Loss-making Pure Storage reveals all in IPO plan
Flash firm reveals financial performance to date and outlines risks to business
Aggressive flash firm Pure Storage has lifted the lid on its financial performance and openly appraised the risks to its business in a document filing for an IPO.
Pure filed for IPO in a document lodged with the US Securities and Exchange Commission (SEC) last night.
In the filing, which is more than 125 pages long, Pure outlined its financial performance since 2013. It has previously boasted strong bookings growth in certain regions, but never before has it formally reported sales and income figures in this way.
For the fiscal year to 31 January 2013, sales reached just $6.1m (£3.9m), but a year later at the end of its FY14, that had rocketed to $42.7m. For its most recent financial year, which closed on 31 January 2015, sales skyrocketed to $174.5m.
The bulk of its sales to date have come from the US – in FY15 almost 80 per cent of sales came from its home country.
But the firm is not profitable, it admitted in the filing.
In its FY13, FY14 and FY15 respectively, Pure Storage made net losses of $23.4m, $78.6m and $183.2m.
Opening up
In the filing, the company set out a lengthy list of factors which pose a risk to its business in the future. Issues such as being unable to sustain its rapid growth and its limited trading history were highlighted, as well as risks pertaining to its channel business and the fierce competition posed by the flash market.
"If we fail to successfully maintain or grow our relationships with channel partners, our business, operating results and financial condition could be harmed," Pure said in the document.
"Our future success is highly dependent upon our ability to establish and maintain successful relationships with a variety of channel partners in markets where we do not have a large direct sales force or direct customer support personnel.
"In markets where we rely on partners more heavily, we have less contact with our customers and less control over the sales process and the quality and responsiveness of our partners. As a result, it may be more difficult for us to ensure the proper delivery and installation of our products or the quality or responsiveness of the support and services being offered.
"Any failure on our part to effectively identify, train and manage our channel partners and to monitor their sales activity, as well as the customer support and services being provided to our customers in their local markets, could harm our business, operating results and financial condition."
It added that channel partners might not "devote sufficient attention and resources towards selling our products and services", which could also cause problems. Competitors poaching channel partners could also pose a threat to Pure, it said, when highlighting the risks of the competitiveness of the flash space.
"We face intense competition from a number of established companies that sell competitive storage products. These competitors include Cisco, Dell, EMC, HP, Hitachi Data Systems, IBM, Lenovo and NetApp.
"These competitors, as well as other potential competitors, may have greater name recognition and longer operating histories; larger sales and marketing and customer support budgets and resources; broader distribution and established relationships with distribution partners and customers; the ability to bundle storage products with other products and services to address customers' requirements [and] greater resources to make acquisitions."