Executive Summary

Q2 FY26 revenue was $861.0M (+13% YoY) and non-GAAP diluted EPS was $0.43; both exceeded Wall Street consensus of $846.4M revenue and $0.388 EPS. The beat was driven by broad-based strength across enterprise, accelerating subscription services, and improving product mix and pricing discipline . Consensus values retrieved from S&P Global.*
Subscription ARR reached $1.8B (+18% YoY) and RPO was $2.8B (+22% YoY), underscoring durable recurring revenue and backlog visibility .
Guidance was raised: FY26 revenue to $3.60–$3.63B (from $3.515B prior) and non-GAAP operating profit to $605–$625M (from $595M prior); Q3 FY26 newly guided to $950–$960M revenue and $185–$195M non-GAAP operating profit. The change and introduction of ranges are a catalyst, reflecting increased confidence and flexibility to invest for growth .
Product non-GAAP gross margin improved sequentially to 68.0% (from 64.0% in Q1), with management citing portfolio mix toward higher-end solutions, software/royalty contribution, and pricing discipline as key drivers .
Hyperscaler update: Meta initiated its first volume deployment and initial revenue was recognized in Q2; the contribution was not material, but the revenue model is largely royalty-like with >90% margin and engagements with other hyperscalers are progressing (early-stage POCs) .

What Went Well and What Went Wrong

What Went Well

Platform and subscription momentum: Subscription services revenue rose to $414.7M (+15% YoY), ARR reached $1.8B (+18%), RPO climbed to $2.8B (+22%), and Evergreen One/consumption TCV sales were $125M (+24% YoY). “Pure Storage exceeded both its revenue and operating profit guidance… reflecting strong customer adoption of our platform strategy” .
Architectural leadership: Introduced the Enterprise Data Cloud (EDC) enabled by Pure Fusion, with CEO highlighting customers “virtualize their storage to create their own Enterprise Data Cloud to unlock their data for business value” . “Purity… now enhanced with Fusion V2… allows our customers to create their own enterprise data cloud, automating their storage and enabling software defined data management” .
Margin improvement: Product non-GAAP gross margin increased to 68.0%. CFO: “Product gross margin again rose sequentially to 68%, aligning with our long term expectation for product gross margins between 65–70%” .

What Went Wrong

GAAP profitability thin: Despite strong revenue, GAAP operating margin was 0.6% and GAAP operating income was $4.9M, reflecting ongoing heavy stock-based comp and opex growth as the company invests in hyperscaler and product roadmap .
Mix forecasting complexity: Management emphasized difficulty forecasting mix between Evergreen One vs product sales, which can create quarterly variability in recognized revenue and margins .
Macro visibility remains limited: Although “dark clouds… seem to have disappeared” in H2, management still flagged uncertainty and early-stage status of non-Meta hyperscaler engagements, limiting visibility on broader hyperscale ramp timing .

Financial Results

Quarterly Summary vs Prior Periods

Metric	Q4 FY25	Q1 FY26	Q2 FY26
Revenue ($USD Millions)	$879.8	$778.5	$861.0
GAAP Gross Margin %	67.5%	68.9%	70.2%
Non-GAAP Gross Margin %	69.2%	70.9%	72.1%
GAAP Operating Income ($M)	$42.5	$(31.2)	$4.9
Non-GAAP Operating Income ($M)	$153.1	$82.7	$130.0
GAAP Diluted EPS ($)	$0.12	$(0.04)	$0.14
Non-GAAP Diluted EPS ($)	$0.45	$0.29	$0.43

Segment Breakdown

Metric	Q4 FY25	Q1 FY26	Q2 FY26
Product Revenue ($USD Millions)	$494.8	$372.1	$446.3
Subscription Services Revenue ($USD Millions)	$385.1	$406.3	$414.7

Segment Margins (Non-GAAP)

Metric	Q4 FY25	Q1 FY26	Q2 FY26
Product Non-GAAP Gross Margin %	62.9%	64.0%	68.0%
Subscription Non-GAAP Gross Margin %	77.2%	77.2%	76.5%

KPIs

KPI	Q4 FY25	Q1 FY26	Q2 FY26
Subscription ARR ($USD Billions)	$1.7	$1.7	$1.8
Remaining Performance Obligations (RPO) ($USD Billions)	$2.6	$2.7	$2.8
Evergreen One/Consumption TCV Sales ($USD Millions)	$140	$95	$125
U.S. Revenue ($USD Millions)	$619	$531	$577
International Revenue ($USD Millions)	$261	$248	$284
New Customers (count)	334	235	>300
Fortune 500 Penetration (%)	62%	62%	62%
Operating Cash Flow ($USD Millions)	$208.0	$283.9	$212.2
Free Cash Flow ($USD Millions)	$151.9	$211.6	$150.1

Results vs Wall Street Consensus (Q2 FY26)

Metric	Q2 FY26 Consensus	Q2 FY26 Actual
Revenue ($USD Millions)	$846.4*	$861.0
Non-GAAP Diluted EPS ($)	$0.388*	$0.43
# of Estimates (EPS / Revenue)	19* / 17*	—

Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY26	$3.515	$3.60–$3.63	Raised
Revenue YoY Growth	FY26	11%	13.5%–14.5%	Raised
Non-GAAP Operating Income ($USD Millions)	FY26	$595	$605–$625	Raised
Non-GAAP OI YoY Growth	FY26	6%	8.2%–11.7%	Raised
Revenue ($USD Millions)	Q3 FY26	n/a	$950–$960	New range
Non-GAAP Operating Income ($USD Millions)	Q3 FY26	n/a	$185–$195	New range

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 FY25)	Previous Mentions (Q1 FY26)	Current Period (Q2 FY26)	Trend
AI/technology initiatives	Announced Fusion v2; expanding E family; NVIDIA certifications; GenAI Pod; CoreWeave partnership	Launched FlashBlade//EXA; near-term focus on training/inference; Fusion adoption nearing 100 customers	FlashBlade momentum; EXA positioned for large-scale AI; EDC/Fusion narrative deepened	Accelerating
Hyperscaler (Meta)	Design win; co-engineering underway; investments to scale for FY27	Production validation testing on track; 1–2 exabytes planned in H2; royalty model contemplated	First revenue recognized; margin-rich royalty; contribution immaterial in Q2; 1–2 exabytes still expected	Progressing
Modern virtualization/Nutanix	VMware-to-Azure migration; early Portworx wins	Announced Nutanix partnership; Portworx/KubeVirt adoption	Strong customer interest; oversubscribed early trials; GA targeted by year-end	Building
Supply chain/tariffs/macro	Contingency plans for tariffs; diversified supply chain	Evergreen One mitigates tariff-pass-through; macro uncertainties elevated	Macro visibility improved for H2, but still variable; strong linearity and pipeline	Stabilizing
Product performance/margins	Product GM pressure (E family + QLC); outlook mid-60s	Product GM rose to ~64%; total GM 70.9%	Product GM 68.0%; total GM 72.1%; driven by mix/discipline	Improving
Regional trends	U.S. drove Q4; Intl down 3% YoY	U.S. +9% YoY; Intl +21% YoY	U.S. +7% YoY; Intl +26% YoY; >300 new logos	Broad-based

Management Commentary

CEO: “Our strong second quarter results demonstrate ever more customers' confidence in the value of the Pure Storage platform… With Purity and Pure Fusion, customers virtualize their storage to create their own Enterprise Data Cloud” .
CEO: “Purity… enhanced with Fusion, will enable businesses to manage their global data as an integrated cloud… Together, these capabilities allow customers to more consistently manage their global datasets through software” .
CFO: “Revenue of $861,000,000 grew 13% year over year… broad based strength… accelerating momentum in… Evergreen One, Cloud Block Store and Portworx” .
CFO: “Product gross margin again rose sequentially to 68%… At the same time, the E family makes it possible to replace legacy disk systems at a comparable upfront cost… turning the vision of the all flash data center into reality” .
CEO on hyperscalers: “They have initiated their first volume deployment, and we have recognized our first revenue from this activity in Q2… by providing Pure Direct Flash technology… we are able to dramatically reduce the power, space and cooling requirements” .

Q&A Highlights

Growth acceleration drivers: Management cited “broad based strength,” improved H2 visibility, and EDC/Fusion architectural shift increasing demand, with macro “dark clouds… disappeared” in H2 .
Meta contribution and margins: Q2 Meta revenue not material; royalty-like revenue at “90% plus” margin; expectation for 1–2 exabytes in FY26 remains, possibly more; broader hyperscaler interest growing .
Guidance philosophy: Shifted to ranges to align with peers and enable incremental investments; confidence supported by RPO/backlog .
Product gross margin drivers: Improvement attributed to product vs software mix, higher-end solutions, and pricing discipline; Portworx deal contributed .
Nutanix partnership: High customer interest, first true external storage integration, Fusion tie-in; GA targeted by year-end .

Estimates Context

Results exceeded consensus: Revenue $861.0M vs $846.4M consensus; non-GAAP diluted EPS $0.43 vs $0.388 consensus (19 EPS estimates; 17 revenue estimates). Management also exceeded its own revenue and operating profit guidance for Q2 . Consensus values retrieved from S&P Global.*
Implications: Street models likely to raise FY26 revenue to the new $3.60–$3.63B range and adjust margin trajectory to reflect improving product mix and subscription margins; watch for higher H2 assumptions given Q3 range and commentary on pipeline and hyperscalers .

Key Takeaways for Investors

The beat-and-raise quarter, with higher FY26 revenue and non-GAAP operating profit ranges, supports near-term positive sentiment and potential estimate revisions upward .
Margin trajectory is improving faster than prior expectations (product GM 68% vs mid-60s plan), driven by mix and discipline—supportive for multiple expansion if sustained .
Recurring metrics (ARR $1.8B, RPO $2.8B) and Evergreen One TCV momentum ($125M, +24% YoY) validate subscription durability and backlog visibility into H2 .
Hyperscaler contribution is currently immaterial, but royalty-like economics (>90% gross margin) and early-stage engagements beyond Meta provide a credible optionality story into FY27+ .
The Nutanix partnership and Portworx/KubeVirt positioning strengthen Pure’s role in the virtualization transition, potentially unlocking incremental enterprise workloads and stickier Fusion-driven fleet management .
Regional performance broad-based (U.S. +7% YoY, Intl +26% YoY), and >300 new logos in Q2 reflect demand breadth, which reduces reliance on single verticals .
Trading: Near term, the guidance range introduction and raised FY26 outlook are likely catalysts; medium term, monitoring sequential margin and subscription mix, hyperscaler ramp clarity, and Fusion adoption will be key to sustaining the thesis .

Additionally relevant press releases in the quarter: product/cyber resilience innovations and EDC messaging (Sep 25), reinforcing the architectural narrative supporting subscription growth and platform adoption .

Pure Storage, Inc. (PSTG)·Q2 2026 Earnings Summary