Cloud Stocks: Analysis Of Pure Storage’s Portworx Acquisition

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According to a recent report, the global 3D NAND Flash Memory market size is projected to grow at 21% CAGR to $47.8 billion by 2026 from $15.54 billion in 2020. Mountain View-based Pure Storage (NYSE: PSTG) recently reported its third-quarter results that surpassed market expectations. The company is transitioning to a subscription-based model for storage to drive growth.

Pure Storage’s Financials

Pure Storage’s third-quarter revenues fell 4% over the year to $410.6 million, ahead of the market’s estimates of $49.52 million. Adjusted EPS of $0.01 also beat analyst estimates of a break-even quarter.

Subscription services revenue grew 29% over the year to $136.1 million. During the same period, product revenues fell from $136.1 million to $105.1 million as the company continued to focus on transitioning to its subscription-based offering.

Given the current economic conditions, Pure Storage did not disclose any outlook for the rest of the year.

Pure Storage’s Subscription Services

Pure Storage is focusing on growing its subscription-based model. Subscription Services, including Evergreen and unified Pure as-a-Service offerings, grew 29% over the year with companies like ME Bank in Australia and The University of Texas Health Science Center adopting the service. Pure Strorage offers a unified subscription service through Pure-as-a-Service offering that includes Cloud Block Store and enables customers to subscribe to storage in their data center and the cloud, paying for only what they consume. The service makes migration to the public cloud possible at any time without organizations having to worry about stranded assets.

Earlier last quarter, it expanded the offering by releasing the Pure Service Catalog as part of the Pure as-a-Service suite. The catalog includes several new service tiers that will be able to deliver increased transparency and flexibility for customers and letting them choose the right storage service level for each workload. To attract a wider range of customers, Pure Storage is making Pure as-a-Service available at lower cost service tiers as well.

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