TMCnet News

Pure Storage Announces First Quarter Fiscal 2017 Financial Results
[May 25, 2016]

Pure Storage Announces First Quarter Fiscal 2017 Financial Results


MOUNTAIN VIEW, Calif., May 25, 2016 /PRNewswire/ -- Pure Storage (NYSE: PSTG) today announced financial results for its fiscal quarter ended April 30, 2016.

www.purestorage.com

Key highlights include:

  • Quarterly revenue: $139.9 million, up 89% Y-Y, and ahead of the guidance range
  • Quarterly gross margin: 66.5% GAAP; 67.3% non-GAAP, up 6.5 ppts and 6.8 ppts Y-Y, respectively
  • Quarterly operating margin: -45.6% GAAP; -29.4% non-GAAP, up 19.5 ppts and 23.8 ppts Y-Y, respectively

"We are pleased to report another strong quarter," said Scott Dietzen, CEO of Pure Storage. "Year over year, our revenue growth continues to dramatically outpace both our storage industry competitors and the broader enterprise technology sector. While the legacy players retool complex, 20-year-old products to compete, customers continue to be attracted to Pure's simplicity and superior customer experience across flash-optimized software, hardware, our Evergreen business model and cloud management."

"Pure delivered robust April quarter results, with better-than-expected revenue and improving margin performance year over year," said Tim Riitters, CFO of Pure Storage. "We continue to expect to reach sustained positive cash flow by the second half of calendar year 2017."

In the quarter, Pure Storage grew its customer base to more than 1,950 organizations, adding almost 300 new customers, including SoftBank, the University of Melbourne, The World Bank and GMO CLOUD K.K., Japan's largest Internet hosting company.

First Quarter Fiscal 2017 Financial Highlights

The following tables summarize our consolidated financial results for the fiscal quarters ended April 30, 2015 and 2016 (in millions except per share amounts, unaudited):





GAAP Quarterly Financial Information


Three
Months
Ended April

30, 2015

Three
Months
Ended April

30, 2016

Year-Over-
Year
Change

Revenue

$74.1

$139.9

89%

Gross Margin 

60.0%

66.5%

6.5 ppts

Product Gross Margin

64.3%

69.5%

5.2 ppts

Support Gross Margin

33.8%

54.3%

20.5 ppts

Operating Loss

-$48.3

-$63.8

-$15.5

Operating Margin

-65.1%

-45.6%

19.5 ppts

Net Loss

-$49.1

-$63.5

-$14.4

Net Loss per Share

-$1.51

-$0.34

$1.17

Weighted-Average Shares (Basic and Diluted)

32.6

189.3

N/A


 

Non-GAAP Quarterly Financial Information


Three
Months
Ended April
30, 2015

Three
Months
Ended April
30, 2016

Year-Over-
Year
Change

Gross Margin

60.5%

67.3%

6.8ppts

Product Gross Margin

64.4%

69.6%

5.2ppts

Support Gross Margin

37.0%

58.0%

21.0ppts

Operating Loss

-$39.4

-$41.1

-$1.7

Operating Margin

-53.2%

-29.4%

23.8ppts

Net Loss

-$40.3

-$40.8

-$0.5

Net Loss per Share

-$0.26

-$0.22

$0.04

Weighted-Average Shares (Basic and Diluted)

154.9

189.3

N/A

Free Cash Flow

-$20.9

-$17.6

$3.3

 

A reconciliation between GAAP and non-GAAP information is provided at the end of this release.

Financial Outlook

Second Quarter Fiscal 2017 Guidance:

  • Revenue in the range of $153 million to $157 million
  • Non-GAAP gross margin in the range of 65% to 68%
  • Non-GAAP operating margin in the range of -30% to -26%

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 of fiscal 2017 results at 2:00 p.m. (PT) on May 25, 2016. 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: 877-883-0383 or 412-902-6506 (for international callers) with passcode 6650445.        
  • To Listen via the Internet: A live and replay audio broadcast of the conference call with corresponding slides will be available at http://investor.purestorage.com/.
  • Replay: A telephone playback of this conference call is scheduled to be available beginning at 4:00 p.m. (PT) on May 25, 2016, through 4:00 p.m. (PT) on June 1, 2016. The replay will be accessible by calling 877-344-7529 (international callers: 412-317-0088), with access code 10085778. The call runs 24 hours per day, including weekends.

A replay of the webcast will be available for approximately 45 days.

CEO Commentary

Pure Storage has posted a blog from its CEO discussing first quarter results at investor.purestorage.com and blog.purestorage.com.

Upcoming Investor Conferences

Pure Storage Co-Founder and CTO, John "Coz" Colgrove, will be participating in a fireside chat at the Bank of America Merrill Lynch Conference in San Francisco on Thursday, June 2 at 9:15 a.m. (PT). A link to the webcast of this session will be available at investor.purestorage.com

Pure Storage CEO, Scott Dietzen, will be participating in a fireside chat at the Stifel 2016 Technology, Internet & Media Conference in San Francisco on Monday, June 6 at 11:30 a.m. (PT). A link to the webcast of this session will be available at investor.purestorage.com.

Annual Meeting of Stockholders

Pure Storage will hold its 2016 annual meeting of stockholders on Thursday, June 9, 2016 at 10:00 a.m. (PT). The meeting will be held virtually, via live webcast at www.virtualshareholdermeeting.com/PSTG2016. The record date for the meeting is Monday, April 11, 2016, 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 2016 proxy statement and Annual Report on Form 10-K at investor.purestorage.com.

About Pure Storage

Pure Storage (NYSE: PSTG) accelerates possible, transforming businesses in ways previously unimagined. The company's disruptive, software-driven storage technology combined with a customer-friendly business model drives business and IT transformation for customers through dramatic increases in performance and efficiency at lower costs. Pure Storage FlashArray//m is simpler, faster and more elegant than any other technology in the data center. FlashArray //m is ideal for the move toward big data and for performance-intensive workloads such as cloud computing, database systems, desktop virtualization, real-time analytics and server virtualization. With Pure's industry leading Satmetrix-certified NPS score of 79, Pure customers are some of the happiest in the world, and include large and mid-size organizations across a range of industries: cloud-based software and service providers, consumer web, education, energy, financial services, governments, healthcare, manufacturing, media, retail and telecommunications. With Pure Storage, companies push the boundaries of what's possible to become faster, smarter and more innovative.

Forward Looking Statements

This press release contains forward-looking statements regarding our products, business and operations, including our expectations regarding technology differentiation, customer adoption and business model advantages, our ability to maintain growth and take market share, and our financial outlook for the second quarter of fiscal 2017 and statements regarding our products, business, operations and results. 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 fiscal year ended January 31, 2016, which is 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, 2016. All information provided in this release and in the attachments is as of May 25, 2016, 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 loss from operations, 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, payroll tax expense related to stock-based activities and assumed preferred stock conversion. 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.

PSTG-IR

PURE STORAGE, INC.

Condensed Consolidated Balance Sheets

(in thousands)








As of


As of



January 31, 2016


April 30, 2016





(unaudited)

Assets





Current assets:





   Cash and cash equivalents


$                604,742


$          286,096

   Marketable securities


-


320,899

   Accounts receivable, net of allowance of $944 and $1,509


126,324


97,164

   Inventory


20,649


21,980

   Deferred commissions, current


15,703


12,136

   Prepaid expenses and other current assets


20,652


23,154

     Total current assets


788,070


761,429

Property and equipment, net


52,629


71,255

Intangible assets, net


6,980


6,654

Deferred income taxes, non-current


536


605

Other long-term assets


22,568


21,532

          Total assets


$                870,783


$          861,475






Liabilities and stockholders' equity





Current liabilities:





   Accounts payable


$                  38,187


$            42,444

   Accrued compensation and benefits


32,995


18,560

   Accrued expenses and other liabilities


14,076


15,970

   Deferred revenue, current


94,514


107,223

   Liability related to early exercised stock options


4,760


4,584

     Total current liabilities   


184,532


188,781

Deferred revenue, non-current


121,690


129,634

Other long-term liabilities


1,207


1,643

     Total liabilities


307,429


320,058






Stockholders' equity:





Common stock and additional paid-in capital


1,118,689


1,159,404

Accumulated other comprehensive income


-


807

Accumulated deficit


(555,335)


(618,794)

Total stockholders' equity


563,354


541,417






         Total liabilities and stockholders' equity


$                870,783


$          861,475

 

PURE STORAGE, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)








Three Months Ended April 30,



2015


2016



(unaudited)

Revenue:





  Product 


$  63,618


$ 111,738

  Support


10,459


28,209

Total revenue


74,077


139,947






Cost of revenue:





  Product (1)


22,712


34,042

  Support (1)


6,924


12,893

Total cost of revenue


29,636


46,935






Gross profit


44,441


93,012






Operating expenses:





  Research and development (1)


31,682


52,500

  Sales and marketing (1)


48,327


82,816

  General and administrative (1)


12,692


21,482

Total operating expenses


92,701


156,798






Loss from operations


(48,260)


(63,786)

Other income (expense), net


(703)


1,282

Loss before provision for income taxes


(48,963)


(62,504)

Provision for income taxes


157


955

Net loss


$ (49,120)


$ (63,459)






Net loss per share attributable to common stockholders, basic and diluted

$     (1.51)


$     (0.34)






Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted


32,605


189,283






(1) Includes stock-based compensation expense as follows:










Cost of revenue -- product


$         56


$        102

Cost of revenue -- support


333


1,051

Research and development


3,625


11,220

Sales and marketing


3,444


7,237

General and administrative 


1,401


2,524

Total stock-based compensation expense


$    8,859


$   22,134

 

PURE STORAGE, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)








Three Months Ended April 30,



2015


2016



(unaudited)

Cash flows from operating activities





Net loss


$ (49,120)


$ (63,459)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:




    Depreciation and amortization


6,479


10,432

    Stock-based compensation expense


8,859


22,134

    Other


-


484

Changes in operating assets and liabilities:





    Accounts receivable, net


4,070


28,593

    Inventory


(1,470)


(2,623)

    Deferred commissions


1,763


4,141

    Prepaid expenses and other assets


(2,985)


(2,744)

    Accounts payable


(285)


166

    Accrued compensation and other liabilities


(3,626)


(11,017)

    Deferred revenue


22,198


20,653

Net cash provided by (used in) operating activities


(14,117)


6,760






Cash flows from investing activities





    Purchases of property and equipment


(6,742)


(24,376)

    Purchases of marketable securities


-


(343,466)

    Sales of marketable securities


-


23,327

    Decrease in restricted cash


-


706

Net cash used in investing activities


(6,742)


(343,809)






Cash flows from financing activities





    Net proceeds from exercise of stock options


1,691


3,324

    Proceeds from issuance of common stock under employee stock purchase

-


15,079

    Payments of deferred offering costs


(313)


-

    Net cash provided by financing activities


1,378


18,403






Net decrease in cash and cash equivalents


(19,481)


(318,646)

Cash and cash equivalents, beginning of period


192,707


604,742

Cash and cash equivalents, end of period


$ 173,226


$ 286,096

 

Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures 
















The following table presents non-GAAP gross margins by revenue source before certain items (in thousands, unaudited):
















Three Months Ended April 30, 2015


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)


















$             56

(c)





$           102

(c)


Gross profit -- product

$           40,906

64.3%

$             56


$                    40,962

64.4%


$           77,696

69.5%

$           102


$                    77,798

69.6%
































$           333

(c)





$        1,051

(c)


Gross profit -- support

$             3,535

33.8%

$           333


$                      3,868

37.0%


$           15,316

54.3%

$        1,051


$                    16,367

58.0%
































$           389

(c)





$        1,153

(c)


Total gross profit

$           44,441

60.0%

$           389


$                    44,830

60.5%


$           93,012

66.5%

$        1,153


$                    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.



















The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts, unaudited):
















Three Months Ended April 30, 2015


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)


















$        8,859

(c)





$      22,134

(c)





-

(d)





505

(d)
















Loss from operations

$         (48,260)

-65.1%

$        8,859


$                  (39,401)

-53.2%


$         (63,786)

-45.6%

$      22,639


$                  (41,147)

-29.4%


















$        8,859

(e)





$      22,134

(c)





-

(d)





505

(d)
















Net loss

$         (49,120)


$        8,859


$                  (40,261)



$         (63,459)


$      22,639


$                  (40,820)
















Net loss per share -- basic and diluted

$             (1.51)




$                      (0.26)



$             (0.34)




$                      (0.22)
















Weighted-average shares used in per share calculation -- basic and diluted

32,605


122,281

(e)

154,886



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.

(e) To assume preferred stock conversion as of the beginning of the period.

 

Reconciliation from net cash provided by (used in) operating activities to free cash flow (in thousands, unaudited):






Three Months Ended April 30,


2015


2016

Net cash provided by (used in) operating activities 

$ (14,117)


$    6,760

Less: purchases of property and equipment 

(6,742)


(24,376)

Free cash flow 

$ (20,859)


$ (17,616)

Free cash flow as % of revenue

-28.2%


-12.6%

 

Logo - http://photos.prnewswire.com/prnh/20150127/171513LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/pure-storage-announces-first-quarter-fiscal-2017-financial-results-300275099.html

SOURCE Pure Storage


[ Back To TMCnet.com's Homepage ]