Pure Storage Continues Move Into Hyperscaler Cloud Business: CEO Giancarlo

‘The conversation continues to evolve and to expand, frankly, in terms of the use cases for different types of data storage tiers inside that hyperscaler. We’ve been evolving and continuing in terms of the depth of the testing and the co-development in particular, but also discussions around future states and where that storage will go. Relative to other vendors, we continue to expand our conversations,’ says Pure Storage CEO Charles Giancarlo.

A design win with one of the top-four hyperscaler cloud providers along with solid growth in several of its key product offerings not only gave Pure Storage a strong fiscal year 2025, but also opened the door to continued growth into fiscal 2026.

Charles Giancarlo, CEO of Santa Clara, Calif., Wednesday used his prepared remarks before financial analysts during the company’s fiscal 2025 earnings call to highlight the progress Pure Storage has made in penetrating the hyperscaler cloud business with its storage technology.

“We achieved a design win with a top four hyperscaler,” said Giancarlo, who didn’t disclose the identity of the firm. “This relationship is proceeding well, in the next stages of both testing and deployment plans. We see continued progress on certifying our use across multiple price-performance layers. Pure’s DirectFlash technology will enable this hyperscaler to deploy a consistent architecture across multiple performance tiers of their storage hierarchy. It also allows them to re-deploy significant amounts of power and space to new workloads, and to increase their data storage performance, reliability, and lifetime.”

When asked by an analyst during the question-and-answer session following prepared remarks how he would characterize the degree further hyperscaler opportunities Pure Storage might have, Giancarlo said that those discussions are in the early stages.

“But the conversation continues to evolve and to expand, frankly, in terms of the use cases for different types of data storage tiers inside that hyperscaler,” he said. “We've been evolving and continuing in terms of the depth of the testing and the co-development in particular, but also discussions around future states and where that storage will go. Relative to other vendors, we continue to expand our conversations, I would say. We indicated last time we expected them to accelerate. They have, in fact, accelerated through this quarter. Nothing to announce just yet, but certainly we're seeing increased interest.”

When asked by another analyst what investments Pure Storage needs to make to advance its hyperscaler business, Giancarlo said his company has an ongoing co-development project with that hyperscaler to develop new software and new infrastructure architectures.

“As we’ve discussed, it's their next generation data center design,” he said. “And as they design that software and those hardware architectures, we have to work alongside them to make sure that our software works closely with theirs. Of course, we’re constantly working together to try to improve both performance and price performance in that environment. As we mentioned, we're working now on multiple different performance tiers. Each one of them requires its own set of tuning. And of course, we have to also qualify several different scales of our DirectFlash Modules, along with several different flash partners, if you will, different flash manufacturers, for those direct flash modules. Now, all of that requires quite a bit of work and testing on our side as well.”

On the technology side, Giancarlo said in his prepared remarks that Pure Storage recently launched its 150-terabyte DirectFlash Modules, which currently has about 2.5-times the capacity of the largest SSDs in the market, and is on track to deliver a 300-terabyte model late this year.

Pure Storage this year also saw an expansion of its FlashBlade//E family of lower-cost all-flash storage systems aimed at unstructured data. Giancarlo said the //E family offers far better economics compared to disk, continuing a long-running theme of his that flash storage technology is at the point where it is actually replacing traditional spinning disk technology in both performance and price.

Pure Storage last year also released the second generation of its Pure Fusion hybrid storage management software for transforming traditional enterprise data storage architectures from application data silos to enterprise data clouds.

“With Fusion, Pure can now provide customers with data set management services supporting their global data estate,” Giancarlo said. “This is an area in the enterprise which is largely managed manually, if at all. Manual management and inadequate traceability of data sets is a leading cause of data sprawl and cyber risk for enterprises worldwide. Fusion opens up significant new opportunity and value for Pure in this space.”

Pure Fusion version 2 helps enterprises face challenges like AI integration, cybersecurity threats, and hybrid cloud optimization, Giancarlo said.

“Fusion automates data management, enhances security, and simplifies hybrid on-prem and cloud environments,” he said. “It supports real-time AI access, eliminates the need for excessive copies of data, and fosters API-driven innovation. Pure Fusion enables a fundamental shift from data silos to an enterprise data cloud model for data management.”

Pure Storage also continues to grow its AI focus, Giancarlo said.

“Machine learning and training environments are increasingly utilizing our high-performance storage, and AI data preparation chains are increasingly utilizing Portworx,” he said. “We are looking forward to showcasing our latest AI advancements at the upcoming Nvidia GPU Technology Conference next month.”

When it comes to macro environment, Pure Storage expects geopolitical uncertainty to contribute to a dynamic environment at least through this year, Giancarlo said.

“In addition to our standard practice of operating with globally distributed and diversified supply and distribution chains, we have also developed contingency plans for a variety of tariff scenarios,” he said.

Pure Storage By The Numbers

For its fiscal fourth quarter 2025, which ended February 2, Pure Storage reported revenue of $879.8 million, up about 11 percent over the $789.8 million the company reported for its fourth fiscal quarter 2024.

That beat analysts’ expectations by $28.7 million, according to Seeking Alpha.

That included product revenue of $494.8 million, up from $460.9 million, and subscriptions services revenue of $385.1 million, up from $328.9 million.

Record sales of FlashBlade, FlashArray//XL, Portworx, //E family, and Evergreen subscription renewals also helped power the company’s fourth quarter revenue.

For the quarter, Pure Storage also reported GAAP net income of $42.4 million or 12 cents per share, down from last year’s $65.4 million or 20 cents per share.

On a non-GAAP basis, Pure Storage reported $153.2 million or 45 cents per share, down from last year’s $166.0 million or 50 cents per share.

That beat analysts’ expectations by 3 cents per share on a non-GAAP basis, according to Seeking Alpha.

For all of fiscal 2025, Pure Storage reported revenue of $3.17 billion, up about 12 percent over the $2.83 billion the company reported for fiscal 2024.

That included product revenue of $1.70 billion, up from $1.62 billion, and subscriptions services revenue of $1.47 billion, up from $1.21 billion.

Pure Storage also reported subscription ARR (annual recurring revenue) of $1.66 billion, up 21 percent over last year.

For the year, Pure Storage also reported GAAP net income of $106.7 million or 31 cents per share, down from last year’s $61.3 million or 19 cents per share.

Pure Storage stock sank in after-hours trading Wednesday by about 8 percent to $57.25.

Looking Ahead

Pure Storage said it expects first fiscal quarter 2026 revenue of $770 million, up 11 percent year-over year. The company also expects non-GAAP operating income of $80 million, and a non-GAAP operating margin of 10.4 percent.

For all of fiscal 2026, Pure Storage expects total revenue of $3.5 billion, up 11 percent, as well as non-GAAP operating income of $595 million and non-GAAP operating margin of 17 percent.