Rival enterprise data storage firms NetApp and Pure Storage reported quarterly earnings late Wednesday. Pure Storage stock tumbled despite results that beat expectations, while NetApp stock also dipped lower despite posting earnings and sales ahead of consensus.
Pure Storage said it earned an adjusted 44 cents per share on sales of $763.8 million for its fiscal second quarter, which ended Aug. 4. Analysts were expecting earnings of 37 cents per share, according to FactSet, and sales of $756 million. Pure Storage stock is down more than 14% at 51.21 in after-hours trading.
NetApp, meanwhile, reported adjusted earnings of $1.56 per share on sales of $1.54 billion for its fiscal first quarter ended July 26. Analysts were expecting earnings of 1.45 per share from sales of $1.53 billion. NetApp stock is down more than 3% at 127.43 in after-hours action.
Pure Storage: Up 70% Heading Into Report
While its sales and earnings beat expectations, Pure Storage lowered its annual guidance for subscription-as-a-service related total contact value to $500 million, from $600 million. However, the company maintained its overall revenue projection of $3.1 billion for its January-ending fiscal year.
Pure Storage Chief Executive Charles Giancarlo said on a conference call with analysts that the company is seeing a "lengthening" of negotiations for large subscription deals.
For the current quarter, Pure Storage projects sales of $815 million. Analysts had previously projected the company would post $811 million in sales for the period.
Mountain View, Calif.-based Pure Storage offers flash-based data storage hardware, as well as software tools to manage data storage. Shares had gained more than 70% this year heading into the report. Ahead of its report, Pure Storage stock has formed a consolidation pattern with a buy point of 70.41, according to MarketSurge.
In a news release, Giancarlo said the company's flash storage can save enterprises on energy costs.
"In a world where energy demands are soaring, the power savings of Pure Storage alone make the move from hard disks to Pure technology a smart choice for both hyperscaler and enterprise data centers," Giancarlo said.
Meanwhile, revenue from subscription services increased 25% year-over-year to $361.2 million. Pure Storage is transitioning more of its sales to subscription-based storage platforms. But that shift created some headwinds for its sales growth late last year.
Pure Storage is part of the IBD 50 flagship stock list. It also is included in the IBD Tech Leaders list.
NetApp Stock Up 50% Heading Into Report
Meanwhile, NetApp beat expectations with sales that increased 8% year-over-year and adjusted EPS growth of 36%. Total billings increased 12% to $1.45 billion for NetApp's fiscal first quarter.
For the current quarter, NetApp projected sales of $1.64 billion, at the midpoint of its range. That was slightly ahead of the $1.63 billion projected by analysts. The company also increased its sales outlook for the its April-ending fiscal year, to $6.58 billion at the midpoint of its range. In May, NetApp guided for sales of $6.55 billion.
"We started fiscal year 2025 on a high note, delivering strong revenue growth and setting records for first quarter operating margin and EPS," Chief Executive George Kurian said in a news release.
NetApp shares are up more than 50% this year but were a fraction lower in Wednesday trading, at 132.91. NetApp stock has formed a consolidation pattern with a buy point of 135.01, according to MarketSurge.
Founded in 1992, San Jose-based NetApp offers flash memory and standard disk storage, as well as a broader storage software platform.
NetApp is a member of the IBD Tech Leaders list.
