Everpure, Inc. (P)

Everpure, formerly known as Pure Storage, is a global technology company providing an integrated storage and data management platform. The company operates in the intensely competitive data storage market, which is characterized by constant change, evolving customer requirements for capacity, performance scalability, and enterprise features, and competition from legacy vendors, cloud providers, and hyperconverged product vendors. The data storage market has not experienced substantial growth in the past few years due to technology transitions, increased storage efficiency, competitive pricing dynamics, and changing economic and business environments, with some customers shifting spending toward the public cloud and software as a service.

The company's main competitors include legacy vendors such as Dell EMC, NetApp, Hitachi Vantara, HP Enterprise, and IBM, as well as cloud providers and vendors of hyperconverged products. Everpure competes favorably based on product and service innovation, pricing and total cost of ownership, product interoperability, environmental sustainability designs, global sales and distribution capability, ability to take advantage of improvements in industry standard components, and customer support and service. The company is in approximately 64% of Fortune 500 companies and has a certified customer Net Promoter Score of 84 as of December 31, 2025 ¹.

The company generates revenue from two sources: product revenue, which includes sales of integrated storage hardware and embedded licensed software products, royalties from hyperscaler shipments, and sales of Portworx term software licenses; and subscription services revenue, which includes sales of Evergreen, Portworx, and Everpure Cloud consumption and subscription-based offerings, support and maintenance, and professional services. The company's subscription offerings include Evergreen//One, which provides outcome-based SLAs across capacity, performance, efficiency, availability, and durability, and Evergreen//Flex, a fleet-level Evergreen architecture with lower upfront cost and flexible pay-as-you-go subscription. The global customer base is over 14,500 at the end of fiscal 2026 ².

FlashArray provides solutions addressing database, application, virtual machine and other traditional workloads, and was the industry's first all-flash array. FlashArray has evolved through seven generations of controllers, a 100x increase in density, and a transition to all-NVMe flash. The FlashArray family includes FlashArray//ST for ultra-high-performance applications, FlashArray//XL which delivers 930% more IOPS per rack unit, 310% more IOPS per watt, and 460% more TB per rack unit compared to competitive solutions, FlashArray//X which supports Tier 1 databases to cloud-native applications with the latest R5 edition delivering up to 30% higher performance and up to a 40% capacity increase, FlashArray//C incorporating QLC flash to modernize and replace hybrid-flash and Tier-2 disk arrays, FlashArray//RC20 introduced in fiscal 2026 for edge use cases and smaller deployments, and FlashArray//E delivering an 80% reduction in power and space, 60% lower operational costs, and 85% less e-waste compared to disk ³.

FlashBlade provides solutions for managing and processing unstructured data workloads, from real-time log analytics and commercial HPC to data protection and recovery, and can manage data for large scale AI training environments. The FlashBlade family includes FlashBlade//S using all-QLC architecture and DirectFlash modules with up to 25% better performance across AI, HPC, EDA, genomics, and analytics workloads compared to competing systems, FlashBlade//E providing up to five times less power consumption, and FlashBlade//EXA introduced in March 2025, which is projected to deliver more than 10+TBs per second read performance and greater than 20x more files in a single namespace. Everpure Cloud services deliver an enterprise-grade virtual block storage array supporting Amazon Web Services and Microsoft Azure. Portworx by Everpure is the market leader in cloud-native Kubernetes data management, providing enterprise-grade container storage coupled with data-protection workflows such as Kubernetes backup, disaster recovery, and portability between on-premise, hybrid cloud and multi-cloud environments.

In fiscal 2026, shipments began on the industry-first Flash design win with a major hyperscaler, and shipments exceeded the annual forecast with more shipments anticipated in fiscal 2027. In 2025, the company released its 300 terabyte DirectFlash Module, delivering up to 18 times the capacity of standard hard drives and seven times the capacity of the largest SSDs ⁴. In March 2025, the company introduced FlashBlade//EXA to expand its AI portfolio. In February 2026, the company entered into a definitive agreement to acquire 1touch for total stated cash consideration of $125.0 million ⁵, expected to close in the second quarter of fiscal 2027. In June 2025, the company entered into a Credit Agreement providing for a five-year, senior unsecured revolving credit facility of $500.0 million ⁶. During fiscal 2026, the Board of Directors authorized additional share repurchases of up to $650.0 million ⁷, and the company repurchased and retired approximately 5.6 million shares of common stock at an average purchase price of $60.93 per share for an aggregate repurchase price of $342.5 million ⁸. The company also withheld approximately 4.2 million shares to cover $271.7 million in tax withholding obligations ⁹.

Total revenue for fiscal 2026 was $3,662,843,000 ¹⁰, representing a 16% increase from $3,168,164,000 ¹¹ in fiscal 2025. Product revenue was $1,971,678,000 ¹² compared to $1,699,494,000 ¹³ in the prior year, and subscription services revenue was $1,691,165,000 ¹⁴ compared to $1,468,670,000 ¹⁵. Net income was $188,181,000 ¹⁶ versus $106,739,000 ¹⁷ in fiscal 2025. Diluted EPS was $0.55 ¹⁸ compared to $0.31 ¹⁹ in the prior year. Total gross margin was 70% ²⁰ in both fiscal 2026 and fiscal 2025. Net cash provided by operating activities was $880,085,000 ²¹ compared to $753,598,000 ²² in the prior year.

The company raised its prices during the first quarter of fiscal year 2027 in response to component cost increases, which may result in reduced sales or the loss of customers. Due to higher component costs, the company expects product gross margin to sequentially decline in the first quarter of fiscal 2027 and normalize on a full year basis. The company anticipates continued component pricing volatility throughout fiscal 2027.

The company is devoting significant resources toward expanding sales to its existing hyperscale customer and to additional hyperscale customers, believing the opportunity is significant and that sales to hyperscalers may in the future account for a significant portion of revenue. More shipments are anticipated in fiscal 2027 for the existing hyperscale design win, as the company's Purity software and integrated DirectFlash hardware technology are expected to continue freeing up significant amounts of data center power and space for this customer and significantly reduce failure rates and maintenance costs associated with legacy disk storage, while doubling the expected lifetime of their storage infrastructure. The company continues to advance the density roadmap for DirectFlash in close collaboration with key QLC flash partners.

The acquisition of 1touch, expected to close in the second quarter of fiscal 2027, will extend the company's data management capabilities by adding data discovery and semantic context to the Everpure Platform, allowing organizations to transform raw data into actionable insights more quickly. The company continues to expand and strengthen its SLA portfolio and cloud-like service capabilities, with features such as Adaptive performance guarantees and Snapshot Retention aiming to deliver defined operational outcomes. The company plans to continue investing globally in significant resources for ongoing research and development efforts, with key incremental investments focusing on accelerating density of direct flash modules, increasing the operational scale of supply chain partners to support large production deployments for the hyperscaler customer, and accelerating product development.

The company expects operating expenses to continue to increase in absolute terms, including investments in marketing, sales, support and research and development, as well as investments to scale operations to support the hyperscaler customer and capture additional growth opportunities. The company anticipates that subscription services revenue will continue to increase and in-line with the overall growth rate as more customers choose to consume storage solutions as a service and existing Evergreen subscription customers renew and expand their offerings. The company expects cost of product revenue to increase in absolute dollars as product revenue increases, and cost of subscription services revenue to increase in absolute dollars as subscription services revenue increases.

The company plans to continue expanding and training its sales force, both domestically and internationally, and intends to continue to invest in its channel partners. The company increased headcount by approximately 8% in fiscal 2026 to advance innovation, customer experience, and expanded sales coverage ²³. The company expects research and development expenses to increase in absolute dollars, sales and marketing expenses to increase in absolute dollars including investments to capture additional growth opportunities in the enterprise market, and general and administrative expenses to increase in absolute dollars including investments in back-office systems to support continued business growth.

Capital expenditures in fiscal 2026 were $264.3 million ²⁴, including investments for data center expansion to support testing of new products and services, investments to scale operations in support of the hyperscaler customer, and funding of initiatives aimed at accelerating Evergreen//One subscription growth. During fiscal 2026, the Board of Directors authorized additional share repurchases of up to $650.0 million ²⁵, of which $329.0 million remained available at the end of fiscal 2026 ²⁶. The company has never declared or paid cash dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. Stock-based compensation expense was $481,652,000 ²⁷ in fiscal 2026.

The company faces headwinds from uncertain macroeconomic conditions, including tariffs, inflation, elevated interest rates, geopolitical tensions, and political and fiscal challenges in the United States and abroad, which have and may continue to have an adverse effect on customer budgets, confidence and demand. The cost of components increased significantly during fiscal 2026, and elevated global demand for components has made future cost fluctuations highly unpredictable. The company's supply chain has been and may continue to be adversely impacted by component cost increases, and in response the company raised prices during the first quarter of fiscal 2027, which may result in reduced sales or the loss of customers.

The company faces intense competition from established companies with greater name recognition, larger sales and marketing budgets, broader distribution, and substantially greater financial, technical and other resources. Many competitors have long-standing relationships with key decision makers at current and prospective customers, which may inhibit the company's ability to compete. The evolving market for data storage and data management products makes it difficult to forecast demand, and the company may be unable to capture significant storage workloads for AI environments and hyperscalers. The company's strategy to compete directly with hard disk systems may take longer than anticipated or may not succeed due to unforeseen factors.

Management's message emphasizes the company's strategic evolution from redefining storage to rethinking data management, as reflected in the name change from Pure Storage to Everpure, Inc. in February 2026. The company is executing a focused strategy to modernize and simplify data infrastructure for customers as AI adoption increases and power, space, and operational constraints intensify. Management highlights six strategic growth pillars: expanding all-flash into new use cases served by disk today, delivering hybrid cloud architecture and data services for modern applications, growing the subscription services business and driving differentiation with as-a-Service and Cloud operating model, integrated data management as a long-term growth driver, delivering integrated dataset management across hybrid and multi-cloud environments, and expanding the AI portfolio into the most demanding specialty GPU clouds and HPC environments. The company raised prices during the first quarter of fiscal year 2027 in response to component cost increases, and expects product gross margin to sequentially decline in the first quarter of fiscal 2027 and normalize on a full year basis. Management believes the opportunity to sell solutions to the existing hyperscale customer and additional hyperscalers is significant, and that sales to hyperscalers may in the future account for a significant portion of revenue.

Total revenue for fiscal 2026 was $3,662,843,000 ²⁸ compared to $3,168,164,000 ²⁹ in fiscal 2025. Net income was $188,181,000 ³⁰ versus $106,739,000 ³¹ in the prior year. Diluted EPS was $0.55 ³² compared to $0.31 ³³ in fiscal 2025. Product revenue was $1,971,678,000 ³⁴ versus $1,699,494,000 ³⁵, and subscription services revenue was $1,691,165,000 ³⁶ versus $1,468,670,000 ³⁷. Total gross margin was 70% ³⁸ in both periods, with product gross margin of 67% ³⁹ in fiscal 2026 versus 66% ⁴⁰ in fiscal 2025, and subscription services gross margin of 74% ⁴¹ in both years. Income from operations was $114,816,000 ⁴² compared to $85,258,000 ⁴³ in the prior year. Net cash provided by operating activities was $880,085,000 ⁴⁴ versus $753,598,000 ⁴⁵. Free cash flow is not explicitly stated but operating cash flow of $880,085,000 ⁴⁶ less capital expenditures of $264,344,000 ⁴⁷ yields approximately $615.7 million. Cash, cash equivalents and marketable securities were $1,547,319,000 ⁴⁸ at the end of fiscal 2026 compared to $1,521,820,000 ⁴⁹ at the end of fiscal 2025. There were no outstanding borrowings under the $500.0 million ⁵⁰ revolving credit facility at the end of fiscal 2026. The company recognized a gain of $27.5 million ⁵¹ from the sale of a publicly-held equity security during fiscal 2026. Restructuring and impairment charges were $0 ⁵² in fiscal 2026 compared to $15,901,000 ⁵³ in fiscal 2025. Subscription annual recurring revenue was $1,924,338,000 ⁵⁴ at the end of fiscal 2026, representing 16% year-over-year growth ⁵⁵. Remaining performance obligations were $3.7 billion ⁵⁶ at the end of fiscal 2026, with 40% year-over-year growth ⁵⁷ compared to 14% ⁵⁸ at the end of fiscal 2025.

The company's business, operating results, and cash flows may be adversely impacted by uncertain macroeconomic conditions, including tariffs, inflation, elevated interest rates, and geopolitical tensions, particularly in the United States where the company derives the majority of its revenue. The company relies on a limited number of suppliers, and in some cases single-source suppliers, for several key components, and any disruption or termination of supply arrangements could delay shipments and harm customer relationships. The cost of components increased significantly during fiscal 2026, and the company raised prices during the first quarter of fiscal 2027 in response, which may result in reduced sales or loss of customers. The company is devoting significant resources toward developing flash storage solutions for hyperscalers, but there can be no assurance that these efforts will lead to meaningful revenue, operating margin, or cash flow, or additional hyperscaler design wins. The company faces intense competition from established companies with substantially greater financial, technical and other resources, including Dell EMC, HP Enterprise, Hitachi Vantara, IBM, and NetApp, as well as cloud providers and vendors of hyperconverged products.