Published - June 1rst, 2023 @ 09:30 AM (GMT+2 )
Pure Storage First-Quarter Report: End of Growth Streak, Shares Jump
Pure Storage (NYSE:PSTG), the enterprise data storage company, saw its shares leap after its fiscal first-quarter results and optimistic guidance surpassed Wall Street's expectations. This report departed from Pure Storage's consistent growth streak, dropping year-over-year earnings and sales.
For the quarter concluded on May 7, Pure Storage reported adjusted earnings of 8 cents per share, beating the expected 4 cents. The company generated sales of $589.3 million, surpassing analysts' prediction of $560 million. However, when juxtaposed with last year's performance, Pure Storage's earnings slid 68%, and sales saw a 5% dip, ending its unbroken earnings growth record over seven quarters and nine quarters of sales growth.
Notable Increase in Subscription-based Annual Recurring Revenue
However, it wasn't all gloomy for Pure Storage. The company's subscription-based annual recurring revenue (ARR) rose impressively by 29% year-over-year to reach $1.2 billion in Q1. This positive trajectory showcases Pure Storage's robust and growing subscription model.
Optimistic Revenue Forecast for the Current Quarter
Looking forward to the current quarter, Pure Storage has guided higher than analysts' views. The company forecasts revenue of $680 million, indicating a 5% rise from the previous year's period. Analysts had projected sales of $658 million for this fiscal second quarter.
Pure Storage's shares soared 7% to 30.80 in the stock market's after-hours trading. However, during Wednesday's regular session, the stock declined by 2.1% to close at 28.79. According to IBD MarketSmith charts, the shares have been in a consolidation phase for the past 29 weeks, with a buy point of 32.55.
Pure Storage's Leadership and Product Superiority
Chief Executive Charles Giancarlo stated in a news release, "We are the clear leader in data storage, now delivering a portfolio that can address the vast majority of storage needs for all enterprises." He emphasized the undeniable advantages of Pure's product portfolio over both hard disk and SSD (solid-state drive)-based, all-flash competitive offerings in terms of economics, performance, and operational and environmental efficiencies.
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