Pure Storage Inc

Pure Storage managed to surpass the revenue expectations as well as the earnings expectations of Wall Street. The company exceeded its projections in the first quarter, bringing in $589 million in revenue and approximately $20 million in operating profit. Due to the extraordinary demand this quarter, they also sold more Evergreen//One subscriptions than ever before. The annual recurring revenue from subscription services and RPO also increased in the quarter. Q1 operating earnings of approximately $20 million exceeded expectations, despite higher-than-expected salary expenditures and their first sales kickoff event since 2020. Pure Storage’s balance sheet and liquidity were extremely robust in the quarter. Looking ahead, their Evergreen subscription services, particularly Evergreen//One, are expected to continue to grow. As the recurring revenue for these services is realized over time, their yearly revenue guide has considered the strength of their Evergreen//One offering. Besides, despite the positive initial reception to FlashBlade//E, Pure Storage expects a modest revenue increase in the second half of the year. We give Pure Storage, Inc. a ‘Hold’ rating with a revised target price.