Data storage specialist Pure Storage (PSTG -1.81%) wasn't in the good graces of the stock market on Thursday. After its latest set of quarterly earnings were published the previous afternoon, investors traded out of the shares to leave them with a nearly 3% decline to close Thursday. That was in contrast to a relatively bouncy S&P 500 (^GSPC -0.81%), which closed up by 0.4%.
A mixed quarter
In the first quarter of its fiscal 2026, Pure Storage booked revenue of just under $779 million, for a 12% year-over-year improvement. Other sales metrics also headed north at double-digit rates -- subscription services revenue rose by 17% to exceed $406 million, while subscription annual recurring revenue (ARR) advanced 18% to $1.7 billion.
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The company also managed to narrow its generally accepted accounting principles (GAAP) net loss, although it's still mired in the red. Its bottom-line deficit came in just shy of $14 million, or $0.04 per share, against the year-ago shortfall of slightly over $35 million.
A key element in the negative investor reaction was that Pure Storage missed badly on earnings. Analysts tracking the stock were modeling a profit, and a robust one at $0.25 per share. On a slightly brighter note, the company beat on revenue, as the pundit consensus was a shade higher than $770 million.
The company attributed its gains to several factors, including the quick take-up of its recently introduced Fusion 2.0 storage platform. It also rolled out FlashBlade Exa, a high-performance solution designed to handle resource-heavy functionalities such as artificial intelligence (AI).
Revenue guidance met expectations
Investors might have also been dismayed by Pure Storage's news that CFO Kevan Krysler is leaving the company. He will remain in his position until a successor is found.
Meanwhile, Pure Storage proffered guidance for both its current (second) quarter and the entirety of fiscal 2026. For the latter period, it's modeling just under $3.52 billion in revenue, for an improvement of 11% year over year. That's slightly above the $3.51 billion collective analyst estimate. The company's non-GAAP (adjusted) operating margin should land at 17%.
