Executive Summary
Pure Storage reported a strong QQ2 2026 performance, underscored by broad-based demand across the portfolio and continued monetization of software and services. Revenue reached $861 million, with subscription services accounting for $415 million (48% of total), reflecting a 15% YoY rise and an ARR of $1.8 billion. The company also disclosed a robust RPO backlog of $2.8 billion, up 22% YoY, and annualized recurring revenue growth supported by Evergreen One and Portworx. Management framed the quarter within a broader shift to the enterprise data cloud, driven by Fusion v2, which enables software-defined data management and global policy-based data governance, a strategic differentiator in a growing AI and cloud-native landscape. Cash generation remained healthy, with $212 million operating cash flow and $150 million in free cash flow, complemented by share buybacks and a strong balance sheet (approximately $1.5 billion in cash and investments).
Key Performance Indicators
Key Insights
Revenue: $861.0m, YoY -2.14%, QoQ 0.00%; Gross Margin: 72.1% (management commentary notes 72.1% gross margin for QQ2); Subscription Revenue: $415.0m, +15% YoY, 48% of total revenue; ARR: $1.8B, +18% YoY; RPO: $2.8B, +22% YoY, with RPO growth at 21% exiting Q2; Gross Product Margin: 68% (noted as sequentially higher, within long-term 65-70% target); Operating Profit: $130.0m, ~15.1% operating margin (management guidance); Net Income: $47.1m, Net Income Margin ~5.5%; Diluted EPS: $0.14; Weighted A...
Financial Highlights
Revenue: $861.0m, YoY -2.14%, QoQ 0.00%; Gross Margin: 72.1% (management commentary notes 72.1% gross margin for QQ2); Subscription Revenue: $415.0m, +15% YoY, 48% of total revenue; ARR: $1.8B, +18% YoY; RPO: $2.8B, +22% YoY, with RPO growth at 21% exiting Q2; Gross Product Margin: 68% (noted as sequentially higher, within long-term 65-70% target); Operating Profit: $130.0m, ~15.1% operating margin (management guidance); Net Income: $47.1m, Net Income Margin ~5.5%; Diluted EPS: $0.14; Weighted Avg Shares: 327.6m; Operating Cash Flow: $212.2m; CapEx: $62.0m; Free Cash Flow: $150.1m, FCF Margin ~17.4%; Headcount: ~6,100; Cash and Equivalents: $887.8m; Short-Term Investments: $649.7m; Total Cash and Short-Term Investments: $1.5375B; Net Debt: -$665.1m (net cash); New Logos: >300; US Revenue: $577.0m (+7% YoY); International Revenue: $284.0m (+26% YoY); Fortunes 500 penetration: 62%; Buybacks: $42m (0.8m shares), 1.1m shares withheld for taxes; Buyback Authorization Remaining: $109m.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
861.00M |
-2.14% |
0.00% |
| Gross Profit |
604.34M |
1.74% |
0.00% |
| Operating Income |
4.87M |
-88.53% |
0.00% |
| Net Income |
47.12M |
11.04% |
0.00% |
| EPS |
0.14 |
7.69% |
0.00% |
Management Commentary
Key takeaways from management comments and Q&A: Fusion v2 and the Enterprise Data Cloud (EDC) position Pure Storage as a software-defined data governance platform, enabling policy-driven, globally orchestrated data management. The company highlighted the premium, high-margin nature of hyperscaler revenue (especially Meta royalty-driven contributions) and the continued momentum in Evergreen One, Cloud Block Store, and Portworx. Pure underscored that hyperscaler deployments (1–2 exabytes initial target) are progressing, with potential upside beyond the initial range, while recognizing that near-term revenue from hyperscalers may not be material for FY2026 but could meaningfully influence the trajectory into FY2027+. The management team also stressed a non-RIP-and-replace path in hyperscaler refresh cycles, noting strategic advantages in transitioning to direct flash across storage tiers and leveraging Purity software for layer-three services in cloud environments.
The enterprise data cloud is an industry-changing architecture that transforms how organizations store and manage data.
— Charlie Giancarlo, Chief Executive Officer
Revenue of $861 million grew 13% year over year, and operating profit of $130 million resulted in an operating margin of 15.1%.
— Tarek Robbiati, Chief Financial Officer
Forward Guidance
Guidance highlights: For FY2026, revenue guidance is raised to a range of $3.6 billion to $3.63 billion, implying ~14% YoY growth at the midpoint; Operating profit guidance is a range of $65 million to $625 million. For Q3, revenue guidance is $950 million to $960 million, with operating profit of $185 million to $195 million. Management emphasized the shift to a guidance range to align with industry practice and to preserve flexibility for transformational investments, including hyperscaler engagements and platform enhancements (Fusion v2). The company indicated better visibility on hyperscaler deployments (notably Meta) and maintained a stance that hyperscaler revenue in FY2026 would not be material, but could accelerate later. Investors should monitor: (i) progression of the Meta exabyte deployments and other hyperscaler contracts, (ii) progression and monetization of Evergreen One and Cloud Block Store, and (iii) cadence of product mix and pricing discipline that influence gross margins.