Executive Summary
Pure Storage reported QQ1 2026 revenue of $778.5 million, up 1.93% year over year but down 11.5% quarter over quarter, reflecting seasonality and mix shifts as the company accelerates its pivot toward subscription/recurring revenue. Gross profit was $536.2 million with a margin of 68.9%, while operating income came in at a loss of $31.2 million and EBITDA was $36.1 million (EBITDA margin approximately 4.6%). Net income was negative at $14.0 million, or a loss per share of $0.04. The company generated $283.9 million in operating cash flow and $211.6 million of free cash flow, delivering a healthy cash conversion even as profitability remains under pressure from elevated R&D and SG&A spend. Cash and cash equivalents stood at $739.3 million, and total cash and short-term investments were $1.579 billion, yielding a net cash position of about $468 million. Deferred revenue remains sizeable, with current deferred revenue of $999.6 million and non-current deferred revenue of $858.2 million, underscoring a strong subscription pipeline and visibility into future revenue streams. The quarter highlighted Pure Storage’s continued investment in the core Flash portfolio, cloud-enabled offerings, and AI-ready infrastructure while balancing near-term profitability with long-term product and platform investments. The balance sheet remains robust, supporting ongoing R&D, product expansion, and cloud/storage initiatives. Investors should monitor: (1) the evolution of the subscription mix and ARR growth, (2) the trajectory of operating margins as scale and efficiency gains materialize, (3) the pace of free cash flow expansion, and (4) the management’s commentary on demand trends and product-cycle dynamics in a competitive storage market.
Key Performance Indicators
QoQ: -173.40% | YoY:-225.30%
QoQ: -132.98% | YoY:-139.23%
QoQ: -130.77% | YoY:-136.36%
Key Insights
Revenue: $778.5m; YoY +1.93%; QoQ -11.52%. Gross Profit: $536.153m; Gross Margin 68.87% (YoY -0.73%; QoQ -9.74%). Operating Income: -$31.171m; Operating Margin -4.00% (YoY -225.30%; QoQ -173.40%). Net Income: -$13.995m; Net Margin -1.80% (YoY -139.23%; QoQ -132.98%). EBITDA: $36.061m; EBITDA Margin 4.63%. EPS (diluted): -$0.04. R&D: $221.74m; SG&A: $345.584m; Total Operating Expenses: $567.324m. Net cash provided by operating activities: $283.936m; Free Cash Flow: $211.590m. Weighted ave...
Financial Highlights
Revenue: $778.5m; YoY +1.93%; QoQ -11.52%. Gross Profit: $536.153m; Gross Margin 68.87% (YoY -0.73%; QoQ -9.74%). Operating Income: -$31.171m; Operating Margin -4.00% (YoY -225.30%; QoQ -173.40%). Net Income: -$13.995m; Net Margin -1.80% (YoY -139.23%; QoQ -132.98%). EBITDA: $36.061m; EBITDA Margin 4.63%. EPS (diluted): -$0.04. R&D: $221.74m; SG&A: $345.584m; Total Operating Expenses: $567.324m. Net cash provided by operating activities: $283.936m; Free Cash Flow: $211.590m. Weighted average shares outstanding: 326.539m. Cash and short-term investments: $1.579b (incl. $739.336m cash and $839.748m short-term investments). Net debt: -$468.038m (net cash). Current ratio: 1.606; Quick ratio: 1.581; Cash ratio: 0.495. Deferred revenue current: $999.570m; Deferred revenue non-current: $858.224m. Capital expenditure: $72.346m. Common stock repurchased: $119.936m. Price/Sales: 19.96x; Price/Book: 12.49x; Debt to capitalization: 0.179; Net debt to EBITDA not provided, but net cash position notable.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
778.49M |
1.93% |
-11.52% |
| Gross Profit |
536.15M |
-0.73% |
-9.74% |
| Operating Income |
-31.17M |
-225.30% |
-173.40% |
| Net Income |
-14.00M |
-139.23% |
-132.98% |
| EPS |
-0.04 |
-136.36% |
-130.77% |
Key Financial Ratios
operatingProfitMargin
-4%
operatingCashFlowPerShare
$0.87
freeCashFlowPerShare
$0.65
priceEarningsRatio
-277.54
Management Commentary
Transcript not provided in the dataset. No earnings call transcript was available for extraction of management quotes or thematic highlights. As a result, transcriptHighlights is not populated with verbatim remarks.
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Forward Guidance
No explicit forward guidance was disclosed in the QQ1 2026 release within the provided data. Investors should consider the following forward-looking factors: (1) subscription/recurring revenue growth trajectory and ARR expansion, (2) margin progression as scale benefits offset rising R&D and go-to-market investments, (3) cadence of free cash flow generation and cash conversion improvements, (4) product cycle dynamics in the Flash portfolio and AI-ready offerings (FlashBlade, Portworx, AIRI, Evergreen storage). Given Pure Storage’s large deferred revenue base and robust balance sheet, the company appears positioned to fund R&D-driven product expansion while pursuing profitable growth, but execution around achieving positive operating margins remains a critical risk factor. Key factors to monitor include: ARR growth rate, margin improvement timing, discipline on operating expenses, and any changes to the cadence of capital returns or share repurchases.