PSTG Beats on Q4 Earnings & Sales, Enters FY27 With Hyperscale Momentum

Pure Storage PSTG reported fourth-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 69 cents, which beat the Zacks Consensus Estimate of 65 cents. The company reported non-GAAP EPS of 45 cents in the prior-year quarter.

From March 5, 2026, the company will trade as Everpure on the NYSE under the PSTG ticker.

Quarterly revenues expanded 20% year over year to $1.1 billion, beating the Zacks Consensus Estimate by 2.5%. This marks the first billion-dollar quarter in company history. For the full fiscal year, revenue totaled $3.7 billion, up 16% year over year. The growth reflects strong demand across enterprise customers, modernizing legacy storage, hyperscalers scaling AI workloads and hybrid and multi-cloud environments. Its Enterprise Data Cloud (EDC) architecture is gaining strong traction, with more than 600 customers adopting Fusion in its first year.

Everpure has strengthened its hyperscale positioning by partnering with SK hynix to deliver advanced QLC flash storage optimized for large data centers. The partnership positions Everpure well for large-scale deployments. Recently, it announced a definitive agreement to acquire 1touch, extending its EDC into data discovery, classification, contextualization and enrichment. This deepens the company’s move into data governance, a critical layer for AI compliance and enterprise security. The deal is expected to close in the second quarter of fiscal 2027, subject to customary conditions, with terms undisclosed.

Pure Storage, Inc. Price, Consensus and EPS Surprise

Pure Storage, Inc. price-consensus-eps-surprise-chart | Pure Storage, Inc. Quote

Despite strong momentum, management remains wary of global supply chain imbalances, AI infrastructure spending cycles, competition from hyperscaler-native storage offerings and pricing pressure in large enterprise deals. However, the strong gross margins suggest pricing power remains intact.

In response to the record performance, PSTG’s shares went up 8.6% in trading and closed at $73.56 on Feb. 25. Shares also jumped 6% in pre-market today. In the past year, shares have gained 17.8% compared with the Zacks Computer-Storage Devices industry’s rise of 146.4%.

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PSTG’s Quarter in Detail

Product revenues (contributing 58.4% to total revenues) amounted to $618 million, up 25% on a year-over-year basis. The product revenue category now also includes royalties from hyperscale shipments and part of Portworx software revenue when sold as term licenses.

Subscription services revenues (41.6%) of $440 million rose 14%.

Subscription annual recurring revenues (ARR) amounted to nearly $1.9 billion, up 16% on a year-over-year basis. High-velocity deals under $5 million lifted Storage-as-a-Service TCV 28% year over year to $179 million.

Total revenues in the United States and International were $674 million and $385 million, up 9% and 48%, respectively. International revenue made up 36% of the total, underscoring global expansion as a key strategic focus.

Margin Highlights

The non-GAAP gross margin came in at 71.4% compared with 69.2% in the prior-year quarter.

Favorable product mix expanded product gross margin to 67.3%, up more than 400 bps year over year. Product gross margin declined sequentially on lumpy hyperscaler and Portworx shipments, mix shifts and modest component cost inflation, with pricing actions taken in early February 2026. The non-GAAP subscription gross margin was 77% compared with 77.2% a year ago.

Pure Storage reported a non-GAAP operating income of $226 million compared with $153 million in the year-ago quarter, boosted by strong revenue and solid gross margins.

Non-GAAP operating margin reached 21.3%, up from 17.4%, demonstrating that scale and recurring revenue are improving profitability leverage.

Balance Sheet & Cash Flow

Pure Storage exited the fiscal fourth quarter, which ended on Feb. 1, with cash and cash equivalents and marketable securities of $1.5 billion, the same as of Nov. 2, 2025.

Cash flow from operations amounted to $268 million in the fiscal fourth quarter compared with $208.5 million reported in the prior-year quarter. Free cash flow was $201.5 million compared with $152.4 million in the year-ago quarter.

In the fiscal fourth quarter, the company returned $127 million to shareholders by buying back 1.7 million shares. In fiscal 2026, it returned $343 million to shareholders by repurchasing 5.6 million shares. It has $329 million left from its existing $400 million share repurchase plan. For fiscal 2026, 56% of free cash flow was used for buybacks.

The remaining performance obligations (RPO) at the end of the fiscal fourth quarter totaled $3.7 billion, up 40% year over year, on the back of sizable deals and continued strength in Evergreen//Forever and Evergreen//One. RPO, which includes its Storage-as-a-Service offerings and Evergreen subscriptions across the install base, grew 34%.

Upbeat Guidance

For first-quarter fiscal 2027, Pure Storage expects revenues of $990 million to $1.01 billion, up about 28% year over year at the midpoint.

The non-GAAP operating income is expected to be $125-$135 million, with around 57% year-over-year growth at the midpoint.

PSTG has entered fiscal 2027 with strong momentum and expects 47% of revenue in the first half, up 2 points year over year.

At the midpoint, revenue expectations of $4.3–$4.4 billion suggests 18.8% year-over-year growth, with operating profit of $780–$820 million expected to rise about 26%.

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 Peer Companies

Western Digital Corporation WDC reported second-quarter fiscal 2026 non-GAAP earnings of $2.13 per share, surpassing the Zacks Consensus Estimate of $1.95. The bottom line expanded 78% year over year and 20% sequentially, exceeding the high end of management’s guidance of $1.88 (+/- 15 cents). For the fiscal second quarter, Western Digital generated $3.02 billion in revenue, up 7% sequentially and 25% year over year, driven primarily by strong data center demand and increased adoption of high-capacity HDDs. The consensus estimate was pinned at $2.95 billion.

Sandisk SNDK reported second-quarter fiscal 2026 non-GAAP earnings of $6.20 per share, which beat the Zacks Consensus Estimate by 75.14%. The company reported earnings of $1.23 per share in the year-ago quarter and $1.22 per share in the previous quarter. Revenues surged 61.2% year over year and 31.1% sequentially to $3.03 billion and beat the Zacks Consensus Estimate by 13.49%. Bit shipments increased at low single digits, and average selling price per Gigabyte increased mid 30% in the reported quarter.

Teradata TDC reported fourth-quarter 2025 non-GAAP earnings of 74 cents per share, which beat the Zacks Consensus Estimate by 35.04%. The bottom line increased 39.6% year over year. Revenues of $421 million beat the Zacks Consensus Estimate by 6.52%. The figure appreciated 3% year over year on a reported basis and 1% on a constant-currency (cc) basis. Total ARR at the fourth-quarter end increased 3% year over year to $1.52 billion and 1% on a constant-currency (cc) basis.

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