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Q1 2018 Quarterly Report

View Pure Storage's Q1 2018 Quarterly Report.

1Pure Storage Announces First Quarter Fiscal 2018 Financial ResultsMOUNTAIN VIEW, Calif., May 24, 2017– Pure Storage (NYSE: PSTG) today announced financial results for itsfirst quarter ended April 30, 2017.Key quarterly business and financial highlights include: • Quarterly revenue: $182.6 million , up 31%Y-Y, 4% ahead of midpoint of guidance• Quarterly gross margin: 65.2% GAAP; 66.4% non-GAAP, reflecting strength in our core FlashArray business and a strong performance from our FlashBlade business• Quarterly operating margin: -34.7% GAAP; -16.7% non-GAAP, up 11.5 ppts and 12.7 pptsY-Y, respectively• First shipments of FlashArray//X lead next-gen industry transformation to NVMe"Pure Storage has built the storage platform for the cloud era," said Pure Storage CEO Scott Dietzen. “We are pursuing one of the biggest available markets in tech in supporting new data-driven applications including AI, the rapid adoption of cloud computing and the revamping of the enterprise data center. With our best year of innovation yet, we could not be more excited about the road ahead.”“Q1 was a strong quarter for Pure, with our results notably exceeding both top line and bottom line guidance," said Pure Storage CFO Tim Riitters. "We continue to drive strong year over year improvement in operating leverage as we drive to our $1 billion full year revenue target."In the quarter, approximately 300 new customers joined Pure Storage, increasing the total to more than 3,350 organizations, including nearly 25% of the Fortune 500. New customer wins in the quarter include: Churchill Downs, Incorporated, Fujitsu Cloud Technologies, Henry Schein, Inc., telecommunications and Cloud IaaS service provider IPTelecom, MacStadium, Oppenheimer & Co. and Securitas Direct. New FlashBlade customer wins include: Black Duck Software, the City of Davenport and nuclear power plant KKG. First Quarter Fiscal 2018 Financial HighlightsThe following tables summarize our consolidated financial results for the fiscal quarters ended April 30, 2017and 2016(in millions except per share amounts, unaudited):GAAP Quarterly Financial InformationThree MonthsEnded April 30,2017Three MonthsEnded April 30,2016Y/Y ChangeRevenue$182.6$139.931%Gross Margin65.2%66.4%-1.2 pptsProduct Gross Margin66.3%69.5%-3.2 pptsSupport Gross Margin61.8%54.1%7.7 pptsOperating Loss-$63.4-$64.7$1.3Operating Margin-34.7%-46.2%11.5 pptsNet Loss-$62.4-$63.8$1.4Net Loss per Share-$0.30-$0.34$0.04Weighted-Average Shares (Basic and Diluted)205.8189.3N/A

2Non-GAAP Quarterly Financial InformationThree MonthsEnded April 30,2017Three MonthsEnded April 30,2016Y/Y ChangeGross Margin66.4%67.3%-0.9 pptsProduct Gross Margin66.6%69.6%-3.0 pptsSupport Gross Margin65.8%58.0%7.8 pptsOperating Loss-$30.5-$41.1$10.6Operating Margin-16.7%-29.4%12.7 pptsNet Loss-$29.5-$40.3$10.8Net Loss per Share-$0.14-$0.21$0.07Free Cash Flow-$27.1-$17.4-$9.7Areconciliation between GAAPand non-GAAPinformation is provided at the end of this release.Financial OutlookPure Storage's second quarter fiscal 2018 guidance is as follows:• Revenue in the range of $214 million to $222 million• Non-GAAPgross margin in the range of 63.5% to 66.5%• Non-GAAPoperating margin in the range of -16% to -12%Pure Storage's full year fiscal 2018 guidance is as follows:• Revenue in the range of $975 million to $1.025 billion• Non-GAAPgross margin in the range of 63.5% to 66.5%• Non-GAAPoperating margin in the range of -9% to -5%All forward-looking non-GAAP financial measures contained in this section titled “Financial Outlook” exclude stock-based compensation expense, payroll tax expense related to stock-based activities and, as applicable, other special items. We have not reconciled guidance for non-GAAP gross margin and non-GAAP operating margin to their most directly comparable GAAP measures because such items that impact these measures are not within our control and/or cannot be reasonably predicted. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAPmeasures is not available without unreasonable effort.Conference Call InformationPure Storage will host a teleconference to discuss the first quarter fiscal 2018 results at 1:30 p.m. (PT) on May 24, 2017. Pure Storage will post its supplemental earnings presentation to the investor relations website at investor.purestorage.comfollowing the conference call. Teleconference details are as follows:• To Listen via Telephone: 877-201-0168 or 647-788-4901 (for international callers).• To Listen via the Internet: A live and replay audio broadcast of the conference call with corresponding slides will be available at investor.purestorage.com.• Replay: Atelephone playback of this conference call is scheduled to be available two hours after the call ends on Wednesday May 24, 2017, through June 7, 2017. The replay will be accessible by calling 800-585-8367 or 416-621-4642 (for international callers), with conference ID 14674669. The call runs 24 hours per day, including weekends.CEO CommentaryPure Storage has posted a blog from its CEO discussing first quarter fiscal 2018 results at investor.purestorage.com and blog.purestorage.com.