Pure Storage Inc (PSTG) Reports Mixed Fiscal Q4 and Full Year 2024 Results
Q4 Revenue: Declined by 3% year-over-year to $789.8 million.
Full-Year Revenue: Increased by 3% year-over-year to $2.8 billion.
Subscription Services Revenue: Grew by 24% in Q4 and 26% for the full year.
Subscription ARR: Rose by 25% year-over-year to $1.4 billion.
Operating Cash Flow: Q4 at $244.4 million; full year at $677.7 million.
Non-GAAP Operating Margin: Q4 at 20%; full year at 16.2%.
Share Repurchase: $21.4 million in Q4; authorized additional $250 million.
On February 28, 2024, Pure Storage Inc (NYSE:PSTG) released its 8-K filing, detailing its fiscal fourth quarter and full year 2024 financial results. The company, known for its advanced data storage technology and services, experienced a 3% decline in Q4 revenue year-over-year, totaling $789.8 million, while full-year revenue saw a 3% increase to $2.8 billion. Notably, subscription services revenue surged by 24% in Q4 and 26% for the full year, reflecting strong demand for Pure Storage's subscription-based offerings.
Financial Performance Overview
Pure Storage's subscription services, including Evergreen Storage subscriptions and Cloud Block Store, demonstrated robust growth, with subscription annual recurring revenue (ARR) reaching $1.4 billion, a 25% increase from the previous year. The company's remaining performance obligations (RPO) also grew significantly by 31% year-over-year to $2.3 billion. Despite the overall revenue dip in Q4, the full-year figures and subscription growth highlight the company's resilience and strategic focus on recurring revenue streams.
The company's GAAP gross margin for Q4 stood at 72.0%, with a non-GAAP gross margin of 73.7%. For the full year, the GAAP gross margin was 71.4%, and the non-GAAP gross margin was 73.2%. Operating income for Q4 on a GAAP basis was $57.4 million, and non-GAAP operating income was $157.8 million. The full-year GAAP operating income was $53.6 million, with non-GAAP operating income at $458.4 million.
Operating cash flow for Q4 was strong at $244.4 million, contributing to a full-year operating cash flow of $677.7 million. Free cash flow for the quarter was reported at $200.9 million, with the full-year figure reaching $482.6 million. Pure Storage ended the fiscal year with $1.5 billion in total cash, cash equivalents, and marketable securities.
Strategic Highlights and Future Outlook
Throughout the fiscal year, Pure Storage achieved significant milestones, including the introduction of the cost-optimized E//Family and the expansion of its strategic partnership with Microsoft. The company also received industry recognition, maintaining its position as a leader in the Gartner Magic Quadrant for Primary Storage and Distributed File Systems & Object Storage.
Looking ahead to FY25, Pure Storage anticipates double-digit revenue growth and strong RPO growth, driven by its differentiated data storage platform and the strength of its Evergreen and Portworx consumption and subscription offerings. The company has provided guidance for Q1FY25 revenue growth of 15.4% and a full-year revenue growth rate of 10.5%, with non-GAAP operating margins expected to be 10% for Q1 and 17% for the full year.
In addition to its financial achievements, Pure Storage has authorized incremental share repurchases of up to an additional $250 million under its stock repurchase program, signaling confidence in its financial health and commitment to delivering shareholder value.
Investor and Analyst Perspectives
Charles Giancarlo, Chairman and CEO of Pure Storage, emphasized the transformative impact of the company's data platform strategy on the storage industry, highlighting its readiness for artificial intelligence applications. CFO Kevan Krysler expressed satisfaction with the company's strong RPO growth and its performance exceeding revenue and operating margin guidance for Q4.
"We closed FY24 delivering strong RPO growth, and exceeded our revenue and operating margin guidance in Q4," said Kevan Krysler, Chief Financial Officer, Pure Storage. "Looking to FY25, we expect double-digit revenue growth and strong growth of RPO, fueled by our highly differentiated data storage platform, and strength of our Evergreen and Portworx consumption and subscription offerings."
Value investors may find Pure Storage's commitment to innovation, customer satisfaction, and environmental sustainability, coupled with its solid subscription revenue growth, an appealing investment opportunity. The company's strategic focus on expanding its subscription services and maintaining a strong balance sheet positions it well for future growth and profitability.
For a more detailed analysis of Pure Storage Inc (NYSE:PSTG)'s financial results and future outlook, investors are encouraged to review the full earnings report and consider the company's upcoming participation in investor conferences for additional insights.
Explore the complete 8-K earnings release (here) from Pure Storage Inc for further details.
This article first appeared on GuruFocus.
