What: Shares of enterprise storage company Pure Storage (NYSE:PSTG) surged on Thursday following the release of the company's third-quarter results. Pure Storage beat analyst estimates for both revenue and earnings, while providing strong guidance for the fourth quarter. As of 2:30 EST, the stock was up about 10%.
So what: Pure Storage reported quarterly revenue of $131.4 million, up 167% year over year, and well above the average analyst estimate of $107 million. The company grew its customer base to 1,350 organizations, a total which increased by more than 250 since the end of the second quarter. In addition to adding new customers, large existing customers expanded their relationships with the company.
Non-GAAP EPS came in at a loss of $0.18, an improvement over the $0.22 loss posted during the third quarter of 2014, and $0.12 better than analysts were expecting. On an GAAP basis, Pure Storage lost $0.73 per share, down substantially from a loss of $1.43 per share during the same period last year.
CEO Scott Dietzen pointed to what makes Pure Storage stand out among its peers: "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."
Now what: In addition to handily beating analyst estimates, Pure Storage provided better-than-expected guidance for the fourth quarter. The company expects revenue to be $134 million to $139 million, well above the average analyst estimate of $123.3 million.
Pure Storage's results are in stark contrast to those of Nimble Storage (NYSE:NMBL), shares of which tumbled in November after the company badly missed analyst estimates and provided guidance well below expectations. Nimble Storage relies heavily on sales to small and medium-sized business, while Pure Storage focuses more on enterprise customers. If Pure Storage's results are any indication, that strategy appears to be working.