We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pure Storage (PSTG) Q4 Earnings & Revenues Surpass Estimates
Read MoreHide Full Article
Pure Storage (PSTG - Free Report) reported non-GAAP earnings per share (EPS) of 50 cents in fourth-quarter fiscal 2024, which beat the Zacks Consensus Estimate by 11.1%. The company reported non-GAAP EPS of 53 cents in the prior-year quarter.
Total revenues decreased 3% from the year-ago reported quarter to $789.8 million. However, revenue’s beat the Zacks Consensus Estimate by 1%.
Strong demand for subscription-based offerings particularly Evergreen//One and Portworx acted as catalysts amid macroeconomic weakness.
For fiscal 2024, the company reported revenues of $2.8 billion, up 3% year over year. Subscription services revenues of $1.2 billion rose 26% year over year. PSTG noted that the total contract value (TCV) sales for Evergreen//One and Evergreen//Flex exceeded $400 million in fiscal 2024.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Product revenues (contributing 58% to total revenues) amounted to $460.9 million, down 15.4% on a year-over-year basis.
Subscription services revenues (42%) of $328.9 million rose 24% on a year-over-year basis.
We expected Product and Subscription services revenues to be $502.8 million and $279.2 million, respectively, for the fiscal fourth quarter.
Subscription annual recurring revenues (ARR) amounted to nearly $1.374 billion, up 25% 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 $522 million and $268 million, respectively.
Margin Highlights
The non-GAAP gross margin expanded 290 basis points (bps) year over year to 73.7%.
The non-GAAP Product gross margin expanded 420 bps year over year to 73.4%. The non-GAAP Subscription gross margin was 74.1%, which contracted 10 bps on a year-over-year basis.
Non-GAAP operating expenses, as a percentage of total revenues, were 53.7% compared with 51.3% in the prior-year quarter.
Pure Storage reported non-GAAP operating income of $157.8 million compared with $158.6 million in the year-ago quarter. The non-GAAP operating margin was 20% compared with 19.6% in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the fiscal fourth quarter that ended on Feb 4 with cash, cash equivalents and marketable securities of $1.5 billion, up from $1.35 billion as of Nov 5, 2023.
Cash flow from operations amounted to $244.4 million in the fiscal fourth quarter compared with $158.4 million in the prior-year quarter. Free cash flow was $200.9 million compared with $113.3 million in the prior-year quarter.
In the fiscal fourth quarter, the company returned $21.4 million to shareholders by repurchasing 0.6 million shares. For fiscal 2024, it returned $135.7 million to shareholders by repurchasing 4.7 million shares. It has $145 million left from its previously announced $250 million share repurchase plan. PSTG also announced a new buyback authorization worth $250 million.
Deferred revenues increased 15.1% year over year to $1.595 billion in the quarter under review.
The remaining performance obligations at the end of the fiscal fourth quarter totaled $2.3 billion, up 31% year over year. The metric represented total committed non-cancelable future revenues.
Guidance
Management expects fiscal 2025 revenues to be $3.1 billion, indicating a rise of 10.5% from the year-earlier levels. The company expects strengthening demand trends to drive performance but remains wary of the volatile macroeconomic conditions.
The non-GAAP operating margin is suggested to be 17%. TCV sales for Evergreen//One & Evergreen//Flex subscription service offerings are forecast to be $600 million, implying 50% growth from a year ago.
Pure Storage expects revenues to be $680 million for first-quarter fiscal 2025, representing an increase of 15.4% from the year-ago reported figure.
The non-GAAP operating income for the fiscal first quarter is expected to be $68 million. The non-GAAP operating margin is expected to be 10%.
Zacks Rank and Stocks to Consider
Pure Storage currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Watts Water Technologies (WTS - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 76.6% in the past year.
The Zacks Consensus Estimate for Watts Water’s 2024 EPS has improved 10 cents to $8.54 in the past seven days. The long-term earnings growth rate is pegged at 7.8%. Shares of WTS have jumped 14.6% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is pegged at 16.2%. MSFT has gained 64.6% in the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Pure Storage (PSTG) Q4 Earnings & Revenues Surpass Estimates
Pure Storage (PSTG - Free Report) reported non-GAAP earnings per share (EPS) of 50 cents in fourth-quarter fiscal 2024, which beat the Zacks Consensus Estimate by 11.1%. The company reported non-GAAP EPS of 53 cents in the prior-year quarter.
Total revenues decreased 3% from the year-ago reported quarter to $789.8 million. However, revenue’s beat the Zacks Consensus Estimate by 1%.
Strong demand for subscription-based offerings particularly Evergreen//One and Portworx acted as catalysts amid macroeconomic weakness.
For fiscal 2024, the company reported revenues of $2.8 billion, up 3% year over year. Subscription services revenues of $1.2 billion rose 26% year over year. PSTG noted that the total contract value (TCV) sales for Evergreen//One and Evergreen//Flex exceeded $400 million in fiscal 2024.
Pure Storage, Inc. Price, Consensus and EPS Surprise
Pure Storage, Inc. price-consensus-eps-surprise-chart | Pure Storage, Inc. Quote
Quarter in Detail
Product revenues (contributing 58% to total revenues) amounted to $460.9 million, down 15.4% on a year-over-year basis.
Subscription services revenues (42%) of $328.9 million rose 24% on a year-over-year basis.
We expected Product and Subscription services revenues to be $502.8 million and $279.2 million, respectively, for the fiscal fourth quarter.
Subscription annual recurring revenues (ARR) amounted to nearly $1.374 billion, up 25% 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 $522 million and $268 million, respectively.
Margin Highlights
The non-GAAP gross margin expanded 290 basis points (bps) year over year to 73.7%.
The non-GAAP Product gross margin expanded 420 bps year over year to 73.4%. The non-GAAP Subscription gross margin was 74.1%, which contracted 10 bps on a year-over-year basis.
Non-GAAP operating expenses, as a percentage of total revenues, were 53.7% compared with 51.3% in the prior-year quarter.
Pure Storage reported non-GAAP operating income of $157.8 million compared with $158.6 million in the year-ago quarter. The non-GAAP operating margin was 20% compared with 19.6% in the prior-year quarter.
Balance Sheet & Cash Flow
Pure Storage exited the fiscal fourth quarter that ended on Feb 4 with cash, cash equivalents and marketable securities of $1.5 billion, up from $1.35 billion as of Nov 5, 2023.
Cash flow from operations amounted to $244.4 million in the fiscal fourth quarter compared with $158.4 million in the prior-year quarter. Free cash flow was $200.9 million compared with $113.3 million in the prior-year quarter.
In the fiscal fourth quarter, the company returned $21.4 million to shareholders by repurchasing 0.6 million shares. For fiscal 2024, it returned $135.7 million to shareholders by repurchasing 4.7 million shares. It has $145 million left from its previously announced $250 million share repurchase plan. PSTG also announced a new buyback authorization worth $250 million.
Deferred revenues increased 15.1% year over year to $1.595 billion in the quarter under review.
The remaining performance obligations at the end of the fiscal fourth quarter totaled $2.3 billion, up 31% year over year. The metric represented total committed non-cancelable future revenues.
Guidance
Management expects fiscal 2025 revenues to be $3.1 billion, indicating a rise of 10.5% from the year-earlier levels. The company expects strengthening demand trends to drive performance but remains wary of the volatile macroeconomic conditions.
The non-GAAP operating margin is suggested to be 17%. TCV sales for Evergreen//One & Evergreen//Flex subscription service offerings are forecast to be $600 million, implying 50% growth from a year ago.
Pure Storage expects revenues to be $680 million for first-quarter fiscal 2025, representing an increase of 15.4% from the year-ago reported figure.
The non-GAAP operating income for the fiscal first quarter is expected to be $68 million. The non-GAAP operating margin is expected to be 10%.
Zacks Rank and Stocks to Consider
Pure Storage currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth consideration in the broader technology space are Manhattan Associates (MANH - Free Report) , Watts Water Technologies (WTS - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MANH’s 2024 EPS has increased 3.6% in the past 60 days to $3.76. Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 76.6% in the past year.
The Zacks Consensus Estimate for Watts Water’s 2024 EPS has improved 10 cents to $8.54 in the past seven days. The long-term earnings growth rate is pegged at 7.8%. Shares of WTS have jumped 14.6% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 EPS is pegged at $11.63, indicating growth of 18.6% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term earnings growth rate is pegged at 16.2%. MSFT has gained 64.6% in the past year.