Everpure raises outlook after record second-quarter revenue

Everpure reported record second-quarter revenue of USD $1.2 billion and raised its full-year outlook, marking its eighth straight quarter of accelerating revenue growth.

Operating profit also rose sharply. GAAP operating income increased to USD $63 million and non-GAAP operating income reached USD $230 million. Revenue rose 38% from a year earlier, with product revenue up 54% to USD $687 million and subscription services revenue up 20% to USD $499 million.

Demand was broad across geographies, product categories and business segments. Subscription annual recurring revenue reached USD $2.1 billion, up 20% year on year, while remaining performance obligations increased 44% to USD $4.1 billion.

Margins improved as the business expanded. GAAP gross margin was 68.4% and non-GAAP gross margin was 69.9%. GAAP operating margin stood at 5.3%, while non-GAAP operating margin was 19.4%.

Cash flow remained negative despite the jump in revenue and profit. Operating cash flow was negative USD $136 million and free cash flow was negative USD $238 million. Total cash, cash equivalents and marketable securities stood at USD $1.0 billion.

Everpure also returned about USD $69 million to shareholders through the repurchase of 0.9 million shares.

Guidance raised

For the current quarter, Everpure forecast revenue of USD $1.325 billion to USD $1.335 billion, implying year-on-year growth of 37% to 38%. It expects non-GAAP operating income of USD $265 million to USD $275 million.

For the full year, Everpure raised its revenue guidance to USD $5.03 billion to USD $5.07 billion from an earlier range of USD $4.41 billion to USD $4.51 billion. It also lifted its non-GAAP operating income forecast to USD $940 million to USD $960 million from USD $820 million to USD $860 million.

The updated outlook implies annual revenue growth of 37% to 38%, up from the prior expectation of 20% to 23%. Expected non-GAAP operating income growth was raised to 48% to 51% from 29% to 36%.

Chairman and Chief Executive Officer Charles Giancarlo linked the quarter to the company's longer run of expansion. "Q2 marks eight straight quarters of accelerating revenue growth for Everpure, and confirmed our position as the most innovative and vital company in our industry," Giancarlo said. "Our expansion into Data Intelligence, and our increasing momentum in AI and hyperscale products, ensures we are well-positioned to capture enduring long-term growth."

Chief Financial Officer Tarek Robbiati said the company had exceeded the upper end of its own targets. "Q2 was another outstanding quarter for Everpure, where we delivered record revenue and operating profit, exceeding the high-end of our guidance," Robbiati said. "Demand remains strong across our solutions portfolio despite historic industry price increases in the first half of FY'27. We are raising guidance significantly for the second half of the year to reflect our confidence in continued revenue momentum."

Product push

Alongside the earnings figures, Everpure highlighted a recent design win with what it described as a second top-five hyperscaler. The deal uses its DirectFlash architecture and is part of its effort to deepen its position in AI and large-scale cloud infrastructure.

It also pointed to several product and partnership announcements across data management, hybrid cloud and virtualisation. These included the launch of a Data Primacy architecture, general availability of Everpure Data Stream, changes to its Pure1 AI Copilot tool, and new integrations involving Red Hat, Microsoft Azure, Cisco Intersight and Databricks.

The quarter's figures suggest hardware demand remains an important growth driver even as subscription revenue expands more slowly. Product sales accounted for more than half of total revenue in the period, and their 54% annual increase outpaced the 20% rise in subscription services.

That mix may be especially relevant for investors watching whether AI-related spending and hyperscale orders can sustain growth rates near current levels. Remaining performance obligations of USD $4.1 billion indicate a larger contracted revenue base, although Everpure did not break out how much of that balance was tied to hyperscale customers.

Everpure said the quarter benefited from strength across its major markets and lines of business, even as it faced higher industry pricing in the first half of the year. The company ended the period with USD $1.0 billion in cash, cash equivalents and marketable securities.