Published - June 1rst, 2023 @ 09:30 AM (GMT+2 )

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Pure Storage First-Quarter Report: End of Growth Streak, Shares Jump

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Pure Storage (NYSE:PSTG), the enterprise data storage company, saw its shares leap after its fiscal first-quarter results and optimistic guidance surpassed Wall Street's expectations. This report departed from Pure Storage's consistent growth streak, dropping year-over-year earnings and sales.

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For the quarter concluded on May 7, Pure Storage reported adjusted earnings of 8 cents per share, beating the expected 4 cents. The company generated sales of $589.3 million, surpassing analysts' prediction of $560 million. However, when juxtaposed with last year's performance, Pure Storage's earnings slid 68%, and sales saw a 5% dip, ending its unbroken earnings growth record over seven quarters and nine quarters of sales growth.

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Notable Increase in Subscription-based Annual Recurring Revenue

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However, it wasn't all gloomy for Pure Storage. The company's subscription-based annual recurring revenue (ARR) rose impressively by 29% year-over-year to reach $1.2 billion in Q1. This positive trajectory showcases Pure Storage's robust and growing subscription model.

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Optimistic Revenue Forecast for the Current Quarter

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Looking forward to the current quarter, Pure Storage has guided higher than analysts' views. The company forecasts revenue of $680 million, indicating a 5% rise from the previous year's period. Analysts had projected sales of $658 million for this fiscal second quarter.

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Pure Storage's shares soared 7% to 30.80 in the stock market's after-hours trading. However, during Wednesday's regular session, the stock declined by 2.1% to close at 28.79. According to IBD MarketSmith charts, the shares have been in a consolidation phase for the past 29 weeks, with a buy point of 32.55.

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Pure Storage's Leadership and Product Superiority

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Chief Executive Charles Giancarlo stated in a news release, "We are the clear leader in data storage, now delivering a portfolio that can address the vast majority of storage needs for all enterprises." He emphasized the undeniable advantages of Pure's product portfolio over both hard disk and SSD (solid-state drive)-based, all-flash competitive offerings in terms of economics, performance, and operational and environmental efficiencies.

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