Pure Storage PSTG reported fourth-quarter fiscal 2025 non-GAAP earnings per share (EPS) of 45 cents, which beat the Zacks Consensus Estimate by 7.1%. The company reported non-GAAP EPS of 50 cents in the prior-year quarter.
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Quarterly revenues expanded 11% from the year-ago quarter to $879.8 million, beating the Zacks Consensus Estimate by 1.08%. The top line outpaced management’s guidance owing to record sales across FlashBlade, FlashArray//XL, Portworx, the //E portfolio and renewals of its Evergreen subscriptions. In the fiscal fourth quarter, TCV sales of Evergreen//One hit a record high of $140 million, up 20% year over year.
In fiscal 2025, the company achieved a key financial milestone, exceeding $3 billion in revenues for the first time, reaching $3.2 billion with 12% year-over-year growth. PSTG's heavy capital investments throughout the year fueled data center expansion, advanced new product testing, accelerated DirectFlash module density and drove Fusion v.2 software development, including a major hyperscale design win.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Pure Storage, Inc. Price, Consensus and EPS Surprise
Pure Storage, Inc. price-consensus-eps-surprise-chart | Pure Storage, Inc. Quote
Management anticipates an 11% year-over-year revenue growth of $3.5 billion for fiscal 2026. Its annual revenue forecast assumes the IT spending environment to align closely with the fiscal 2025 level, along with renewed growth for Evergreen//One and other service offerings.
In addition, Pure Storage expects product gross margins to stabilize in the mid-60s, aligning with its long-term 65-70% target. This outlook is driven by strong demand for the E family and FlashArray C, along with expected moderation in QLC flash pricing, which is pivotal for competing with disk-based solutions. PSTG projects a 17% operating margin, resulting in an estimated operating profit of $595 million.
In response to the solid performance, PSTG’s shares went up 2% in trading and closed at $62.44 on Feb. 26. In the past year, shares have gained 31% against the Zacks Computer-Storage Devices industry’s decline of 7%.
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PSTG’s Quarter in Detail
Product revenues (contributing 56.2% to total revenues) amounted to $494.8 million, up 7.4% on a year-over-year basis. Subscription services revenues (43.8%) of $385.1 million rose 17%.
We expected Product and subscription revenues to be $467.9 million and $399.1 million, respectively, for the fiscal fourth quarter.
Subscription annual recurring revenues (ARR) amounted to nearly $1.7 billion, up 21% on a year-over-year basis. Subscription ARR includes the annualized value of all active subscription contracts as of the last day of the quarter, along with annualized on-demand revenues.
Total revenues in the United States and International were $619 million and $261 million, respectively.
Margin Highlights
The non-GAAP gross margin came in at 69.2% compared with 73.7% in the prior-year quarter.
The non-GAAP product gross margin was 62.9%, down from 73.4% in the prior year. The non-GAAP subscription gross margin was 77.2% compared with 74.1% a year ago.
Non-GAAP operating expenses, as a percentage of total revenues, were 51.8% compared with 53.7% reported in the prior-year quarter.
Pure Storage reported a non-GAAP operating income of $153.1 million compared with $157.8 million in the year-ago quarter. The non-GAAP operating margin was 17.4% compared with 20% in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the fiscal fourth quarter, which ended on Feb. 2, with cash and cash equivalents and marketable securities of $1.5 billion, down from $1.6 billion as of Nov. 3, 2024.
Cash flow from operations amounted to $208 million in the fiscal fourth quarter compared with $244.4 million reported in the prior-year quarter. Free cash flow was $151.9 million compared with $200.9 million in the year-ago quarter.
In the fiscal fourth quarter, the company returned $192 million to shareholders by repurchasing 3.1 million shares. In fiscal 2025, it returned $374 million to shareholders by repurchasing 6.7 million shares. It has $21 million left from its previously announced $250 million share repurchase plan. PSTG also announced a new buyback authorization worth $250 million.
The remaining performance obligations at the end of the fiscal fourth quarter totaled $2.6 billion, up 14% year over year.
Fiscal Q1 Guidance
Pure Storage expects revenues to be $770 million, implying an increase of 11% from a year ago level. The Zacks Consensus Estimate is pegged at $776.2 million, up 11.9% year over year.
The non-GAAP operating income is expected to be $80 million. The non-GAAP operating margin is projected to be 10.4%.
PSTG’s Zacks Rank
Pure Storage currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Western Digital Corporation WDC reported second-quarter fiscal 2025 non-GAAP earnings of $1.77 per share, surpassing the Zacks Consensus Estimate of $1.75. The company incurred a loss of 75 cents per share in the prior-year quarter.
Shares of WDC declined 12.1% in the past year.
Quantum Corporation QMCO reported a third-quarter fiscal 2025 non-GAAP loss of 81 cents per share, wider than the Zacks Consensus Estimate of a loss of 70 cents. The company incurred a loss of $1.79 per share in the year-ago quarter.
Shares of QMCO soared 38.9% in the past year.
Seagate Technology Holdings plc STX reported second-quarter fiscal 2025 non-GAAP earnings of $2.03 per share, beating the Zacks Consensus Estimate by 7.98%. The company reported non-GAAP earnings of 12 cents per share in the year-ago quarter.
In the past year, STX shares have gained 9.4%.
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