As I look over my notes on Pure Storage’s earnings report and conference call, I am amazed that it was initially off 10%, and that someone was willing to sell me his beloved shares this morning at $19.89 (down almost 9%), when I added to my position. Let’s look:
Key quarterly highlights:
• Record quarterly revenue: $338 million, up 48%. Now that 48% was on top of 52% gains the year before. The last four quarters have been up 31%, 38%, 41%, and now 48%. Is that a reason to sell?
• Record full year revenue: $1023 million, up 41%
• Record GAAP operating margin: -4.7%, up 14% from a year ago. Is that a reason to sell?
• Record Adj operating margin: 8.3%, up 10% from a year ago. Is that a reason to sell?
• Record Adj income per share of 13 cents, up from a loss of 2 cents a year ago. Is that a reason to sell?
• Record quarterly operating cash flow of $59 million and free cash flow of $38 million, and
• Record full-year operating cash flow of $73 million and free cash flow of $7.7 million. Note that last year their FCF was minus $61 million and this year it’s plus $7.7 million. Have you seen a reason to sell?
This quarter marks important milestones for Pure, surpassing $1 billion in annual sales and achieving adj profitability. Momentum in the business is strong. Approximately 500 customers joined Pure in the quarter, increasing the total to more than 4,500 organizations.
We delivered another outstanding quarter to finish the year, growing nearly 50% over the year-ago quarter. As we look ahead to next year, we look forward to achieving our first full-year of adjusted profitability.
We have achieved $1 billion in revenue in just 8 years since our founding, one of the fastest starts of any enterprise company in history, and we are just getting started.
For the quarter, revenue was $338 million, up 48%, and operating margin was 8.3%, both exceeding our high-end of our guidance. Not only did we have an exceptional first quarter of profitability, but we also achieved positive free cash flow for the full fiscal year.
We finished our fiscal year with more than 4,500 customers, up nearly 50% from a year ago.
In this quarter we saw an increase in win rate against all of our competition.
We finished with cash of $597 million, up $46 million sequentially.
We are now in the first half of our fiscal year, a period where we focus on making investments to drive velocity in the business. This is a consistent and deliberate strategy we have been following for several years now, to invest early in the year and reap the rewards in the seasonally stronger second half. Specifically, Q1 is marked by notable ramp up in our go to market hiring and our company kick-off, while Q2 is marked by the full quarter impacts of Q1 hiring as well as our Accelerate User Conference.
The partnership with NVIDIA started in the field which is generally where the best partnerships begin. We did a bunch of global tours with them across the last couple of quarters in joint marketing activities and we got some fantastic wins with joint engagements. We are continuing to work on formalizing the partnership and working jointly with their sales and field teams.
The traction with Cisco in the field is very strong, it continues to grow. The momentum with the product is significantly outpacing the converged and integrated systems markets. And we see that continuing to grow into the future.
We expect NVMe to grow very rapidly in our portfolio, eventually extending to most of it and part of our competitive advantages we were first, we have the performance of the underlying software and architecture to allow NVMe to be most effective and fast. And it’s been driving a lot of our growth in in customers. Frankly we are the only player that can provide the performance necessary to address their application environments. I will just add to that our approach has really been a software centric one.
AI use cases that you are seeing beyond so autonomous driving? What are some of the other AI related use cases that your product has been pulled into?
Lots of real-time analytics use cases, specifically security and threat detection internally. Think of Splunk on-prem leveraging our FlashBlade technology to really run through that. Lots of IOT types of applications as well, so there is a whole host of next generation applications. But I think the thing that I am most excited about is the progress of the rapid restore use case.
I think that you can see with 48% year-over-year growth in the overall data storage market we are picking up market share.
You’d have to be out of your mind to sell this company down 10% today. Just my way of looking at it.
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