Pure Storage, Inc. (NYSE:PSTG) Q3 2020 Earnings Conference Call - Final Transcript

Nov 21, 2019 • 05:00 pm ET


Pure Storage, Inc. (NYSE:PSTG) Q3 2020 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Ladies and gentlemen, thank you for standing by and welcome to the Pure Storage Third Quarter Fiscal 2020 Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Head of Investor Relations, Matt Danziger. Thank you. Please go ahead, sir.

Matthew Danziger

Thank you and good afternoon. Welcome to the Pure Storage Third Quarter Fiscal 2020 Earnings Conference Call. Joining me today are our CEO, Charlie Giancarlo; our COO, Pual Mountford; our Vice Chair, 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 various 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 reconciliations 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.

Charlie Giancarlo

Thank you, Matt, and good afternoon everyone. Thank you for joining us on today's earnings call. I will begin by sharing our high-level results and highlights from the quarter. Hat will provide a go-to-market update, and I will close with our guidance for the remainder of FY '20.

Revenue for Q3 was $428 million, up 15% year-over-year, significantly faster than our major competitors and the market as a whole. Continued pricing declines, which were higher than we expected, accounted for the gap to our revenue expectations at the beginning of the quarter, although we are also seeing signs of a more challenging global business environment as commented on by other large infrastructure suppliers.

Despite these in-quarter headwinds, Pure achieved all-time-high gross margins this quarter of 71.7%, well above our guided range of 66% to 69%. Operating margin for the quarter was 6.8%, at the high end of our guided range. These results speak to the resiliency of our model in the current environment.

Turning to Executive Leadership, we recently announced important changes to our leadership team at Pure. After almost seven years, David Hatfield is starting a new chapter at Pure,