Chip Stock Investor Podcast Pure Storage Revenue is Up, But Investors Are Spooked (Here is Why)
Dec 23, 2025
Pure Storage impresses with a revenue growth of 16%, but investor jitters arise from their new strategy catering to mega-customers like Meta. The shift demands hefty R&D investments, raising questions about margins. A global NAND flash shortage complicates the landscape further, impacting pricing strategies. On a positive note, a $400 million buyback program aims to bolster share value. Despite volatility, analysts remain optimistic about long-term growth potential in the evolving software licensing model.
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Pure Storage Business And Recovery
- Pure Storage sells flash storage systems and software, and is shifting into a new growth cycle after enterprise weakness.
- Revenue growth accelerated to 16% with ARR up 17%, showing early recovery but continued investor caution.
Hyperscaler Deal With Meta Raises Stakes
- Pure Storage entered a hyperscaler deal with Meta and is in an R&D phase to support massive social apps.
- That relationship could accelerate revenue if product ramps but raises near-term execution risk.
Strong Top Line, Weak Free Cash Flow
- Q3 fiscal 2026 revenue hit $964M, up 16% year-over-year, and adjusted operating margin was 20.3% with 74% gross margin.
- Free cash flow remains low at $53M, highlighting profitability concerns despite top-line beats.