Pure Storage (PSTG) -), a cloud-based data storage company, reported third-quarter earnings results Wednesday that featured a muted outlook for the rest of the year, despite topping Street expectations.
The tech company earned an adjusted $763 million for the quarter, a 13% year-over-year increase that topped analyst forecasts of $761 million. Pure further reported a 26% year-over-year increase in subscription services revenue and a non-GAAP gross margin of 74%.
"We are pleased to see strengthening demand across our data storage platform,” CFO Kevan Krysler said in a statement. “Our business strategy continues to focus on continually increasing the value we provide to our customers including our consumption and subscription-based offerings."
Still, the company posted lower-than-anticipated guidance for the year, saying that it expects to see revenue of $782 million for its current quarter, and revenue of $2.8 billion for its full fiscal year. Both forecasts came in well below analyst expectations of $919 million and $2.96 billion respectively.
CEO Charles Giancarlo told CNBC after the release of the results that the weaker forecast is due to the fact that the company is switching over to a subscription model. Once investors have more time to go over the results, he said, they will see that Pure still has a "good story."
Investors, however, weren't buying it — the stock plummeted more than 12% in the wake of the report, falling a further 3% Friday morning. With some of its earlier gains now erased, the stock is up only 24% for the year.
Cathie Wood, the CEO and investment lead of Ark Invest, took advantage of the dip to roughly double a small holding Ark had in the company.
Ark, through its Next Generation Internet ETF, on Nov. 30 bought 143,107 shares of Pure, a purchase worth roughly $4.7 million based on Pure's closing price of $33.31. The purchase boosted Ark's Pure holding to 316,219 shares, worth $10.5 million and weighted at .69% of the fund.
Roughly 30% of the ETF is made up of large holdings in Coinbase (COIN) -), Roku (ROKU) -) and Grayscale Bitcoin Trust.
Related: Meet the biotech company Cathie Wood bought half a million shares of this month
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