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Everpure, Inc.: Q2 FY2027 earnings call

What management said about Q2 FY2027, from the documents filed with the SEC on 26 August 2026: press release. Guidance figures: 4 raised, 2 new. The quarter’s numbers.

Key takeaways

  • Revenue rose 38% to $1.2 billion: Total revenue was $1,185.9 million against $861.0 million a year earlier. Product revenue was $686.8 million and subscription services revenue $499.1 million. Source
  • Second top-five hyperscaler design win: Announced August 10. The design win uses DirectFlash architecture to lower operational costs and reclaim power and rack space for hyperscale workloads. Source
  • Subscription ARR up 20%: Subscription annual recurring revenue was $2.1 billion at quarter end, up 20% year over year, on the release's ARR definition. Source
  • Gross margin below prior-year level: GAAP gross margin was 68.4% against 70.2%, and non-GAAP 69.9% against 72.1%. Product GAAP margin was 65.3% and subscription services 72.7%. Source
  • Free cash flow negative this quarter: Operating cash flow was $(136.3) million and free cash flow $(237.6) million, against $212.2 million and $150.1 million a year earlier. Source
  • Prepaid and other assets outflow: The change in prepaid expenses and other assets was a $577.2 million outflow, against $14.0 million a year earlier. Current prepaid and other assets were $1,025.6 million at quarter end. Source

“Q2 marks eight straight quarters of accelerating revenue growth for Everpure, and confirmed our position as the most innovative and vital company in our industry,”

Charles Giancarlo, Chairman and CEO of Everpure

Guidance

AreaPeriodFigureAgainst last quarter
Revenue SourceThird quarter of fiscal 2027$1.325B to $1.335BNew
Non-GAAP operating income SourceThird quarter of fiscal 2027$265M to $275MNew
Revenue SourceFY27$5.03B to $5.07BRaised from $4.41B to $4.51B
Revenue growth rate SourceFY2737% to 38%Raised from 20% to 23%
Non-GAAP operating income SourceFY27$940M to $960MRaised from $820M to $860M
Non-GAAP operating income growth rate SourceFY2748% to 51%Raised from 29% to 36%

What changed from last quarter

  • Guidance raised: FY27 revenue range raised from $4.41B to $4.51B to $5.03B to $5.07B; non-GAAP operating income range raised from $820M to $860M to $940M to $960M. Source
  • New guidance: Guidance given for the third quarter of fiscal 2027, which the first-quarter release did not include. Source
  • New: Everpure Data Stream moved from upcoming beta, as described in the first-quarter release, to general availability. Source
  • New: A second top-five hyperscaler design win was announced on August 10. Source

Results and growth drivers

  • Revenue rose 38% to $1.2 billion: Total revenue was $1,185.9 million against $861.0 million a year earlier. Product revenue was $686.8 million and subscription services revenue $499.1 million. Source
  • Operating profit rose on both bases: GAAP operating income was $63.2 million against $4.9 million a year earlier. Non-GAAP operating income was $229.6 million against $130.0 million. Source
  • Diluted EPS rose to $0.21: Net income was $74.1 million, or $0.21 diluted per share, against $47.1 million and $0.14 a year earlier. Source

Products and customers

  • Second top-five hyperscaler design win: Announced August 10. The design win uses DirectFlash architecture to lower operational costs and reclaim power and rack space for hyperscale workloads. Source
  • Data Primacy architecture unveiled: Data Primacy architecture was unveiled at //Accelerate 2026, alongside Everpure Data Intelligence for automated data discovery and governance. Source
  • Data Stream now generally available: Everpure Data Stream reached general availability and automates data pipelines from ingestion to inference, which the first-quarter release described as an upcoming beta. Source
  • Cloud offerings expanded: Portworx for Edge was introduced on Red Hat OpenShift, and Everpure Cloud Azure Native reached general availability for Azure Virtual Machines. Source

“Demand remains strong across our solutions portfolio despite historic industry price increases in the first half of FY’27.”

Everpure CFO Tarek Robbiati

Demand and order book

  • Subscription ARR up 20%: Subscription annual recurring revenue was $2.1 billion at quarter end, up 20% year over year, on the release's ARR definition. Source
  • Remaining performance obligations up 44%: Remaining performance obligations were $4.1 billion, up 44% year over year. The first-quarter release reported $3.8 billion. Source
  • Demand held despite price increases: Management said demand held across the solutions portfolio, despite historic industry price increases in the first half of FY27. Source

Costs, margins and operating expenses

  • Gross margin below prior-year level: GAAP gross margin was 68.4% against 70.2%, and non-GAAP 69.9% against 72.1%. Product GAAP margin was 65.3% and subscription services 72.7%. Source
  • Operating expenses rose across lines: Research and development was $293.7 million (prior $242.0 million), sales and marketing $346.1 million ($285.9 million), and general and administrative $108.4 million ($71.5 million). Source
  • Stock-based compensation increased: Stock-based compensation was $159.8 million against $117.4 million a year earlier. It is excluded from the non-GAAP measures. Source

Cash flow, capital spending and returns

  • Free cash flow negative this quarter: Operating cash flow was $(136.3) million and free cash flow $(237.6) million, against $212.2 million and $150.1 million a year earlier. Source
  • Prepaid and other assets outflow: The change in prepaid expenses and other assets was a $577.2 million outflow, against $14.0 million a year earlier. Current prepaid and other assets were $1,025.6 million at quarter end. Source
  • Capital spending rose to $101.3 million: Purchases of property and equipment were $101.3 million against $62.0 million, including $12.5 million of capitalized internal-use software. Source
  • Acquisition paid in cash: The acquisition cash outflow was $125.3 million. The first-quarter release described 1touch as completed in May. Goodwill rose to $466.3 million from $365.1 million. Source
  • Share repurchases and cash balance: Repurchases totaled about $69 million for 0.9 million shares, against $42.2 million in cash repurchases a year earlier. Cash and marketable securities were $1.0 billion at quarter end. Source

Strategy and investment

  • Data Intelligence and AI named as growth basis: The CEO cited the expansion into Data Intelligence and momentum in AI and hyperscale products as the basis for long-term growth. Source
  • Pure1 AI Copilot now acts as operator: Pure1 AI Copilot moved from a conversational assistant to an active operator that analyzes performance anomalies and guides root-cause analysis and resolution. Source
  • Partner integrations with Cisco and Databricks: FlashBlade integration into Cisco Intersight reached general availability. The OpenSharing Connector lets Databricks query Iceberg and Delta tables on Everpure object storage. Source

Industry recognition

  • Gartner Leader for second year: Named a Leader in the 2026 Gartner Magic Quadrant for Enterprise Storage Platforms, positioned highest in execution and furthest in vision. Source
  • Red Hat and Forrester recognition: Named Virtualization Transformation Partner of the Year in the 2026 Red Hat Ecosystem Innovation Awards, and recognized as a Leader in The Forrester Wave for Object Storage Solutions, Q2 2026. Source
  • CEO named to CRN executives list: CEO Charles Giancarlo was recognized on CRN’s list of the 25 most influential executives of 2026. Source

Figures management reported

FigureReported
Gross margin SourceGAAP 68.4%; non-GAAP 69.9%
Product gross margin SourceGAAP 65.3%; non-GAAP 66.2%
Subscription services gross margin SourceGAAP 72.7%; non-GAAP 74.9%
Remaining performance obligations (backlog) Source$4.1 billion, up 44%

Earlier plans management reported on

  • Ahead: Management said second-quarter results exceeded the high end of the guidance it had given. Second-quarter revenue was $1,185.9 million against the $1.095B to $1.105B range in the first-quarter release. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.