Everpure, Inc. (P) | The Buildout — AI Infrastructure
The Verdict
Everpure, formerly Pure Storage, builds flash-based storage systems and a unified data-management platform that virtualizes data across on-premises, hybrid cloud, public cloud and edge environments into a single storage layer with consistent control and built-in automation. It sells the storage and data-preparation layer beneath AI and enterprise workloads rather than the processors or models themselves: FlashBlade//EXA is purpose-built for large-scale, GPU-intensive AI and HPC, FlashBlade//S serves enterprise AI and research, and DirectFlash modules go to hyperscalers building their own storage services. The company does not own a fab — third-party contract manufacturers build its hardware — and it competes against legacy storage vendors that its filings describe as having the technical and financial resources to bring competing products to market.
| Market Cap | — |
| Revenue (TTM) | $4.3B |
| Revenue Growth | +27.2% |
| EBITDA Margin (TTM) | 9.0% |
| Net Cash | $783M |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- AI-linked products span the stack: FlashBlade//EXA for GPU-intensive AI and HPC, FlashBlade//S for enterprise AI and research, Everpure Data Stream built on NVIDIA's AI data platform — which reached general availability and saw its first sales in Q2 FY27 — and DirectFlash modules for hyperscalers.
- A second top-5 hyperscaler design win and supply agreement was signed on August 10, 2026, with order commitments extending into calendar 2028 at tens of exabytes, which management calls a multiple of its expectations for this year.
- Evergreen//One TCV reached a $1B annualized run rate for FY2027, Storage-as-a-Service TCV was $277M, up 121% year over year, and RPO passed $4B, up 44%.
- Operating profit grew 77% year over year to $230M in Q2 FY27 on 38% revenue growth — the third consecutive quarter above the Rule of 40.
- Hyperscale revenue carries a standardized 75%–85% gross margin, and hyperscalers procure their own NAND, leaving that business insulated from the component cost spike that pressures core product margin.
What We’re Watching
- Product gross margin sits at the low end of management's 65%–70% range and is not expected back at the upper end until semiconductor costs stabilize — a condition management does not control.
- System units are down: customers are paying more for fewer, higher-performance systems. Management declined to quantify the unit decline and did not say whether the back-half guide embeds conservatism.
- Q2 FY27 free cash flow was negative $238M after strategic component purchases; the FY27 guide of $600M–$800M depends on operating cash flow normalizing over the next two quarters.
- The second top-5 hyperscaler is de minimis in FY27 with meaningful ramp beginning in FY2028, and management is narrowing disclosure to category-level hyperscale rather than per-customer detail.
The evidence points to a strengthening thesis. Revenue growth moved from about 16% for FY26 to 20%, 35% and 38% across the last three reported quarters; guidance was initiated, then raised twice; and a second top-5 hyperscaler turned hyperscale from a single-customer concentration into a signed category with a stated 75%–85% margin model. RPO passed $4B and Evergreen//One TCV reached a $1B annualized run rate for FY27, which management says makes reported growth understate bookings momentum. The counterweight is that the acceleration has been substantially pricing-led, unit volumes are down, product margin is deliberately held at the low end, and cash flow swung negative to secure supply. The open question is whether hyperscale and as-a-service momentum convert into durable volume growth, or whether the current acceleration proves more pricing-dependent than the guide implies.
Earnings Beat
Everpure reported Q2 FY27 revenue of $1.186B, up 38% year over year and above the high end of guidance, at a 68.4% total gross margin. On the company's non-GAAP basis, operating profit was $230M, up 77% year over year at a 19.4% operating margin, which management described as the third consecutive quarter above the Rule of 40. Remaining performance obligations passed $4B, up 44% year over year, and management calls RPO a leading indicator for future ARR.
| Metric | Q2 FY2027 | Q1 FY2027 | Q2 FY2026 | YoY |
|---|---|---|---|---|
| Revenue | $1.2B | $1.1B | $861M | +37.7% |
| Gross margin | 68.4% | 68.7% | 70.2% | -180bps |
| EBITDA | $105M | $60M | $41M | +156.6% |
| EPS | $0.21 | $0.07 | $0.14 | +53.7% |
| RPO | $4B+ | $3.8B | n/a | +44% YoY |
| Storage-as-a-Service TCV | $277M | $165M | n/a | +121% YoY |
We are very intentional with our gross margins. I feel that we are in complete control of our gross margins, and we are choosing to operate at the lower end of our normal range in order to help customers.— Charles Giancarlo, Chief Executive Officer, 2026-08-26
Management tone: Management's tone shifted from caution to confidence between the two quarters. On the Q1 FY27 call they said it was too early to call for further upside to the guide and described the supply environment as very unstable with a lot of shortages. On the Q2 FY27 call they said the concern about sourcing components and the concern around the supply chain had gone away, and they raised FY27 guidance materially. They stayed deliberately abstract on hyperscale sizing and declined to quantify the unit decline, the dollar size or duration of the strategic NAND purchases, or any third-hyperscaler timing.
Management Guidance
For FY2027, management guides revenue of $5.030B–$5.070B, about 38% year over year at the midpoint, operating profit of $940M–$960M, about 50% at the midpoint, and free cash flow of $600M–$800M. For Q3 FY27 the guide is revenue of $1.325B–$1.335B and operating profit of $265M–$275M, both about 38% year over year at the midpoint. Management says it will operate product gross margin at the low end of the 65%–70% range until semiconductor costs stabilize and then return to the upper end. It expects the majority of hyperscaler revenue in the second half of FY27 — significant in Q3, growing in Q4 and in future years — and calls the second top-5 hyperscaler de minimis in FY27 with meaningful ramp beginning in FY2028.
Trajectory
Revenue reached $1.186B in Q2 FY27, up from $1.053B in Q1 FY27 and $1.059B in Q4 FY26, with year-over-year growth of 20%, 35% and 38% across those three quarters against roughly 16% for FY26 as a whole. On the audited figures, EBITDA moved from $127.5M in Q4 FY26 to $60.1M in Q1 FY27 and $104.7M in Q2 FY27, while total gross margin drifted from 69.9% to 68.7% to 68.4%. Management attributes the revenue step-up to roughly 20% price increases implemented on February 9, 2026, a mix shift to higher-performance FlashArray and FlashBlade systems, and as-a-service growth — while acknowledging that overall system units are down. Free cash flow went from $201.4M in Q4 FY26 to $111.8M in Q1 FY27 to negative $237.6M in Q2 FY27 on strategic component purchases.
The Model
The model projects FY+1 revenue of $5,100M with EBITDA of $500M, a 9.8% margin, and FY+2 revenue of $6,500M with EBITDA of $858M, a 13.2% margin. The near-term anchor is the company's own FY2027 guidance of $5.030B–$5.070B in revenue, $940M–$960M in operating profit and its free cash flow guidance, plus the hyperscale ramp management expects in the second half. The step-up to FY+2 depends on the second top-5 hyperscaler ramping after a de minimis FY27, as-a-service TCV converting into recognized revenue, and product gross margin recovering toward the upper end of the 65%–70% range.
| Metric | FY2026 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $3.7B | $5.1B | $6.5B |
| YoY Growth | — | +39.2% | +27.5% |
| EBITDA | $263M | $500M | $858M |
| EBITDA Margin | 7.2% | 9.8% | 13.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 5.6% above analyst consensus.
For FY2027, management guides revenue of $5.030B–$5.070B, about 38% year over year at the midpoint, operating profit of $940M–$960M, about 50% at the midpoint, and free cash flow of $600M–$800M. For Q3 FY27 the guide is revenue of $1.325B–$1.335B and operating profit of $265M–$275M, both about 38% year over year at the midpoint. Management says it will operate product gross margin at the low end of the 65%–70% range until semiconductor costs stabilize and then return to the upper end. It expects the majority of hyperscaler revenue in the second half of FY27 — significant in Q3, growing in Q4 and in future years — and calls the second top-5 hyperscaler de minimis in FY27 with meaningful ramp beginning in FY2028.
What Could Go Right — and Wrong
- Hyperscale product revenue arrives as guided — significant in Q3 FY27 and growing in Q4 — with the 75%–85% margin holding, adding an accretive second growth engine to the core enterprise business.
- Volume returns as component prices stabilize, and product gross margin moves back toward the upper end of the 65%–70% range.
- Operating cash flow normalizes within the next two quarters and FY27 free cash flow lands inside the FY27 guide.
- The second top-5 hyperscaler ramps on schedule in FY2028 against order commitments extending into calendar 2028 at tens of exabytes.
- Data Stream and Data Intelligence become revenue lines, and the 1touch acquisition accretes within 24 months as promised.
- Pricing stops doing the work and volume does not return as costs stabilize, resetting reported growth lower.
- Component costs keep rising, forcing further price increases that trigger the demand destruction management said it could not rule out.
- Product gross margin stays pinned at the low end of 65%–70% while semiconductor costs remain elevated.
- The hyperscale ramp slips — the filings note that a design win does not guarantee sales and that hyperscale customers could delay or cancel.
- Strategic NAND purchase commitments become an obligation if hyperscale demand softens, and cash flow fails to normalize.
Looking Ahead
The next twelve months turn on two things: whether the first hyperscaler ramp produces significant product revenue in the second half of FY27 as promised, and whether operating cash flow normalizes inside the two quarters management named. Beyond that, the Financial Analyst Meeting on September 23, 2026 is set to cover long-term strategy and a long-term financial framework, and international Accelerate conferences begin in September 2026 with advanced data-management detail. Product gross margin recovery is tied to semiconductor costs stabilizing, which management hopes to see toward the end of the year. The second top-5 hyperscaler is not expected to contribute meaningfully until FY2028.
- September 21, 2026S&P 500 inclusion — Effective prior to the open; company announcement September 8, 2026.
- September 23, 2026Financial Analyst Meeting — Long-term strategy and financial framework; Santa Clara campus.
- September 2026 onwardInternational Accelerate conferences — Advanced data-management product detail.
- October 16, 2026Q3 quiet period begins — No company updates until the Q3 FY27 print.
- H2 FY2027Hyperscale revenue ramp — Majority of hyperscaler revenue expected; significant in Q3.
- FY2028Second hyperscaler ramp — Meaningful revenue begins; de minimis in FY27.
Financials
Annual Summary
| Metric | FY2025 | FY2026 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $3.2B | $3.7B | $4.3B | +15.6% |
| Gross Margin | 70.0% | 70.3% | 69.7% | +38bps |
| EBITDA | $212M | $263M | $384M | +23.9% |
| EBITDA Margin | 6.7% | 7.2% | 9.0% | +48bps |
| Net Income | $107M | $188M | $253M | +76.4% |
| Free Cash Flow | $527M | $616M | $128M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)69.7%
- EBITDA Margin (TTM)9.0%
- Net Margin (TTM)5.9%
- ROIC23.4%
- FCF Conversion33.4%
- SBC / Revenue9.2%
The Company
Everpure, formerly Pure Storage, sells flash-based storage systems and an integrated data-management platform. It began as a provider of flash-based storage systems and now describes itself as delivering a cloud experience that virtualizes data across on-premises, hybrid and public cloud, and edge environments into a single storage layer. Its products hold and serve the data that databases, applications, virtual machines, Kubernetes environments and AI workloads read and write. FlashBlade//EXA is purpose-built for large-scale, GPU-intensive AI and HPC workloads, FlashBlade//S uses all-flash hardware built on an all-QLC architecture with DirectFlash modules, and DirectFlash modules are also sold to hyperscalers to build their own storage services.
Everpure outsources manufacturing to third-party contract manufacturers and relies on a limited number of suppliers — in some cases single-source — for several key components, including flash, and generally has not entered long-term purchase agreements for those components. It reports as a single operating and reportable segment, managed by the CEO at the consolidated level. Corporate headquarters are in Santa Clara, California, with R&D primarily in Santa Clara, Prague, Bangalore, Bellevue and Vancouver. The company employed 6,900 people and served more than 15,000 customers as of Q2 FY27, and more than 2,000 customers had enabled the Fusion / Enterprise Data Cloud capability.
Business Segments
Competitive Landscape
Everpure's filings name Dell EMC, NetApp, Hitachi Vantara, HP Enterprise and IBM, and the 10-Q adds Huawei, describing them as legacy vendors that each offer a broad range of systems targeting various use cases and end markets and have the technical and financial resources to bring competitive products to market. The competitor read-through in the evidence shows NetApp's all-flash array revenue at $1.31B, up 47% year over year, roughly 350 AI and data-lake modernization deals, and a win at a major U.S. utility over 'legacy and flash-only competitors', with accelerating interest in hybrid-flash and some lower-value workloads trading down from flash. That trade-down is the cautionary counterpart to Everpure's own decline in system units, even as its high-end mix holds.
- Dell EMCNamed in the 10-K as a legacy vendor with the technical and financial resources to compete; not discussed further.
- NetAppNamed in the 10-K as a legacy vendor; the supply-chain evidence set treats it as a verified competitor.
- Hitachi VantaraNamed in the 10-K competitor list; not discussed further.
- HP EnterpriseNamed in the 10-K as a legacy vendor; the supply-chain evidence set treats it as a verified competitor.
- IBMNamed in the 10-K competitor list; not discussed further.
Supply Chain
Everpure designs storage and data-management systems but does not build them: third-party contract manufacturers do. It relies on a limited number of suppliers, in some cases single-source, for key components including flash, and sells to enterprises, service providers and hyperscalers.
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