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Pure Storage PSTG reported third-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 58 cents, which missed the Zacks Consensus Estimate of 59 cents. The company reported non-GAAP EPS of 50 cents in the prior-year quarter.
Pure Storage generated $964.5 million in revenues, up 16% year over year, surpassing management’s expectations ($950-$960 million) as well as the consensus mark of $958 million. The upside reflects steady demand for its differentiated storage and data management solutions. Sales stayed strong across the portfolio, driven by enterprise and hyperscaler customers. The company also saw continued momentum in Evergreen//One and its modern virtualization products like Cloud Block Store and Portworx.
It also exceeded its full-year goal of 2 exabytes of hyperscale shipments in the fiscal third quarter and expects to ship even more in the fiscal fourth quarter. The company expanded its Enterprise Data Cloud with the launch of Pure Storage Cloud Azure Native, new FlashArray R5 systems and broader AI-driven capabilities through Pure1 AI Copilot and Portworx integration. It also strengthened its cyber-resilience ecosystem with partnerships with Veeam, CrowdStrike and Superna.
Pure Storage, Inc. price-consensus-eps-surprise-chart | Pure Storage, Inc. Quote
Citing stronger-than-expected fiscal third-quarter performance, Pure Storage raised its fiscal 2026 outlook. It now expects revenues of $3.63–$3.64 billion, up from $3.60–$3.63 billion, indicating 14.5–14.9% year-over-year growth. Non-GAAP operating income is also projected to be $629–$639 million, higher than the previous estimated range of $605–$625 million, implying 12.4–14.2% growth.
However, management anticipates that rising commodity costs and strong demand will create new pressure on global supply chains, similar to the disruptions seen in 2021–2022. This could result in longer lead times and higher component prices across the technology industry. Still, it remains well-positioned with a flexible supply chain, global suppliers, multiple manufacturing sites and solid continuity plans. The company also notes that commodity price changes generally impact revenue more than margins, meaning higher component costs could actually boost its top-line growth.
Following a better-than-anticipated quarter and boosted outlook, PSTG’s shares rose 7% in trading and closed the session at $94.72 on Dec. 2. In the past year, shares have gained 44.9% compared with the Zacks Computer-Storage Devices industry’s growth of 45.9%.
Product revenues (contributing 55.4% to total revenues) amounted to $534 million, up 18% on a year-over-year basis. The product revenue category now also includes royalties from hyperscale shipments and part of Portworx software revenue when sold as term licenses.
Subscription services revenues (44.6%) of $430 million rose 14%. We expected Product and Subscription revenues to be $502.8 million and $452.3 million, respectively, for the fiscal third quarter.
Subscription annual recurring revenues (ARR) amounted to nearly $1.8 billion, up 17% on a year-over-year basis. TCV sales for Storage-as-a-Service offerings rose 25% year over year to $120 million, showing strong customer demand for Evergreen//One and other subscription services that provide a stable, seamless operating environment.
Total revenues in the United States and International were $683 million and $281 million, up 22% and 4%, respectively.
The non-GAAP gross margin came in at 74.1% compared with 71.9% in the prior-year quarter. The non-GAAP product gross margin was 72.9%, up from 67.4% due to more sales of high-performance FlashArrays, a bit more Portworx term-license revenue and increased hyperscaler shipments.
The non-GAAP subscription gross margin was 75.5% compared with 77.4% a year ago.
Pure Storage reported a non-GAAP operating income of $196.2 million compared with $167.3 million in the year-ago quarter, exceeding the outlook of $185-195 million, boosted by strong revenue and solid gross margins.
The non-GAAP operating margin was 20.3% compared with 20.1% in the prior-year quarter.
Pure Storage exited the fiscal third quarter, which ended on Nov. 2, with cash and cash equivalents and marketable securities of $1.5 billion, the same as of Aug. 3, 2025.
Cash flow from operations amounted to $116 million in the fiscal third quarter compared with $97 million reported in the prior-year quarter. Free cash flow was $52.6 million compared with $35.2 million in the year-ago quarter.
In the fiscal third quarter, the company returned $53 million to shareholders by repurchasing 0.6 million shares. It has nearly $56 million left under its authorization plan.
The remaining performance obligations (RPO) at the end of the fiscal third quarter totaled $2.9 billion, up 24% year over year. RPO, which includes its Storage-as-a-Service offerings and Evergreen subscriptions across the install base, grew 22%.
Pure Storage expects revenues in the $1.02-$1.04 billion band, implying an increase of 17.1% at the midpoint from the year-ago level. The Zacks Consensus Estimate is pegged at $1.02 billion, up 16.4%.
The non-GAAP operating income is expected to be $220-$230 million, with around 47% year-over-year growth at the midpoint.
Pure Storage currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NetApp, Inc. NTAP reported second-quarter fiscal 2026 non-GAAP earnings of $2.05 per share, which beat the Zacks Consensus Estimate by 8.5%. The figure increased 9.6% year over year. The bottom line exceeded the company’s guided range of $1.84-$1.94. Revenues of $1.71 billion increased 3% year over year. The figure was within the guidance of $1.615-$1.765 billion. The top line beat the consensus mark by 1.1%. Management highlighted that the company’s revenue growth was propelled by accelerating demand for its AI offerings, cloud storage services across first-party and marketplace channels, and its all-flash solutions.
Teradata TDC reported third-quarter 2025 non-GAAP earnings of 72 cents per share, which beat the Zacks Consensus Estimate by 35.85%. The bottom line increased 4.3% year over year. Revenues of $416 million beat the Zacks Consensus Estimate by 2.54%. The figure declined 5.5% year over year on a reported basis and 6% on a constant-currency (cc) basis.
Super Micro Computer SMCI came out with first-quarter fiscal 2026 earnings of 35 cents per share, which beat the Zacks Consensus Estimate by 25%. The bottom line declined 52% year over year. Super Micro Computer posted revenues of $5.02 billion for the first quarter of fiscal 2026, which missed the Zacks Consensus Estimate by 0.56%. The top line declined 15.5% year over year.
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This article originally published on Zacks Investment Research (zacks.com).
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Pure Storage Stock Slides Despite Strong Quarterly Report. Here's What Wall Street Is Saying.
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