DafinchiPure Storage Revenue and Gross Margin Trends Analysis 2019-2026
📊 An insightful exploration of Pure Storage's revenue growth and gross margin stability from 2019 through 2026, highlighting robust subscription expansion and product mix impacts. 🚀
"What has been the revenue trends and gross margin trends over the years."
- Summarization for Each Period:
| Fiscal Year / Quarter | Revenue (approx.) | Revenue Growth | Total Gross Margin | Product Gross Margin | Subscription Gross Margin | Key Commentary |
|---|---|---|---|---|---|---|
| 2026 Q2 (Guidance) | $3.6B-$3.63B (FY) | 14% YoY (midpt) | 72.1% (Q2) | 68% (Q2) | 76.5% (Q2) | Product and subscription revenue both growing; subscription margin higher than product; product margin improved 4 pts YoY. |
| 2026 Q1 | Not specified | 12% YoY (Q1) | 70.9% (Q1) | 64% (Q1) | 77.2% (Q1) | Product margin expected to settle in mid-60s for year; subscription >50% of revenue. |
| 2025 Q4 (FY) | $3.2B (FY) | 12% YoY (FY) | 71.8% (FY) | 62.9% (Q4) | 77.2% (Q4) | Product margin impacted by E family sales; subscription margin robust. |
| 2025 Q3 | $831M (Q3) | 9% YoY (Q3) | 71.9% (Q3) | 67.4% (Q3) | 77.4% (Q3) | Product margin declined modestly due to mix shift to cost-sensitive E family. |
| 2025 Q2 | $764M (Q2) | 11% YoY (Q2) | 72.8% (Q2) | 69.5% (Q2) | 76.4% (Q2) | Product margin in high-60s; expected modest decline in 2H due to E family growth. |
| 2025 Q1 | $489M (US Q1) | Not specified | 73.9% (Q1) | 72.8% (Q1) | 74.9% (Q1) | Strong start to year; product margin high due to mix and pricing. |
| 2024 Q4 (FY) | $2.82B (FY) | 2.5% YoY (FY) | 73.2% (FY) | 73.4% (Q4) | 74.1% (Q4) | Subscription revenue and ARR strong; product margin high. |
| 2024 Q3 | $689M (Q2) | 6.5% YoY (Q2) | 74% (Q3) | 73.1% (Q3) | 75.4% (Q3) | Product and subscription margins strong; flash pricing favorable. |
| 2024 Q2 | $495M (US Q2) | Not specified | 72.8% (Q2) | 71.5% (Q2) | 74.5% (Q2) | Product margin strong; subscription revenue 42% of total. |
| 2024 Q1 | $589M (Q1) | ~5% YoY (adj.) | 72.2% (Q1) | 70.8% (Q1) | 73.7% (Q1) | Subscription revenue 48% of total; gross margins stable. |
| 2023 Q4 (FY) | $2.8B (FY) | 26% YoY (FY) | 71% (Q4) | Not specified | 74% (Q4) | Product and subscription margins strong; subscription revenue 1/3 of total. |
| 2023 Q3 | $676M (Q3) | 20% YoY (Q3) | 70.9% (Q3) | 70.1% (Q3) | 72.3% (Q3) | Product margin up YoY; subscription margin stable. |
| 2023 Q2 | $647M (Q2) | 30% YoY (Q2) | 70.4% (Q2) | 69% (Q2) | ~73% (Q2) | Product and subscription margins strong. |
| 2023 Q1 | Not specified | Not specified | 70.6% (Q1) | 70% (Q1) | 71.5% (Q1) | Margins at high end of range. |
| 2022 Q4 (FY) | $2.2B (FY) | 29% YoY (FY) | 69% (Q4) | 67% (Q4) | 73% (Q4) | Product margin slightly impacted by supply chain costs. |
| 2022 Q3 | Not specified | Not specified | 68.5% (Q3) | 66.7% (Q3) | 72.1% (Q3) | Product margin impacted by hyperscaler deal and supply chain costs. |
| 2022 Q2 | Not specified | Not specified | 70.5% (Q2) | 70.2% (Q2) | 71.1% (Q2) | Margins improved sequentially. |
| 2022 Q1 | $413M (Q1) | 12% YoY (Q1) | 70.5% (Q1) | 70.2% (Q1) | 71.1% (Q1) | Margins at high end of range. |
| 2021 Q4 (FY) | Not specified | Not specified | 69.4% (Q4) | 69.1% (Q4) | 70.2% (Q4) | Product margin down YoY due to prior year NAND pricing. |
| 2021 Q3 | $410.6M (Q3) | -4.2% YoY (Q3) | 69.1% (Q3) | Not specified | Not specified | Product margin down YoY; subscription margin up. |
| 2021 Q2 | Not specified | Not specified | 69.8% (Q2) | 70.1% (Q2) | 69.2% (Q2) | Margins stable. |
| 2021 Q1 | Not specified | Not specified | 71.9% (Q1) | 73.3% (Q1) | 68.9% (Q1) | Margins up YoY. |
| 2020 Q4 (FY) | Not specified | Not specified | Not specified | Not specified | Not specified | Not enough data. |
| 2019 Q4 (FY) | Not specified | Not specified | 67.6% (Q4) | 67.8% (Q4) | 66.8% (Q4) | Margins at high end of range. |
| 2019 Q3 | Not specified | Not specified | 68.1% (Q3) | 68.1% (Q3) | 68.1% (Q3) | Margins stable. |
| 2019 Q2 | Not specified | Not specified | Not specified | 67.9% (Q2) | 68.4% (Q2) | Highest gross margin in company history. |
| 2019 Q1 | Not specified | Not specified | 66.3% (Q1) | 66.3% (Q1) | 66.3% (Q1) | Margins stable. |
- Comparison and Contrast Over Time:
- Revenue Growth: Revenue growth was robust from 2019 through 2022, with annual growth rates in the high teens to 30%. Growth moderated in FY2023 (26%) and slowed further in FY2024 (2.5%), before re-accelerating to double digits in FY2025 (10-12%) and FY2026 (guidance: 14%).
- Gross Margin Trends: Total gross margin has remained strong and generally stable, ranging from 66% to 74% over the years. Product gross margin was typically in the high 60s to low 70s, with some periods of modest decline due to product mix (notably, increased sales of cost-sensitive E family solutions in FY2025). Subscription gross margin has consistently been higher than product margin, often in the mid-70s, and has trended upward as the subscription business has grown.
- Product vs. Subscription Mix: Over time, subscription revenue has grown as a share of total revenue, now representing roughly half of total revenue. This shift has supported higher overall gross margins, as subscription margins are structurally higher.
- Identification of Salient Points:
- The company has maintained industry-leading gross margins, even as product mix has shifted toward lower-margin, cost-sensitive solutions in recent years.
- Subscription services have become a larger portion of revenue, supporting higher total gross margins.
- Product gross margin has seen some pressure from mix shifts (notably E family), but management expects margins to stabilize in the mid-60s.
- Revenue growth slowed in FY2024 but rebounded in FY2025 and is expected to accelerate further in FY2026.
- Explanation of Complex Concepts:
- Gross Margin: Gross margin is the percentage of revenue remaining after deducting the cost of goods sold. Higher gross margins indicate greater efficiency and pricing power. Product gross margin reflects hardware and direct sales, while subscription gross margin reflects recurring service and software revenue, which typically carries higher margins due to lower incremental costs.
- Product Mix Impact: Shifts toward lower-priced, cost-sensitive products (like the E family) can reduce product gross margin, but may drive higher overall revenue and market share.
- Subscription Revenue: As subscription services become a larger share of revenue, total gross margin benefits due to the higher profitability of these offerings.
- Conclusions:
- Pure Storage has demonstrated strong and resilient gross margins over time, with total gross margin generally in the 68-74% range.
- Product gross margin has fluctuated with product mix, but remains robust and is expected to stabilize in the mid-60s.
- Subscription gross margin is consistently higher and has supported overall margin expansion as the business mix shifts.
- Revenue growth has been strong historically, with a temporary slowdown in FY2024, followed by a return to double-digit growth in FY2025 and a further acceleration expected in FY2026.
- The company’s ability to maintain high gross margins while growing subscription revenue and navigating product mix changes is a key strength in its financial profile.
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