Delaware | 001-37570 | 27-1069557 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Pure Storage, Inc. | |||
(Registrant) | |||
By: | /s/ Timothy Riitters | ||
Timothy Riitters | |||
Chief Financial Officer |
• | Q4 Revenue; $422 million, up 24% year over year |
• | Full-year revenue $1.36 billion, up 33% year over year |
• | Q4 GAAP gross margin 66.5%; non-GAAP gross margin 67.6% |
• | Full-year GAAP gross margin 66.4%; non-GAAP gross margin 67.6% |
• | Q4 GAAP operating margin -5.9%; non-GAAP operating margin +7.4% |
• | Full year GAAP operating margin -12.5%; non-GAAP operating margin +3.7% |
• | Following the quarter close, Pure signed a more than $100 million-dollar deal over approximately two years with a leading global systems integrator. |
• | As part of Pure’s Cloud Data Services, the company announced ObjectEngineTM, redefining data protection to rapid restoration built for modern enterprises. |
• | In addition, Pure launched DirectFlash™ Fabric for end-to-end NVMe and NVMe-oF support, enabling customers to improve performance of mission-critical applications and web-scale applications that traditionally have relied on direct attached storage. |
GAAP Quarterly Financial Information | ||||||
Three Months Ended January 31, 2019 | Three Months Ended January 31, 2018 | Y/Y Change | ||||
Revenue | $422.2 | $339.9 | 24% | |||
Gross Margin | 66.5% | 65.3% | 1.2 ppts | |||
Product Gross Margin | 67.4% | 66.2% | 1.2 ppts | |||
Support Subscription Gross Margin | 62.5% | 60.6% | 1.9 ppts | |||
Operating Loss | $(25.0) | $(18.8) | $(6.2) | |||
Operating Margin | -5.9% | -5.5% | -0.4 ppts | |||
Net Loss | $(25.8) | $(14.9) | $(10.9) | |||
Net Loss per Share - Basic and Diluted | $(0.11) | $(0.07) | $(0.04) | |||
Weighted-Average Shares | 239.6 | 218.0 | 21.6 | |||
Headcount | >2,800 | >2,100 | ~700 |
Non-GAAP Quarterly Financial Information | ||||||
Three Months Ended January 31, 2019 | Three Months Ended January 31, 2018 | Y/Y Change | ||||
Gross Margin | 67.6% | 66.3% | 1.3 ppts | |||
Product Gross Margin | 67.8% | 66.5% | 1.3 ppts | |||
Support Subscription Gross Margin | 66.8% | 65.4% | 1.4 ppts | |||
Operating Income | $31.1 | $24.9 | $6.2 | |||
Operating Margin | 7.4% | 7.3% | 0.1 ppts | |||
Net Income | $37.0 | $28.8 | $8.2 | |||
Net Income per Share - Diluted | $0.14 | $0.11 | $0.03 | |||
Weighted-Average Shares - Diluted | 263.7 | 250.8 | 12.9 |
• | Revenue in the range of $327 million to $339 million, 30% Y/Y growth at the midpoint |
• | Non-GAAP gross margin in the range of 65.0% to 68.0% |
• | Non-GAAP operating margin in the range of -8.5% to -4.5% |
• | Revenue in the range of $1.735 billion to $1.805 billion, 30% Y/Y growth at the midpoint |
• | Non-GAAP gross margin in the range of 65.0% to 68.0% |
• | Non-GAAP operating margin in the range of 3.0% to 7.0% |
• | To Listen via Telephone: (866) 393-4306 or (734) 385-2616 (for international callers). |
• | To Listen via the Internet: A live and replay audio broadcast of the conference call with corresponding slides will be available at investor.purestorage.com. |
• | Replay: A telephone playback of this conference call is scheduled to be available two hours after the call ends on Thursday, February 28, 2019, through March 14, 2019. The replay will be accessible by calling (855) 859-2056 or (404) 537-3406 (for international callers), with conference ID 5479904. |
January 31, 2019 | January 31, 2018 | |||||||
(As Adjusted*) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 447,990 | $ | 244,057 | ||||
Marketable securities | 749,482 | 353,289 | ||||||
Accounts receivable, net of allowance of $660 and $1,062 | 378,729 | 243,001 | ||||||
Inventory | 44,687 | 34,497 | ||||||
Deferred commissions, current | 29,244 | 21,088 | ||||||
Prepaid expenses and other current assets | 51,695 | 47,552 | ||||||
Total current assets | 1,701,827 | 943,484 | ||||||
Property and equipment, net | 125,353 | 89,142 | ||||||
Deferred commissions, non-current | 85,729 | 66,225 | ||||||
Intangible assets, net | 20,118 | 5,057 | ||||||
Goodwill | 10,997 | — | ||||||
Deferred income taxes, non-current | 1,060 | 1,060 | ||||||
Restricted cash | 15,823 | 14,763 | ||||||
Other assets, non-current | 12,118 | 4,264 | ||||||
Total assets | $ | 1,973,025 | $ | 1,123,995 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 103,462 | $ | 84,420 | ||||
Accrued compensation and benefits | 99,910 | 59,898 | ||||||
Accrued expenses and other liabilities | 39,860 | 27,149 | ||||||
Deferred revenue, current | 266,584 | 191,229 | ||||||
Total current liabilities | 509,816 | 362,696 | ||||||
Convertible senior notes, net | 449,828 | — | ||||||
Deferred revenue, non-current | 269,336 | 182,873 | ||||||
Other liabilities, non-current | 6,265 | 4,025 | ||||||
Total liabilities | 1,235,245 | 549,594 | ||||||
Stockholders’ equity: | ||||||||
Common stock and additional paid-in capital | 1,820,067 | 1,479,905 | ||||||
Accumulated other comprehensive loss | (338 | ) | (1,917 | ) | ||||
Accumulated deficit | (1,081,949 | ) | (903,587 | ) | ||||
Total stockholders' equity | 737,780 | 574,401 | ||||||
Total liabilities and stockholders' equity | $ | 1,973,025 | $ | 1,123,995 |
Three Months Ended January 31, | Twelve Months Ended January 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(As Adjusted*) | (As Adjusted*) | |||||||||||||||
Revenue: | ||||||||||||||||
Product | $ | 340,137 | $ | 284,163 | $ | 1,075,586 | $ | 834,454 | ||||||||
Support subscription | 82,079 | 55,693 | 284,238 | 190,308 | ||||||||||||
Total revenue | 422,216 | 339,856 | 1,359,824 | 1,024,762 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Product (1) | 110,762 | 95,953 | 352,054 | 275,242 | ||||||||||||
Support subscription (1) | 30,758 | 21,970 | 105,474 | 78,539 | ||||||||||||
Total cost of revenue | 141,520 | 117,923 | 457,528 | 353,781 | ||||||||||||
Gross profit | 280,696 | 221,933 | 902,296 | 670,981 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development (1) | 96,630 | 75,480 | 349,936 | 279,196 | ||||||||||||
Sales and marketing (1) | 171,092 | 137,763 | 584,111 | 464,049 | ||||||||||||
General and administrative (1) | 37,934 | 27,506 | 137,506 | 95,170 | ||||||||||||
Total operating expenses | 305,656 | 240,749 | 1,071,553 | 838,415 | ||||||||||||
Loss from operations | (24,960 | ) | (18,816 | ) | (169,257 | ) | (167,434 | ) | ||||||||
Other income (expense), net | (96 | ) | 5,046 | (8,016 | ) | 11,445 | ||||||||||
Loss before provision for income taxes | (25,056 | ) | (13,770 | ) | (177,273 | ) | (155,989 | ) | ||||||||
Income tax provision | 699 | 1,134 | 1,089 | 3,889 | ||||||||||||
Net loss | $ | (25,755 | ) | $ | (14,904 | ) | $ | (178,362 | ) | $ | (159,878 | ) | ||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.11 | ) | $ | (0.07 | ) | $ | (0.77 | ) | $ | (0.76 | ) | ||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 239,571 | 218,009 | 232,042 | 211,609 |
Cost of revenue -- product | $ | 761 | $ | 732 | $ | 2,951 | $ | 1,630 | ||||||||
Cost of revenue -- support subscription | 3,438 | 2,609 | 12,378 | 9,050 | ||||||||||||
Research and development | 24,528 | 19,597 | 92,484 | 71,229 | ||||||||||||
Sales and marketing | 16,460 | 13,518 | 66,350 | 47,687 | ||||||||||||
General and administrative | 9,520 | 6,297 | 36,482 | 21,077 | ||||||||||||
Total stock-based compensation expense | $ | 54,707 | $ | 42,753 | $ | 210,645 | $ | 150,673 |
Three Months Ended January 31, | Twelve Months Ended January 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
(As Adjusted*) | (As Adjusted*) | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net loss | $ | (25,755 | ) | $ | (14,904 | ) | $ | (178,362 | ) | $ | (159,878 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 19,497 | 16,219 | 70,878 | 61,744 | ||||||||||||
Amortization of debt discount and debt issuance costs | 6,617 | — | 21,031 | — | ||||||||||||
Stock-based compensation expense | 54,707 | 42,753 | 210,645 | 150,673 | ||||||||||||
Other | (2 | ) | 1,175 | (5,039 | ) | 2,054 | ||||||||||
Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||||||||||
Accounts receivable, net | (73,026 | ) | (40,875 | ) | (135,649 | ) | (74,505 | ) | ||||||||
Inventory | 4,814 | 1,719 | (12,289 | ) | (12,595 | ) | ||||||||||
Deferred commissions | (18,533 | ) | (14,009 | ) | (27,660 | ) | (27,978 | ) | ||||||||
Prepaid expenses and other assets | (8,968 | ) | (23,687 | ) | (6,972 | ) | (23,799 | ) | ||||||||
Accounts payable | 2,493 | 17,470 | 14,293 | 29,278 | ||||||||||||
Accrued compensation and other liabilities | 44,218 | 26,263 | 51,810 | 26,622 | ||||||||||||
Deferred revenue | 74,732 | 46,876 | 161,737 | 101,140 | ||||||||||||
Net cash provided by operating activities | 80,794 | 59,000 | 164,423 | 72,756 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Purchases of property and equipment | (29,439 | ) | (20,709 | ) | (100,246 | ) | (65,060 | ) | ||||||||
Acquisition, net of cash acquired | — | — | (13,899 | ) | — | |||||||||||
Purchase of other investment | (5,000 | ) | — | (5,000 | ) | — | ||||||||||
Purchases of marketable securities | (107,109 | ) | (50,658 | ) | (665,357 | ) | (202,656 | ) | ||||||||
Sales of marketable securities | 1,076 | 20,422 | 19,878 | 66,489 | ||||||||||||
Maturities of marketable securities | 97,231 | 45,047 | 253,280 | 144,068 | ||||||||||||
Net cash used in investing activities | (43,241 | ) | (5,898 | ) | (511,344 | ) | (57,159 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Net proceeds from exercise of stock options | 4,429 | 8,916 | 47,771 | 24,677 | ||||||||||||
Proceeds from issuance of common stock under employee stock purchase plan | — | — | 33,444 | 22,137 | ||||||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs | — | — | 562,062 | — | ||||||||||||
Payment for purchase of capped calls | — | — | (64,630 | ) | — | |||||||||||
Repayment of debt acquired from acquisition | — | — | (6,101 | ) | — | |||||||||||
Tax withholding on vesting of restricted stock | (632 | ) | — | (632 | ) | — | ||||||||||
Repurchase of common stock | — | — | (20,000 | ) | — | |||||||||||
Net cash provided by financing activities | 3,797 | 8,916 | 551,914 | 46,814 | ||||||||||||
Net increase in cash and cash equivalents and restricted cash | 41,350 | 62,018 | 204,993 | 62,411 | ||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 422,463 | 196,802 | 258,820 | 196,409 | ||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 463,813 | $ | 258,820 | $ | 463,813 | $ | 258,820 |
Three Months Ended January 31, 2019 | Three Months Ended January 31, 2018 (As Adjusted*) | ||||||||||||||||||||||||||||||||||
GAAP results | GAAP gross margin (a) | Adjustment | Non- GAAP results | Non- GAAP gross margin (b) | GAAP results | GAAP gross margin (a) | Adjustment | Non- GAAP results | Non- GAAP gross margin (b) | ||||||||||||||||||||||||||
$ | 761 | (c) | $ | 732 | (c) | ||||||||||||||||||||||||||||||
10 | (d) | 8 | (d) | ||||||||||||||||||||||||||||||||
632 | (e) | — | |||||||||||||||||||||||||||||||||
Gross profit -- product | $ | 229,375 | 67.4 | % | $ | 1,403 | $ | 230,778 | 67.8 | % | $ | 188,210 | 66.2 | % | $ | 740 | $ | 188,950 | 66.5 | % | |||||||||||||||
$ | 3,438 | (c) | $ | 2,609 | (c) | ||||||||||||||||||||||||||||||
63 | (d) | 82 | (d) | ||||||||||||||||||||||||||||||||
Gross profit -- support subscription | $ | 51,321 | 62.5 | % | $ | 3,501 | $ | 54,822 | 66.8 | % | $ | 33,723 | 60.6 | % | $ | 2,691 | $ | 36,414 | 65.4 | % | |||||||||||||||
$ | 4,199 | (c) | $ | 3,341 | (c) | ||||||||||||||||||||||||||||||
73 | (d) | 90 | (d) | ||||||||||||||||||||||||||||||||
632 | (e) | — | |||||||||||||||||||||||||||||||||
Total gross profit | $ | 280,696 | 66.5 | % | $ | 4,904 | $ | 285,600 | 67.6 | % | $ | 221,933 | 65.3 | % | $ | 3,431 | $ | 225,364 | 66.3 | % |
Three Months Ended January 31, 2019 | Three Months Ended January 31, 2018 (As Adjusted*) | ||||||||||||||||||||||||||||||||||
GAAP results | GAAP operating margin (a) | Adjustment | Non- GAAP results | Non- GAAP operating margin (b) | GAAP results | GAAP operating margin (a) | Adjustment | Non- GAAP results | Non- GAAP operating margin (b) | ||||||||||||||||||||||||||
$ | 54,707 | (c) | $ | 42,753 | (c) | ||||||||||||||||||||||||||||||
763 | (d) | 973 | (d) | ||||||||||||||||||||||||||||||||
632 | (e) | — | |||||||||||||||||||||||||||||||||
Operating income (loss) | $ | (24,960 | ) | -5.9 | % | $ | 56,102 | $ | 31,142 | 7.4 | % | $ | (18,816 | ) | -5.5 | % | $ | 43,726 | $ | 24,910 | 7.3 | % | |||||||||||||
$ | 54,707 | (c) | $ | 42,753 | (c) | ||||||||||||||||||||||||||||||
763 | (d) | 973 | (d) | ||||||||||||||||||||||||||||||||
632 | (e) | — | |||||||||||||||||||||||||||||||||
6,616 | (f) | — | |||||||||||||||||||||||||||||||||
Net income (loss) | $ | (25,755 | ) | $ | 62,718 | $ | 36,963 | $ | (14,904 | ) | $ | 43,726 | $ | 28,822 | |||||||||||||||||||||
Net income (loss) per share -- diluted | $ | (0.11 | ) | $ | 0.14 | $ | (0.07 | ) | $ | 0.11 | |||||||||||||||||||||||||
Weighted-average shares used in per share calculation -- diluted | 239,571 | 24,097 | (g) | 263,668 | 218,009 | 32,752 | (g) | 250,761 |
Three Months Ended January 31, | ||||||||
2019 | 2018 | |||||||
Net cash provided by operating activities | $ | 80,794 | $ | 59,000 | ||||
Less: purchases of property and equipment | (29,439 | ) | (20,709 | ) | ||||
Free cash flow (non-GAAP) | $ | 51,355 | $ | 38,291 | ||||
Adjust: ESPP Impact | (17,027 | ) | (11,495 | ) | ||||
Free cash flow without ESPP impact (non-GAAP) | $ | 34,328 | $ | 26,796 | ||||
Free cash flow as % of revenue | 12.2 | % | 11.3 | % | ||||
Free cash flow without ESPP Impact as % of revenue | 8.1 | % | 7.9 | % |