Pure Storage, Inc. (NYSE:PSTG) Q1 2019 Earnings Conference Call Transcript

May 21, 2019 • 05:00 pm ET

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Pure Storage, Inc. (NYSE:PSTG) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Pure Storage First Quarter Fiscal 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)

I will now turn the call over to Matthew Danziger, Head of Investor Relations. You may begin your conference.

Executive
Matthew Danziger

Thank you, and good afternoon. Welcome to the Pure Storage first quarter fiscal 2020 earnings conference call. Joining me today are our CEO, Charlie Giancarlo; our CFO, Tim Riitters; our President, David Hatfield; and our VP of Strategy, Matt Kixmoeller.

Before we begin, I would like to remind you that during this call, Management will make forward-looking statements, which are subject to various risks and uncertainties. These include statements regarding competitive, industry and technology trends; our strategy, positioning and opportunity; our current and future products; business and operations, including our operating model; growth prospects; and revenue and margin guidance for future periods. Any forward-looking statements that we make are based on assumptions as of today and we undertake no obligation to update them. Our actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties relating to our business is contained in our filings with the SEC and we refer you to these public filings.

During this call, we will discuss non-GAAP measures in talking about the Company's performance and reconciliation to the most directly comparable GAAP measures are provided in our earnings press release and slides. This call is being broadcast live on the Pure Storage Investor Relations website and is being recorded for playback purposes. An archive of the webcast will be available on the IR website for at least 45 days and is the property of Pure Storage.

With that, I'll turn the call over to our CEO, Charlie Giancarlo.

Executive
Charles Giancarlo

Thank you, Matt, and good afternoon, everyone. We appreciate you joining us on today's earnings call. I will begin by sharing our high-level results from the quarter, Hat will provide a go-to-market update and finally Tim will offer a detailed review of our financials.

The fundamentals of our business are strong. We are broadening our customer base, we are delivering new innovation through both organic and inorganic investments and we continue to delight our customers. For Q1, revenue was $327 million, growing 28% year-over-year. While we are growing well above the industry average, we were not satisfied with our results this quarter. Gross margin remained strong at 68.1% and operating margin was negative 9.6%. Revenue was just below the low end of our guidance, and consequently, profitability was below our guidance.

As you know, a particular area of focus has been to increase our at bats and expand our engagement with large enterprise customers. To that end, we have hired aggressively, adding nearly 40%