Core Insights - Pure Storage (PSTG) reported second-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 43 cents, exceeding the Zacks Consensus Estimate by 10.3% and slightly down from 44 cents in the prior-year quarter [1][8] - Quarterly revenues increased by 13% year-over-year to $861 million, surpassing both the Zacks Consensus Estimate by 1.8% and management's guidance of $845 million, driven by strong demand from large enterprises and growth in FlashBlade and core software offerings [2][8] Financial Performance - PSTG's product revenues, which accounted for 51.8% of total revenues, reached $446.3 million, reflecting a 10.6% year-over-year increase, while subscription services revenues (48.2%) rose by 14.8% to $414.7 million [5] - Subscription annual recurring revenues (ARR) were nearly $1.8 billion, marking an 18% increase year-over-year [6] - Non-GAAP operating income is forecasted between $605 million and $625 million, indicating about 10% year-over-year growth at the midpoint, which is an improvement from prior guidance [3][4] Guidance and Market Response - For fiscal 2026, PSTG expects revenues in the range of $3.6 billion to $3.63 billion, suggesting a 14% year-over-year growth at the midpoint, which is an increase from the previously guided 11% growth [3][4] - Following the strong quarterly performance and positive guidance, PSTG shares jumped 15% in pre-market trading, with a 21% increase over the past year compared to the industry growth of 7.1% [4] Margin and Cash Flow - The non-GAAP gross margin was reported at 72.1%, slightly down from 72.8% in the prior-year quarter, while the non-GAAP operating margin decreased to 15.1% from 18.1% year-over-year [10][11] - Cash flow from operations for the quarter was $212.2 million, down from $226.6 million in the prior-year quarter, with free cash flow at $150.1 million compared to $166.6 million [12] Shareholder Returns and Obligations - In the fiscal second quarter, the company returned $42 million to shareholders through share repurchases, with $109 million remaining under its current authorization plan [13] - Remaining performance obligations totaled $2.8 billion, reflecting a 22% year-over-year increase [13] Future Outlook - For fiscal Q3, PSTG anticipates revenues in the range of $950 million to $960 million, indicating a 15% increase at the midpoint from the previous year, with non-GAAP operating income expected to be between $185 million and $195 million [14]

Core Insights - Pure Storage (PSTG.US) surged nearly 30%, reaching an all-time high of $78.41 following the release of its Q2 FY2026 earnings report [1] Financial Performance - The company reported revenue of $861 million for Q2 FY2026, a 13% year-over-year increase, exceeding analyst expectations of $846.8 million [1] - Earnings per share were $0.43, surpassing the anticipated $0.39 [1] - Subscription service revenue reached $414.7 million, reflecting a 15% year-over-year growth [1] - Annual recurring revenue from subscriptions hit $1.8 billion, up 18% year-over-year, contributing to an overall gross margin of 72.1% [1] Guidance and Projections - The company raised its sales guidance for FY2026 to between $3.6 billion and $3.63 billion, up from the previous guidance of $3.515 billion [1] - For Q3, sales are projected to be between $950 million and $960 million, exceeding the expected $913.1 million [1]

Core Viewpoint - Pure Storage (PSTG.US) experienced a nearly 30% surge, reaching an all-time high of $78.41 following the release of its Q2 FY2026 earnings report, which exceeded analyst expectations [1] Financial Performance - The company reported revenue of $861 million for Q2 FY2026, a 13% year-over-year increase, surpassing analyst expectations of $846.8 million [1] - Earnings per share were $0.43, exceeding the anticipated $0.39 [1] - Subscription service revenue reached $414.7 million, reflecting a 15% year-over-year growth [1] - Annual recurring revenue from subscriptions hit $1.8 billion, up 18% year-over-year, contributing to an overall gross margin of 72.1% [1] Guidance and Projections - Pure Storage raised its sales guidance for FY2026 to between $3.6 billion and $3.63 billion, up from the previous guidance of $3.515 billion [1] - The company anticipates Q3 sales to be between $950 million and $960 million, exceeding the expected $913.1 million [1]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2026 was $861 million, representing a 13% year-over-year growth, while operating profit was $130 million with an operating margin of 15.1% [22][28] - Subscription services revenue reached $415 million, up 15% year-over-year, accounting for 48% of total revenue [26] - Total remaining performance obligations (RPO) grew 22% to $2.8 billion, reflecting robust renewals and new commitments [26] - Total gross margin remained strong at 72.1%, with subscription services gross margin at 76.5% [27] Business Line Data and Key Metrics Changes - Strong performance was noted across the entire portfolio, particularly in FlashBlade and core software and services offerings like Evergreen One, Cloud Block Store, and Portworx [22][24] - Total contract value (TCV) sales for Storage as a Service offerings grew 24% year-over-year to $125 million [24] - The FlashBlade E family showed strength, contributing to overall product gross margin improvement [88] Market Data and Key Metrics Changes - U.S. revenue was $577 million, growing 7%, while international revenue was $284 million, growing 26% year-over-year [27] - More than 300 new customers were added, maintaining a 62% penetration rate in the Fortune 500 [27] Company Strategy and Development Direction - The company is focused on the enterprise data cloud architecture, which is transforming how organizations manage data, emphasizing the shift from traditional siloed storage to a software-defined model [9][11] - Continued investment in partnerships with hyperscalers, including Meta, to enhance direct flash technology and expand market presence [25][17] - The introduction of a guidance range for financial metrics aims to align with industry practices and provide flexibility for growth opportunities [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to extend industry leadership despite a variable macro environment, citing strong execution and planning [20] - Positive momentum is expected in the second half of the fiscal year, driven by strong demand signals and an increasing pipeline of large deals [110] - The company anticipates revenue for FY 2026 to be in the range of $3.6 billion to $3.63 billion, representing a 14% year-over-year growth at the midpoint [31] Other Important Information - The company reported a strong free cash flow performance of $150 million, with a free cash flow margin of 17.4% [29] - A new partnership with Nutanix is expected to enhance customer interest and scalability in virtualization environments [58] Q&A Session Summary Question: What is driving the acceleration of growth in the back half of the fiscal year? - Management noted broad-based strength in product lines and improved visibility into the pipeline, contributing to confidence in growth forecasts [36] Question: How has the relationship with Meta evolved? - The relationship is progressing as expected, with deployments on track and revenue recognition beginning [42] Question: What factors contributed to the sequential gross margin improvement? - Management attributed the improvement to revenue mix, product mix, and pricing discipline, with Meta's contribution being less material than anticipated [48] Question: How is the engagement with other hyperscalers progressing? - Early-stage engagements are ongoing, with technology assessments and proofs of concept underway, but still in the initial phases [64] Question: What are the long-term expectations for Meta's contribution? - Management expects to achieve one to two exabytes of deployment this fiscal year, with potential for double-digit contributions in the next fiscal year [70] Question: How should the split between product versus subscriptions be viewed? - Management indicated that both product and subscription revenues are expected to grow, with subscription gross margins being higher than product gross margins [98]

Financial Data and Key Metrics Changes - Revenue for Q2 FY 2026 was $861 million, representing a 13% year-over-year growth [20] - Operating profit was $130 million, resulting in an operating margin of 15.1% [20] - Subscription services revenue reached $415 million, up 15% year-over-year, accounting for 48% of total revenue [25] - Total remaining performance obligations (RPO) grew 22% to $2.8 billion [25] - Free cash flow was $150 million, with a free cash flow margin of 17.4% [28] Business Line Data and Key Metrics Changes - Strong performance in FlashBlade and core software and services offerings, including Evergreen One, Cloud Block Store, and Portworx [20][6] - TCV sales for Storage as a Service offerings grew 24% year-over-year to $125 million [23] - Product gross margin rose to 68%, aligning with long-term expectations [26] Market Data and Key Metrics Changes - U.S. revenue was $577 million, growing 7%, while international revenue was $284 million, growing 26% year-over-year [26] - The company added over 300 new customers, maintaining a 62% penetration of the Fortune 500 [26] Company Strategy and Development Direction - The company is focused on the enterprise data cloud architecture, which transforms data management for organizations [9][13] - Continued emphasis on modernizing IT environments, including partnerships with hyperscalers and financial institutions [11][15] - The introduction of a guidance range for financial metrics to align with industry practices and allow flexibility for growth opportunities [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the macroeconomic environment, indicating a positive outlook for the second half of the fiscal year [36][110] - The company anticipates revenue growth of 14% year-over-year for FY 2026, with Q3 revenue expected to be between $950 million and $960 million [29][30] Other Important Information - The company recognized its first revenue from a strategic co-engineering effort with Meta during Q2 [24] - The balance sheet remains strong with $1.5 billion in cash and investments [27] Q&A Session Summary Question: What is driving the acceleration of growth in the back half of the fiscal year? - Management noted broad-based strength in product lines and improved visibility into the pipeline, contributing to confidence in forecasts [35] Question: How has the relationship with Meta evolved? - The relationship is progressing as expected, with revenue recognition beginning and confidence in achieving the forecasted deployment of one to two exabytes [40][42] Question: How much of the gross margin improvement was due to Meta shipments? - Management indicated that while Meta contributed to gross margin improvement, the majority came from product and revenue mix, as well as pricing discipline [48] Question: What are the expectations for the partnership with Nutanix? - The partnership is generating strong customer interest, with plans for general availability by the end of the year [57] Question: How are early engagements with other hyperscalers progressing? - Engagements are progressing well, with technology assessments and proofs of concept underway, but still in early stages [62] Question: What are the demand drivers observed in the quarter? - Demand was steady with above-average linearity, indicating strong macro and competitive environments, along with an increasing willingness from customers to expand their needs [110]

Q2 Fiscal Year 2026 Performance - Total revenue reached $861 million, representing a 13% year-over-year growth[9] - Subscription Annual Recurring Revenue (ARR) hit $1.8 billion, an 18% year-over-year increase[9] - Storage as a Service offerings generated $125 million in revenue, a 24% year-over-year growth[9] - Non-GAAP operating margin was 15.1%[9] - Free cash flow was $150.1 million, resulting in a free cash flow margin of 17.4%[12, 33] Customer Satisfaction and Adoption - The company has over 13,500 global customers[9] - Net Promoter Score (NPS) reached 81, the highest in the industry[9] - 62% of Fortune 500 companies are customers[9, 31] Financial Position - Total cash and marketable securities amounted to $1.54 billion[9] - Remaining Performance Obligations (RPO) reached $2.84 billion, a 22% year-over-year growth[9] Future Outlook (Guidance) - Q3 Fiscal Year 2026 revenue is projected to be between $950 million and $960 million, indicating a year-over-year growth of 14.3% to 15.5%[57] - Q3 Fiscal Year 2026 non-GAAP operating income is expected to range from $185 million to $195 million, a year-over-year growth of 10.6% to 16.6%[57] - Fiscal Year 2026 revenue guidance was raised to $3.60 billion - $3.63 billion, reflecting a 13.5% to 14.5% year-over-year growth[59] - Fiscal Year 2026 non-GAAP operating income guidance was increased to $605 million - $625 million, an 8.2% to 11.7% year-over-year growth[59]

Executive Summary & Highlights [Second Quarter Fiscal 2026 Performance Overview](index=1&type=section&id=Second%20Quarter%20Fiscal%202026%20Performance%20Overview) Pure Storage reported strong second-quarter fiscal 2026 results, exceeding revenue and operating profit guidance, driven by customer confidence in its platform's value and successful strategic execution - Total revenue increased by **13% year-over-year**[1](index=1&type=chunk) - Storage as a Service (SaaS) product TCV sales grew by **24%**[1](index=1&type=chunk) - Full-year revenue and operating profit guidance were raised[1](index=1&type=chunk) - CEO Charles Giancarlo emphasized strong customer confidence in Pure Storage's platform for data storage and management, which unlocks data business value through the Enterprise Data Cloud[2](index=2&type=chunk) - CFO Tarek Robbiati noted robust customer adoption of the company's platform strategy, leading to revenue and operating profit exceeding guidance[4](index=4&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Pure Storage demonstrated strong performance in the second quarter of fiscal 2026, achieving significant year-over-year growth in total revenue, subscription services revenue, and Annual Recurring Revenue (ARR), while maintaining healthy gross and operating margins Second Quarter Fiscal 2026 Key Financial Highlights | Metric | Q2 Fiscal 2026 Amount | Year-over-Year Change | | :-------------------------------- | :------------------- | :--------- | | Revenue | $861.0 million | +13% | | Subscription Services Revenue | $414.7 million | +15% | | Subscription Annual Recurring Revenue (ARR) | $1.8 billion | +18% | | Remaining Performance Obligations (RPO) | $2.8 billion | +22% | | GAAP Gross Margin | 70.2% | | | Non-GAAP Gross Margin | 72.1% | | | GAAP Operating Income | $4.9 million | | | Non-GAAP Operating Income | $130.0 million | | | GAAP Operating Margin | 0.6% | | | Non-GAAP Operating Margin | 15.1% | | | Operating Cash Flow | $212.2 million | | | Free Cash Flow | $150.1 million | | | Total Cash, Cash Equivalents, and Marketable Securities | $1.5 billion | | - Approximately **$42 million** was returned to shareholders through the repurchase of **0.8 million shares**[5](index=5&type=chunk) [Company Operational Highlights](index=1&type=section&id=Company%20Operational%20Highlights) In the second quarter of fiscal 2026, Pure Storage launched a new data and storage management architecture, expanded its next-generation storage portfolio, enhanced efficiency through virtualized storage, and received multiple industry recognitions - Launched the **Enterprise Data Cloud (EDC)**, an industry-transforming architecture powered by Pure Fusion, designed to revolutionize organizational data management by simplifying and automating data and storage management[5](index=5&type=chunk) - Expanded the product portfolio with next-generation storage products including **FlashArray//XL, FlashArray//ST, and FlashBlade//S**, designed to support high-performance and scalable workloads across diverse enterprise use cases, offering unified block, file, and object storage capabilities[5](index=5&type=chunk) - Introduced **Portworx for KubeVirt**, a virtualization-centric storage solution for Kubernetes, enabling more cost-effective and simplified VM workload management via Red Hat OpenShift Virtualization Engine[5](index=5&type=chunk) - Received multiple industry recognitions, including being named to Fortune's 2025 Best Workplaces in the Bay Area™ and 25 Best Large Workplaces in the Bay Area, recognized by Newsweek as one of America's Greatest Workplaces 2025, and listed by DBTA as one of the 100 Most Important Companies in Data for 2025[10](index=10&type=chunk) Financial Guidance [Third Quarter Fiscal 2026 Guidance](index=2&type=section&id=Third%20Quarter%20Fiscal%202026%20Guidance) Pure Storage provided guidance for the third quarter of fiscal 2026, projecting revenue between $950 million and $960 million, with a year-over-year growth rate of 14.3% to 15.5%, and non-GAAP operating income between $185 million and $195 million Third Quarter Fiscal 2026 Guidance | Metric | Q3 Fiscal 2026 Guidance | Year-over-Year Growth Rate | | :-------------------------- | :--------------- | :----------- | | Revenue | $950 million to $960 million | 14.3% to 15.5% | | Non-GAAP Operating Income | $185 million to $195 million | 10.6% to 16.6% | - These forward-looking statements are subject to risks, and actual results may differ materially[6](index=6&type=chunk) [Full Year Fiscal 2026 Guidance Update](index=2&type=section&id=Full%20Year%20Fiscal%202026%20Guidance%20Update) Pure Storage raised its full-year fiscal 2026 guidance for revenue and non-GAAP operating income, reflecting a positive outlook for the year's performance Full Year Fiscal 2026 Guidance Update | Metric | Previous Guidance | New Guidance | Year-over-Year Growth Rate (New) | | :-------------------------- | :--------- | :------------- | :--------------- | | Revenue | $3.515 billion | $3.60 billion to $3.63 billion | 13.5% to 14.5% | | Non-GAAP Operating Income | $595 million | $605 million to $625 million | 8.2% to 11.7% | - The company has not reconciled non-GAAP operating income and its year-over-year growth rate to the most directly comparable GAAP measures, as certain items impacting these metrics are outside the company's control or cannot be reasonably predicted[6](index=6&type=chunk) Company Information & Investor Relations [About Pure Storage](index=3&type=section&id=About%20Pure%20Storage) Pure Storage is an IT pioneer offering the industry's most advanced data storage platform, delivering a cloud experience with extreme simplicity and flexibility across various environments through its Evergreen architecture, leading to high customer satisfaction - Provides the industry's most advanced data storage platform to store, manage, and protect global data at any scale, offering organizations extreme simplicity and flexibility, saving time, money, and energy[11](index=11&type=chunk) - Delivers a cloud experience across on-premises, cloud, and co-located environments through a unified Storage as-a-Service platform, built on the **Evergreen architecture** that evolves with business growth, guaranteeing zero planned downtime[11](index=11&type=chunk) - Achieved one of the highest **Net Promoter Scores** in the industry for years, indicating extremely high customer satisfaction[11](index=11&type=chunk) [Investor Communications & Events](index=2&type=section&id=Investor%20Communications%20%26%20Events) Pure Storage will host a conference call to discuss second-quarter fiscal 2026 results and plans to participate in a financial analyst product and technology session at Pure//Accelerate NYC in September 2025 - A live audio webcast of the second-quarter fiscal 2026 earnings conference call was held on **August 27, 2025**, with a replay available on the Pure Storage investor relations website[7](index=7&type=chunk)[8](index=8&type=chunk) - Scheduled to participate in a financial analyst product and technology session at **Pure//Accelerate NYC** in New York City on **Thursday, September 25, 2025**, which will be webcast and archived[9](index=9&type=chunk)[10](index=10&type=chunk) [Forward-Looking Statements & Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) This press release contains forward-looking statements regarding Pure Storage's products, business, and operations, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements cover areas such as the company's opportunities in hyperscale and AI environments, ability to meet hyperscale customer performance and pricing requirements, future financial and business results, product and subscription service demand, technology and product strategy, and the impact of macroeconomic conditions[13](index=13&type=chunk) - Actual results may differ materially from projected outcomes, with potential risks and uncertainties including those listed in the 'Risk Factors' section of the company's filings and reports with the U.S. Securities and Exchange Commission (SEC)[14](index=14&type=chunk) [Key Performance Metrics & Non-GAAP Measures](index=4&type=section&id=Key%20Performance%20Metrics%20%26%20Non-GAAP%20Measures) Pure Storage defines key business metrics such as Subscription Annual Recurring Revenue (ARR) and Total Contract Value (TCV) sales, and utilizes non-GAAP financial measures to provide supplementary information for evaluating performance and liquidity while excluding certain expenses - **Subscription Annual Recurring Revenue (ARR)** is the annualized aggregate contract value of all active subscription agreements as of the last day of the quarter, plus four times the on-demand revenue for that quarter[15](index=15&type=chunk) - **Total Contract Value (TCV) sales** represent the value of orders received for Pure Evergreen//One and similar consumption and subscription offerings during the reporting period[15](index=15&type=chunk) - Non-GAAP financial measures, such as non-GAAP gross profit, non-GAAP operating income, and free cash flow, are used for financial and operational decision-making, providing meaningful supplemental information by excluding specific expenses like stock-based compensation, amortization of acquired intangible assets, and restructuring costs[16](index=16&type=chunk)[17](index=17&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of the end of the second quarter of fiscal 2026, Pure Storage's total assets slightly increased, with significant changes in cash and cash equivalents, marketable securities, and deferred revenue, alongside a modest rise in total liabilities Condensed Consolidated Balance Sheets Highlights (in thousands of USD) | Metric | Q2 Fiscal 2026 | Fiscal 2025 | Change (Q2 Fiscal 2026 vs. Fiscal 2025) | | :-------------------------------- | :--------------- | :--------------- | :----------------------------------- | | Total Assets | $4,026,537 | $3,963,942 | +$62,595 | | Cash and Cash Equivalents | $887,849 | $723,583 | +$164,266 | | Marketable Securities | $649,661 | $798,237 | -$148,576 | | Accounts Receivable, Net | $530,481 | $680,862 | -$150,381 | | Total Current Assets | $2,524,738 | $2,567,279 | -$42,541 | | Total Liabilities | $2,707,716 | $2,657,467 | +$50,249 | | Deferred Revenue (Current) | $1,006,197 | $953,836 | +$52,361 | | Deferred Revenue (Non-Current) | $904,867 | $841,467 | +$63,400 | | Total Stockholders' Equity | $1,318,821 | $1,306,475 | +$12,346 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In the second quarter of fiscal 2026, Pure Storage's total revenue grew, primarily driven by increased product and subscription services revenue, leading to higher gross profit and net income, despite an increase in operating expenses Condensed Consolidated Statements of Operations Highlights (in thousands of USD, except per share data) | Metric | Q2 Fiscal 2026 | Q2 Fiscal 2025 | Year-over-Year Change (Q2 Fiscal 2026 vs. Q2 Fiscal 2025) | | :-------------------------------- | :--------------- | :--------------- | :------------------------------------------------- | | Total Revenue | $861,002 | $763,771 | +$97,231 (+12.7%) | | Product Revenue | $446,303 | $402,595 | +$43,708 (+10.9%) | | Subscription Services Revenue | $414,699 | $361,176 | +$53,523 (+14.8%) | | Gross Profit | $604,336 | $540,080 | +$64,256 (+11.9%) | | Operating Income | $4,871 | $24,878 | -$20,007 (-80.4%) | | Net Income | $47,118 | $35,674 | +$11,444 (+32.1%) | | Net Income Per Share, Diluted | $0.14 | $0.10 | +$0.04 | | Total Stock-Based Compensation Expense | $117,393 | $104,890 | +$12,503 (+11.9%) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In the second quarter of fiscal 2026, Pure Storage generated substantial cash from operating activities, investment activities turned positive due to sales and maturities of marketable securities, while financing activities resulted in net cash outflow from share repurchases and debt payments Condensed Consolidated Statements of Cash Flows Highlights (in thousands of USD) | Metric | Q2 Fiscal 2026 | Q2 Fiscal 2025 | Year-over-Year Change (Q2 Fiscal 2026 vs. Q2 Fiscal 2025) | | :-------------------------------- | :--------------- | :--------------- | :------------------------------------------------- | | Net Cash Provided by Operating Activities | $212,157 | $226,597 | -$14,440 (-6.4%) | | Net Cash Provided by (Used in) Investing Activities | $129,775 | ($84,501) | +$214,276 | | Net Cash Used in Financing Activities | ($192,384) | ($72,499) | -$119,885 | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $149,548 | $69,597 | +$79,951 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $909,690 | $979,807 | -$70,117 | - Common stock repurchases amounted to **$42,242 thousand** in the second quarter of fiscal 2026[25](index=25&type=chunk) - Principal payments on borrowings and finance lease obligations totaled **$100,000 thousand** in the second quarter of fiscal 2026[25](index=25&type=chunk) Non-GAAP Reconciliations [Non-GAAP Gross Margins Reconciliation](index=8&type=section&id=Non-GAAP%20Gross%20Margins%20Reconciliation) Pure Storage's non-GAAP total gross margin for the second quarter of fiscal 2026 was 72.1%, with product gross margin at 68.0% and subscription services gross margin at 76.5%, after adjustments for stock-based compensation, payroll taxes, and amortization of acquired intangible assets Non-GAAP Gross Margins Reconciliation (Q2 Fiscal 2026, in thousands of USD) | Metric | GAAP Gross Profit | GAAP Gross Margin | Adjustments | Non-GAAP Gross Profit | Non-GAAP Gross Margin | | :-------------------------- | :--------------- | :--------------- | :--------- | :--------------- | :--------------- | | Product | $296,007 | 66.3% | $7,582 | $303,589 | 68.0% | | Subscription Services | $308,329 | 74.4% | $9,025 | $317,354 | 76.5% | | Total | $604,336 | 70.2% | $16,607 | $620,943 | 72.1% | - Adjustments primarily include stock-based compensation expense, payroll tax expense related to stock-based activities, and amortization of acquired intangible assets[27](index=27&type=chunk) [Non-GAAP Operating Income and Net Income Reconciliation](index=9&type=section&id=Non-GAAP%20Operating%20Income%20and%20Net%20Income%20Reconciliation) In the second quarter of fiscal 2026, Pure Storage's non-GAAP operating income was $129.964 million (15.1% margin) and non-GAAP net income was $144.475 million ($0.43 diluted per share), significantly higher than GAAP figures due to adjustments for stock-based compensation, payroll taxes, amortization, debt issuance costs, and unrealized gains Non-GAAP Operating Income and Net Income Reconciliation (Q2 Fiscal 2026, in thousands of USD, except per share data) | Metric | GAAP Results | GAAP Margin | Adjustments | Non-GAAP Results | Non-GAAP Margin | | :-------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Operating Income | $4,871 | 0.6% | $125,093 | $129,964 | 15.1% | | Net Income | $47,118 | | $97,357 | $144,475 | | | Net Income Per Share, Diluted | $0.14 | | | $0.43 | | - Key adjustments include stock-based compensation expense (**$117,393 thousand**), payroll tax expense related to stock-based activities (**$4,164 thousand**), amortization of acquired intangible assets (**$3,536 thousand**), amortization of debt issuance costs related to debt (**$230 thousand**), and mark-to-market unrealized gain on strategic investments (**-$27,966 thousand**)[29](index=29&type=chunk)[30](index=30&type=chunk) [Free Cash Flow Reconciliation](index=10&type=section&id=Free%20Cash%20Flow%20Reconciliation) Pure Storage's free cash flow for the second quarter of fiscal 2026 was $150.130 million, calculated by subtracting capital expenditures for property and equipment from net cash provided by operating activities Free Cash Flow Reconciliation (Q2 Fiscal 2026, in thousands of USD) | Metric | Q2 Fiscal 2026 | Q2 Fiscal 2025 | | :-------------------------------- | :--------------- | :--------------- | | Net Cash Provided by Operating Activities | $212,157 | $226,597 | | Less: Purchases of Property and Equipment | ($62,027) | ($60,035) | | Free Cash Flow (Non-GAAP) | $150,130 | $166,562 | - Purchases of property and equipment include **$8.7 million** of capitalized internal-use software costs in the second quarter of fiscal 2026[32](index=32&type=chunk)

Group 1 - Pure Storage (NYSE:PSTG) is expected to announce Q2 FY'26 earnings on August 27, 2025, with earnings anticipated at $0.39 per share and revenues projected to increase by 11% to $846 million, driven by strong demand for its data-storage solutions [2][3] - The company reported a total revenue of $3.3 billion over the past twelve months, achieving operational profitability with $96 million in operating profits and a net income of $128 million [3] - The total contract value for Storage-as-a-Service solutions surged 70% to $95 million in Q1, indicating significant customer acquisitions and smaller agreements [2] Group 2 - Historical data shows that Pure Storage has had 20 earnings data points over the last five years, with 11 positive and 9 negative one-day post-earnings returns, resulting in a 55% rate of positive returns [6] - The median of the 11 positive returns stands at 13%, while the median of the 9 negative returns is -10% [6] - Analyzing the correlation between short-term and medium-term returns post-earnings can help traders position themselves effectively, particularly if 1D and 5D returns show strong correlation [7]

Core Insights - Pure Storage, Inc. (PSTG) is set to report its second-quarter fiscal 2026 results on August 27, 2025, with earnings expected to decline by 11.4% year-over-year to 39 cents per share, while total revenues are projected to grow by 10.7% to $845.8 million [1][2]. Financial Performance - For the fiscal second quarter, Pure Storage anticipates revenues of $845 million, reflecting a 10.6% increase from the previous year, with non-GAAP operating income expected to be $125 million and a non-GAAP operating margin of 14.8% [2]. - The company has achieved a trailing four-quarter earnings surprise of 13.8%, consistently beating estimates, including a 16% surprise in the last reported quarter [2]. Market Dynamics - Increased demand for AI and virtualization storage, along with strong progress in hyperscale partnerships, is expected to positively impact PSTG's performance amid macroeconomic volatility [3]. - The company continues to see robust demand for its data-storage solutions, particularly the //E family and Storage-as-a-Service offerings [3]. Subscription Services - Subscription services are a significant growth driver, with revenues from this segment rising 17% to $406.3 million in the last quarter. For the upcoming quarter, subscription revenues are expected to reach $398.3 million, a 10.3% year-over-year increase [4]. - The Evergreen//One portfolio is contributing to strong customer adoption and growth, with large deals enhancing momentum [4]. Technological Advancements - Pure Storage is innovating in enterprise storage, focusing on AI, containerization, and high-performance computing (HPC). The Portworx Enterprise 3.3 enhances Kubernetes-native capabilities by adding VM workload support [5]. - Collaborations with Nutanix and NVIDIA are optimizing hybrid cloud deployments and enhancing AI infrastructure [5]. Strategic Partnerships - The collaboration with Meta is progressing well, with validation testing on schedule and certification across performance tiers, aiming to deliver 1–2 exabytes in the second half of the year [6]. - In June 2025, Pure Storage's all-flash technology was utilized by TierPoint to launch a specialized Imaging Storage-as-a-Service solution for the healthcare sector [7]. Product Launches - The launch of the Enterprise Data Cloud (EDC) aims to simplify data and storage management, addressing the challenges posed by traditional fragmented storage systems as AI drives data growth [8].

Core Insights - Pure Storage (PSTG) is expected to report quarterly earnings of $0.39 per share, reflecting an 11.4% decline year over year, while revenues are forecasted to reach $845.76 million, indicating a 10.7% increase compared to the previous year [1] - There has been no revision in the consensus EPS estimate for the quarter over the past 30 days, suggesting stability in analysts' projections [1][2] Revenue Estimates - Analysts project 'Revenue- Product' to be $427.18 million, a 6.1% increase from the prior-year quarter [4] - 'Revenue- Subscription services' is estimated to reach $418.58 million, reflecting a 15.9% increase year over year [4] - 'Geographic Revenue- Rest of the world' is expected to be $244.58 million, indicating an 8.2% year-over-year change [4] - 'Geographic Revenue- United States' is projected at $600.65 million, showing an 11.7% increase from the year-ago quarter [5] Profit Estimates - Non-GAAP Gross profit from Subscription services is estimated at $319.88 million, up from $275.83 million reported in the same quarter last year [5] - Non-GAAP Gross profit from Product is expected to be $277.24 million, slightly down from $279.85 million reported in the previous year [6] Market Performance - Shares of Pure Storage have experienced a -2.2% return over the past month, contrasting with a +1.1% change in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), indicating expectations to mirror overall market performance in the near future [6]