Categories Earnings, Technology

Pure Storage stock plunges on weak outlook

Pure Storage (NYSE: PSTG) stock dwindled above 2% after the bell as the sales outlook for the Q3 and full-year failed to impress the street. However, the storage provider reported better-than-expected results for the second quarter.

The company’s stock has plunged 30% since May after the first quarter results failed to impress the street. Earlier this month, the share price touched a new 52-week low of $12 mark.

Disappointing Outlook

For the third quarter, the company is guiding revenue of $434-446 million ($440 million at the midpoint) compared to $466 million projected by the street. The company usually doesn’t provide earnings guidance, but analysts are anticipating non-GAAP earnings of 13 cents per share.

Looking ahead for the full-year guidance, Pure Storage has revised downwards the outlook provided in the prior quarter. The company is now expecting sales of $1.645-1.715 billion ($1.680 billion at the midpoint), which is lower than the $1.70-1.77 billion ($1.73 billion at the midpoint) provided last quarter. The street is projecting top line of $1.73 billion and non-GAAP earnings of 22 cents per share.

Q2 Performance

Revenue rose 28% to $396.3 million aided by strong growth from product sales (up 25%) and subscription services (up 42%). Adjusted earnings came in at 1 cent per share, flat over last year. Analysts were projecting revenue of $393.1 million and adjusted loss of 4 cents per share. The company surpassed estimates on both the top and bottom line metrics.

Pure Storage is expecting increase in demand for its products as data analysis by companies are witnessing huge adoption. In addition, the trend towards moving towards flash-based storage devices from traditional disks is going to be a tailwind for the cloud-based flash-storage offerings.

Client Trend

The company added 450 clients in the second quarter, bringing the total client base to nearly 6,600. Client additions improved 28% over prior year period. Out of the total customers, above 40% are Fortune 500 firms.

Pure Storage Client Trend

As of June 30, the top 25 customers had spent about $9 on new purchases from $1 of initial purchase within the first 18 months. If we take into account the entire client base, from $1 initial purchase, the clients made $2 purchase within 2 years.

This trend is encouraging for investors and expected to continue in the latter half of the year. It clearly shows the ability of the company to up-sell its products to its existing clients.

Expenses Update 

Operating expenses surged 28% due to increasing spending on research and development (R&D) and sales and marketing (S&M) and general & administrative (G&A) metrics. R&D expenses jumped 27% while S&M costs increased 29% followed by 18% jump in G&A spending.

The company is currently improving its product offering in line with the customer demand. As a result, it is seeing increased investments in R&D and sales and marketing to broaden its reach. This is going to be a drag on the earnings in the latter half of the year.

Earlier this month, NetApp (NTAP) Q1 earnings surpassed estimates, while revenues came in line with consensus. Revenue contracted 16% while adjusted EPS was down 38% due to drop in product and hardware maintenance services.

We’re on Flipboard! Follow us to receive the latest stock market, earnings, and financial news at your fingertips

Most Popular

ISRG Earnings: Intuitive Surgical Q2 profit jumps on strong revenue growth

Medical device company Intuitive Surgical, Inc. (NASDAQ: ISRG) announced operating results for the second quarter of 2024, reporting higher revenues and adjusted profit. Second-quarter net profit, excluding one-off items, climbed

Infographic: Halliburton (HAL) reports strong earnings growth for Q2 2024

Energy giant Halliburton Company (NYSE: HAL) Friday announced financial results for the second quarter of 2024, reporting a double-digit increase in net profit. Second-quarter revenue edged up 1% annually to

AXP Earnings: Key quarterly highlights from American Express’ Q2 2024 financial results

American Express Company (NYSE: AXP) reported its second quarter 2024 earnings results today. Consolidated total revenues, net of interest expense, were $16.3 billion, up 8% from a year ago, driven

Comments

  1. Pingback: Arie Baisch
  2. Pingback: Chirurgie Tunisie
  3. Pingback: Research projects
  4. Pingback: Admission Process
  5. Pingback: البحث
  6. Pingback: Family dentistry
  7. Pingback: Global Impact
  8. Pingback: fue contact
  9. Pingback: agreement
  10. Pingback: Community service
  11. Pingback: Dental emergencies
  12. Pingback: Gum Disease
  13. Pingback: assignments
  14. Pingback: MBA in FUE
  15. Pingback: pulley machine
  16. Pingback: pec deck
  17. Pingback: Fiverr Earn
  18. Pingback: Fiverr Earn
  19. Pingback: Fiverr Earn
  20. Pingback: fiverrearn.com
  21. Pingback: fiverrearn.com
  22. Pingback: fiverrearn.com
  23. Pingback: 3pl Broker
  24. Pingback: clima hoy
  25. Pingback: french bulldog
  26. Pingback: frenchie merle
  27. Pingback: cavapoo dog
  28. Pingback: jute vs sisal rug
  29. Pingback: crypto news
  30. Pingback: micro frenchies
  31. Pingback: drip bucket hat
  32. Pingback: slot nexus
  33. Pingback: bulldogs puppy
  34. Pingback: Fiverr
  35. Pingback: FiverrEarn
  36. Pingback: lean manufacturing
  37. Pingback: Moving logistics
  38. Pingback: Classic Books 500
  39. Pingback: FiverrEarn
  40. Pingback: Speaker
  41. Pingback: FiverrEarn
  42. Pingback: FiverrEarn
  43. Pingback: FiverrEarn
  44. Pingback: Sefton Strip Club
  45. Pingback: partners
  46. Pingback: FiverrEarn
  47. Pingback: FiverrEarn
  48. Pingback: FiverrEarn
  49. Pingback: FiverrEarn
  50. Pingback: FiverrEarn
  51. Pingback: FiverrEarn
  52. Pingback: FiverrEarn
  53. Pingback: Situs Slot Online
  54. Pingback: Situs Slot Online
  55. Pingback: cheap sex cams
  56. Pingback: dog probiotics
  57. Pingback: live sex cams
  58. Pingback: live sex cams
  59. Pingback: frt trigger
  60. Pingback: 늑대닷컴
  61. Pingback: Bonus game
  62. Pingback: One Peace AMV
  63. Pingback: nangs sydney
  64. Pingback: superslot
  65. Pingback: allgame
  66. Pingback: 918kiss
  67. Pingback: หวย24
  68. Pingback: Acne
  69. Pingback: pg slot
  70. Pingback: AI Lawyer
  71. Pingback: cybersécurité
  72. Pingback: megagame
  73. Pingback: 300 win mag ammo
  74. Pingback: sicarios
  75. Pingback: itsMasum.Com
  76. Pingback: itsMasum.Com
  77. Pingback: chauffe eau Tours
  78. Pingback: itsmasum.com
  79. Pingback: itsmasum.com
  80. Pingback: anonymous chat
  81. Pingback: teen chat
  82. Pingback: berlin job search
  83. Pingback: osaka jobs
  84. Pingback: webcam sex
  85. Pingback: Kampus Islami
  86. Pingback: 918kiss

Comments are closed.

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top