Everpure, Inc.

Q2 revenue increased 38% year over year; product revenue was $687 million, up 54%; subscription services revenue was $499 million, up 20%; operating profit was $230 million, up 77%; total gross margin was 69.9%; product gross margin was 66.2%; subscription services margin was 74.9%; U.S. revenue was $688 million, up 19%, and international revenue was $498 million, up 75%. For cash flow, cash from operations was negative $136 million, capex was $101 million, and free cash flow was negative $238 million; cash and investments were over $1 billion. Guidance: Q3 revenue is expected to be $1.325 billion to $1.335 billion and operating profit $265 million to $275 million. FY27 revenue guidance was raised to $5.030 billion to $5.070 billion, with operating profit expected at $940 million to $960 million. Management said FY27 hyperscaler revenue will still be mostly recognized in the second half, while the new second top-5 hyperscaler agreement should contribute de minimis revenue in FY27 and ramp meaningfully in FY28.

Charlie Giancarlo framed the quarter as evidence that Everpure has entered what he called “breakout territory” in its core enterprise market, driven by a broader product lineup, a unified software base, and stronger market share gains. He said growth acceleration has been steady over the last 8 quarters and argued the higher growth rate should be sustainable for some time, supported by demand in enterprise, AI, virtualization, and hyperscale. His tone was confident and emphatic, especially around the second top-5 hyperscaler win, the Gartner ranking, and the belief that pricing and supply dynamics now favor the company.

Tarek Robbiati highlighted that Q2 beat the top end of guidance on both revenue and operating profit, with 38% revenue growth and 77% operating profit growth, and called out a third straight quarter above the Rule of 40. He said the quarter’s strength came from price, mix, capacity growth, and broad-based demand, while product gross margin at 66.2% remained in the long-term 65% to 70% range; he also said the company is intentionally operating at the low end of that range to gain share. On cash, he noted over $1 billion in cash and investments, negative $136 million in operating cash flow due mainly to strategic component purchases, capex of $101 million, and a FY27 free cash flow outlook of $600 million to $800 million; he also said the company repurchased 932,000 shares for about $69 million and had about $176 million remaining under its authorization.

Analysts focused on what changed over the last 90 days, why the full-year guide was raised so sharply, and whether pricing, supply, or demand had shifted. Management said the main changes were that supply-chain concerns eased, the impact of higher prices became clearer in the market, and the company gained more visibility after two quarters of the year. Questions also probed the mix of price versus volume, hyperscaler economics, and whether the second hyperscaler win or strategic buys would alter margins; management said system unit volumes were down even as pricing and higher-capacity configurations drove growth, the hyperscaler business is mostly an FY28 story, and the strategic buys were for the core business rather than hyperscale.