Everpure NYSE: P reported second-quarter fiscal 2027 results that exceeded its guidance, with revenue rising 38% year over year and operating profit increasing 77% to $230 million. Chief Executive Officer Charlie Giancarlo said growth was broad-based across geographies, products and business segments, while the company raised its full-year outlook on continued demand strength and improved visibility into supply availability.
Giancarlo said the company’s revenue growth has accelerated over the past eight quarters and that management believes the higher growth rate can be sustained “for some time.” He attributed the momentum to the expansion of Everpure’s product portfolio, its unified Purity software platform, its DirectFlash technology, and the growth of its Evergreen//One storage-as-a-service offering.
“We have entered into breakout territory in our core enterprise market,” Giancarlo said, citing the company’s product architecture, go-to-market expansion and broader brand recognition across enterprise, mid-market and government customers.
Revenue, Profit and Subscription Growth
Product revenue increased 54% year over year to $687 million in the quarter. Subscription services revenue rose 20% to $499 million and represented 42% of total company revenue. Annual recurring revenue increased 20% to more than $2 billion, while remaining performance obligations increased 44% to more than $4 billion.
Chief Financial Officer Tarek Robbiati said the results marked the company’s third consecutive quarter above the Rule of 40, a measure combining revenue growth and profitability. Total gross margin was 69.9%, including product gross margin of 66.2% and subscription-services margin of 74.9%.
Management said demand remained resilient despite higher component costs and price increases. Robbiati said the quarter’s growth reflected pricing, a shift toward higher-performance configurations and higher capacity per system, while overall system unit volumes declined.
- Deals above $5 million grew 59% year over year.
- Deals above $20 million increased 385% year over year.
- U.S. revenue was $688 million, up 19%.
- International revenue was $498 million, up 75% and accounted for 42% of total revenue.
Giancarlo said Everpure is deliberately operating at the lower end of its long-term 65% to 70% product gross-margin range in order to share component-cost pressures with customers and support market-share gains. Robbiati said the company expects margins to move toward the upper end of that range after semiconductor costs stabilize closer to original levels.
Evergreen//One Momentum
Evergreen//One total contract value reached an annualized run rate above $1 billion for fiscal 2027, according to management. Storage-as-a-service portfolio TCV, which includes Evergreen//One, rose 121% year over year to $277 million in the second quarter.
Management said the current pricing environment has strengthened the appeal of Evergreen//One because the consumption-based offering gives customers more predictable spending and lower upfront capital requirements. Giancarlo said the company did not raise Evergreen//One pricing as much as traditional product pricing, helping customers plan around lower costs over a longer period.
Average Evergreen//One contracts typically run between three and four years, Giancarlo said. The company has seen increased demand for the offering as customers confront higher prices for traditional storage products.
AI, Data Management and Hyperscale Expansion
Everpure highlighted growth opportunities in artificial intelligence, data management and virtualization. Giancarlo said the company’s Data Intelligence offering, including capabilities gained through its 1touch acquisition, is designed to help enterprises identify distributed data sources, understand their context and prepare data for AI applications.
The company said more than 2,000 of its 15,000 customers now have enterprise data-cloud capabilities. It also reported first-quarter sales for DataStream, an offering built on NVIDIA’s AI Data Platform, and continued adoption of FlashBlade//S and FlashBlade//EXA systems for enterprise AI and large-scale AI environments.
In virtualization, Everpure said its alternatives to VMware—including Portworx with Red Hat OpenShift and Nutanix virtualization—have grown to a run rate of more than $100 million annually.
On Aug. 10, Everpure announced a design win and supply agreement with a second top-five hyperscaler. Management expects the agreement to contribute only minimally to fiscal 2027 revenue, with a meaningful ramp beginning in fiscal 2028. The company continues to expect significant hyperscale revenue in the third and fourth quarters of fiscal 2027 from existing commitments.
Giancarlo said DirectFlash currently is primarily replacing SSDs in hyperscale environments. Chief Technology and Growth Officer Rob Lee said the technology can provide higher reliability, density and power efficiency than SSD-based deployments. Lee said the second hyperscale customer’s implementation is substantially similar to the first customer’s design, including initial use in higher-performance storage tiers.
Cash Flow, Supply Purchases and Outlook
Everpure ended the quarter with more than $1 billion in cash and investments. Cash flow from operations was negative $136 million, largely due to strategic purchases of NAND and other components intended to support demand and mitigate further cost inflation. Free cash flow was negative $238 million after $101 million in capital expenditures.
Robbiati said the company expects operating cash flow to normalize over the next two quarters and forecast fiscal 2027 free cash flow of $600 million to $800 million. Everpure repurchased 932,000 shares for about $69 million during the quarter and had approximately $176 million remaining under its existing repurchase authorization.
For the third quarter, Everpure forecast revenue of $1.325 billion to $1.335 billion, representing approximately 38% year-over-year growth at the midpoint. It expects operating profit of $265 million to $275 million.
For fiscal 2027, the company raised its revenue outlook to $5 billion to $5.7 billion, with midpoint growth of 38% year over year. It forecast operating profit of $940 million to $960 million, representing approximately 50% growth at the midpoint.
Robbiati said the guidance increase reflects strong second-quarter execution, improved short-term pipeline visibility, continued customer demand despite price increases, and strategic component purchases that have provided supply coverage for the foreseeable future.
About Everpure (NYSE:P)
Pure Storage, Inc provides data storage technologies, products, and services in the United States and internationally. The company's Purity software is shared across its products and provides enterprise-class data services, such as data reduction, data protection, and encryption, as well as storage protocols, including block, file, and object. Its products portfolio includes FlashArray for block-oriented storage, addressing databases, applications, virtual machines, and other traditional workloads; FlashArray//XL; and FlashArray//C, an all-QLC flash array.
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