LONDON, UK / ACCESSWIRE / September 15, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Pure Storage, Inc. (NYSE: PSTG), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PSTG, following the Company's reporting of its second quarter fiscal 2018 financial results on August 24, 2017. The enterprise flash-storage Company outperformed top- and bottom-line expectations and raised its revenue guidance for the fiscal year. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

Pure Storage's total revenue reaccelerated to 38% to $224.5 million, or 3% above the midpoint of the Company's guidance. Pure Storage had recorded revenue of $163.2 million in Q2 FY18. The Company's revenue beat analysts' expectations of $218.8 million.

In Q2 FY18, more than 350 new customers joined Pure Storage, increasing the total to more than 3,700 organizations, including more than 25% of the Fortune 500.

For Q2 FY18, Pure Storage's total gross margin of 67.1% increased 0.7 points on a q-o-q basis. The Company's operating loss was negative $26.4 million, or negative 11.8% of revenue, in the reported quarter versus a loss of negative $31.4 million, or negative 19.3% of revenue, in the year-ago comparable quarter.

During Q2 FY18, Pure Storage's net loss totaled $61.7 million, or $0.29 per share, compared to a net loss of $59.6 million, or $0.31 per share, in Q2 FY17. The Company's non-GAAP net loss for the reported quarter was negative $23.9 million, or negative $0.11 per share. This compared to the year-ago corresponding period non-GAAP net loss of $31.5 million, or negative $0.16 per share. Pure Storage's reported numbers beat Wall Street's expectations for a loss of $0.14 per share.

Segment Results

During Q2 FY18, Pure Storage's Product revenue advanced 34% on a y-o-y basis to $175.01 million from $130.92 million in Q2 FY17. The Company noted that the performance was driven by strong repeat purchases with existing customers, continued the momentum in its FlashArray business, and strong FlashBlade traction. Pure Storage's Support revenue surged 53% to $49.45 million on y-o-y basis in Q2 FY18 driven by continued revenue recognition of ongoing support contracts.

During Q2 FY18, 74% of Pure Storage's revenue came from the US and 26% from international. The Company experienced notable growth across all its regions.

For Q2 FY18, Product gross margin of 67.5% improved 0.9 points on a q-o-q basis, reflecting solid performance in both its FlashArray and FlashBlade product portfolios, one-time benefits of using lower-cost components from previous quarter inventory purchases as well as seasonal scale benefits in logistics and related COGS.

The Company's Support gross margins of 65.9% improved 0.1 points on a q-o-q basis reflecting its expanding customer base and the corresponding amortization of deferred revenue.

Pure Storage's total headcount at the end of Q2 FY18 was over 1,900, up from over 1,800 at the end of Q1 FY18 and up from over 1,600 in Q2 FY17, largely reflecting ongoing hiring in both sales and R&D organizations.

Cash Matters

Pure Storage finished the quarter with cash and investments of $523 million. The Company's free cash flow was negative $17.5 million, or negative 8% of revenue, compared to negative $33.3 million, or negative 20% of revenue, in the year-ago same quarter. This included $5 million of cash impact related to the Company's employee stock purchase plan. Excluding this amount, Pure Storage's free cash flow would have been negative $22.5 million, or negative 10% of revenue, compared to negative $39.5 million, or negative 24% of revenue, in Q2 FY17.

Outlook

For Q3 FY18, Pure Storage is forecasting revenue in the range of $267 million and $275 million. This represents a 38% year-on-year revenue growth at the midpoint. The Company is expecting gross margins non-GAAP in the range of between 63.5% and 66.5% for the upcoming quarter.

Pure Storage is expecting Q3 FY18 non-GAAP operating margins to be between negative 5% and negative 1%, which represents a 7 point y-o-y improvement and more than a 60% y-o-y improvement on a rate basis.

For FY18, Pure Storage is projecting revenues of between $985 million and $1.025 billion; total gross margins of between 63.5% and 66.5%; and operating margins of between negative 7% and negative 3%. Based on performance to date and its guidance, the Company expects Q4 FY18 to be Pure Storage's first profitable quarter.

CEO Change

On August 24, 2017, Pure Storage announced that its Board of Directors has named Charles Giancarlo Chief Executive Officer and a member of the Board of Directors, effective immediately. Mr. Giancarlo previously served in senior executive roles at Silver Lake Partners and Cisco Systems, Inc. Mr. Giancarlo succeeds Scott Dietzen who is stepping down from his role as CEO and has been appointed Chairman of the Board.

Stock Performance

Pure Storage's share price finished yesterday's trading session at $14.58, marginally advancing 0.90%. A total volume of 1.31 million shares have exchanged hands. The Company's stock price soared 10.79% in the last three months, 40.33% in the past six months, and 6.19% in the previous twelve months. Additionally, the stock surged 28.91% since the start of the year. The stock currently has a market cap of $3.18 billion.

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