Market Overview

Pure Storage Announces Second Quarter Fiscal 2020 Financial Results

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MOUNTAIN VIEW, Calif., Aug. 21, 2019 /PRNewswire/ -- Pure Storage (NYSE:PSTG), the data solutions leader that helps innovators build a better world with data, today announced financial results for its second quarter ended July 31, 2019.

www.purestorage.com (PRNewsFoto/Pure Storage) (PRNewsfoto/Pure Storage)

"Our significant growth this quarter and continued market share gains are the result of creating a modern data experience for our customers," said Charles Giancarlo, Chairman and CEO, Pure Storage. "Pure frees enterprises to leverage their data rather than locking it away."

Key Financial Highlights:

  • Revenue: $396.3 million, up 28% Year-over-Year
  • Gross margin: GAAP 67.7%; non-GAAP 69.4%
  • Operating margin: GAAP -16.4%; non-GAAP -0.8%

Recent Company Highlights:

Pure's second quarter yielded strong momentum as customers are selecting Pure's modern approach that enables organizations to better utilize all data today and for the future direction of their hybrid IT environment.

  • Customer Traction: Added more than 450 new customers in Q2, the highest number in any Q2 of our history.
  • Technology Momentum: The subscription-based Cloud Block Store beta as part of Pure Cloud Data Services, is oversubscribed and early customer feedback has been overwhelmingly positive.
  • Repurchase Program: Pure's board of directors authorized a $150 million share buy-back program.

"Pure's strong growth in Q2 has separated us from the legacy vendors," said Tim Riitters, CFO, Pure Storage. "Our fundamentals remain strong, and our innovative product cycle is helping customers leverage their data in a powerful way."

Organizational Update

Chief Financial Officer Tim Riitters will be departing the company this year after a successful five-year tenure. Riitters will remain on into the Fall as the company undergoes the search for a replacement CFO. Riitters first joined Pure in August 2014, assuming leadership of the company's worldwide financial and accounting operations. In that time, he has helped drive an increase in revenue of nearly 10x, while also helping the company achieve profitability.

"Tim has been an integral part of the Pure Storage leadership team for the last five years. As our CFO, the success of his tenure is in the numbers and the numbers speak for themselves," said Giancarlo. "Everyone at Pure has the utmost respect for what Tim has accomplished and we wish him well."

Second Quarter Fiscal 2020 Financial Highlights

The following tables summarize our consolidated financial results for the fiscal quarters ended July 31, 2019 and 2018 (in millions except percentages, per share amounts and headcount, unaudited):

GAAP Quarterly Financial Information



Three Months Ended
July 31, 2019


Three Months Ended
July 31, 2018


Y/Y Change

Revenue


$ 396.3


$ 308.9


28 %

Gross Margin


67.7 %


66.7 %


1.0 ppts

Product Gross Margin


69.1 %


67.5 %


1.6 ppts

Support Subscription Gross Margin


63.5 %


63.9 %


-0.4 ppts

Operating Loss


$ (64.9)


$ (55.2)


$ (9.7)

Operating Margin


-16.4 %


-17.9 %


1.5 ppts

Net Loss


$ (66.0)


$ (60.1)


$ (5.9)

Net Loss per Share – Basic and Diluted


$ (0.26)


$ (0.26)


Weighted-Average Shares


251.3


229.4


21.9

Headcount


>3,300


>2,450


~850



Non-GAAP Quarterly Financial Information



Three Months Ended
July 31, 2019


Three Months Ended
July 31, 2018


Y/Y Change

Gross Margin


69.4 %


68.0 %


1.4 ppts

Product Gross Margin


70.0 %


67.9 %


2.1 ppts

Support Subscription Gross Margin


67.4 %


68.4 %


-1.0 ppts

Operating Income (Loss)


$ (3.2)


$ 0.9


$ (4.1)

Operating Margin


-0.8 %


0.3 %


-1.1 ppts

Net Income


$ 2.5


$ 2.4


$ 0.1

Net Income per Share


$ 0.01


$ 0.01


Weighted-Average Shares


270.8


262.6


8.2

A reconciliation between GAAP and non-GAAP information is provided at the end of this release.

Financial Outlook

Third quarter fiscal 2020 guidance:

  • Revenue in the range of $434 million to
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