Pure Storage’s impressive earnings thrill Wall Street, but Nutanix and NetApp disappoint – News

Flash data storage pioneer Pure Storage Inc. outshone its rivals today with solid second-quarter results that crushed Wall Street’s estimates and upbeat guidance, sending its stock soaring in extended trading.

In contrast, shares of rival storage providers Nutanix Inc. and NetApp Inc. were headed in the opposite direction. Although Nutanix beat the Street’s expectations, its guidance came up short, while NetApp was hamstrung by a lower profit amid slowing growth for its all-flash storage products.

Pure Storage powers ahead

Pure Storage delivered stellar results, with earnings before certain costs such as stock compensation coming to 43 cents per share, ahead of the 39 cent consensus estimate. Revenue was up 13% from a year earlier to $861 million, sailing past the Streets target of $846.2 million. Subscription sales came to $414.7 million, up 15%.

On a conference call with analysts, Pure Storage Chief Executive Charles Giancarlo (pictured) said customers are increasingly confident in the company’s ability to enhance their storage systems, as they provide greater flexibility than legacy hardware offerings.

For the current quarter, Pure Storage is forecasting revenue of between $950 million and $960 million, far ahead of the Street’s target of $913.2 million. The company also raised its full-year revenue forecast, saying it’s now guiding for sales of $3.6 billion to $3.63 billion, up from its prior range of $3.51 billion to $3.53 billion.

Investors liked what they saw, and Pure Storage’s stock jumped more than 15% in late trading, adding to a gain of 3% during the regular trading session.

NAND Research Inc. analyst Steve McDowell told News that Pure Storage’s storage-as-a-service offerings were the biggest bright spot during the quarter, growing substantially faster than any other product segment.

“The big question has always been whether Pure can stay differentiated in a crowded enterprise storage market,” McDowell said. “They’re showing that they can. The strategy of combining software-defined automation, flexible consumption models, and deep hyperscaler partnerships gives Pure a competitive narrative beyond speeds and feeds.”

Nutanix’s forecast comes up light

The market was a lot less enthusiastic about Nutanix after the hybrid multicloud computing company came up short with its guidance for the first quarter of fiscal 2026. Officials said they’re targeting revenue of $675 million at the midpoint of their guidance range, trailing Wall Street’s forecast of $678 million. The stock fell more than 4% after-hours.

The disappointing outlook overshadowed some decent results. The company delivered fourth-quarter earnings of 37 cents, surpassing the consensus estimate of 32 cents, while revenue jumped 19% to $653.3 million, ahead of the $624.2 million forecast.

Nutanix CEO Rajiv Ramaswami hailed the company’s “good finish” to fiscal 2025, pointing out that it added more than 2,700 new customers during the quarter.

McDowell said this number stood out most. “This is more than in any other quarter over the past four years,” he said. “The company clearly continues to see good tailwinds from VMware migrations, as it remains the most compelling alternative.”

NetApp wobbles on declining profit

NetApp also beat expectations as it delivered its first-quarter fiscal 2026 results, but it was a pretty close thing. The company posted earnings of $1.55 per share, edging past the Street’s target of $1.54, while revenue inched up by 1% to $1.56 billion in the quarter, just ahead of the $1.55 billion target.

With revenue more or less flat from a year ago, NetApp suffered a drop in profitability, logging net income of $233 million, down from $248 million in the year-ago quarter. That sparked a mini-exodus of investors, and NetApp’s stock was down nearly 7% after the report.

Analysts pointed to the company’s all-flash storage array segment, where revenue growth slowed to 6% from 14% in the prior quarter. On a call with analysts, NetApp CEO George Kurian said the segment was hurt by reduced demand from public sector customers.

“We saw change in the budgets allocated to different types of agencies, and we have moved resources to where the budgets are,” he told analysts.

NetApp’s guidance for the current quarter was somewhat encouraging, at least. The company said it’s looking for earnings of between $1.84 and $1.94 per share on sales of $1.62 billion to $1.77 billion. The midpoints of those two ranges are just ahead of the Street’s targets of $1.87 per share in earnings and $1.68 billion in revenue.

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