Everpure (formerly Pure Storage) saw its shares decline 2.8% to $85.74 in after-hours trading Wednesday, even as the data-storage company reported better-than-expected first-quarter results and raised its full-year guidance. The mixed market reaction underscores investor concerns about margin compression from surging memory and component costs tied to the AI storage boom.
For the fiscal first quarter of 2027, Everpure posted revenue of $1.05 billion, a 35% increase year-over-year and above the $998 million consensus estimate. Product revenue surged 55% to $577 million, while subscription services brought in $476 million, up 17%. Subscription annual recurring revenue (ARR) climbed 19% to $2 billion, and remaining performance obligations hit $3.8 billion, up 41%.
On an adjusted basis, diluted earnings per share came in at $0.47, topping the $0.40 consensus from MarketBeat. GAAP operating income was $20 million, while non-GAAP operating income reached $159 million.
Management raised its fiscal 2027 revenue outlook to a range of $4.41 billion to $4.51 billion, up from the prior $4.3 billion to $4.4 billion. Non-GAAP operating income guidance was lifted to $820 million to $860 million, compared to the previous $780 million to $820 million range.
Despite the strong top-line numbers, Everpure faces persistent margin headwinds from higher memory and component costs, a challenge shared by rivals NetApp, Dell, and HPE. The AI-driven surge in data-center demand has tightened memory chip supply, forcing storage vendors to adjust pricing. According to ITPro, Everpure, Dell, HPE, and NetApp have all raised prices recently, with some shifting to shorter quote cycles to protect margins.
CEO Charles Giancarlo attributed the quarter's performance to "deepening trust" from customers and highlighted the completed acquisition of 1touch, which adds data discovery, classification, and security tools to Everpure's platform. CFO Tarek Robbiati acknowledged a "challenging supply chain environment" but noted broad-based demand. The company also completed its rebrand from Pure Storage, changing its ticker to P.
Wall Street had expected earnings of $0.40 per share and $1.01 billion in revenue, according to Zacks. Analysts pointed to enterprise and hyperscaler demand as growth drivers, but the stock's decline suggests the market is now focused on whether Everpure can sustain its momentum amid rising input costs. If memory and flash prices remain elevated, the company may face a tough choice between further price increases and margin erosion.
Everpure flagged several risks in its earnings release, including component supply constraints, hyperscaler purchasing patterns, tariffs, currency fluctuations, and inflation. With shares slipping despite a beat-and-raise quarter, the narrative is shifting from pure growth to margin sustainability in the AI storage cycle.
