What to Expect Ahead of Pure Storage's (PSTG) Q2 Earnings?

Pure Storage, Inc. PSTG is scheduled to report second-quarter fiscal 2022 results on Aug 25.

For fiscal second quarter, management anticipates total revenues to be $470 million. The Zacks Consensus Estimate for revenues is pegged at $471 million, suggesting an increase of 16.7% on a year-over-year basis.

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 5 cents per share, indicating a decline of 16.7%.

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Factors to Note

Pure Storage’s performance is likely to gain from solid uptick of its subscription services namely Pure as-a-Service subscription (includes Cloud Block Store) and Evergreen Storage. Increasing customer acquisitions along with strength in commercial business bodes well.

During first-quarter fiscal 2022, Pure Storage announced the general availability of Pure Cloud Block Store on Amazon’s AMZN Amazon Web Services as well as Microsoft’s MSFT Azure platform.

Steady momentum witnessed for FlashArray and FlashBlade solutions might have contributed to the company’s top-line performance.

Incremental gains from healthy adoption of its second generation FlashArray//C (an all-QLC flash array) is likely to have acted as a tailwind. FlashArray//C is a cost-effective storage array solution that offers clients with enhanced performance capabilities and helps them to run complex cloud workloads on a single platform. In the last reported quarter, FlashArray//C witnessed double-digit growth on a year-over-year basis.

The company is also likely to benefit from uptake of its Pure FlashRecover offering, which provides all-flash data backup and recovery in case of a ransomware attack. In fiscal first quarter, the company introduced Pure Storage on Equinix Metal solution that provides a cohesive and connected platform for any stage of cloud migration.

The continuation of remote work, distance learning and tele-healthcare set up due to the COVID-19 crisis is likely to have driven adoption of Pure Storage’s hybrid multi-cloud offerings and cloud data services. It is expected to have favored the company’s fiscal second-quarter performance.

Higher uptake of Pure Storage’s VMWare’s cloud portfolio for offerings, which includes VMware Site Recovery Manager, vSphere Virtual Volumes with VMware Cloud Foundation, Cloud Native Storage for Kubernetes on VMware and NVMe over Fabric are likely to have accelerated the deployment of hybrid cloud offerings.

Pure Storage currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Synergies from the Portworx acquisition, in a bid to expand its cloud-services solutions for Kubernetes technology, are likely to have acted as a tailwind.

Higher expenses on product development amid stiff competition from storage peers including NetApp NTAP might have limited margin expansion in the to-be-reported quarter.

Increases in supply chain related costs, owing to disturbances caused by the ongoing pandemic, are likely to have exerted pressure on fiscal second-quarter margins.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.