Pure Storage, NetApp beat Wall Street expectations as cloud services dominate

Distributed storage startup Pure Storage this afternoon reported a fiscal Q2 revenue that beat analysts’ expectations while also sending the company’s shares up by 8.35% in late trading.

Also this afternoon, storage networking pioneer NetApp reported fiscal Q1 revenue and profit that similarly topped expectations. The report sent NetApp shares up 1.50% in late trading.

Pure Storage’s revenue for the quarter rose to $496.8 million, a growth of 23% year-over-year. Analysts had been modeling $471.1 million.

Pure Storage’s CEO, Charles Giancarlo, said that the company’s revenue growth made it “clear” that their long-term strategy to provide customers with modern data services is working.

“We are in a great innovation cycle with our portfolio and our sales momentum and execution have never been stronger,” Giancarlo said.

CFO Kevan Krysler added that the performance in Q2 “reflected strong sales execution.”

“We saw strength from both our enterprise and commercial customers across our entire solutions portfolio,” Krysler explained.

For the current quarter, the company expects a revenue of $530 million with a non-GAAP operating income of $40 million.

For the full year, the company sees revenue rising to $2.04 billion.

The company added that the reported figures were the highest total sales for any second quarter in the history of the company, representing a growth of more than 30% year-over-year. Revenue from subscription services was up 31% year-over-year, particularly with Pure as-a-Service, which they said nearly doubled its revenues compared to last year.

Pure Storage also found success with large enterprises, reporting that their top 10 customers spent more than $100 million. This quarter, Pure Storage said its software for managing public cloud block storage is available on Microsoft’s Azure cloud computing service.

For NetApp, the company’s CEO George Kurian said the company saw strong revenue, gross margin and operating leverage across their entire business.

“Cloud and digital transformation initiatives remain top customer priorities and our results underscore the value we bring to customers in a hybrid, multi-cloud, data-driven world. With focused execution and demonstrated leadership, we are reshaping the industry,” Kurian said.

“We made a number of innovation announcements this quarter, and we will continue to bring industry-leading capabilities to market, further enhancing our differentiated position in cloud and software.”

Revenue for the quarter rose 12%, year-over-year, to $1.46 billion, yielding a profit of $1.15 a share.

Analysts had been modeling $1.42 billion and $0.943 per share.

For the current quarter, the company predicted a revenue of $1.49 billion to $1.59 billion, and an EPS in a range of $1.14 and $1.24.