Everpure comfortably beat its quarterly $1 billion guidance with $1.1 billion in revenues for its first fiscal 2027 quarter, ended May 3, as surging AI demand overcame supply chain-induced price rises.
This was a year/year increase of 35 percent, with $24.1 million in GAAP net income; a substantial turnaround from the year-ago $14 million loss. Its sales performance has been positively affected by industry-wide cost and price increases, with Everpure saying it had an all-flash array market share gain,
Chairman and CEO Charles Giancarlo was full of good news, saying; “Q1 was another outstanding and a truly remarkable quarter, reflected in the strength of both top and bottom line. Revenue growth of 35% year on year is a very strong start to our Fiscal Year 27. Operating profit nearly doubled year-over-year to $159 million. Sales momentum started off strong, and continued to build throughout the quarter. Revenue and operating profit exceeded the high end of our guidance range and we foresee continued strength throughout the year as will be seen in our revised full-year guidance.”
It was Everpure’s ninth successive growth quarter and the one with the steepest rise. CFO Tarek Robbiati said: “Price increases have led to higher sales per unit and customer pull-ins to buy ahead of future price increases. We estimate that these two effects represented nearly a third of our Q1 year-on-year revenue growth, and will continue to drive performance in future quarters this year.”
He added: ”Growth was driven by broad-based strength across our core businesses and geographies. Large deals above $5 million were up in high double digits compared to prior year, and our commercial business also showed strong momentum. New customer logos were up 20 percent year-on-year,” to 275.
About the market share gain; he said: ”We are now beginning to displace competitive AI storage products in the enterprise and Neo-cloud markets as customers transition to our FlashBlade family for its unmatched performance, operational simplicity, flexibility, and overall quality.”
Financial summary
- Gross margin: 68.7 percent vs 69.9 percent last quarter
- Operating cash flow: $180 million vs prior quarter’s $268 million
- Free cash flow: $112 million vs prior quarter’s $201 million
- Cash, restricted cash & investments: $1.5 billion vs year-ago $1.6 billion
The operating cash flow numbers were down, Robbiati said, due to “elevated sales activity, including higher commission payments pertaining to Q4 overachievement driven by the strong demand environment, as well as merit bonus payments.”
Free cash flow numbers were reduced due to capital investments which “supported the continued scaling of our hyperscale business as we ramp up investments to qualify more NAND for various Hyperscalers, Tech Titans and Cloud Providers and accelerate growth of our Evergreen//One subscription offering.”
Giancarlo said:”As expected, Q1 included relatively little revenue associated with our hyperscale products. As discussed last quarter, we expect hyperscale product revenue to rise significantly in Q3 and Q4, based on customer order commitments.” There should be further rises next year.
Robbiati pointed out that: ”International revenue represented 30 percent of total revenue in Q1 2027. Scaling our international presence represents a significant opportunity and a key strategic focus for the company.”
Next quarter’s revenue guidance is $1.1 billion +/-$5 million; a 27.8 percent increase at the mid-pont and the fy 2027 revenue guidance has been uplifted from $4.35 billion +/- $50 million to $4.46 billion +/- $5 million; a narrower band and a 20.5 percent Y/Y increase. Everpure had forecast an 18.8 percent increase three months ago. The fiscal year has started out very well indeed.