10 pages

Q2 2019 Quarterly Report

View Pure Storage Q2 2019 quarterly report.

1 Pure Storage Announces Second Quarter Fiscal 2019 Financial Results MOUNTAIN VIEW, Calif., August 21, 2018 – Pure Storage (NYSE: PSTG), the all-flash storage leader that helps innovators build a better world with data, today announced financial results for its second quarter ended July 31, 2018. Key quarterly business and financial highlights include: • Revenue: $308.9 million, up 37% Y/Y, exceeding the high end of our guidance;• Gross margin: 66.7% GAAP; 68.0% non-GAAP, all-time high in history;• Operating margin: -17.9% GAAP; 0.3% non-GAAP, up 9.2 ppts and 10.6 ppts Y/Y, respectively;• Acquired StorReduce, Inc., a cloud-first software-defined storage solution. “Pure has delivered another exceptional quarter, with all measures exceeding our Q2 guidance ranges," said Charles Giancarlo, CEO, Pure Storage. “Our continued focus on enabling customers to succeed in a data-centric world is working and validated, maintaining Pure's lead in the data storage market.” Nearly 400 new customers joined Pure Storage in the quarter, increasing the total to more than 5,150 organizations. New customer wins in the quarter include: Dustin Sverige, Honda Federal Credit Union, Fresenius Medical Care, Lufthansa Aero Alzey Gmbh, New York Genome Center, Syntax, TaxSlayer, The University of Texas MD Anderson Cancer Center, and Zeiss Vision Care France. “Q2 was another strong quarter for Pure,” said Tim Riitters, CFO, Pure Storage. “Growth was strong, gross margins were the highest in history, and we achieved another profitable quarter.” Second Quarter Fiscal 2019 Financial Highlights The following tables summarize our consolidated financial results for the fiscal quarters ended July 31, 2018 and 2017 (in millions except percentages, per share amounts and headcount, unaudited): GAAP Quarterly Financial InformationThree Months Ended July 31, 2018 Three Months Ended July 31, 2017 Y/Y Change Revenue$308.9$224.737%Gross Margin66.7%66.0%0.7 pptsProduct Gross Margin67.5%68.1%-0.6 pptsSupport Subscription Gross Margin63.9%57.4%6.5 pptsOperating Loss$(55.2)$(60.9)$5.7Operating Margin-17.9%-27.1%9.2 pptsNet Loss$(60.1)$(58.4)$(1.7)Net Loss per Share –Basic and Diluted$(0.26)$(0.28)$0.02Weighted-Average Shares229.4209.220.2Headcount>2,450>1,900~550

2 Non-GAAP Quarterly Financial InformationThree Months Ended July 31, 2018 Three Months Ended July 31, 2017 Y/Y Change Gross Margin68.0%67.2%0.8 pptsProduct Gross Margin67.9%68.3%-0.4 pptsSupport Subscription Gross Margin68.4%62.5%5.9 pptsOperating Income (Loss)$0.9$(23.1)$24.0Operating Margin0.3%-10.3%10.6 pptsNet Income (Loss)$2.4$(20.7)$23.1Net Income (Loss) per Share –Diluted$0.01$(0.10)$0.11Weighted-Average Shares –Diluted262.6209.253.4A reconciliation between GAAP and non-GAAP information is provided at the end of this release. Financial Outlook Pure Storage’s third quarter fiscal 2019 guidance is as follows: • Revenue in the range of $361 million to $369 million • Non-GAAP gross margin in the range of 64.5% to 67.5% • Non-GAAP operating margin in the range of 4.0% to 8.0% Pure Storage’s full year fiscal 2019 guidance is as follows: • Revenue in the range of $1.350 billion to $1.380 billion • Non-GAAP gross margin in the range of 65.5% to 67.5% • Non-GAAP operating margin in the range of 2.5% to 4.5% 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, amortization of debt discount and debt issuance costs and any applicable anti-dilutive share count impact of our convertible debt hedge agreements 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 the 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 GAAP measures is not available without unreasonable effort. Conference Call Information Pure Storage will host a teleconference to discuss the second quarter fiscal 2019 results at 2:00 p.m. (PT) on August 21, 2018. Pure Storage will post its supplemental earnings presentation to the investor relations website at investor.purestorage.com following 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: A telephone playback of this conference call is scheduled to be available approximately two hours after the call ends on Tuesday, August 21, 2018, through September 4, 2018. The replay will be accessible by calling (800) 585-8367 or (416) 621-4642 (for international callers), with conference ID 9794206.