Pure Storage is looking at more competition and more opportunity than ever, and handling both well. The all-flash vendor bucked industry trends by growing revenue significantly last quarter despite new flash arrays flooding the market.
Pure Wednesday reported $150 million in revenue for last quarter, a 128% increase over last year and well above its own guidance. Its 2015 revenue of $440.3 million grew 152% over 2014. Pure claims it added more than 300 customers in the fourth quarter, bringing its total to more than 1,650.
Pure Storage is still losing money, but cut losses slightly last quarter due to the spike in sales along with a shift to commodity hardware that lowered costs for its M Series arrays.
Its loss of $44.3 million for the quarter compared to a loss of $47.6 million a year ago, although its loss for the year of $213.7 million actually grew from $183.2 million loss in 2015. Pure did have free cash flow of $32 million for the quarter compared to negative $45 million a year ago.
“We are making progress toward profitability,” Pure Storage CEO Scott Dietzen said on the earnings conference call. “We’ve previously said that we expected to reach sustained positive cash flow by 2018, and today we are pleased to pull that date forward to the second half of 2017. The business also rounded the corner on operating losses, which peaked last year, but will be flat this year and then improve going forward.”
Reaching profitability will require sustained revenue growth, too. Pure forecast revenue of between $135 million and $139 million for this quarter, compared to $74 million for the same quarter a year ago. The overall market for all-flash arrays is growing, but so is the amount of competition.
Flash is all over the storage news these days. EMC rolled out two new all-flash products this week and declared 2016 the year that all-flash arrays take over the primary storage word. SanDisk lined up partner IBM to sell its InfiniFlash system and Tegile Systems started shipping its IntelliFlash box based on SanDisk technology. Nimble Storage launched its first all-flash array last week after years of trying to convince people that hybrid was the way to go. NetApp also closed its acquisition of all-flash startup SolidFire last week, and earlier this year Hitachi Data Systems launched a new all-flash platform.
“That feels to us like a really strong endorsement of the founding thesis of the company,” Dietzen said of all the flash activity.
Pure will also launch new flash products at its Accelerate user conference this month. Pure is well behind EMC’s market-leader XtremIO in revenue from all-flash systems, but is close to or ahead of the other large storage vendors.
Dietzen attributes Pure’s revenue growth to its ability to tap into cloud companies as well as take advantage of flash. He said Pure counts “cloud customers” such as LinkedIn, Intuit and Workday, as well as software-as-a-service and infrastructure-as-a-service providers as a rapidly growing part of its business.
He said Pure is “in a rapidly evolving market that is proving difficult for competitors ill-prepared for the all-flash and cloud disruptions … Our success is being driven by increased customer adoption of our uniquely flash and cloud-friendly storage platform.”
That sets up an interesting battle between Pure and NetApp’s SolidFire arrays that focus on cloud companies.