US ▾
P
Earnings call · Jul 2026 (Q2 FY27)

Everpure Q2 FY27 earnings call P

Aug 26, 2026 Source

Executive summary

Everpure Q2 FY27 — Strong Growth & Hyperscaler Wins Drive Raised Full-Year Guidance

Everpure delivered an outstanding Q2 FY27, exceeding guidance on revenue and operating profit, driven by broad-based demand and strategic pricing. The company secured a second top 5 hyperscaler design win, validating its DirectFlash technology. Despite negative cash flow from strategic component buys, management significantly raised full-year guidance, expressing confidence in sustained growth and market share gains.

Highlights

5

  • Revenue grew 38% year-over-year, exceeding the high end of guidance.

  • Operating profit surged 77% year-over-year to $230 million, also exceeding guidance.

  • Evergreen//One Total Contract Value (TCV) accelerated to an annualized run rate of over $1 billion for fiscal year '27.

  • Secured a design win and supply agreement with a second top 5 hyperscaler.

  • Full-year revenue guidance was raised by more than $500 million to a range of $5.030 billion to $5.070 billion.

Concerns

3

  • Cash flow from operations was negative $136 million due to strategic component purchases.

  • Free cash flow was negative $238 million in the quarter.

  • System unit volumes were down due to price elasticity, with customers buying fewer solutions at higher prices.

Guidance & targets

CategoryTargetConfidence
Q3 FY27 Revenue
$1.325B-$1.335B
medium materiality
High
Q3 FY27 Operating Profit
$265M-$275M
medium materiality
High
FY27 Revenue
$5.030B-$5.070B
high materiality
High
FY27 Operating Profit
$940M-$960M
high materiality
High
FY27 Free Cash Flow
$600M-$800M
high materiality
High
Hyperscaler Revenue Ramp (new deal)
Meaningful ramp
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
US
US revenue growth.
$688M19%——
International
International revenue growth, representing the highest contribution to date and a key strategic focus.
% of total revenue: 42%
$498M75%——

P operating KPIs by quarter

P operating KPIs stated on its earnings calls, by fiscal quarter
KPI May 2026 Q1 FY27This call Jul 2026 Q2 FY27Change vs prior quarter
Remaining performance obligation (RPO)
$3.8B Consistent with last quarter, our remaining performance obligations, or RPO, grew 41% to $3.8 billion, driven by the execution of large deals and strength of our Evergreen Forever and Evergreen/One offerings. Source transcript
$4B+ Remaining performance obligations, or RPO, increased 44% year-over-year to more than $4 billion. Source transcript
—
Employees
6,600 Finally, our head count increased sequentially by 211 employees, bringing our total headcount to 6,600 employees. Source transcript
6,900 Finally, our head count increased sequentially by 282 employees, bringing our total head count to 6,900 employees. Source transcript
+4.5%

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Remaining Performance Obligations (RPO) >$4B Q2 FY27

44% YoY growth

Growth driven by strong bookings across core business and Evergreen//One momentum. RPO often serves as a leading indicator for future ARR growth.

Evergreen//One Total Contract Value (TCV) run rate >$1B FY27

Annualized run rate for fiscal year '27.

Evergreen//One Total Contract Value (TCV) $277M Q2 FY27

121% YoY growth

Driven by velocity deals and large enterprise agreements.

Product announcements

ProductTypeDetails
Everpure Data Streamlaunch
Everpure Data Intelligenceupdate
Pure1 Copilotupdate

Deals & partnerships

Second top 5 hyperscaler Design win and supply agreement for hyperscale products.

Announced on August 10. Validates DirectFlash's value proposition in massive-scale environments. Hyperscaler order commitments expected to extend into calendar 2028, powering tens of exabytes of capacity.

Samsung Electronics Chose FlashBlade//S to support advanced AI and research initiatives.

Customer win for AI needs.

Major global bank Selected FlashBlade//S to standardize internal GPU-as-a-Service and agent development and deployment environments.

Customer win for AI needs.

One of the largest trial court systems in the U.S. Selected Data Stream to streamline and automate AI-accelerated analysis of petabytes of unstructured data.

Customer win for Everpure Data Stream, meeting strict data privacy requirements.

International high-performance and AI computing provider Selected FlashBlade//EXA for high-performance AI training environments.

Customer win for FlashBlade//EXA.

STN Expanded FlashBlade//EXA investment to support growing customer demand.

Large AI managed service provider leveraging FlashBlade//EXA for performance and scalability.

University of Western Australia Expanded its Evergreen//One footprint.

Enjoying the ability to scale storage on demand while managing costs efficiently.

Europe's largest telecom operator Long-standing customer enjoying flexible scaling without disruptive hardware refreshes.

Example of benefits from Evergreen capabilities.

Fast-growing global managed service provider Chose Evergreen//One for predictable, consumption-based economics and capacity expansion.

Embraced SLA-backed Evergreen//One model, allowing teams to focus on delivering high-value services.

Risks & headwinds

Negative cash flow from strategic component purchases Q2 FY27

Cash flow from operations: -$136M; Free cash flow: -$238M

Mitigation:Strategic purchases of NAND and other key components were made to mitigate cost inflation and secure supply. Operating cash flow is expected to normalize over the next 2 quarters, and FY27 free cash flow is guided to be $600M-$800M.

Continued supply tightness and higher component costs Ongoing

Market prices increased to levels not experienced since 2017; customers paying more for less capacity; system unit volumes down.

Mitigation:Intentional strategy to operate at the lower end of product gross margin range (65%-70%) to drive market share and maintain customer relationships. Increased adoption of Evergreen//One due to its predictable, cost-efficient model. Pricing actions largely offset component cost increases.

Fragmented internal data hindering AI adoption Current

Fragmented and inconsistent data leads to manual reconciliation and incorrect AI results, especially where 100% accuracy is required (e.g., financial operations).

Mitigation:Everpure Data Intelligence (from 1touch acquisition) helps enterprises find, discover semantics, and deliver shared context for distributed data, enabling control and sovereignty over their data for AI readiness.

What to watch in Q3 FY27

Operating Cash Flow Normalization

Next 2 quarters
Current Negative $136M
Target Normalization

Why it matters

Indicates effective management of strategic component purchases and a return to positive cash generation, crucial for financial health.

While these purchases created a temporary headwind to operating cash flow in the quarter, we expect operating cash flow to normalize over the next 2 quarters.

Q&A highlights

What specifically changed in the last 90 days to drive the significant uplift in full-year guidance, given prior implied deceleration?

Management clarified they previously did not update guidance due to uncertainty, not implied deceleration. What changed was the resolution of concerns regarding component sourcing and a better understanding of customer response to higher prices, which were fully observed in Q2. This, combined with two quarters of visibility, allowed for the increased confidence and guidance raise.

“Two things went away, concern about the higher prices and the effect, the concern around supply chain, which we feel now we are very much on top of. And then one thing, new information that came in, which is actual experience in how customers are responding to the higher prices.”

asked by Amit Daryanani · answered by Charles Giancarlo

2 min read 6 chapters

Detailed narrative

Growth Acceleration & Market Share

Everpure's revenue growth of 38% year-over-year continues a trend of 30%+ growth, driven by the expansion of its product line and architecture, unified by the Purity software foundation. The company believes this higher growth rate is sustainable due to strong demand signals and win rates, leading to outsized market share gains against legacy competitors. This momentum is validated by industry analysts, with Gartner positioning Everpure highest in execution and furthest in vision in its 2026 Magic Quadrant for Enterprise Storage Platforms.

Pricing Environment & Evergreen//One Adoption

The rapid increase in semiconductor demand and cost has led to higher prices across the industry, with customers now paying more for less capacity. This environment has strengthened the value proposition of Evergreen//One, Everpure's as-a-service offering, which provides predictable, consumption-based economics and lower upfront capital requirements. Evergreen//One's Total Contract Value (TCV) has accelerated to an annualized run rate exceeding $1 billion for FY27, as customers seek stability and cost efficiency in a high-cost environment.

AI & Data Primacy Strategy

Everpure is addressing the growing AI market by focusing on 'data primacy,' a concept for streamlining operations and making data AI-ready by rationalizing and structuring it into sources of truth. Interest in Everpure Data Intelligence, which includes capabilities from the 1touch acquisition, is significant, as enterprises struggle with fragmented internal data for AI. New offerings like Everpure Data Stream (built on NVIDIA's AI data platform) and FlashBlade//EXA are gaining traction, supporting AI needs from enterprise to large-scale neoclouds.

Expanding Virtualization Solutions

The company is seeing growing traction in its virtualization solutions, helping customers optimize their VMware footprints with VCF. Additionally, adoption for non-VMware modern virtualization solutions, such as Portworx with Red Hat OpenShift and Nutanix Virtualization, has grown significantly. Everpure has been named Technology Partner of the Year by both Red Hat and Nutanix, with its VMware alternative solutions now exceeding a $100 million annual run rate.

Hyperscale Opportunity Validation

Everpure achieved a significant milestone by securing a design win and supply agreement with a second top 5 hyperscaler for its DirectFlash solutions. This validates the technology's value proposition in massive-scale environments, offering industry-leading density, power, cooling, and lifetime benefits over traditional SSDs. While revenue contribution from this new agreement will be de minimis in FY27, a meaningful ramp is anticipated in FY28 and beyond, with total sales to hyperscalers expected to power tens of exabytes of capacity.

Strategic Component Purchases & Cash Flow

Cash flow from operations was negative $136 million in Q2, primarily due to strategic purchases of NAND and other key components. These buys were intentionally made to mitigate the impact of continued cost inflation and secure supply to fuel the strong growth of the core business. While these purchases created a temporary headwind to operating cash flow and resulted in negative free cash flow of $238 million, management expects operating cash flow to normalize over the next two quarters, with FY27 free cash flow guided between $600 million and $800 million.

AI-generated summary of the company's earnings call. Not investment advice.