Pure Storage Announces Fourth Quarter and Full Year Fiscal 2021 Financial Results
MOUNTAIN VIEW, Calif., Feb. 24, 2021 /PRNewswire/ -- Today Pure Storage (NYSE: PSTG), the IT pioneer that delivers storage as-a-service in a multi-cloud world, announced financial results for its fiscal fourth quarter and full year ended January 31, 2021.
"Pure ended fiscal 2021 with great strength and growth, setting new revenue and sales records for the quarter and for the full fiscal year," said Charles Giancarlo, Chairman and CEO, Pure Storage. "I am confident in our opportunity, our long-term strategy, and our ability to accelerate growth. Our Q4 results are a leading indicator of that acceleration. We saw broad based growth year over year, including in our subscription services, our enterprise and cloud segments, our new product lines, and in every theater."
Fourth Quarter and Full Year Financial Highlights
-- Q4 revenue $502.7 million, up 2.2% year-over-year
-- Full-year revenue $1.684 billion, up 2.5% year-over-year
-- Q4 GAAP gross margin 67.8%; non-GAAP gross margin 69.4%
-- Full-year GAAP gross margin 68.2%; non-GAAP gross margin 70.0%
-- Q4 GAAP operating loss $46.8 million; non-GAAP operating income $36.7
million
-- Full-year GAAP operating loss $261.0 million; non-GAAP operating income
$46.0 million
-- Q4 operating cash flow $69.0 million; and full-year operating cash flow
$187.6 million
-- Q4 free cash flow $47.7 million; and full-year free cash flow $92.7
million
-- Total cash and investments $1.25 billion
-- Remaining performance obligations (RPO) $1.1 billion, up 24%
year-over-year; and deferred revenue $843.7 million, up 21%
year-over-year
"We are very pleased to be exiting this year on a high note as sales and revenue have surpassed our expectations with particular strength from our enterprise customers," said Kevan Krysler, CFO, Pure Storage. "The momentum we are seeing is the result of our consistent focus on investing in innovation for our customers."
Fourth Quarter and Full Year Company Highlights and Achievements
-- Leader in the Gartner Magic Quadrant for Primary Storage Arrays: Pure
was named the clear leader, positioned highest on the ability to execute
axis and furthest on the completeness of vision axis in the 2020 Gartner
Magic Quadrant.
-- Strong Subscription Services Momentum: Only Pure delivers true flexible
storage consumption, a cloud experience on-prem, an easy path to move
data to the cloud, and aligns spend with actual consumption. In Q4, Pure
expanded the Pure as-a-Service(TM) offering with a new Service Catalog
aimed at revolutionizing the industry by publishing transparent pricing
for on-prem and hybrid cloud storage delivered as-a-Service, providing a
seamless purchasing model for customers.
-- Market-Leading Portfolio Innovation: Pure continued its pace of
innovation across the portfolio to enable new use cases and render
hybrid arrays obsolete. Among this year's new offerings, Pure expanded
the industry-defining unified, fast file and object FlashBlade(®) with
scale-out native SMB support and the industry's first all-QLC solution
with the third generation FlashArray//C. Both products achieved
consecutive record sales quarters in FY21.
-- Extending Kubernetes Market Leadership with Portworx: With Portworx(®)
fully integrated into Pure, the company delivers the industry's most
complete Kubernetes Data Services Platform, supporting cloud native
applications on any infrastructure, on-prem or in-cloud. In Q4, we saw
significant growth of in-cloud deployments of Portworx and traction
through the IBM partnership both in-cloud and on-prem via our
best-in-class support for Red Hat OpenShift. In FY21, Portworx was named
a leader in the GigaOm Radar for Data Storage for Kubernetes and for
Kubernetes Data Protection.
Guidance: Q1 FY22 and Annual FY22
Q1 FY22 FY22
Revenue
$405 Million 14%-15% Y/Y Growth
---
Non-GAAP Operating Income
(Loss)
$(20) Million
~$90 Million
---
These statements are forward-looking and actual results may differ materially. Refer to the Forward Looking Statements section below for information on the factors that could cause our actual results to differ materially from these statements.
Pure has not reconciled its guidance for non-GAAP operating income (loss) to the most directly comparable GAAP measure because certain items that impact this measure are not within Pure's control and/or cannot be reasonably predicted. Accordingly, a reconciliation of this non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.
Conference Call Information
Pure will host a teleconference to discuss the fourth quarter and full year fiscal 2021 results at 2:00 pm PT today, February 24, 2021. A live audio broadcast of the conference call will be available at the Pure Storage Investor Relations website, investor.purestorage.com. Pure will also post its supplemental earnings presentation and prepared conference call remarks to the Investor Relations website in advance of the call for reference. A replay will be available following the call on the Pure Storage Investor Relations website for two weeks at (855) 859-2056 (or 404-537-3406 for international callers) with passcode 6395722.
Upcoming IR Events
-- Pure will be presenting at the Morgan Stanley Technology, Media and
Telecom Virtual Conference on March 2 at 9:30 am PT.
-- Pure will be presenting at the Raymond James Institutional Investors
Virtual Conference on March 3 at 8:40 am PT.
The presentations from these events will be webcast live, and all information will be available on the Investor Relations website at investor.purestorage.com.
Share Repurchase Authorization
Pure's board of directors has authorized incremental share repurchases of up to an additional $200 million under its stock repurchase program. The authorization allows Pure to repurchase shares of its Class A common stock opportunistically and will be funded from available working capital. Repurchases may be made at management's discretion from time to time on the open market through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The repurchase program does not have an expiration date, does not obligate Pure to acquire any of its common stock, and may be suspended or discontinued by the company at any time without prior notice.
About Pure Storage
Pure Storage (NYSE: PSTG) gives technologists their time back. Pure delivers a modern data experience that empowers organizations to run their operations as a true, automated, storage as-a-service model seamlessly across multiple clouds. One of the fastest-growing enterprise IT companies in history, Pure helps customers put data to use while reducing the complexity and expense of managing the infrastructure behind it. And with a certified customer satisfaction score in the top one percent of B2B companies, Pure's ever-expanding list of customers are among the happiest in the world. For more information, visit www.purestorage.com.
Analyst Recognition
Pure Storage has been named a Leader in the 2020 Gartner Magic Quadrant for Primary Storage Arrays.
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Pure Storage, the Pure P Logo, Portworx, and the marks on the Pure Trademark List at www.purestorage.com/legal/productenduserinfo.html are trademarks of Pure Storage, Inc. Other names are trademarks of their respective owners.
Forward Looking Statements
This press release contains forward-looking statements regarding our products, business and operations, including but not limited to our views relating to future period outcomes, our momentum and growth potential, the scope and duration of the COVID-19 pandemic and its impact on our business operations, liquidity and capital resources, employees, customers, supply chain, financial results and the economy, our expectations regarding product and technology differentiation, including our new offerings, strategy and adoption of subscription services, the success of the Portworx acquisition and technology, and other statements regarding our products, business, operations and results. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements.
Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions "Risk Factors" and elsewhere in our filings and reports with the U.S. Securities and Exchange Commission, which are available on our Investor Relations website at investor.purestorage.com and on the SEC website at www.sec.gov. Additional information is also set forth in our Annual Report on Form 10-K for the year ended January 31, 2021. All information provided in this release and in the attachments is as of February 24, 2021, and Pure undertakes no duty to update this information unless required by law.
Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, Pure uses the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures such as stock-based compensation expense, payments to former shareholders of acquired companies, payroll tax expense related to stock-based activities, amortization of debt discount and debt issuance costs related to long-term debt, amortization of intangible assets acquired from acquisitions, acquisition-related transaction and integration expenses, restructuring activities, and expenses directly related to the COVID-19 pandemic that may not be indicative of our ongoing core business operating results. Pure believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.
For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to free cash flow," included at the end of this release.
PURE STORAGE, INC.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
At the End of Fiscal
2021 2020
Assets
Current assets:
Cash and cash equivalents $
337,147 $
362,635
Marketable securities 916,388 936,518
Accounts receivable, net of allowance of $1,033 and $542 460,879 458,643
Inventory 46,733 38,518
Deferred commissions, current 57,183 37,148
Prepaid expenses and other current assets 89,836 56,930
Total current assets 1,908,166 1,890,392
Property and equipment, net 163,041 122,740
Operating lease right-of-use assets 134,668 112,854
Deferred commissions, non-current 130,741 102,056
Intangible assets, net 76,648 58,257
Goodwill 358,736 37,584
Restricted cash 10,544 15,287
Other assets, non-current 36,896 25,034
Total assets $
2,819,440 $
2,364,204
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $
67,530 $
77,651
Accrued compensation and benefits 160,817 106,592
Accrued expenses and other liabilities 61,754 47,223
Operating lease liabilities, current 32,231 27,264
Deferred revenue, current 438,321 356,011
Total current liabilities 760,653 614,741
Long-term debt 755,814 477,007
Operating lease liabilities, non-current 120,361 92,977
Deferred revenue, non-current 405,376 341,277
Other liabilities, non-current 27,230 8,084
Total liabilities 2,069,434 1,534,086
Stockholders' equity:
Common stock and additional paid-in capital 2,307,608 2,107,605
Accumulated other comprehensive income 7,410 5,449
Accumulated deficit (1,565,012) (1,282,936)
Total stockholders' equity 750,006 830,118
Total liabilities and stockholders' equity $
2,819,440 $
2,364,204
PURE STORAGE, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data, unaudited)
Fourth Quarter of Fiscal
Fiscal Year Ended
2021 2020 2021 2020
Revenue:
Product $
350,380 $
376,517 $
1,144,098 $
1,238,654
Subscription services 152,338 115,487 540,081 404,786
Total revenue 502,718 492,004 1,684,179 1,643,440
Cost of revenue:
Product (1) 112,310 103,510 352,987 362,970
Subscription services (1) 49,551 40,284 182,268 146,916
Total cost of revenue 161,861 143,794 535,255 509,886
Gross profit 340,857 348,210 1,148,924 1,133,554
Operating expenses:
Research and development (1) 130,388 114,904 480,467 433,662
Sales and marketing (1) 198,865 190,389 716,014 728,022
General and administrative (1) 50,414 43,611 182,477 163,153
Restructuring and other (2) 8,009 30,999
Total operating expenses 387,676 348,904 1,409,957 1,324,837
Loss from operations (46,819) (694) (261,033) (191,283)
Other income (expense), net (2,427) (924) (9,127) (3,383)
Loss before provision for income taxes (49,246) (1,618) (270,160) (194,666)
Income tax provision 3,047 3,033 11,916 6,321
Net loss $
(52,293) $
(4,651) $
(282,076) $
(200,987)
Net loss per share attributable to common $
(0.19) $
(0.02) $
(1.05) $
(0.79)
stockholders, basic and diluted
Weighted-average shares used in computing net 274,421 259,218 267,824 252,820
loss per share attributable to common
stockholders, basic and diluted
(1) Includes stock-based compensation expense as follows:
Cost of revenue -- product $
988 $
889 $
4,001 $
3,732
Cost of revenue -- subscription services 4,018 3,302 14,979 14,403
Research and development 29,450 26,726 117,220 107,658
Sales and marketing 17,230 16,389 65,248 67,560
General and administrative 10,903 8,857 40,896 33,352
Total stock-based compensation expense $
62,589 $
56,163 $
242,344 $
226,705
(2) Includes expenses related to restructuring and incremental expenses directly related to COVID-19.
PURE STORAGE, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
Fourth Quarter of Fiscal Fiscal Year Ended
2021 2020 2021 2020
Cash flows from operating activities
Net loss $
(52,293) $
(4,651) $
(282,076) $
(200,987)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 20,231 22,925 70,042 89,710
Amortization of debt discount and debt issuance costs 7,545 6,993 29,070 27,179
Stock-based compensation expense 62,589 56,163 242,344 226,705
Impairment of long-lived assets 7,505
Other 3,229 1,819 7,340 1,336
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable, net (82,810) (96,521) 410 (79,442)
Inventory (3,966) (329) (8,690) 2,393
Deferred commissions (35,836) (16,073) (48,721) (24,231)
Prepaid expenses and other assets 3,624 (18,198) (33,982) (16,734)
Operating lease right-of-use assets 7,370 6,549 28,804 26,511
Accounts payable (22,930) 16,388 (14,364) (18,856)
Accrued compensation and other liabilities 86,709 47,059 76,972 20,296
Operating lease liabilities (6,874) (6,357) (27,318) (25,377)
Deferred revenue 82,445 54,091 140,305 161,071
Net cash provided by operating activities 69,033 69,858 187,641 189,574
Cash flows from investing activities
Purchases of property and equipment (21,332) (13,641) (94,975) (87,847)
Acquisitions, net of cash acquired 165 (339,641) (51,594)
Purchase of intangible assets (9,000)
Purchases of marketable securities (119,568) (155,556) (573,959) (795,580)
Sales of marketable securities 39,323 83,733 171,530 200,251
Maturities of marketable securities 99,156 73,402 423,936 419,059
Other (5,000)
Net cash used in investing activities (2,256) (12,062) (418,109) (324,711)
Cash flows from financing activities
Net proceeds from exercise of stock options 33,695 17,095 59,372 42,899
Proceeds from issuance of common stock under employee stock purchase plan 7 32,439 43,298
Proceeds from borrowings, net of issuance costs 251,892
Repayment of borrowings (33) (33)
Repayment of debt assumed from acquisition (11,555)
Tax withholding on vesting of equity awards (4,178) (1,592) (8,258) (10,379)
Repurchases of common stock (23,621) (15,017) (135,175) (15,017)
Net cash provided by financing activities 5,863 493 200,237 49,246
Net increase (decrease) in cash and cash equivalents and restricted cash 72,640 58,289 (30,231) (85,891)
Cash, cash equivalents and restricted cash, beginning of period 275,051 319,633 377,922 463,813
Cash, cash equivalents and restricted cash, end of period $
347,691 $
377,922 $
347,691 $
377,922
Reconciliations of non-GAAP results of operations to the nearest comparable GAAP measures
The following table presents non-GAAP gross margins by revenue source before certain items (in thousands except percentages, unaudited):
Fourth Quarter of Fiscal
Fourth Quarter of Fiscal
2021 2020
GAAP GAAP Adjustment Non- Non- GAAP GAAP Adjustment Non- Non-
results gross GAAP GAAP results gross GAAP GAAP
margin results gross margin
(a) (a) results gross
margin margin
(b) (b)
$
988 (c) $
889 (c)
18 (d) 14 (d)
3,062 (e) 2,074 (e)
Gross profit -- $
238,070 67.9 $
4,068 $
242,138 69.1 $
273,007 72.5 $
2,977 $
275,984 73.3
% % % %
product
$
4,018 (c) $
3,302 (c)
64 (d) 88 (d)
25 (f)
Gross profit -- $
102,787 67.5 $
4,107 $
106,894 70.2 $
75,203 65.1 $
3,390 $
78,593 68.1
% % % %
subscription services
$
5,006 (c) $
4,191 (c)
82 (d) 102 (d)
3,062 (e) 2,074 (e)
25 (f)
Total gross profit $
340,857 67.8 $
8,175 $
349,032 69.4 $
348,210 70.8 $
6,367 $
354,577 72.1
% % % %
(a) GAAP gross margin is defined as
GAAP gross profit divided by
revenue.
(b) Non-GAAP gross margin is defined
as non-GAAP gross profit divided
by revenue.
(c) To eliminate stock-based
compensation expense.
(d) To eliminate payroll tax expense
related to stock-based
activities.
(e) To eliminate amortization expense
of acquired intangible assets.
(f) To eliminate payments to former
shareholders of acquired company.
The following table presents non-GAAP gross margins by revenue source before certain items (in thousands except percentages, unaudited):
Fiscal Year Ended
2021
GAAP results GAAP gross
margin
(a) Adjustment Non- Non-
GAAP GAAP
results gross
margin (b)
$
4,001 (c)
84 (d)
735 (e)
9,465 (f)
Gross profit -- product $
791,111 69.1 $
14,285 $
805,396 70.4
% %
$
14,979 (c)
267 (d)
190 (e)
32 (g)
Gross profit -- subscription services $
357,813 66.3 $
15,468 $
373,281 69.1
% %
$
18,980 (c)
351 (d)
925 (e)
9,465 (f)
32 (g)
Total gross profit $
1,148,924 68.2 $
29,753 $
1,178,677 70.0
% %
(a) GAAP gross margin is defined as
GAAP gross profit divided by
revenue.
(b) Non-GAAP gross margin is defined
as non-GAAP gross profit divided
by revenue.
(c) To eliminate stock-based
compensation expense.
(d) To eliminate payroll tax expense
related to stock-based
activities.
(e) To eliminate expenses directly
related to COVID-19 pandemic
including hazard pay premiums.
(f) To eliminate amortization expense
of acquired intangible assets.
(g) To eliminate payments to former
shareholders of acquired company.
The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts and percentages, unaudited):
Fourth Quarter of Fiscal
Fourth Quarter of Fiscal
2021 2020
GAAP GAAP Adjustment Non- Non- GAAP GAAP Adjustment Non- Non-
results operating GAAP GAAP results operating GAAP GAAP
margin (a) results operating margin (a) results operating
margin (b) margin (b)
$
62,589 (c) $
56,163 (c)
6,435 (d) 1,935 (d)
2,024 (e) 1,401 (e)
7,977 (f)
3,594 (g) 2,074 (g)
921 (h)
Operating income (loss) $
(46,819) -9.3 $
83,540 $
36,721 7.3 $
(694) -0.1
%
% % % $
61,573 $
60,879 12.4
$
62,589 (c) $
56,163 (c)
6,435 (d) 1,935 (d)
2,024 (e) 1,401 (e)
7,977 (f)
3,594 (g) 2,074 (g)
921 (h)
7,545 (i) 6,993 (i)
Net income (loss) $
(52,293) $
91,085 $
38,792 $
(4,651) $
68,566 $
63,915
Net income (loss) per share --diluted $
(0.19) $
0.13 $
(0.02) $
0.23
Weighted-average shares used in per share
calculation -- diluted 274,421 22,786 (j) 297,207 259,218 17,984 (j) 277,202
(a) GAAP operating margin is defined as
GAAP operating loss divided by
revenue.
(b) Non-GAAP operating margin is
defined as non-GAAP operating
income divided by revenue.
(c) To eliminate stock-based
compensation expense.
(d) To eliminate payments to former
shareholders of acquired
companies.
(e) To eliminate payroll tax expense
related to stock-based
activities.
(f) To eliminate restructuring expenses
related to (1) workforce
reductions and (2) the cease-use
of certain facilities.
(g) To eliminate amortization expense
of acquired intangible assets.
(h) To eliminate acquisition-related
transaction and integration
expenses.
(i) To eliminate amortization expense
of debt discount and debt issuance
costs related to our long-term
debt.
To include effect of dilutive
securities (employee stock
options, restricted stock, and
shares from employee stock
(j) purchase plan).
The following table presents certain non-GAAP consolidated results before certain items (in thousands, except per share amounts and percentages, unaudited):
Fiscal Year Ended
2021
GAAP results GAAP Adjustment Non- GAAP
results Non- GAAP
operating operating
margin (a) margin (b)
$
242,344 (c)
13,849 (d)
6,040 (e)
9,869 (f)
22,055 (g)
10,174 (h)
2,683 (i)
Operating income (loss) $
(261,033) -15.5 $
307,014 $
45,981 2.7
% %
(a)
GAAP operating margin is defined as GAAP operating loss divided by revenue.
(b)
Non-GAAP operating margin is defined as non-GAAP operating income divided by revenue.
(c)
To eliminate stock-based compensation expense.
(d)
To eliminate payments to former shareholders of acquired companies.
(e)
To eliminate payroll tax expense related to stock-based activities.
(f)
To eliminate expenses directly related to COVID-19 pandemic. These expenses included marketing commitments no longer deemed to have value and hazard pay premiums.
(g)
To eliminate restructuring expenses related to (1) workforce reductions and (2) the cease-use of certain facilities.
(h)
To eliminate amortization expense of acquired intangible assets.
(i)
To eliminate acquisition-related transaction and integration expenses.
Reconciliation from net cash provided by operating activities to free cash flow (in thousands except percentages, unaudited):
Fourth Quarter of Fiscal Fiscal Year Ended
2021 2020 2021 2020
Net cash provided by operating activities $
69,033 $
69,858 $
187,641 $
189,574
Less: purchases of property and equipment (21,332) (13,641) (94,975) (87,847)
Free cash flow (non-GAAP) $
47,701 $
56,217 $
92,666 $
101,727
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