Everpure (P) Q1 FY27 earnings call: guidance and Q&A

Given strong Q1 and Q2 guidance, why does the full-year guidance imply a deceleration in the second half? Is it due to conservatism, component pricing, or AI deployment timing?

The dynamic supply chain and pricing environment makes high visibility into the second half unrealistic. While demand is currently strong, the company is cautious due to uncertainty about potential demand destruction from historically high prices and the unstable supply environment, which requires constant effort to secure components.

“What I will say is we saw a very strong demand, as you can see in the first quarter. We continue to see strong demand now. So the 2 things that, frankly, we'd want to see before raising guidance one of which is, will demand continue given these historically high prices or will we start to see some demand destruction? We don't know.”

asked by Amit Daryanani · answered by Charles Giancarlo

With increasing context windows and tokenomics, what innovations are being made in granular prompts caching, and what are the implications for KB cache moving to SSD storage?

The space of inference is evolving, and increased context windows drive more demand for memory, both in GPU servers and remote storage. Everpure's partnership with NVIDIA and solutions like KB Caching address this, with future product roadmaps focused on expanding context memory.

“I think the -- as we look at the increase in context windows and what that's driving in terms of memory and storage, overall, the more tokens, the more data you try to process, the more context you need to assemble. And we do see that as driving more demand of memory, both in the GPU servers remote memory, remote storage, and that's a large part of our partnership with NVIDIA, our solutions that we've developed around NVIDIA technology such as KB Cashing as well as future plans and product road maps that look at where the expansion of contact memory is likely to go in the future.”

asked by Richard Steiler · answered by Robert Lee

Can the company quantify contracted versus forecasted hyperscaler revenue for the full year, and could supply shortages lead to higher shipments at higher ASPs for lead hyperscalers?

The company does not specifically quantify hyperscaler revenues but confirms they are based on customer order commitments agreed before the fiscal year. They are on track and feel good about the prospects, expecting a multiple of FY26 revenues in FY27 and beyond.

“We don't quantify specifically the revenues that we will derive from hyperscalers. These are really based on customer order commitments that were agreed before the beginning of this fiscal year. So we are on track for that. We feel very good about the prospects of our hyperscaler business.”

asked by Howard Ma · answered by Tarek Robbiati

Considering the revenue growth excluding price increases, where is the enterprise AI adoption cycle currently (imminent, happening, or early stage)?

The vast majority of enterprise AI purchases are still in the cloud, with limited on-prem development in traditional enterprises, except for high-end banking, automotive, and pharma. Everpure's standard products are already serving on-prem AI deployments.

“I would say that the vast majority of the enterprise AI purchase cycle is still in the cloud. So there's a lot of adoption, but not a lot of development of their own native hardware capabilities on-prem.”

asked by Sreekrishnan Sankarnarayanan · answered by Charles Giancarlo

How much of the 1/3 growth from pricing and pull-forward is expected to sustain in the second half, and is any incremental pricing or pull-forward built into the 2H guidance?

The company is not calculating any additional pull-forward into its second-half forecast. While further price increases are projected for the year, they are for planning purposes to maintain margins and not rolled into a revenue forecast. Pull-ins are likely to continue as long as prices rise, but this is not factored into the second-half guide.

“I will say that we are -- we project that there will be further price increases this year, but that doesn't go into -- that is just something that we have to plan on as we go forward to make sure we can maintain our margins, et cetera. But the -- but we don't -- we haven't rolled that into a forecast from a revenue standpoint.”

asked by Wamsi Mohan · answered by Charles Giancarlo

How are hyperscalers reacting to the expanding price differential between HDDs and QLC NAND regarding DFM adoption, and what is the impact on conversations and adoption timelines?

Hyperscalers are 'desperate for storage capacity of any type' because HDDs are sold out through 2028. Everpure's solution replaces both SSDs and HDDs. This situation has increased the urgency of the qualification process with hyperscalers, though NAND availability remains a factor.

“Our solution is a replacement for both SSDs and for hard disk also hard disk has been sold out through 2028. So I would say that at this point, if we ask about the tenor of our conversations with the hyperscalers, they are effectively desperate for storage capacity of any type in any form.”

asked by Dylan Lu · answered by Charles Giancarlo

Provide quantitative insight into memory pricing (contract vs. spot) and clarify participation in long-term agreements, specifically if pricing is fixed in those agreements.

The analyst's reported price increase numbers are 'very low'; prices have gone up 5-10x on the spot market. Long-term contracts were not honored at former prices. Quotes now have only 30 days of longevity. Fab capacity for NAND, memory, CPUs, and low-end chips is sold out through 2027, driven by demand completely outstripping supply.

“Your numbers are very low. We'd be glad to buy from those suppliers that you've just identified at that pricing level. Prices have gone up anywhere from 5 to 10x on the spot market. Long-term contracts were not worth the paper they were written on at former prices.”

asked by Paramveer Singh · answered by Charles Giancarlo

The math on Q2/Q4 guidance implies a significant decline in unit shipments if pricing is up 70%. Is this due to sourcing problems, demand disruption, or a mix shift to as-a-Service?

The company does not expect unit shipments to decline as much as implied. One-third of Q1 growth was from price increases and pull-ins, with the rest being volume, indicating strong demand. A mix shift towards Evergreen/One is also a factor, but the company believes shipment volumes will not drop significantly in the second half.

“We do not expect the number of systems that we ship to decline as much as you highlighted far from it. We do believe that the growth in units of what we sell continues to be pretty strong.”

asked by Matthew Bryson · answered by Tarek Robbiati