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]
Pure Storage Q2 Earnings & Sales Top, Stock Rallies on Upbeat Forecast