Everpure (PSTG) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue grew 11% year-over-year to $763.8M, with subscription services revenue up 25% to $361.2M and ARR reaching $1.51B, up 24% year-over-year, driven by Evergreen//One and high-velocity business.

• Net income for Q2 FY25 was $35.7M, reversing a net loss of $7.1M in Q2 FY24, reflecting improved profitability.

• Customer base expanded to over 13,000, including 261 new customers in Q2 and approximately 62% of Fortune 500 companies.

• Platform innovation included new AI storage services, enhanced automation, and the launch of a generative AI copilot for storage.

• Discussions with hyperscalers to replace core storage with Pure technology are progressing positively.

Financial highlights

• Q2 FY25 revenue: $763.8M, up 11% year-over-year; product revenue: $402.6M; subscription services revenue: $361.2M.

• Subscription services ARR: $1.51B, up 24% year-over-year; RPO: $2.34B, up 24% year-over-year.

• Non-GAAP operating income: $138.6M (18.1% margin); GAAP operating income: $24.9M (3.3% margin).

• Non-GAAP gross margin: 72.8%; GAAP gross margin: 70.7%; product gross margin: 68-69.5%; subscription services gross margin: 74-76.4%.

• Cash, cash equivalents, and marketable securities totaled $1.8B at quarter-end; operating cash flow: $226.6M; free cash flow: $166.6M.

Outlook and guidance

• Q3 FY25 revenue expected at $815M, with non-GAAP operating income of $140M (17.2% margin).

• FY25 revenue guidance reaffirmed at $3.1B (10.5% growth), with non-GAAP operating income of $532M (17% margin).

• Storage-as-a-service TCV sales forecast for FY25 is $500M, reflecting 25% growth.

• Modest sequential decline in product gross margins expected in the second half, driven by product mix and cost-sensitive workloads.

• Management expects continued growth in subscription services and recurring revenue, with RPO at $2.3B.