Pure as the driven IPO: Upstart tells SEC it's go for stock market debut

Pure Storage, funded to the tune of $470 million and valued at around $3 billion, has filed for an IPO. The all-flash array biz was founded in 2009 and has taken in funding and grown fast every year. It's currently being ranked as the second highest player in the all-flash array market behind EMC, which Pure sees as its main …

[Anonymous Coward]

"Gartner published a May 2015 report looking at all-flash array revenues in 2014. It said Pure's 2014 revenue was $276 million. Pure's fiscal year runs from February 1 to January 31; close enough to the calendar year, and Pure's S1 says its revenues in the fiscal year ending January 31, 2015, were $174 million. This is well short of Gartner's $276 million number."

Well now. Isn't this interesting? It's funny how an IPO can bring reality to the surface, and leave hype behind.

Best of luck with the IPO. Tough time to list, with both the DOW and NASDAQ at all time highs and a nervous market.

[Nate Amsden]

chart reminds me of fusion io

Worked out well for them eh.

[Anonymous Coward]

wow

That is a big, big, big loss. I mean like Orca-fat.

[Anonymous Coward]

They don't have a choice

Last year free cash flow was negative 197 million. They only have 173 left in the bank.

Don't think the would get another round of funding after 470 million, so the have to IPO.

[Anonymous Coward]

92M in R&D for a single product vendor?

As a per cent of what the company has taken in for funding, that's a significant amount of money. Compare with HP who has a plethora of products and spends 2.8 per cent on R&D. Looking at the M series system they released which is a simple HW update, seems like they are pursuing something else that has not materialized.

[Anonymous Coward]

Re: 92M in R&D for a single product vendor?

I'd be surprised. Whatever they have, whatever positive thing they can say about their business, is going to go into the S-1.

They are probably just not particularly efficient with their resources. Growing headcount super fast is a good way to spend a lot of money super fast. Every headcount they add requires incremental hardware resources (not cheap), lab space, HVAC overhead on that lab space, health insurance, etc. Basically, one of Pure's core competencies is spending investor's money. As somebody else said, that is exactly why they need to raise another round, hence the filing.

Yes, I work for a competitor. Which one? It doesn't matter.

[ByteMe]

Not a great time for IPO

Not a great time to IPO. There is a U.S. Presidential election looming on the horizon. Presidential elections have historically made the stock market very skittish until elections are over. As AC mentioned above, Pure Storage is burning through the cash and are not likely to get another round of funding, so they have to go public. Yet they're grossly over-valued and expenses are clearly way too high. Once they're public, there will be enormous pressure to get spending under control and get expenses down.

Where is the cash going? Likely R & D for a hyperconverged appliance which they've hinted at before. Seeing as how they don't currently have a scale-out cluster technology, this could take years to bring to market. By the time they deliver something, it could be too little too late as there are a LOT of competitors in that space already.

Should be fun to watch.

[davidfranklin]

marketing expenses

Pure spends a dollar in marketing & sales for every dollar of revenue. Is this a normal practice, or an accounting trick to inflate revenue numbers? I can see how a steep discount could be counted (via creative accounting) as a marketing cost: you can add $100M to revenue (money going in) and $100M to marketing (marketing going out) and the numbers will still add up. Something looks fishy here.

[Lynrd]

Good luck to the pure guys

Having been through this sort of thing not long ago - seriously, congrats to the pure guys. Hope it goes well - it's a lot of work to get as far as you have. It won't get easier once you're publicly traded, so savor the moment.

[Anonymous Coward]

The data reporter to Gartner wasn't only wrong this year but also the previous years. Garner amended their 2013 revenue from the 114 declared to 67 million in their latest report, yet we can see from S1 that the product revenue was around 40 million. Also the product revenue is 154 million, 176 million includes services that shouldn't be accounted when looking at a product market share.

[dpk]

I drink your MILKSHAKE ! I DRINK IT UP !

[Anonymous Coward]

Show me the liabilities on their books

Given the way Pure promise free controller upgrades in year 3 etc, Ive been curious how they recognise these on their books as a future liability. they maybe are only able to recognise 75% of the product revenue on sale, and the remaining 25% in year 3.

If they haven't then those losses will continue as they recognise the extra expenses in the future years.

[Anonymous Coward]

Re: Show me the liabilities on their books

To their credit here, they won't see this as a liability. They've spend all that money on marketing, part of which has convinced people that the controllers will be free. They won't be. They will only be free IF you renew maintenance for another 3 years. I.e. we bake the cost of the controllers into your new maintenance bill. Well played, but just another sign of the deceit and misleading practices of the firm.

[Marc 25]

we bake the cost of the controllers into your new maintenance bill. Well played, but just another sign of the deceit and misleading practices of the firm.

How is that deceitful?

That's like saying contracted mobile phones are "free" and that it's deceitful for the phone company to "hide" the cost in the contract!

Any IT manager worth his salt knows that paying for ongoing support (including hardware) is way easier to get past the beancounters than 3 years forklift upgrades.

[Anonymous Coward]

It's misleading because, as you can see from the first post above about this, many customers are under the impression that they just get the new controllers after 3 years. They don't realize that's they're not really free, they have to renew M&S for another 3 years.

[Anonymous Coward]

"Free" controller upgrades

While yes it is baked into the maint, it's going to become the norm. Big news coming out of a major storage vendor this week. Wait for it......

[Anonymous Coward]

Re: "Free" controller upgrades

... waiting .....