Pure Storage shares are inching higher in late trading Wednesday after the provider of flash-memory based enterprise storage products and services posted better than expected results for its fiscal first quarter ended May 2.
For the quarter, Pure (ticker: PSTG) posted revenue of $412.7 million, up 12% from a year earlier, and above the company’s forecast of $405 million. The company posted a non-GAAP loss for the quarter of 2 cents a share, smaller than Street consensus forecast of a loss of 6 cents a share. Under generally accepted accounting principles, the company lost 30 cents a share.
For the second quarter, Pure is projecting revenue of $470 million, ahead of the Street consensus at $456 million. The company sees non-GAAP operating income in the quarter of $15 million.
Pure Storage CEO Charlie Giancarlo noted in an interview with Barron’s that the company saw a 15% uptick in new customers in the quarter – the first year-over-year increase since the start of the pandemic. He said business was strong across all geographies and business segments.
Asked about the impact on the company’s hardware business of component shortages, Giancarlo said his operations team “has been working like crazy to secure inventory,” and that he feels “reasonably good” about the company’s ability to secure required parts in the second quarter. But he adds that “projecting further out is not prudent.”
He notes that tight component supply is driving expenses higher than they would have been with more normal supply conditions. Giancarlo also notes that Pure is seeing higher prices for flash memory, and that while it has been able to boost average selling prices, “most of our deals are competitive,” implying some potential margin pressure.
Giancarlo says that there were no signs in the April quarter business of customers emerging from the work-from-home dominated pandemic era environment but he thinks demand should pick up as businesses begin to return to the office. And he says Pure is seeing steady improvement in IT spending as people adjust to the current environment.
Asked about Pure’s own plans, Giancarlo says that the company will have a “soft opening” of its offices on Aug. 1, and switch to a new hybrid environment on Sept. 7, with teams arranging to be in the office on some days to be able to meet in person. Giancarlo said Pure’s policy will be to require anyone working in the office to be vaccinated to avoid the need for masks or social distancing requirements.
The Pure CEO predicts that two years from now, “everyone will be back in the office.”
Pure in late trading is up 0.8%, to $19.35.
Write to Eric J. Savitz at eric.savitz@barrons.com
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May 27, 2021 at 06:14AM
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Pure Storage Earnings Top Wall Street Estimates - Barron's
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