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Investing.com -- Pure Storage Inc. (NYSE:PSTG) reported better-than-expected first quarter revenue on Tuesday, though earnings missed estimates. The data storage company’s shares rose 0.8% in after-hours trading following the results.
Pure Storage posted Q1 revenue of $778.5 million, up 12% year-over-year and above analyst estimates of $770.1 million. However, the company reported a loss of $0.04 per share, falling short of the $0.25 profit analysts were expecting.
Subscription services revenue grew 17% to $406.3 million, now comprising over half of total revenue. Subscription annual recurring revenue increased 18% to $1.7 billion.
"Pure continues to demonstrate the superiority of our technology and strategy through our steady growth and the expansion of our products and services," said CEO Charles Giancarlo.
For the second quarter, Pure Storage expects revenue of $845 million, slightly ahead of the $841 million consensus estimate. The company also raised its full-year revenue outlook to $3.515 billion, slightly above Wall Street’s $3.51 billion projection.
The slight uptick in shares suggests investors are focusing on the revenue beat and raised guidance rather than the earnings miss. Pure Storage’s transition to a subscription-based model appears to be progressing well, though profitability remains a near-term challenge.
CFO Kevan Krysler announced plans to leave the company after over five years of service. Pure Storage said it will begin searching for a successor.