WavebreakMediaMicro - Fotolia
Pure Storage announced its first set of quarterly financial results since going public and things are looking good for the all-flash provider.
For the third fiscal quarter ended October 31, 2015, revenues stood at $131.4m, up from $49.2m in the year ago period. This represents a staggering 167% growth year over year and a 55% growth sequentially.
Pure Storage achieved these impressive numbers with a strong boost to its customer base, adding more than 250 new customers in the third quarter alone and bringing the total to more than 1,350 organisations. Big brands like Domino's Pizza and The Boston Globe have now joined the likes of LinkedIn and ServiceNow.
Yet for all the good news, the all-flash storage company is still some way off becoming a profit-making business. Pure posted a GAAP net loss of $56.5m, meaning that losses actually deepened YoY from $40m. It was, however, an improvement on the previous quarter’s loss of $63.8m.
"We had an outstanding third quarter including record revenue, gross margin and operating margin," said Scott Dietzen, CEO of Pure Storage. "None of our primary competitors are properly enabling customers to reap the benefits of flash and cloud, the biggest changes to the storage market in decades, as we are. We believe this is why others in the storage space are stumbling while we are growing."
And ‘stumbling’ they are. Violin Memory also reported its third quarter results, and it was not a pretty picture.
Revenue fell 42% year-over-year to $12.5m. Analysts were expecting revenue of $17.2m. On a GAAP basis, the company reported a loss of $22.7m, down from a loss of $23.5m for the year ago period.
"Our strategic shift and product line transition to become a market leader in flash-based primary storage for enterprises continues to create short-term challenges in achieving predictable, consistent growth," CEO Kevin DeNuccio said in a statement. "However, we believe we are headed in the right direction overall and that our opportunity continues to be extremely attractive."
Violin had to write off much of its inventory earlier this year as it transitioned away from its 6000-series product line after one of the most dismal IPOs in recent memory. The company was the number one all-flash player back in 2012, but has since been priced out of the market by the likes of Pure, which – coincidentally - is part of the reason that none of these companies are turning a profit.
DeNuccio hinted that drastic action might be on the horizon.
“Our stock price remains at a level that we do not believe reflects the true value of our business and developed technology," he said. "Therefore, it is our responsibility to all stakeholders to consider alternate ways of creating value. Our board has authorized us to explore strategic alternatives, and we've retained the services of an investment banking firm to assist us with this process."
Today, Violin stock fell as low as $1 and, at the time of writing, is hovering around $1.03.