Pure Storage 2026 Q3 Earnings Revenue Surges 16% as Net Income Declines 13.9%

Pure Storage (PSTG) reported Q3 2026 results, with revenue exceeding estimates and guidance raised for FY26. While GAAP EPS fell short of expectations, the company’s strategic focus on hyperscale growth and AI-driven solutions underscored long-term optimism.

Revenue

Product revenue surged to $534.76 million, while subscription services contributed $429.69 million, propelling total revenue to $964.45 million, a 16% year-over-year increase. The segment breakdown highlights robust demand for integrated storage hardware and cloud-based subscription offerings, with subscription services now accounting for 45% of total revenue.

Earnings/Net Income

Despite a 16% revenue increase, EPS and net income declined year-over-year, highlighting ongoing financial challenges.

Post-Earnings Price Action Review

The strategy of buying Pure Storage (PSTG) shares after its revenue raise on the financial report released date and holding for 30 days showed favorable performance. The compound annual growth rate (CAGR) of this strategy over the past three years was 14.8%, with a maximum drawdown of 12.8% during the December 2024 update. The strategy outperformed the SPY ETF, which had a CAGR of 11.1% over the same period.

Recent price action revealed mixed signals: a 3.54% intraday gain, a 15.33% weekly surge, and a 2.36% monthly decline. Post-earnings volatility underscores market skepticism about valuations despite revenue momentum.

CEO Commentary

CEO Charles Giancarlo emphasized enterprise momentum and hyperscale shipments exceeding 2 exabytes annually, positioning Pure’s Enterprise Data Cloud as critical for AI and operational velocity. Strategic priorities include expanding hyperscale partnerships and accelerating R&D in AI/ML, while navigating macro challenges like commodity pricing pressures.

Guidance

CFO Tarek Robbiati provided Q4 revenue guidance of $1.02–1.04 billion (17.1% YoY growth at midpoint) and FY26 revenue guidance of $3.63–3.64 billion (14.7% YoY growth). Operating profit for Q4 is expected to grow 47% YoY, with FY26 operating profit projected to rise 13.3%.

Additional News

Norges Bank acquired a 1.20% stake in PSTG, investing $225.2 million, while Schroder Investment Management Group increased its holding by 35.2%. West Family Investments Inc. also entered the fray with a $229,000 position. These institutional moves reflect confidence in Pure Storage’s long-term data storage and AI infrastructure potential.