Everpure, Inc.

Q1 revenue increased 35% year over year; product revenue grew 55% to $577 million; subscription services revenue rose 17% to $476 million. Operating profit was $159 million, up more than 90% year over year, with operating margin at 15.1%. Total gross margin was 70.1%; product gross margin was 65.5%, up 150 basis points year over year and down 180 basis points sequentially; subscription services margin was 75.6%. ARR grew 19% to over $2 billion and RPO grew 41% to $3.8 billion. Cash and investments were over $1.5 billion, CFO was $180 million, capex was $68 million, and free cash flow was $112 million. For Q2, management guided to revenue of $1.095 billion-$1.105 billion and operating profit of $195 million-$205 million. For fiscal 2027, management raised guidance to revenue of $4.41 billion-$4.51 billion and operating profit of $820 million-$860 million. Management said hyperscale product revenue should rise significantly in Q3 and Q4, and the full-year guide now implies 48% of revenue will be generated in H1 versus 45% in prior years.

Charlie Giancarlo said the quarter reflected strong top- and bottom-line performance, with broad-based demand, higher win rates and accelerating market share gains. He repeatedly emphasized that the current supply chain crisis and rapid component price inflation are driving both pricing and customer pull-ins, but said Everpure is trying not to profit from the situation and is holding pricing increases below competitors to protect customers and long-term franchise value. He also highlighted momentum in Evergreen/One, Purity Fusion, AI storage wins, and the hyperscale pipeline, while stressing that visibility into the second half remains limited because the environment changes weekly.

Tarek Robbiati said Q1 revenue growth of 35% and operating profit growth of more than 90% both exceeded the high end of guidance. He broke out product revenue at $577 million, subscription services revenue at $476 million, ARR above $2 billion, RPO at $3.8 billion, and PCB sales for Storage-as-a-Service at $165 million, up 73% year over year. On margins, he cited total gross margin of 70.1%, product gross margin of 65.5%, and subscription margin of 75.6%, and said 1touch is expected to be about $12 million dilutive to operating profit in fiscal 2027 before turning accretive within 24 months post-synergies. He also noted $180 million of operating cash flow, $68 million of capital investments, $112 million of free cash flow, $84 million of share repurchases, and $245 million remaining under the repurchase authorization.

Analysts focused on how much of Q1 growth came from pricing and pull-ins, what that means for second-half demand, and whether supply shortages or AI infrastructure timing could cause a sharper deceleration. Management said about one-third of Q1 growth came from pricing and pull-ins, but insisted the rest was volume driven and that demand remains robust; they also said they are not building additional pull-forward into the second-half forecast. On hyperscalers, management said revenue is based on customer order commitments made before the fiscal year and reiterated that hyperscale shipments should ramp meaningfully in Q3 and Q4. On Evergreen/One, management said the product is gaining traction because it is economically attractive in a high-price environment and pricing on that offering rose far less than traditional CapEx products.