Earnings Recap — Q2 FY2027
CY Q3 2026 · Reported August 26, 2026 · Beat 6 of last 6 quarters
Everpure, Inc. reported Q2 FY2027 revenue of $1.19B, a beat of 8.0% against consensus, and EPS of $0.70, a beat of 20.7%.
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Everpure's results signal that enterprise storage demand remains robust despite unprecedented component cost inflation, with AI workloads driving adoption of high-performance flash platforms like FlashBlade//S and FlashBlade//EXA. The second top-5 hyperscaler design win for DirectFlash validates that software-defined flash is becoming a viable alternative to traditional SSDs at massive scale, potentially reshaping how hyperscalers architect storage for AI training and inference. The acceleration of Evergreen//One to a $1 billion TCV run rate suggests enterprises increasingly prefer consumption-based infrastructure models as they navigate cost uncertainty in the AI buildout.
Everpure reported Q2 FY2027 revenue growth of 38% year-over-year and operating profit of $230 million, up 77%, both exceeding the high end of guidance. Product revenue grew 54% to $687 million, while subscription services revenue rose 20% to $499 million (42% of total revenue). Growth was broad-based across all geographies, with international revenue up 75% to $498 million (42% of total, a record). The company secured a design win and supply agreement with a second top-5 hyperscaler on August 10, with de minimis FY2027 revenue and meaningful ramp beginning FY2028.
Management substantially raised full-year FY2027 revenue growth guidance, driven by confidence in component supply (supported by strategic NAND purchases) and actual customer behavior data showing demand remained resilient despite unprecedented price increases. Management expects significant hyperscaler product revenue in Q3 and Q4, with a second top-5 hyperscaler design win beginning meaningful ramp in FY2028. They intend to continue operating at the low end of the 65–70% product gross margin range to drive market share gains, with margins expected to return to the upper end once semiconductor costs stabilize.
“We have seen our revenue growth accelerate, consistently and steadily, over the last 8 quarters, and we now believe that this higher growth rate will be sustainable for some time.”
on Growth sustainability
“Our goal here is not simply to maximize margins in the current environment. We intend to continue to operate at the low end of our 65% to 70% product revenue gross margin range to drive top-line growth and market share gains while maintaining strong customer relationships.”
on Margin strategy
“We expect large hyperscaler order commitments for our DirectFlash solution to extend into calendar 2028, powering tens of exabytes of capacity, representing a multiple of our expectations for this year.”
on Hyperscaler outlook
What specifically changed in the last 90 days to drive the sizable guidance uplift, and how durable is it?
Charlie explained that two concerns were resolved: component sourcing ability and understanding of how customers respond to higher prices. Q2 was the first full quarter of higher prices, and demand proved resilient. Combined with two quarters of visibility, this gave confidence to raise guidance.
Can you unpack what's baked into the full-year guide regarding product gross margin trajectory and OpEx growth in the back half?
Charlie emphasized they are intentionally operating at the low end of the 65–70% product gross margin range to share cost pain with customers. Tarek added that the goal is not maximizing margin percentage but accelerating growth and market share, with operating leverage visible in 77% operating profit growth.
Can you help us understand ASP versus volume mix, and does the back-half guide imply a significant drop-off in capacity?
Charlie noted elasticity works against volume when prices rise, and capacity shipped has not kept pace with revenue dollars. Tarek added that system units are down but customers are buying higher-performance configurations with more capacity per system. Pull-ins did not play a role in Q2 and are not anticipated going forward.