Executive Summary

Q1 FY26 revenue of $778.5M (+12% y/y) and non-GAAP EPS of $0.29, with non-GAAP operating margin of 10.6%; GAAP net loss was $(14.0)M as stock-based comp and taxes offset other income . Versus S&P Global consensus, revenue (~~$770.4M*) and EPS (~~$0.248*) were both beaten. Values retrieved from S&P Global.
Subscription momentum: subscription services revenue $406.3M (+17%), ARR $1.7B (+18%), RPO $2.7B (+17%); Storage-as-a-Service TCV sales grew 70% y/y (≈$95M) .
Guidance: Q2 FY26 revenue $845M and non-GAAP operating margin 14.8%; FY26 revenue $3.515B and non-GAAP operating margin 17.0% maintained; company reiterated FY26 outlook despite macro/tariff uncertainties .
Strategic updates: Launch of FlashBlade//EXA for AI/HPC and partnerships with Nutanix and SK hynix underpin AI/virtualization narratives; management highlighted tariff insulation via Evergreen One pricing and progress toward hyperscale deployments (Meta) in 2H .
Leadership: CFO transition announced; Kevan Krysler to depart after successor is named; company cited no issues with financial integrity .

What Went Well and What Went Wrong

What Went Well
- Strong subscription mix and backlog: subscription services revenue $406.3M (+17% y/y), ARR $1.7B (+18%), and RPO $2.7B (+17%) . “Q1 FY26 was a solid start to the year, with strong revenue growth” – CFO Kevan Krysler .
- Evergreen momentum and predictability: Storage-as-a-Service TCV +70% y/y to ~$95M; large Evergreen One deals and high-velocity transactions both contributed; management emphasized tariff cost absorption and SLA-based pricing predictability .
- AI and platform innovation: Introduced FlashBlade//EXA to target AI/HPC scale, and advanced Fusion 2.0 adoption (“almost 100 customers are using or testing Fusion”) to virtualize data into an enterprise data cloud – CEO .
What Went Wrong
- GAAP profitability: GAAP operating loss $(31.2)M and GAAP net loss $(14.0)M (driven by stock-based comp and taxes), despite non-GAAP operating income of $82.7M .
- Opex headwinds from FX: foreign currency-based operating expenses increased sequentially by ~+$8M on weaker USD, tempering non-GAAP margin expansion .
- 2H macro/tariffs visibility: management flagged reduced visibility for 2H given tariffs/retaliatory tariffs and broader macro uncertainty; tone: cautiously confident but vigilant .

Financial Results

Revenue and EPS vs prior periods

Metric	Q3 FY25	Q4 FY25	Q1 FY26
Revenue ($M)	$831.1	$879.8	$778.5
GAAP EPS (diluted)	$0.19	$0.12	$(0.04)
Non-GAAP EPS (diluted)	$0.50	$0.45	$0.29

Margins vs prior periods

Metric	Q3 FY25	Q4 FY25	Q1 FY26
GAAP Gross Margin %	70.1%	67.5%	68.9%
Non-GAAP Gross Margin %	71.9%	69.2%	70.9%
Non-GAAP Operating Margin %	20.1%	17.4%	10.6%

Segment revenue breakdown

Metric	Q3 FY25	Q4 FY25	Q1 FY26
Product Revenue ($M)	$454.7	$494.8	$372.1
Subscription Services Revenue ($M)	$376.3	$385.1	$406.3

Key KPIs and cash flow

Metric	Q3 FY25	Q4 FY25	Q1 FY26
Subscription ARR ($B)	$1.6	$1.7	$1.7
RPO ($B)	$2.4	$2.6	$2.7
Evergreen/Storage-as-a-Service TCV Sales ($M)	$96	$140	~$95
Operating Cash Flow ($M)	$97.0	$208.0	$283.9
Free Cash Flow ($M)	$35.2	$151.9	$211.6
Cash & Mkt. Securities ($B)	$1.6	$1.5	$1.6

Estimate vs Actual (S&P Global consensus)

Metric	Consensus	Actual
Q1 FY26 Revenue ($M)	770.4*	778.5
Q1 FY26 Primary EPS ($)	0.248*	0.29

Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q2 FY26	n/a	$845	New
Non-GAAP Operating Income ($M)	Q2 FY26	n/a	$125	New
Non-GAAP Operating Margin (%)	Q2 FY26	n/a	14.8%	New
Revenue ($B)	FY26	$3.515	$3.515	Maintained
Non-GAAP Operating Income ($M)	FY26	$595	$595	Maintained
Non-GAAP Operating Margin (%)	FY26	17.0%	17.0%	Maintained

Note: After Q2 results, FY26 guidance was raised to Revenue $3.60–$3.63B and non-GAAP OI $605–$625M, but this occurred subsequent to Q1 disclosure .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY25, Q4 FY25)	Current Period (Q1 FY26)	Trend
Hyperscale/Meta	Design win with top-4 hyperscaler; double-digit EB deployments expected in CY26/FY27; licensing/royalty model; heavy co-engineering; investments in DFM density, NAND suppliers, supply chain	“On schedule” production validation; 1–2 EB in 2H FY26 as planned; revenue de minimis in 2H and licensing-based; broader hyperscaler POCs ongoing	Improving visibility
AI/FlashBlade//EXA	Teased AI training push; NVIDIA DGX SuperPOD cert; GenAI Pod launched; AI cited as E-family data growth driver	Introduced FlashBlade//EXA; targets AI/HPC with disaggregated architecture; economics at/above company margins over time	Accelerating
Evergreen One (SaaS)	Mixed conversion dynamics (OpEx pressure → CapEx shift); record Q4 TCV; expect FY26 growth	TCV +70% y/y to ~$95M; large + velocity deals; tariff costs absorbed; subscription rates insulated	Re-accelerating
Tariffs/Macro	Contingency planning; macro muted; expect moderation in QLC pricing aiding margins	Visibility lower in 2H; tariffs top-of-mind; Evergreen pricing predictability emphasized	Cautious
Virtualization/Nutanix	VMware-to-Azure migration; KubeVirt with Portworx	Nutanix partnership; early field trials oversubscribed; Fusion integration; Azure AVS integration	Broadening
Regional Trends	Q3: US $562M, Intl $269M; Q4: US-led growth	Q1: US $531M (+9%), Intl $248M (+21%)	Positive intl mix

Management Commentary

Strategy: “Pure’s platform enables customers to unify, virtualize and modernize their data footprints… with our single, advanced Purity Operating Environment.” – CEO Charles Giancarlo .
AI/Hyperscale: “Production validation testing is on schedule… on track to deliver our anticipated one to two exabytes… in the second half of the year.” – CEO . On EXA: “Margins would be at or above our standard company margins on a long-term basis.” – CEO .
Evergreen One & Tariffs: “Any incremental tariff costs… will be absorbed… customer subscription rates will not be subjected to higher tariff costs.” – CFO Kevan Krysler .
Macro: “We are navigating increased uncertainty… confident in our ability to outpace the competition.” – CEO .

Q&A Highlights

Hyperscale ramp and rev rec: Management reiterated 1–2 EB in 2H with licensing/royalty revenue model; Q1/Q2 FY26 contributions de minimis; long-term gross margin accretive due to high software mix .
EXA economics: EXA targets niche but sizable GPU/sovereign cloud/HPC markets; disaggregated model with software monetization on data nodes; margins at or above company levels over time .
Evergreen One trajectory: Q1 TCV strength included a larger deal that closed earlier; does not change full-year revenue assumption; tariff cost absorption reiterated .
Margins/FX: Non-GAAP product GM rose sequentially to 64%; total GM 70.9%; FX lifted opex by ~$8M q/q, limiting margin expansion .
Linearity and cash: “Very typical linearity… started off strong, stayed strong,” aiding cash flow performance .

Estimates Context

Q1 FY26: Beat on both revenue and EPS vs S&P Global consensus (Revenue: $778.5M vs ~$770.4M*; EPS: $0.29 vs ~$0.248*). Values retrieved from S&P Global. Actuals per company 8‑K .
Q2 FY26: Company guided revenue $845M and non-GAAP operating margin 14.8% , broadly consistent with S&P consensus revenue (~~$846.4M*) and EPS (~~$0.388*), noting EPS guidance not provided. Values retrieved from S&P Global.
FY26: At Q1, company maintained $3.515B revenue guide vs S&P consensus (~$3.619B*), implying room for later revision; indeed, FY26 guidance was raised after Q2 results . Values retrieved from S&P Global.

Key Takeaways for Investors

Mixed headline (GAAP loss) but clear underlying strength: non-GAAP profitability, subscription growth, and cash generation (FCF $211.6M) support quality of earnings .
Narrative catalysts: (1) execution on 1–2 EB hyperscale deployments with licensing revenue in 2H; (2) early traction for FlashBlade//EXA in AI/HPC; (3) Nutanix partnership and Azure AVS integration broadening virtualization opportunity .
Defensive positioning vs tariffs: Evergreen One pricing absorbs tariff costs, providing deal certainty and potentially shifting mix toward subscriptions in uncertain environments .
Watch gross margin trajectory: sequential product GM improvement and non-GAAP GM ~71% align with mid-60s product GM target; FX headwinds may be transient .
Cash returns/discipline: $120M buybacks in Q1 with $152M remaining authorization; ongoing strong OCF supports capital allocation flexibility .
Leadership transition risk contained: CFO departure not related to financial integrity; continuity until successor named (subsequently filled in Q2) .
Near-term trading lens: Q1 beat/maintained FY guide + Q2 guide strength = constructive; stock likely sensitive to hyperscale updates, EXA demand signals, and any changes to FY26 outlook at Q2/Q3 checkpoints .

Notes:

Asterisks (*) denote S&P Global consensus data. Values retrieved from S&P Global.

Pure Storage, Inc. (PSTG)·Q1 2026 Earnings Summary