enterprise storage platform with solutions such as Pure Fusion v2.0 and FlashArray integration with AWS Outposts.
Financial highlights include a 22% increase in subscription services revenue and a non-GAAP operating margin of 20.1%. Pure also returned $182 million to shareholders through share repurchases.
Pure Storage’s Q3 FY25: Innovations in Hyperscale, AI, and Enterprise Storage
Analyst Take: Pure Storage’s Q3 FY2025 results indicate a company focused on technological advancements and taking advantage of its R&D work to capture new markets. The design win with a leading hyperscaler for Pure DirectFlash, and collaboration with Kioxia highlights its capability to serve hyperscale environments while announcements in AI infrastructure support the current surge in CSP and enterprise demand.
Additionally, Pure Storage’s latest models for QLC designs further on premises hybrid cloud adoption and sustainability initiatives for the enterprise and show their customer-focused solutions position for potential sustained growth.
Hyperscale Market Expansion: A Strategic Milestone
One of the quarter’s standout achievements was Pure Storage’s design win with a top-four hyperscaler, marking a critical step in the company’s hyperscale strategy. This development brings Pure DirectFlash technology, both hardware and software innovations to a solution designed to replace traditional hard disks with scalable, high-performance storage infrastructure. Citing the opportunity, the firm highlighted the the focus on the HDD market which today dominated by the hyperscalers nearline high performance and long priced bulk capacity all of which Futurum expects to expand with AI requirements. We would expect for some workloads to move to this tier for its good enough performance.
Hyperscale environments face increasing power consumption, and cost management challenges. It is foreseeable the new designs will address these issues, due to lower power requirements and higher reliability of solid state drives. Pure also cites better reliability than traditional SSD due to their design, furthering the cost savings.
Pure Storage also announced its relationship with Kioxia was strengthened by its hyperscale position by a key provider of NAND Flash technology. By leveraging Kioxia’s expertise in NAND technology, Pure ensures a strong supply chain and positions itself as a reliable partner in hyperscale storage innovation.
AI-Focused Innovations: Scaling Infrastructure for Emerging Needs
Artificial intelligence is reshaping industries globally, and Pure Storage has positioned itself to support this transformation. The certification of its FlashBlade//S500 with NVIDIA DGX SuperPOD demonstrates the company’s ability to meet the NVIDIA performance and compatibility for their large-scale AI environments. Expanding its AI-focused capabilities further, Pure Storage entered a strategic partnership with CoreWeave, a cloud provider specializing in GPU-accelerated workloads.
Through this collaboration, Pure’s storage solutions are now a standard offering in CoreWeave’s cloud environment, enabling organizations to access AI-ready infrastructure. The partnership reflects the growing demand for cloud-based solutions that cater to computationally intensive workloads, including generative AI applications.
Additionally, Pure launched the GenAI Pod, a full-stack solution designed to simplify generative AI deployment. By reducing the time, cost, and expertise required to initiate AI projects, the GenAI Pod provides organizations with an accessible entry point to this transformative technology.
Pure Storage Q3 FY25 Financial Highlights
Pure Storage reported solid financial performance in the third quarter, with revenue reaching $831.1 million, a 9% increase compared to the previous year. The company’s subscription services revenue grew 22% year-over-year, totaling $376.4 million. Subscription annual recurring revenue (ARR) also increased by 22%, hitting $1.6 billion. As we have seen with other organizations, Pure’s storage-as-a-service offering EverygreenOne has seen a slow down, as customers opt for CAPEX transactions. Still, these figures reflect Pure’s successful transition to a subscription-based model, offering predictable revenue streams.
The company achieved a non-GAAP operating income of $167.3 million and maintained gross margins above 70%, emphasizing strong operational efficiency. Free cash flow stood at $35.2 million, highlighting Pure’s ability to generate cash while investing in innovation and growth.
Enterprise Storage Innovations: Enhancing Operational Flexibility
Pure Storage continued to enhance its enterprise storage platform, introducing new solutions to address evolving customer needs. One of the quarter’s key announcements was the upcoming release of Pure Fusion v2.0. This update will create a platform to manage data as a platform similarly to hyperscale environments.
The company also unveiled solutions to simplify cloud migrations for enterprises. Strategically this is to support migrations from VMware environments to Microsoft Azure. Another noteworthy innovation was the integration of Pure’s FlashArray with AWS Outposts. This development combines Pure’s storage capabilities with AWS’s cloud services, offering organizations the flexibility to run cloud services within their own data centers.
Looking Forward: Preparing for Long-Term Growth
Pure Storage’s Q3 FY2025 results show continued growth as the company addresses key trends in data storage, hyperscale, and artificial intelligence. While the executives declined to provide guidance in the form of revenue impact or gross margin of the hyperscaler win, it is a strong indicator of the traction of solid state and their engineering and should have a strong impact in 2026. Their movements with QLC offerings and AI offerings are strong, and while they will continue to face stiff competition in the market, expect their focus and strong NPS score will serve them well.
As demand for high-performance storage solutions grows, particularly in hyperscale and AI workloads, Pure’s strategic partnerships and innovations position it to capture a larger share of these expanding markets.
See the complete press release on Pure Storage’s Q3 FY25 earnings on the Pure Storage website.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discusses Pure Storage’s 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 Q2 FY2025: Noteworthy Growth in a Competitive Market
Pure Storage FlashArray //C20: Meeting the Needs of SMB and ROBO Markets
Author Information
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.
