Pure Storage, Inc. has announced financial results for the fourth quarter of FY2025 and full-year figures for the period ending 2nd February 2025. For the full year, revenue increased by 11.9%, with Subscriptions revenue up by 21.6%. Net revenue for the year increased by 16.5%, representing the third year of consecutive profit.
Background
Pure Storage, Inc. announced financial results for Q4 FY2025 and the full year for the period ending 2nd February 2025 on 26th February 2025. For the year, revenue increased by 11.9% to $3.2 billion, the first year in which revenue has exceeded the $3 billion mark. Revenue from subscriptions was up 21.6% at $1.5 billion, while profit increased by 16.5% to $101 million.
For the fourth quarter, revenue increased 11.4% year-on-year to $800 million (5.9% sequentially), with subscriptions revenue up 17.1% ($385 million). Compared to Q4 FY2024, profit was down 24.3% and down 27.2% sequentially.
We present the data in eight graphs labelled Figures 1 to 8.
Growth
Once again, Pure Storage continues to grow revenue at a fairly constant rate, both quarterly and on an annual basis. Figure 2 shows the trend, which declined slightly compared to FY2022/FY2023, but remains remarkably constant. To a degree, despite a move to subscriptions, the purchasing model for Pure Storage solutions continues to look cyclical by quarter, with increasing revenue in quarters two, three and four, compared to Q1. This trend has been part of the revenue cycle since 2017.
Expansion
Over the course of the financial and calendar year, Pure Storage has continued to expand its product family with smaller entry-level products such as the C20 FlashArray and FlashBlade//S100. Fusion, the SaaS-based management platform, was upgraded to a new version release (v2) aimed at improving customer productivity and efficiency.
In the post-announcement financial call, CEO Charlie Giancarlo indicated that the “E” product line now forms a greater percentage of the overall sales mix, resulting in slightly lower gross margins. The “E” family is targeted at replacing HDD-based systems, so was impacted by higher NAND prices, although this issue is expected to recede during FY2026.
Hyper-scaler
Of course, the big news for the year has been the engagement with a “top 4 hyper-scaler”. We covered this announcement with Q3 FY2025 results. No additional information was presented during the earnings call, other than to indicate the engagement is proceeding and could be on a slightly accelerated time path.
The Architect’s View®
From a financial perspective, Pure Storage continues to grow the business, very much in a “business as usual” fashion, with a further increase in revenue and profit. The company has clearly reacted to customer demand with a wider range of hardware solutions at the lower end and with better price points (the C and E families). These products arguably have lower margins than the main product lines, but growth needs to come from somewhere, which must include further erosion of hybrid and HDD-based systems from other vendors.
However, competitors such as NetApp, Dell, and IBM have also widened their product offerings, with NetApp being the most aggressive in targeting specific block workloads (ASA) and capacity-optimised solutions. IBM has announced a QLC-based solution only this week, while Dell has a single QLC PowerStore product (albeit using older controller technology).
The integration with Fusion, plus the expected 300TB DFM (DirectFlash Module) capacity will continue to provide Pure Storage with differentiation within the hardware part of the business. However, SSD vendors have announced 122TB drives with much greater capacities on the horizon, so the cost/efficiency gap that Pure Storage currently exploits could start to close up.
Elsewhere, the hyper-scaler engagement will provide value to the bottom line from FY2027, but that is currently 12 months away. This means Pure Storage is currently dependent on container-based Portworx for public cloud revenue, in addition to Cloud Block Store (CBS) on AWS and Azure.
The current point release updates for Portworx follow a cadence of approximately 6-9 months, with the current version at 3.2. Pure Storage currently provides no financial guidance on the success or otherwise of Portworx or CBS, and generally, the hardware products gain all the news stories.
We would like to see more information provided on Portworx and the overall integration with the hardware business. Much of this information is available in the Portworx Enterprise release notes, but not easily consumable by potential customers.
Overall, we believe that Pure Storage will continue to gain market share in the traditional on-premises block and unstructured storage markets. However, competitors such as VAST Data are expanding much more quickly with the capability to support new data protocols while also adding block protocol support into the mix. Exactly how Pure Storage will address this challenge is unclear as we have seen no statement on strategy regarding alternative protocols.
This, then, it perhaps an area to regard for 2026, as AI and data mining in general gain more focus.
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