Post Earnings Coverage as Pure Storage Delivered Better Than Expected Q2 Earnings

LONDON, UK / ACCESSWIRE / August 31, 2016 / Active Wall St. announces its post-earnings coverage on Pure Storage, Inc. (NYSE: PSTG). The company posted its financial results for the second quarter fiscal 2017 (Q2 FY17) on August 25, 2016. The flash-based storage company reported better-than-expected second quarter earnings readings with its outlook for the October quarter predicting continued progress. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Numbers

For the three months ended on July 31, 2016, Pure Storage posted revenue of $163.2 million up 92.8% compared to corresponding prior year’s quarter. Revenue topped analysts’ forecasts of $155 million, driven by repeat purchase rates and growing sales to international customers. For Q2 FY17 the company reported net loss of $59.6 million or $(0.31) per share, lower than net loss of $63.8 million or $(1.89) per share in Q2 FY16. On adjusted basis, Pure Storage reported loss of $(0.16) per share which was less than the estimated loss of $0.23.

Pure storage’s gross margin improved 6.7% compared to 65.2% for the year earlier quarter; up 6.7% y-o-y. Adjusted gross margin came in at 66.3%, up 7.1% on y-o-y basis.

“We are delighted to report another great quarter with record revenue,” Pure Storage CEO Scott Dietzen stated.

Cloud Expanding

The company attributed the growth in business to repeat purchases. The company also noted healthy demand in cloud customers, which was making up 25% of the company’s core business. Pure Storage’s revenue growth was also bolstered by international customers, which account for 25% of the revenue earned by the firm.

During Q2 FY17, Pure Storage started shipping of its new product “FlashBlade”, its second major product line. At the outset, the new product was only available to a select number of customers. FlashBlade has now been dispatched and is on its way to datacenters. Mr. Dietzen emphasized that the company does not see FlashBlade making an impact on revenue for FY 2017; however the company’s management is excited about the range of possibilities FlashBlade is already offering to customers in chip design, genomics and life sciences, big data analytics, software development, Internet of Things, machine learning, and film production.

In Q2 FY16, Pure Storage added more than 350 new customers to its portfolio, increasing its total client base to more than 2,300 firms. Some of the giants that are now doing business with Pure Storage include the University of Tokyo, Sally Beauty Supply, British Airways, and others.

Financials

As of July 31, 2016, Pure Storage had cash and cash equivalents worth $205.81 million compared to cash in hand of $604.74 million as of January 31, 2016.

Outlook

For Q3 FY17, Pure Storage is forecasting revenue to be in the range of $187 million to $195 million versus analysts’ estimate of $190.7 million. Non-GAAP gross margin is expected to be in the range of 64% to 67%, while non-GAAP operating gross margin is projected to be in the range of -17.5% to -13.5%.

Stock Performance

At the closing bell, on August 30, 2016, Pure Storage’ shares were flat for the day, finishing the trading session at $11.69. A total volume of 1.09 million shares were traded for the day. For the past 3 months, the stock gained 3.36%.

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