Everpure, Inc. (P) FY2026 10-K and Q2 FY2027 10-Q Summary

Business

From the fiscal 2026 Form 10-K, accession 0001474432-26-000027.

Everpure sells enterprise data storage and data-management systems to businesses, governments, cloud and managed service providers, and hyperscale data-center operators. It makes money in two ways. Product revenue ($1.97 billion in fiscal 2026) comes from its all-flash storage arrays, FlashArray and FlashBlade, which run its own Purity software, plus Portworx term software licences and royalties on hyperscaler shipments. Subscription services revenue ($1.69 billion) comes from Evergreen support and upgrade subscriptions, the Evergreen//One storage-as-a-service offering, Everpure Cloud and Portworx subscriptions, and professional services. Total fiscal 2026 revenue was $3.66 billion. The company reports a single segment. By billing address, 67% of fiscal 2026 revenue came from the United States ($2.46 billion) and 33% from the rest of the world ($1.20 billion).

The company was known as Pure Storage, Inc. until February 23, 2026, when it renamed itself Everpure, Inc. (8-K, accession 0001474432-26-000011). The shares kept trading under PSTG at first and now trade on the NYSE under the symbol P. Everpure is headquartered in Santa Clara, California.

Technology and products. The core of the business is flash storage built around in-house DirectFlash modules. These modules work directly with raw NAND flash rather than going through commodity solid-state drives, and in 2025 the company released a 300 TB module. Purity is the single operating environment across the product line, Pure1 is the cloud-based management layer, and Everpure Fusion automates storage provisioning and policy across a customer's fleet. The company calls the combination the "Everpure Platform" and markets it as a way for customers to build an "Enterprise Data Cloud".

• FlashArray covers block, file and object storage for databases, applications and virtual machines. Models include //XL and //X (TLC flash, high performance), //ST (ultra-high performance), //C and the new //RC20 (QLC flash, aimed at replacing hybrid and Tier-2 disk), and //E (large repositories up to 4 PB).
• FlashBlade is scale-out storage for unstructured file and object data. It comes as //S (all-QLC), //E (large repositories priced close to disk) and //EXA, introduced in March 2025 for GPU-cloud and high-performance-computing AI workloads.
• Evergreen is the subscription model that lets customers upgrade hardware and software without disruption. Evergreen//One is a hardware-independent storage service sold against service-level agreements, in which Everpure pays the customer's power and rack-space costs. Evergreen//Flex combines owned hardware with pay-as-you-go pricing.
• Everpure Cloud runs Purity as virtual block storage on AWS and Microsoft Azure. Portworx provides Kubernetes container storage and data protection.

Hyperscale. In fiscal 2026, shipments began under the company's first flash design win with a major hyperscaler, and they exceeded the company's annual forecast. The hyperscaler buys third-party hardware from Everpure's supply-chain partners, and that hardware carries a perpetual licence to Everpure's intellectual property. Everpure books royalties on those shipments as product revenue when the partners ship.

Customers, go-to-market and operations. Everpure had more than 14,500 customers at the end of fiscal 2026, including about 64% of the Fortune 500. It sells through a direct sales force working jointly with channel partners and service providers. Contract manufacturers build all of its products to its forecasts. Sales are usually lowest in the first fiscal quarter and highest in the fourth. The main competitors are Dell EMC, NetApp, Hitachi Vantara, HP Enterprise, IBM and Huawei, along with public-cloud providers and hyperconverged vendors. The company holds more than 3,000 issued patents and patent applications and had about 6,400 employees at fiscal year-end (about 3,700 in the US). Headcount grew about 8% during fiscal 2026.

Data management and 1touch. Everpure is pushing beyond storage into data governance for AI. On February 20, 2026 it agreed to buy 1touch, a data-intelligence and orchestration company whose tools discover, classify and add context to enterprise data. The stated price was $125.0 million in cash, subject to closing adjustments. The deal closed during the current quarter (see Current quarter).

Risks

From the fiscal 2026 Form 10-K (accession 0001474432-26-000027), updated where noted by the second-quarter fiscal 2027 Form 10-Q (accession 0001474432-26-000088).

The risks below are the ones most specific to Everpure's current position:

• Component cost inflation and pricing. Component costs, including flash and DRAM, rose significantly in fiscal 2026, and the company expects price volatility to continue through fiscal 2027. It raised its own prices in the first quarter of fiscal 2027. The 10-Q says prices rose during the first half and may have to rise again, which could cost sales or customers. Supply agreements soften this volatility but do not remove it.
• Supply commitments tied to hyperscale demand. To secure flash for hyperscale customers, Everpure has signed agreements under which suppliers sell set volumes directly to contract manufacturers. If the contract manufacturers do not buy the full volume, Everpure must buy the remainder. Prices are fixed or set within a range well in advance. If hyperscale demand falls, or market prices drop below the committed price, the company could be left with excess components at above-market cost, inventory write-downs and lower margins (10-Q).
• Hyperscaler bet. Winning a hyperscaler design win takes substantial investment in a single customer with no guarantee of revenue. A design win does not guarantee purchases, and the volume and timing of any purchases are hard to predict. If a hyperscale customer delays, cuts or cancels purchases, or if Everpure cannot fill its orders, results would suffer.
• Supply chain concentration. Everpure relies on a small number of contract manufacturers and on limited or single-source suppliers for key components. Some components come from outside the US, including China, so tariffs and trade-policy changes can raise costs or force price increases.
• Competition. Larger incumbents can bundle storage, discount heavily or give it away, and use their existing customer relationships to discourage evaluations. Public-cloud providers that build their own storage reduce demand for products like Everpure's.
• Subscription transition and revenue mix. Evergreen//One and other consumption offerings recognize revenue over the contract term, not on shipment. A shift in mix toward them can depress reported product and total revenue growth in the near term. Renewal rates and renewal terms are uncertain.
• Gross margin variability. Margins move with component costs, discounting, and customer and product mix. They also depend on the share of lower-margin products such as FlashBlade//E, FlashArray//E and FlashArray//C, and on hyperscale volumes.
• Channel economics. The company recently increased partner incentive compensation, which it expects to reduce revenue, with no assurance that sales will rise to match.
• Operating leverage and profitability. Expenses are largely fixed in the short term, and the company plans to keep investing heavily, including to support hyperscale customers. It warns it may report GAAP losses even while revenue grows.
• Cybersecurity and product defects. A breach of Everpure's systems or a vulnerability in its products could cause data loss for customers, liability and damage to its reputation. The company notes that AI is making attacks more sophisticated.
• Government sales. Public-sector demand depends on budget cycles and can be hit by shutdowns. Contracts can be terminated for convenience, and some agencies require US manufacturing.
• Tax. The US One Big Beautiful Bill Act, enacted July 4, 2025, lowered current tax expense, but future guidance could change that. Pillar Two global minimum tax rules could raise the effective tax rate. A full valuation allowance remains on US deferred tax assets, and the company says part or all of it could be released within 12 months.
• People. Everpure hired a new chief financial officer and a new chief revenue officer in fiscal 2026. Competition for sales and engineering talent is intense.
• Stock-specific. The company has never paid a dividend and does not expect to. The classified board and Delaware anti-takeover provisions could deter a change of control.
• Acquisitions. Integrating 1touch and any future deals carries execution, personnel-retention and impairment risk.

Management's Discussion, fiscal 2026

From the fiscal 2026 Form 10-K, accession 0001474432-26-000027.

Fiscal 2026 revenue rose 16% to $3.66 billion from $3.17 billion. Product revenue grew 16% to $1.97 billion. Management attributes the growth to enterprise sales of FlashArray//XL, FlashArray//X and the //E family, plus royalties from hyperscaler shipments. Subscription services revenue grew 15% to $1.69 billion, driven by Evergreen//One and renewals of Evergreen subscriptions across the installed base. US revenue grew 12% and rest-of-world revenue grew 25%.

Three forward indicators diverged:

• Subscription annual recurring revenue (ARR) reached $1.92 billion at year-end, up 16%. Growth slowed from 21% a year earlier, which management attributes mainly to longer-term Evergreen renewals.
• Subscription net dollar retention was 113%, down from 117%.
• Remaining performance obligations (RPO) were $3.7 billion, up 40% compared with 14% growth a year earlier. Management credits large deals and the strength of Evergreen//Forever and Evergreen//One. It expects about 45% of RPO to be recognized as revenue within 12 months.

Margins and costs. Total gross margin held at 70%. Product gross margin edged up to 67% from 66% on product mix and hyperscaler royalties, partly offset by higher component costs. Management warned that component costs would push product margin down sequentially in the first quarter of fiscal 2027 before it normalized over the full year. Subscription gross margin was steady at 74%. Operating expenses rose 16% to $2.46 billion, mainly on higher headcount, compensation and stock-based compensation: R&D rose 20%, sales and marketing 16%, and G&A 11%. Fiscal 2025 had $15.9 million of restructuring and impairment charges; fiscal 2026 had none.

Earnings. Operating income rose to $114.8 million from $85.3 million. Other income increased to $109.5 million from $62.6 million on foreign-exchange gains and a gain on the sale of an equity security. The tax provision fell to $36.1 million because the One Big Beautiful Bill Act restored immediate deduction of domestic R&D costs. Net income was $188.2 million ($0.55 per diluted share), up from $106.7 million ($0.31).

Cash and capital. Operating cash flow was $880.1 million, up from $753.6 million, and capital expenditures were $264.3 million. Major capital projects included data-center expansion for product testing, capacity to support the hyperscale customer, and Evergreen//One equipment. The company bought back 5.6 million shares for $342.5 million at an average of $60.93 per share. It also spent $271.7 million to cover employee tax withholding on vested equity. In June 2025 it replaced its $300.0 million revolving credit facility, repaying the $100.0 million drawn, with an undrawn $500.0 million unsecured revolver that matures June 10, 2030. Year-end cash, cash equivalents and marketable securities totalled $1.5 billion with no debt outstanding. Non-cancelable purchase obligations stood at $565.8 million.

Current quarter, second quarter of fiscal 2027

From the Form 10-Q for the quarter ended August 2, 2026 (accession 0001474432-26-000088), and the second-quarter results release furnished on Form 8-K on August 26, 2026 (accession 0001474432-26-000084).

Growth accelerated sharply. Revenue rose 38% to $1.19 billion from $861.0 million, ahead of the company's May guidance of $1.095 billion to $1.105 billion. The company described it as the eighth straight quarter of accelerating revenue growth.

• Product revenue jumped 54% to $686.8 million. The 10-Q attributes the increase to:
  • stronger demand for FlashArray and FlashBlade across all key regions, especially from large enterprises;
  • higher pricing, together with a mix shift toward higher-performance configurations and more terabytes per system;
  • to a lesser extent, hyperscaler royalties.
• Subscription services revenue rose 20% to $499.1 million. Subscription ARR reached $2.13 billion, also up 20%, compared with 18% growth a year earlier, which the company attributes to Evergreen subscription growth and strong renewals.
• RPO reached $4.1 billion, up 44%. About 42% is expected to be recognized within 12 months. The total includes $44.5 million from a lessor arrangement: multiple seven-year leases of Everpure systems with total net consideration of $377.0 million. Their sales-type lease components produced $38.1 million of product revenue in the first half.
• Geography. International revenue grew 75% to $497.5 million. US revenue grew 19% to $688.4 million.

Margins and earnings. Rising component prices pulled GAAP gross margin down to 68.4% from 70.2%. Product gross margin was 65.3% (66.3% a year earlier) and subscription gross margin was 72.7% (74.4%). On the subscription side the company cites higher part-replacement costs, depreciation on Evergreen//One assets, and amortization of capitalized software for Everpure Fusion and Everpure Cloud Azure Native. Operating expenses rose 25% to $748.2 million, more slowly than revenue. Headcount-driven compensation and higher commissions were the main causes, and G&A also included 1touch transaction costs. GAAP operating income rose to $63.2 million (a 5.3% margin) from $4.9 million. Non-GAAP operating income was $229.6 million (a 19.4% margin). That non-GAAP figure excludes $159.8 million of stock-based compensation, $5.4 million of payroll tax on equity activity and $1.3 million of acquired-intangible amortization. Other income fell to $9.0 million from $45.7 million, because the year-earlier quarter included a $28.0 million unrealized gain on an equity security. A $2.0 million tax benefit, helped by discrete benefits tied to the 1touch acquisition, lifted net income to $74.1 million ($0.21 per diluted share) from $47.1 million ($0.14).

Cash flow turned negative on a component build. Operating cash flow for the quarter was an outflow of $136.3 million, compared with an inflow of $212.2 million a year earlier, and free cash flow was negative $237.6 million (8-K). For the first half, operating cash flow fell to $43.8 million from $496.1 million (10-Q). Management attributes the $625.4 million year-over-year swing in working capital mainly to strategic component purchases to meet customer demand and secure supply. On the balance sheet, other receivables rose to $903.7 million from $250.0 million at fiscal year-end. The company says these consist primarily of amounts due from contract manufacturers for components it bought and resold to them, plus tax-related receivables. Inventory rose to $106.3 million from $75.9 million. During the quarter, conditions in one long-term supply arrangement were met, committing the company to about $1.1 billion of component supply through calendar 2027. Either Everpure or its approved contract manufacturers can make these purchases, and the company expects the contract manufacturers to buy substantially all of the volume in the ordinary course of business.

1touch closed. On May 7, 2026 Everpure completed the 1touch acquisition for total cash consideration of $125.9 million ($125.3 million net of cash acquired). The preliminary purchase-price allocation includes $101.2 million of goodwill and $19.5 million of intangible assets. 1touch's results since closing are not material. Building on it, the company unveiled its Data-Primacy architecture and Everpure Data Intelligence product for automated data discovery and governance at its //Accelerate 2026 event.

Balance sheet and capital return. Cash, cash equivalents and marketable securities fell to $1.0 billion from $1.5 billion at fiscal year-end. The decline reflects the working-capital build, the acquisition, $169.7 million of first-half capital spending, $153.1 million of buybacks and $173.3 million of tax-withholding payments on vested equity. In the quarter the company repurchased 0.9 million shares for $69.0 million at an average of $74.01 per share. The board has authorized up to $1.8 billion in total, of which $176.0 million remained. The $500.0 million revolver was undrawn and the company was in covenant compliance. Deferred revenue grew to $2.52 billion. During the first half the company also signed new headquarters office and data-center leases, expected to start between fiscal 2027 and fiscal 2031, with about $385.8 million of aggregate payments.

Guidance. The company raised its fiscal 2027 outlook for the second time this year:

For the third quarter of fiscal 2027 it guided to revenue of $1.325 billion to $1.335 billion (37%–38% growth) and non-GAAP operating income of $265 million to $275 million. The CFO said demand remained strong despite historic industry price increases in the first half.

Subsequent events

From the Form 10-Q (accession 0001474432-26-000088) and the August 26, 2026 Form 8-K (accession 0001474432-26-000084).

The quarterly report does not include a separate subsequent-events note. It also discloses no acquisitions, divestitures or borrowings after the August 2, 2026 quarter end, and the revolving credit facility was undrawn at that date. Events disclosed after the quarter closed:

• Second hyperscaler design win (August 10, 2026). Everpure announced a design win with a second top-five hyperscaler, built on its DirectFlash architecture, to lower operating costs and free up power and rack space for hyperscale workloads. The 10-Q's risk factors describe the win as secured in August 2026 and repeat that a design win does not guarantee sales or set their timing or volume. No financial terms were disclosed.
• Analyst meeting. The results release scheduled a Financial Analyst Meeting for September 23, 2026 to update the long-term strategy and financial framework.

The subsequent event in the fiscal 2026 10-K was the February 20, 2026 agreement to acquire 1touch for a stated $125.0 million. That deal has since closed: it was completed on May 7, 2026 for $125.9 million, inside the second quarter.