Pure Storage (NYSE:PSTG) reported its Q3 results, with EPS of $0.50 coming in better than the consensus estimate of $0.40. Revenue grew 13% year-over-year to $762.8 million, better than the consensus estimate of $761.49M.

Despite the beat, shares plunged more than 17% pre-open Thursday due to worse-than-expected guidance.

For Q4/24, the company anticipates revenue of $782M, compared to the consensus estimate of $919.4M.

“We are pleased to see strengthening demand across our data storage platform, including the growth of our Evergreen//One Storage-as-a-Service offering, while also expanding our operating margin,” said CFO Kevan Krysler.

Subscription services revenue in Q3 increased 26% year-over-year to $309.6M. Remaining performance obligations (RPO) were $2.0 billion, representing a 30% year-over-year growth.

Analysts at Morgan Stanley were surprised by the “meaningful” guidance cut. Still, they remain Overweight-rated on PSTG due to share gains in the fastest growing part of the market.

However, they acknowledge that “multiple will compress in NT given subscription headwind.”

On the other hand, analysts at UBS reiterated a Neutral rating.

“We expect better margins with a mix to more Subscription Services limiting the EPS impact. That said, we would expect multiple compression given the near-term reset and the shares to be under pressure