Pure Storage Reports 48 Percent Revenue Growth As Full Year Sales Pass $1 Billion

Mountain View, Calif.-based Pure Storage enjoyed its first cash flow positive growth and brought in more customers than any other quarter in its history, company executives said on Thursday.

"Fiscal 2018 was a very good year for Pure Storage," said Pure Storage CEO Charles Giancarlo during the company's earnings call. "It has been at least two decades since a company like ours has reached this scale."

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Giancarlo told analysts that fiscal 2018, which ended January 31, was also a time of big advances in the company's technology. About 25 percent of Pure Storage sales were based on sales of high-performance NVMe flash storage, which Giancarlo said was 10 times that of any competitor.

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The company also introduced synchronous replication, as well as its Pure1 Meta A.I. (artificial intelligence) engine that allows the development what the company calls "self-driving" storage featuring full automation of the functions. It also completed its first full year of sales of FlashBlade, which it called the first all-flash array for unstructured data, Giancarlo said.

"These and other technologies open new markets for Pure," he said.

During the question and answer period of the conference call, David Hatfield, president of Pure Storage, said that the company's storage technology is being used with such artificial intelligence use cases as autonomous cars, security, and IoT.

However, he said, the most compelling use case is the company's Rapid Restore technology for quickly restoring data after a loss because of its importance to the company's core enterprise IT customers. "(This) is taking advantage of our go-to-market," he said.

Hatfield said the company had 4,500 customers by the end of fiscal 2018, which was up about 50 percent year-over-year. The company added more customers in the fourth fiscal quarter than in any other quarter in the company's history, Hatfield said.

The year also saw the introduction of the company's FlashArray//X, which Hatfield called the storage industry's first enterprise-class all-NVMe storage array, and hopes to make this a mainstream technology in the near future, he said.

The FlashStack converged infrastructure offering that combines Pure Storage's flash storage technology with Cisco's UCS server and networking capabilities, is currently available in 30 countries and is enjoying growth exceeding that of the converged infrastructure industry in general, Hatfield said.

Pure Storage's traction with Cisco is strong, Hatfield said. "And we see that continuing to grow into the future," he said.

Giancarlo, responding to analysts' questions, said that Pure Storage is not seeing any real competitive threats despite the growth of all-flash storage sales by the company's competitors including NetApp, which last month said it now enjoys a $2-billion annual run rate for flash storage sales.

The fourth fiscal quarter 2018 was in general a great quarter for storage across the board, Giancarlo said. "But I think what you can see in [our] 48-percent growth year-over-year made this a pretty good quarter … We feel good about our growth and our growth prospects," he said.

When asked specifically about competition with NetApp, Hatfield said it is good to see infrastructure-focused vendors, in general, make progress with on-premises storage and non-storage sales. He said NetApp is doing well not only in terms of converting its installed base to all-flash storage but also on getting customers to seriously look at the vendor's block storage technology.

"We think it's good to have healthy competition and a healthy environment for all of us," he said.

Giancarlo, in response to an analyst's question about how the cost of NAND flash memory is impacting flash storage, said that Pure Storage's technology gives it an advantage even when NAND prices rise.

He cited Pure Storage's software-based data reduction technology and the ability to take advantage of different types of NAND depending on needs as advantages for the company. "It's a case of tails we win, heads we win," he said.

For Pure Storage's fiscal fourth quarter 2018, the company reported revenue of $338.3 million, up 48 percent over the $227.9 million the company reported for its fiscal fourth quarter 2017.

About 76 percent of the company's revenue came from the U.S. market.

On a GAAP basis, Pure Storage reported a net loss of $11.9 million, or $0.05 per share, down from last year's net loss of $42.9 million, or $0.21 per share. However, the company reported a net income of $31.8 million, or $0.13 per share, on a non-GAAP basis, up from last year's loss of $4.8 million.

For all of fiscal 2018, Pure Storage reported revenue of $1.02 billion, up from last year's $728.0 million. On a GAAP basis, the company reported a net loss of $177.6 million, or $0.84 a share, down from last year's net loss of $245.1 million, or $1.26 per share.