MOUNTAIN VIEW, Calif.,
May 24, 2017 /PRNewswire/
-- Pure Storage (NYSE: PSTG) today announced financial results
for its first quarter ended April 30,
2017.
Key quarterly business and financial highlights include:
- Quarterly revenue: $182.6
million, up 31% Y-Y, 4% ahead of midpoint of guidance
- Quarterly gross margin: 65.2% GAAP; 66.4% non-GAAP, reflecting
strength in our core FlashArray business and a strong performance
from our FlashBlade business
- Quarterly operating margin: -34.7% GAAP; -16.7% non-GAAP, up
11.5 ppts and 12.7 ppts Y-Y, respectively
- First shipments of FlashArray//X lead next-gen industry
transformation to NVMe
"Pure Storage has built the data platform for the cloud era,"
said Pure Storage CEO Scott Dietzen.
"We are pursuing one of the biggest available markets in tech in
supporting new data-driven applications including AI, the rapid
adoption of cloud computing and the revamping of the enterprise
data center. With our best year of innovation yet, we could not be
more excited about the road ahead."
"Q1 was a strong quarter for Pure, with our results notably
exceeding both top line and bottom line guidance," said Pure
Storage CFO Tim Riitters. "We
continue to drive strong year over year improvement in operating
leverage as we drive to our $1
billion full year revenue target."
In the quarter, approximately 300 new customers joined Pure
Storage, increasing the total to more than 3,350 organizations,
including nearly 25% of the Fortune 500. New customer wins in the
quarter include: Churchill Downs Incorporated, Fujitsu Cloud
Technologies, Henry Schein, Inc.,
telecommunications and Cloud IaaS service provider IP Telecom,
MacStadium, Oppenheimer & Co. and Securitas Direct. New
FlashBlade customer wins include: Black Duck Software, the City of
Davenport and nuclear power plant KKG.
First Quarter Fiscal 2018 Financial Highlights
The following tables summarize our consolidated financial
results for the fiscal quarters ended April
30, 2017 and 2016 ($ in millions except per share amounts,
unaudited):
GAAP Quarterly
Financial Information
|
|
Three Months
Ended
April 30, 2017
|
Three Months
Ended
April 30, 2016
|
Y/Y
Change
|
Revenue
|
$182.6
|
$139.9
|
31%
|
Gross Margin
|
65.2%
|
66.4%
|
-1.2 ppts
|
Product Gross
Margin
|
66.3%
|
69.5%
|
-3.2 ppts
|
Support Gross
Margin
|
61.8%
|
54.1%
|
7.7 ppts
|
Operating
Loss
|
-$63.4
|
-$64.7
|
$1.3
|
Operating
Margin
|
-34.7%
|
-46.2%
|
11.5 ppts
|
Net Loss
|
-$62.4
|
-$63.8
|
$1.4
|
Net Loss per
Share
|
-$0.30
|
-$0.34
|
$0.04
|
Weighted-Average
Shares (Basic and Diluted)
|
205.8
|
189.3
|
N/A
|
|
|
Non-GAAP Quarterly
Financial Information
|
|
Three Months
Ended
April 30, 2017
|
Three Months
Ended
April 30, 2016
|
Y/Y
Change
|
Gross
Margin
|
66.4%
|
67.3%
|
-0.9 ppts
|
Product Gross
Margin
|
66.6%
|
69.6%
|
-3.0 ppts
|
Support Gross
Margin
|
65.8%
|
58.0%
|
7.8 ppts
|
Operating
Loss
|
-$30.5
|
-$41.1
|
$10.6
|
Operating
Margin
|
-16.7%
|
-29.4%
|
12.7 ppts
|
Net Loss
|
-$29.5
|
-$40.3
|
$10.8
|
Net Loss per
Share
|
-$0.14
|
-$0.21
|
$0.07
|
Free Cash
Flow
|
-$27.1
|
-$17.4
|
-$9.7
|
A reconciliation between GAAP and non-GAAP information is
provided at the end of this release.
Financial Outlook
Pure Storage's second quarter fiscal 2018 guidance is as
follows:
- Revenue in the range of $214 million to
$222 million
- Non-GAAP gross margin in the range of 63.5% to 66.5%
- Non-GAAP operating margin in the range of -16% to -12%
Pure Storage's full year fiscal 2018 guidance is as follows:
- Revenue in the range of $975 million to
$1.025 billion
- Non-GAAP gross margin in the range of 63.5% to 66.5%
- Non-GAAP operating margin in the range of -9% to -5%
All forward-looking non-GAAP financial measures contained in
this section titled "Financial Outlook" exclude stock-based
compensation expense, payroll tax expense related to stock-based
activities and, as applicable, other special items. We have not
reconciled guidance for non-GAAP gross margin and non-GAAP
operating margin to their most directly comparable GAAP measures
because such items that impact these measures are not within our
control and/or cannot be reasonably predicted. Accordingly, a
reconciliation of the non-GAAP financial measure guidance to the
corresponding GAAP measures is not available without unreasonable
effort.
Conference Call Information
Pure Storage will host a teleconference to discuss the first
quarter fiscal 2018 results at 1:30 p.m.
(PT) on May 24, 2017. Pure
Storage will post its supplemental earnings presentation to the
investor relations website at investor.purestorage.com following
the conference call.
Teleconference details are as follows:
- To Listen via Telephone: 877-201-0168 or 647-788-4901 (for
international callers).
- To Listen via the Internet: A live and replay audio broadcast
of the conference call with corresponding slides will be available
at investor.purestorage.com.
- Replay: A telephone playback of this conference call is
scheduled to be available two hours after the call ends on
Wednesday, May 24, 2017, through
June 7, 2017. The replay will be
accessible by calling 800-585-8367 or 416-621-4642 (for
international callers), with conference ID 14674669. The call runs
24 hours per day, including weekends.
CEO Commentary
Pure Storage has posted a blog from its CEO discussing first
quarter fiscal 2018 results at investor.purestorage.com and
blog.purestorage.com.
2017 Annual Meeting of Stockholders
Pure Storage will hold its 2017 annual meeting of stockholders
on Tuesday, June 20, 2017 at
10:00 a.m. (PT). The meeting will be
held virtually, via live webcast at
www.virtualshareholdermeeting.com/PSTG2017. The record date for the
meeting was April 25, 2017, and only
stockholders of record on that date are eligible to participate in
the meeting. Other interested persons may listen to the live
webcast of the meeting and can view the 2017 proxy statement and
Annual Report on Form 10-K at investor.purestorage.com.
2017 Investor Day
Pure Storage will host its 2017 investor day from 1:00 p.m. to 4:00 p.m. (PT) on June 13, 2017, in conjunction with its second
annual technology conference, Pure//Accelerate. A live video
webcast will be available at investor.purestorage.com. This event
is designed for financial analysts and institutional investors.
Pure//Accelerate
Building upon a successful inaugural Pure//Accelerate last year,
the 2017 conference will feature guest speakers from technology
giants such as Cisco and VMware; marquee brands including Mercedes
AMG Petronas Formula One and The World Bank; cutting-edge
scientific minds from the UC Berkeley AMPLab; and Jeffrey Ma of the infamous MIT Blackjack Team.
Pure//Accelerate will be held June 12-14,
2017 at Pier 70 in San
Francisco.
About Pure Storage
Pure Storage (NYSE:PSTG) helps companies push the boundaries of
what's possible. Pure's end-to-end data platform – including
FlashArray, FlashBlade and our converged offering with Cisco,
FlashStack – is powered by innovative software that's
cloud-connected for management from anywhere on a mobile device and
supported by the Evergreen business model. The company's all-flash
based technology, combined with its customer-friendly business
model, drives business and IT transformation with solutions that
are effortless, efficient and evergreen. With Pure's industry
leading Satmetrix-certified NPS score of 83.5, Pure customers are
some of the happiest in the world, and include organizations of all
sizes, across an ever-expanding range of industries.
Connect with Pure Storage:
Read the blog
Converse on Twitter
Follow on LinkedIn
Analyst Recognition:
Gartner Magic Quadrant for
Solid-State Arrays
IDC MarketScape for All-Flash Arrays
Pure Storage, Evergreen, FlashBlade, FlashStack and the "P" Logo
mark are trademarks of Pure Storage, Inc. All other trademarks or
names referenced in this document are the property of their
respective owners.
Forward Looking Statements
This press release contains forward-looking statements regarding
our products, business and operations, including our expectations
regarding technology differentiation, our current and future
opportunities and ability to execute for continued growth and
industry leadership, and our outlook for the second quarter and
full year fiscal 2018 and statements regarding our products,
business, operations and results, including progress toward
profitability. Forward-looking statements are subject to known and
unknown risks and uncertainties and are based on potentially
inaccurate assumptions that could cause actual results to differ
materially from those expected or implied by the forward-looking
statements. Actual results may differ materially from the results
predicted, and reported results should not be considered as an
indication of future performance. The potential risks and
uncertainties that could cause actual results to differ from the
results predicted include, among others, those risks and
uncertainties included under the captions "Risk Factors" and
elsewhere in our filings and reports with the U.S. Securities and
Exchange Commission, including, but not limited to, our Annual
Report on Form 10-K for the year ended January 31, 2017, which are available on our
investor relations website at investor.purestorage.com and on the
SEC website at www.sec.gov. Additional information will also be set
forth in our Quarterly Report on Form 10-Q for the quarter ended
April 30, 2017. All information
provided in this release and in the attachments is as of
May 24, 2017, and we undertake no
duty to update this information unless required by law.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with GAAP, we use
the following non-GAAP financial measures: non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating
margin, non-GAAP net loss, non-GAAP net loss per share, free cash
flow, and free cash flow as a percentage of revenue. In computing
these non-GAAP financial measures, we exclude the effects of
stock-based compensation expense and payroll tax expense related to
stock-based activities. The presentation of this financial
information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and
operational decision-making and as a means to evaluate
period-to-period comparisons. Our management believes that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance and liquidity by excluding
certain expenses and expenditures such as stock-based compensation
expense that may not be indicative of our ongoing core business
operating results. We believe that both management and investors
benefit from referring to these non-GAAP financial measures in
assessing our performance and when analyzing historical performance
and liquidity and planning, forecasting, and analyzing future
periods. The presentation of these non-GAAP financial measures is
not meant to be considered in isolation or as a substitute for our
financial results prepared in accordance with GAAP, and our
non-GAAP measures may be different from non-GAAP measures used by
other companies.
For a reconciliation of these non-GAAP financial measures to
GAAP measures, please see the tables captioned "Reconciliations of
non-GAAP results of operations to the nearest comparable GAAP
measures" and "Reconciliation from net cash provided by (used in)
operating activities to free cash flow," included at the end of
this release.
PURE STORAGE,
INC.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
As
of
|
|
As
of
|
|
|
April 30,
2017
|
|
January 31,
2017
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and
cash equivalents
|
|
$
168,757
|
|
$
183,675
|
Marketable securities
|
|
367,218
|
|
362,986
|
Accounts
receivable, net of allowance of $1,744 and $2,000
|
|
132,134
|
|
168,978
|
Inventory
|
|
39,478
|
|
23,498
|
Deferred
commissions, current
|
|
16,409
|
|
15,787
|
Prepaid
expenses and other current assets
|
|
28,637
|
|
25,157
|
Total current
assets
|
|
752,633
|
|
780,081
|
Property and
equipment, net
|
|
82,293
|
|
81,695
|
Intangible assets,
net
|
|
6,184
|
|
6,560
|
Deferred income
taxes, non-current
|
|
795
|
|
844
|
Other assets,
non-current
|
|
30,970
|
|
30,565
|
Total assets
|
|
$
872,875
|
|
$
899,745
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
51,015
|
|
$
52,719
|
Accrued
compensation and benefits
|
|
24,714
|
|
39,252
|
Accrued
expenses and other liabilities
|
|
15,981
|
|
21,697
|
Deferred
revenue, current
|
|
159,094
|
|
158,095
|
Liability related to early exercised stock options
|
|
1,064
|
|
1,362
|
Total current
liabilities
|
|
251,868
|
|
273,125
|
Deferred revenue,
non-current
|
|
152,431
|
|
145,031
|
Other liabilities,
non-current
|
|
3,268
|
|
3,159
|
Total liabilities
|
|
407,567
|
|
421,315
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
additional paid-in capital
|
|
1,330,607
|
|
1,281,472
|
Accumulated other
comprehensive loss
|
|
(445)
|
|
(562)
|
Accumulated
deficit
|
|
(864,854)
|
|
(802,480)
|
Total stockholders'
equity
|
|
465,308
|
|
478,430
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
872,875
|
|
$
899,745
|
|
|
PURE STORAGE,
INC.
|
Condensed
Consolidated Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
|
2017
|
|
2016
|
|
|
(unaudited)
|
Revenue:
|
|
|
|
|
Product
|
|
$
138,425
|
|
$111,738
|
Support
|
|
44,206
|
|
28,209
|
Total
revenue
|
|
182,631
|
|
139,947
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
Product
(1)
|
|
46,645
|
|
34,046
|
Support
(1)
|
|
16,903
|
|
12,934
|
Total cost of
revenue
|
|
63,548
|
|
46,980
|
|
|
|
|
|
Gross
profit
|
|
119,083
|
|
92,967
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Research and
development (1)
|
|
65,428
|
|
52,938
|
Sales and
marketing (1)
|
|
96,964
|
|
83,098
|
General and
administrative (1)
|
|
20,096
|
|
21,581
|
Total operating
expenses
|
|
182,488
|
|
157,617
|
|
|
|
|
|
Loss from
operations
|
|
(63,405)
|
|
(64,650)
|
Other income
(expense), net
|
|
1,995
|
|
1,282
|
Loss before provision
for income taxes
|
|
(61,410)
|
|
(63,368)
|
Provision for income
taxes
|
|
964
|
|
420
|
Net loss
|
|
$
(62,374)
|
|
$ (63,788)
|
|
|
|
|
|
Net loss per share
attributable to common stockholders, basic and diluted
|
|
$
(0.30)
|
|
$
(0.34)
|
|
|
|
|
|
Weighted-average
shares used in computing net loss per share attributable to common
stockholders, basic and diluted
|
|
205,783
|
|
189,283
|
|
|
|
|
|
(1) Includes
stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
Cost of revenue --
product
|
|
$
397
|
|
$
106
|
Cost of revenue --
support
|
|
1,774
|
|
1,092
|
Research and
development
|
|
15,588
|
|
11,658
|
Sales and
marketing
|
|
10,626
|
|
7,519
|
General and
administrative
|
|
3,834
|
|
2,623
|
Total stock-based
compensation expense
|
|
$
32,219
|
|
$
22,998
|
|
|
PURE STORAGE,
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
|
2017
|
|
2016
|
|
|
(unaudited)
|
Cash flows from
operating activities
|
|
|
|
|
Net loss
|
|
$ (62,374)
|
|
$ (63,788)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
14,825
|
|
10,432
|
Stock-based compensation expense
|
|
32,219
|
|
22,998
|
Other
|
|
451
|
|
182
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable, net
|
|
36,571
|
|
28,593
|
Inventory
|
|
(16,105)
|
|
(2,623)
|
Deferred commissions
|
|
(362)
|
|
4,141
|
Prepaid expenses and other current assets
|
|
(3,944)
|
|
(2,744)
|
Accounts payable
|
|
(3,982)
|
|
166
|
Accrued compensation and other liabilities
|
|
(19,998)
|
|
(11,017)
|
Deferred revenue
|
|
8,398
|
|
20,653
|
Net cash provided by
(used in) operating activities
|
|
(14,301)
|
|
6,993
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Purchases of property and equipment
|
|
(12,769)
|
|
(24,376)
|
Purchases of marketable securities
|
|
(55,976)
|
|
(343,466)
|
Sales of marketable securities
|
|
5,384
|
|
23,327
|
Maturities of marketable securities
|
|
46,321
|
|
-
|
Net decrease in restricted cash
|
|
-
|
|
706
|
Net cash used in
investing activities
|
|
(17,040)
|
|
(343,809)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Net proceeds from exercise of stock options
|
|
2,257
|
|
3,091
|
Proceeds from issuance of common stock under employee stock
purchase plan
|
|
14,166
|
|
15,079
|
Net cash provided by
financing activities
|
|
16,423
|
|
18,170
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(14,918)
|
|
(318,646)
|
Cash and cash
equivalents, beginning of period
|
|
183,675
|
|
604,742
|
Cash and cash
equivalents, end of period
|
|
$168,757
|
|
$286,096
|
Reconciliations of
non-GAAP results of operations to the nearest comparable GAAP
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
presents non-GAAP gross margin by revenue source before certain
items (in thousands, unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, 2017
|
|
Three Months Ended
April 30, 2016
|
|
GAAP
results
|
GAAP
gross
margin (a)
|
Adjustment
|
|
Non-
GAAP
results
|
Non-GAAP
gross
margin (b)
|
|
GAAP
results
|
GAAP
gross
margin (a)
|
Adjustment
|
|
Non-GAAP
results
|
Non-GAAP
gross
margin (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
397
|
(c)
|
|
|
|
|
|
$
106
|
(c)
|
|
|
|
|
|
5
|
(d)
|
|
|
|
|
|
-
|
(d)
|
|
|
Gross profit --
product
|
$
91,780
|
66.3%
|
$
402
|
|
$
92,182
|
66.6%
|
|
$ 77,692
|
69.5%
|
$
106
|
|
$ 77,798
|
69.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1,774
|
(c)
|
|
|
|
|
|
$
1,092
|
(c)
|
|
|
|
|
|
31
|
(d)
|
|
|
|
|
|
-
|
(d)
|
|
|
Gross profit --
support
|
$
27,303
|
61.8%
|
$
1,805
|
|
$
29,108
|
65.8%
|
|
$ 15,275
|
54.1%
|
$
1,092
|
|
$ 16,367
|
58.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
2,171
|
(c)
|
|
|
|
|
|
$
1,198
|
(c)
|
|
|
|
|
|
36
|
(d)
|
|
|
|
|
|
-
|
(d)
|
|
|
Total gross
profit
|
$119,083
|
65.2%
|
$
2,207
|
|
$121,290
|
66.4%
|
|
$ 92,967
|
66.4%
|
$
1,198
|
|
$ 94,165
|
67.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) GAAP gross margin
is defined as gross profit divided by revenue.
|
(b) Non-GAAP gross
margin is defined as non-GAAP gross profit divided by
revenue.
|
(c) To eliminate
stock-based compensation expense.
|
(d) To eliminate
payroll tax expense related to stock-based activities.
|
The following table
presents certain non-GAAP consolidated results before certain items
(in thousands, except per share amounts, unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
April 30, 2017
|
|
Three Months Ended
April 30, 2016
|
|
GAAP
results
|
GAAP
operating
margin (a)
|
Adjustment
|
|
Non-
GAAP
results
|
Non-GAAP
operating
margin (b)
|
|
GAAP
results
|
GAAP
operating
margin (a)
|
Adjustment
|
|
Non-GAAP
results
|
Non-GAAP
operating
margin (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
32,219
|
(c)
|
|
|
|
|
|
$
22,998
|
(c)
|
|
|
|
|
|
651
|
(d)
|
|
|
|
|
|
505
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
$ (63,405)
|
-34.7%
|
$
32,870
|
|
$ (30,535)
|
-16.7%
|
|
$(64,650)
|
-46.2%
|
$
23,503
|
|
$(41,147)
|
-29.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
32,219
|
(c)
|
|
|
|
|
|
$
22,998
|
(c)
|
|
|
|
|
|
651
|
(d)
|
|
|
|
|
|
505
|
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$ (62,374)
|
|
$
32,870
|
|
$ (29,504)
|
|
|
$(63,788)
|
|
$
23,503
|
|
$(40,285)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
-- basic and diluted
|
$
(0.30)
|
|
|
|
$
(0.14)
|
|
|
$
(0.34)
|
|
|
|
$
(0.21)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used in per share calculation -- basic and
diluted
|
205,783
|
|
|
|
205,783
|
|
|
189,283
|
|
|
|
189,283
|
|
|
(a) GAAP operating
margin is defined as loss from operations divided by
revenue.
|
(b) Non-GAAP
operating margin is defined as non-GAAP loss from operations
divided by revenue.
|
(c) To eliminate
stock-based compensation expense.
|
(d) To eliminate
payroll tax expense related to stock-based activities.
|
Reconciliation
from net cash provided by (used in) operating activities to
free cash flow (in thousands, unaudited):
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
2017
|
|
2016
|
Net cash provided by
(used in) operating activities
|
$(14,301)
|
|
$
6,993
|
Less: purchases of
property and equipment
|
(12,769)
|
|
(24,376)
|
Free cash
flow
|
$(27,070)
|
|
$(17,383)
|
Free cash flow as %
of revenue
|
-14.8%
|
|
-12.4%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pure-storage-announces-first-quarter-fiscal-2018-financial-results-300463432.html
SOURCE Pure Storage