Everpure, Inc. (P) | The Buildout — AI Infrastructure
The Verdict
Everpure designs and sells all-flash and scale-out storage systems, unified by its Purity operating system, for enterprises, governments, and hyperscale cloud providers. It is expanding into data management and AI readiness with software like Fusion and the pending 1touch acquisition. In the AI infrastructure buildout, Everpure’s FlashBlade//EXA and hyperscale solutions feed high-speed data to GPU clusters, making it a bridge between storage and AI compute.
| Market Cap | — |
| Revenue (TTM) | $3.9B |
| Revenue Growth | +21.0% |
| EBITDA Margin (TTM) | 8.1% |
| Net Cash | $1.3B |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Revenue growth accelerated to 21% on a trailing basis, with FY2027 guidance implying ~19% growth — outpacing legacy storage peers.
- Hyperscale business shipped low double-digit exabytes in FY2026 and now operates under a standardized model with 75–85% gross margins.
- FlashBlade//EXA won its first customer, displacing an incumbent after a performance test; dozens of advanced discussions are underway.
- RPO surged 40% YoY in Q4, indicating long-term contracted revenue and deepening customer commitments.
- International revenue grew 48% YoY in Q4 and now represents 36% of the total, broadening geographic diversification.
What We’re Watching
- Product gross margin (ex-hyperscale) is guided to the low end of 65–70% in Q1 FY2027 due to component cost spikes; recovery is not guaranteed.
- A single hyperscaler accounts for over 10% of revenue; no second design win has been announced, and the 10-Q warns of potential NAND purchase obligations if demand drops.
- Reported subscription revenue growth decelerated to 15% in FY2026 (from 22% in FY2025), masking underlying RPO strength.
- FlashBlade//EXA remains early-stage; the “dozens” of discussions must convert into material revenue over FY2027.
The thesis is strengthening, as the company’s AI-driven growth acceleration and strategic repositioning are progressing. However, near-term margin compression and single-customer concentration temper confidence. The open question: can cost stabilization and the price increase restore product gross margins to their historical 65–70% band, and will hyperscale diversify?
Earnings Beat
Everpure reported its first billion-dollar quarter with revenue of $1.06B, up 20% YoY. Total gross margin was 69.9%, and product revenue grew 25% to $618M. RPO growth accelerated to 40%, signaling strong forward demand.
| Metric | Q1 FY2027 | Q4 FY2026 | Q1 FY2026 | YoY |
|---|---|---|---|---|
| Revenue | $1.1B | $1.1B | $778M | +35.2% |
| Gross margin | 68.7% | 69.9% | 68.9% | -20bps |
| EBITDA | $60M | $128M | $3M | +2211.5% |
| EPS | $0.07 | $0.29 | $-0.04 | −272.1% |
| RPO growth (YoY) | 40% | 24% | n/a | — |
our first billion-dollar revenue quarter— Charlie Giancarlo, CEO, 25 Feb 2026
Management tone: Management balanced enthusiasm for the strategic transformation and AI-driven growth with unusual candor about the unprecedented component cost surge. The CEO described visibility as “non-existent,” while the CFO was precise and transparent in quantifying the price-hike pull-forward and 1touch dilution.
Management Guidance
FY2027 revenue is guided to $4.3B–$4.4B, with operating profit of $780M–$820M. Q1 revenue is expected at $990M–$1.01B, with product gross margin (excluding hyperscale) at the lower end of the 65–70% range. Hyperscale gross margins are forecast at 75–85%, accretive to the company, with the majority of revenue in the second half. The 1touch acquisition is expected to dilute operating profit by 1.5% in FY2027 before turning accretive within 24 months.
Trajectory
Trailing twelve-month revenue reached $3.94B, up 21% year-over-year, as hyperscale and large enterprise deals accelerated. Total gross margin held at 69.9% in Q4 but is guided lower in Q1 FY2027 due to component cost inflation. The shift toward longer subscription contracts boosted RPO growth to 40%, even as reported subscription revenue growth slowed.
The Model
The model projects FY+1 revenue of $4,540M and EBITDA of $499M (11.0% margin), slightly above the midpoint of management’s FY2027 guidance. For FY+2, the model sees revenue rising to $5,450M with EBITDA of $790M (14.5% margin), driven by hyperscale volume ramps and the flow-through of the ~20% price increase.
| Metric | FY2026 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $3.7B | $4.5B | $5.5B |
| YoY Growth | — | +23.9% | +20.0% |
| EBITDA | $263M | $499M | $790M |
| EBITDA Margin | 7.2% | 11.0% | 14.5% |
Projections are the median of 5 independent model runs. The model’s revenue sits 5.6% above analyst consensus.
FY2027 revenue is guided to $4.3B–$4.4B, with operating profit of $780M–$820M. Q1 revenue is expected at $990M–$1.01B, with product gross margin (excluding hyperscale) at the lower end of the 65–70% range. Hyperscale gross margins are forecast at 75–85%, accretive to the company, with the majority of revenue in the second half. The 1touch acquisition is expected to dilute operating profit by 1.5% in FY2027 before turning accretive within 24 months.
What Could Go Right — and Wrong
- A second hyperscale design win validates the model’s repeatability and lifts FY+2 revenue assumptions.
- EXA converts its “dozens” of advanced discussions into a material revenue stream, adding a high-growth AI-scale line.
- Component costs stabilize or decline, allowing the price increase to expand product gross margins toward the upper end of the 65–70% range.
- 1touch integration accelerates the data-intelligence platform, driving higher-margin subscription revenue.
- The single hyperscale customer reduces or pulls demand, triggering NAND purchase obligations and removing a key growth engine.
- Component cost inflation persists beyond FY2027, breaking the historical 65–70% product gross margin band.
- EXA fails to scale beyond a niche, leaving the AI-storage narrative unfulfilled.
- A macro downturn curtails enterprise “franchise” deals, and the price-hike pull-forward unwinds, revealing weaker underlying demand.
Looking Ahead
The next twelve months hinge on whether Everpure can restore product gross margins as pricing catches up with component costs, and whether the hyperscale pipeline delivers a second design win. The 1touch acquisition and EXA ramp provide additional catalysts that could reinforce the platform story.
- Q2 FY2027Product gross margin recovery — First quarter with the ~20% price increase flowing into margins; tests cost pass-through.
- FY2027Hyperscale design win — Certification of an additional hyperscaler would broaden the growth base.
- Through FY2027EXA pipeline conversion — Dozens of advanced discussions must convert into material revenue.
- H2 FY2027Hyperscale revenue ramp — Low double-digit exabytes to deliver majority of revenue in second half.
- Coming months1touch acquisition close — Integration into Purity begins; 1.5% op profit dilution expected.
- FY2027Share repurchase execution — $329M remaining on $400M authorisation.
Financials
Annual Summary
| Metric | FY2026 | TTM |
|---|---|---|
| Revenue | $3.7B | $3.9B |
| Gross Margin | 70.3% | 70.2% |
| EBITDA | $263M | $542M |
| EBITDA Margin | 7.2% | 8.1% |
| Net Income | $188M | $226M |
| Free Cash Flow | $616M | $1.1B |
| Net Cash | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)70.2%
- EBITDA Margin (TTM)8.1%
- Net Margin (TTM)5.7%
- ROIC77.9%
- FCF Conversion161.2%
- SBC / Revenue12.9%
The Company
Everpure designs and sells a unified data storage and management platform built on its Purity operating system and DirectFlash hardware. Its product lines include FlashArray for block-optimized workloads, FlashBlade for scale-out file and object storage, and the Evergreen//One storage-as-a-service offering. The company is expanding into data intelligence with Fusion and the pending 1touch acquisition, aiming to become a comprehensive data platform for the AI era.
Manufacturing is outsourced to third-party contract manufacturers on three continents; the company designs its own hardware and software and invests in R&D at a level it says exceeds any competitor in data storage. It goes to market through a direct sales force and channel partners, with subscription and as-a-service models that now account for 42% of total revenue.
Business Segments
Competitive Landscape
Everpure competes against legacy enterprise storage vendors such as Dell EMC, NetApp, HPE, IBM, and Hitachi Vantara, as well as emerging AI-storage entrants. The company differentiates on its unified Purity platform, high customer satisfaction (NPS 84), and an Evergreen model that avoids disruptive hardware refreshes.
- Dell EMCNamed in 10-K; no specific discussion.
- NetAppNamed in 10-K; competitor call reported record AI wins and similar gross margin pressure.
- HPENamed in 10-K; competitor call reported strong storage orders but supply constraints.
- IBMNamed in 10-K; no specific discussion.
- Hitachi VantaraNamed in 10-K; no specific discussion.
Supply Chain
Everpure sits between component suppliers and end customers, assembling storage systems via contract manufacturers. Its hyperscale business model uniquely has the customer procuring NAND directly, insulating that revenue stream from flash price swings.