Pure Storage Inc (PSTG) Reports Strong Third Quarter Fiscal 2024 Results
Revenue increased by 13% year-over-year to $762.8 million.
Subscription services revenue grew by 26% year-over-year.
GAAP operating margin improved to 9.7%, with non-GAAP operating margin at 22.2%.
Company raises full-year revenue and operating income guidance.
On November 29, 2023, Pure Storage Inc (NYSE:PSTG) released its 8-K filing, announcing financial results for the third quarter of fiscal year 2024, which ended on November 5, 2023. The company reported a significant year-over-year revenue increase, driven by strong sales in its FlashBlade portfolio and a robust growth in subscription services.
Financial Performance Overview
Pure Storage Inc (NYSE:PSTG) delivered a robust financial performance in the third quarter of fiscal 2024. The company's revenue reached $762.8 million, marking a 13% increase compared to the same period last year. Subscription services were a standout, with revenue climbing to $309.6 million, a 26% year-over-year growth. This was complemented by a subscription annual recurring revenue (ARR) of $1.3 billion, also up by 26% from the previous year.
The company's remaining performance obligations (RPO) stood at $2.0 billion, showing a substantial 30% increase year-over-year. Pure Storage Inc (NYSE:PSTG) reported a GAAP gross margin of 72.5% and a non-GAAP gross margin of 74.0%. Operating income on a GAAP basis was $74.2 million, while non-GAAP operating income reached $169.1 million. The GAAP operating margin improved significantly to 9.7%, and the non-GAAP operating margin was an impressive 22.2%.
Operating cash flow for the quarter was strong at $158.4 million, and free cash flow was reported at $113.4 million. The company's total cash, cash equivalents, and marketable securities amounted to $1.35 billion. During the quarter, Pure Storage Inc (NYSE:PSTG) returned approximately $22.4 million to stockholders through share repurchases.
Strategic Highlights and Future Outlook
Charles Giancarlo, Chairman and CEO of Pure Storage, highlighted the company's growth in Evergreen Storage-as-a-Service consumption services and the introduction of strong service-level agreements (SLAs).
Pure continues to see extraordinary growth in our Evergreen Storage-as-a-Service consumption services providing customers with a Cloud Operating Model for their multi-cloud infrastructure,"
said Giancarlo.
The company also introduced an industry-first paid power and rack commitment, addressing the challenges of rising electricity costs and rack space management. The general availability of FlashArray//E began shipping, expanding the //E family of products.
For the fourth quarter and full fiscal year 2024, Pure Storage Inc (NYSE:PSTG) provided guidance that reflects continued confidence in its business strategy and market position. The company expects Q4 revenue to be approximately $782 million and full-year revenue to reach $2.82 billion. Non-GAAP operating income is anticipated to be around $150 million for Q4 and $450 million for the full year, with non-GAAP operating margins projected at 19% for Q4 and 16% for FY24.
Balance Sheet and Cash Flow Highlights
The balance sheet of Pure Storage Inc (NYSE:PSTG) remains solid, with a total of $2.24 billion in current assets, including $529.19 million in cash and cash equivalents and $821.87 million in marketable securities. The company's total assets were valued at $3.35 billion. On the liabilities side, current liabilities totaled $1.23 billion, with long-term debt at $100 million.
The condensed consolidated statements of cash flows showed a net cash provided by operating activities of $158.43 million for the quarter. Capital expenditures, including capitalized internal-use software costs, amounted to $45.06 million, resulting in free cash flow of $113.4 million.
Conclusion
Pure Storage Inc (NYSE:PSTG) has demonstrated a strong performance in the third quarter of fiscal 2024, with significant growth in revenue and subscription services. The company's strategic initiatives and focus on innovation in the storage-as-a-service market are yielding positive results. With increased guidance for the full year, Pure Storage Inc (NYSE:PSTG) is poised for continued success in the data storage industry.
Investors and interested parties can find more detailed financial information and the full earnings presentation on the Pure Storage Investor Relations website.
Explore the complete 8-K earnings release (here) from Pure Storage Inc for further details.
This article first appeared on GuruFocus.
