Pure Storage (PSTG) Q2 FY25 Earnings call transcript Aug 28, 2024

Pure Storage, a leading innovator in data storage solutions, recently announced its second quarter fiscal 2025 financial results, showcasing an impressive 11% year-over-year revenue growth. The company, which has been gaining market share and outpacing the industry in innovation and growth, held its Annual //Accelerate Conference in Las Vegas, where it introduced its next generation of Fusion, a first-of-its-kind storage cloud architecture, and the industry's first AI Storage as a Service for GPU clouds.

Fusion: A Game-Changer in Data Storage

During the conference, Pure unveiled the next generation of Fusion, a revolutionary storage cloud architecture set to transform Pure Storage systems into an automated data storage cloud. This innovative solution eliminates data silos in existing enterprise data storage systems, providing businesses with an automated and flexible data management system. The launch of Fusion underscores Pure's commitment to staying at the forefront of the storage industry, addressing the challenges of data access and preparation that are major barriers to AI deployment.

Strong Performance in Evergreen//One Service Offerings

Pure's Evergreen//One service offering remains strong, with its subscription-based model proving to be a popular choice among customers. This service removes the burden of operating a storage environment from enterprise IT organizations, providing flexibility, simplifying operations, and significantly boosting efficiency. While the lengthening of large enterprise deal times has impacted Evergreen//One growth in the first half, the company continues to see strong deal activity, indicating a positive outlook for the service in the future.

Navigating the AI Market

Artificial intelligence (AI) continues to be a significant focus for Pure Storage, with the company seeing increasing interest from customers in both the potential uses and infrastructure requirements for AI. Pure is positioning itself as a key player in the AI market, offering solutions tailored to machine learning and training environments, as well as enterprise inference or rack environments. The company's anticipated NVIDIA DGX SuperPOD certification is a testament to its commitment to providing advanced AI storage solutions.

Looking Ahead

Despite challenges in the macro environment, Pure remains optimistic about its future prospects. The company's focus on innovation and customer-centric solutions, combined with its strategic initiatives, positions it well for continued success in the data storage industry. With a strong financial performance and a robust product roadmap, Pure Storage is well-positioned to capitalize on the growing demand for high-performance, sustainable data storage solutions.

Financial Highlights

In the second quarter of fiscal '25, Pure reported revenue of $764 million, exceeding its guidance by $35 million. Subscription services, including Evergreen//One, grew by 24% to over $1.5 billion, demonstrating the strength of Pure's as-a-service offerings. Total RPO and exiting Q2 grew by 24% year-over-year, reflecting the company's strong sales performance. Pure's balance sheet and liquidity remain robust, with cash and investments totaling $1.8 billion at the end of Q2.

Conclusion

Pure Storage's Q2 fiscal '25 financial results highlight the company's strong performance and strategic initiatives, positioning it as a leader in the data storage industry. With a focus on innovation, customer-centric solutions, and a robust product roadmap, Pure is well-positioned to navigate the challenges and opportunities in the storage market. As the company continues to transform the storage industry, its commitment to unlocking the full potential of analytics and artificial intelligence is a testament to its vision and leadership.