P 10-K & 10-Q changes, risk factors and insider trading
Everpure, Inc. · NYSE · Computer Storage Devices · CIK 1474432 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “If we do not manage the supply of our products and their components efficiently, or if our suppliers fail to perform their contractual obligations to us or are otherwise unable to allocate a sufficient volume of components to us, our ability to deliver products could be adversely affected and result in delayed or reduced revenue, reduced product margins or lost sales opportunities altogether.”
New heading “We are devoting significant resources toward developing flash storage solutions for hyperscalers, but there can be no assurance that our efforts will lead to meaningful revenue, operating margin or cash flow, or additional hyperscaler design wins.”
New heading “The evolving market for data storage and data management products makes it difficult to forecast demand for our Everpure Platform.”
Removed heading “We are devoting significant resources toward developing flash storage solutions for hyperscalers. We recently secured a design win with a major hyperscale customer, but there can be no assurance that our efforts will be successful or lead to any sales.”
Removed heading “The evolving market for data storage products makes it difficult to forecast demand for our Pure Platform.”
Removed heading “If we do not manage the supply of our products and their components efficiently, our results of operation could be adversely affected.”
Largest changes
“We rely on contract manufacturers and component vendors, some of which are located outside the United States. As such, the importation of our products and the underlying components may be affected by changes in applicable tariffs, trade agreements, and trade policies, and expose us to risks associated with doing business globally. …”see in full comparison
“We rely on contract manufacturers and component vendors, some of which are located outside the United States. The importation of our products and the underlying components may be affected by changes in applicable tariffs, trade agreements, and trade policies, and expose us to risks associated with doing business globally. …”see in full comparison
Cyberattacks, malicious internet-based activity and online and offline fraud are prevalent and continue to increase. We and third-party service providers on whom we rely have been, and may in the future be, subject to attempts to gain unauthorized access to our data or systems. The threats to our information systems and information and those of third parties on whom we rely, include traditional computer “hackers,” social engineeringsee in full comparisonschemesattacks including phishing, vishing, smishing and domain spoofing (for example, attempts to induce fraudulent invoice payments or divert money from us),phishing attacks,faulty password management, software bugs, malicious code (such as viruses and worms), malware installation, personnel misconduct or error, theft, denial-of-service attacks (such as credential stuffing), advanced persistent threat intrusions, server malfunction, software or hardware failures, loss of data or other computer assets, adware, as well as attacks from nation-state and nation-state supported actors. These threats are also becoming increasingly difficult to detect.AIRecenttechnologies may also be usedadvances inconnectionAIwithhavecertainincreasedattacks,theresulting in heightened riskssophistication ofsecuritythesebreachestypes of attacks as attackers are able to automate cyberattacks andincidents.create more personalized and targeted communications. Additionally, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, arebecoming increasinglyprevalentand severeand could lead to significant interruptions, delays, or outages in our operations, disruptions in our services, loss of data, loss of income, significant extra expense to restore data or systems, reputational loss and the diversion of funds. To alleviate the financial, operational and reputational impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable laws or regulations prohibit such payments). Similarly, supply chain attacks have increased in frequency and severity, and there have been high-profile incidents of third-party service providers causing widespread disruptions to their customers’ infrastructure due to errors in their SaaS offerings. We cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to ourPureEverpure Platform, systems and network or the systems and networks of third parties that support us and our business. Moreover, we may have limited remedies against third-party providers in the event of a service disruption.
“If we do not manage the supply of our products and their components efficiently, or if our suppliers fail to perform their contractual obligations to us or are otherwise unable to allocate a sufficient volume of components to us, our ability to deliver products could be adversely affected and result in delayed or reduced revenue, reduced product margins or lost sales opportunities altogether.”see in full comparison
“Managing the supply of our products and underlying components is complex and has become increasingly difficult, in part, due to component quality, component scarcity, increased global demand, and inflationary pressure. Our supply chain has been, and may continue to be adversely impacted by component cost increases in our supply chain. In response to these cost increases, we raised our prices during the first quarter of fiscal year 2027, which may result in reduced sales or the loss of customers, and adversely impact our business and results of operations. …”see in full comparison
“We are devoting significant resources toward developing flash storage solutions for hyperscalers. We recently secured a design win with a major hyperscale customer, but there can be no assurance that our efforts will be successful or lead to any sales.”see in full comparison
Full comparison: every changed paragraph (81)
•If we do not manage the supply of our products and their components efficiently, or if our suppliers fail to perform their contractual obligations to us or are otherwise unable to allocate a sufficient volume of components to us, our ability to deliver products could be adversely affected and result in delayed or reduced revenue, reduced product margins or lost sales opportunities altogether.
•We rely on a limited number of suppliers, and in some cases single-source suppliers, and any disruption or termination of our supply arrangements could delay shipments of our products and could harm our relationships with current and prospective customers.
•We are devoting significant resources toward developing flash storage solutions for hyperscalers. We recently secured a design win with a major hyperscale customer,hyperscalers, but there can be no assurance that our efforts will be successful or lead to anymeaningful sales.revenue, operating margin, or cash flow, or additional hyperscaler design wins.
•If we do not manage the supply of our products and their components efficiently, our results of operation could be adversely affected.
•Sales of our subscription and consumption offerings as a percentage of our total sales are difficult to predict, and we expect they will fluctuate over time. With a traditional CapEx sale, a large portion of revenue is recognized as product revenue as the order is fulfilled. Revenue for our subscription and consumption offerings is recognized over a period of time, andwhich the majority of revenue is included in subscription services revenue. As such, we expect fluctuations in sales of our subscription and consumption offerings towill impact bothour product and total revenue growth.
If we do not manage the supply of our products and their components efficiently, or if our suppliers fail to perform their contractual obligations to us or are otherwise unable to allocate a sufficient volume of components to us, our ability to deliver products could be adversely affected and result in delayed or reduced revenue, reduced product margins or lost sales opportunities altogether.
Managing the supply of our products and underlying components is complex and has become increasingly difficult, in part, due to component quality, component scarcity, increased global demand, and inflationary pressure. Our supply chain has been, and may continue to be adversely impacted by component cost increases in our supply chain. In response to these cost increases, we raised our prices during the first quarter of fiscal year 2027, which may result in reduced sales or the loss of customers, and adversely impact our business and results of operations. We enter into agreements with our suppliers to provide components at specified prices, volume, and timing. Our suppliers have in the past, and may in the future, seek to renegotiate terms of our supply agreements. Furthermore, in the current environment of increased global demand and component scarcity, suppliers may lack the capacity to allocate the necessary volume of components to meet our manufacturing requirements. If our suppliers fail to perform their obligations or if they are unable or refuse to provide components to us at the specified prices, volumes, or at the times that we have agreed upon, or if they are simply unable to allocate the volume of components that we need, we may be unable to secure alternate supply on commercially reasonable terms or within our required timeframes. As a result, we could face component shortages, higher component costs, manufacturing disruptions, longer customer lead times and delays in shipping our products, or lost sales opportunities altogether. Such a disruption could cause us to miss revenue opportunities, damage our relationships with customers and partners, and negatively impact our reputation. A significant or sustained supply chain failure of this nature could adversely affect our business, financial condition, product margins, results of operations, and prospects.
In addition, to scale our supply chain, we must manage our supply and inventory effectively, including ensuring a sufficient supply of flash to support our hyperscaler customer. If our hyperscale customer reduces its demand for our flash storage solutions, we may be obligated to fulfill component purchase commitments. If we are unable to effectively manage our supply and inventory, including the supply of flash necessary to fulfill potential hyperscaler demand, our results of operations could be adversely affected.
Our third-party contract manufacturers procure components and build our products based on our forecasts, and we generally do not hold inventory for a prolonged period of time. Our forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and analyses from our sales and marketing organizations, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate component supply, we may issue orders for components and products that are non-cancelable and non-returnable. Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to make accurate forecasts and effectively manage the supply of our products and components. If we have excess supply, we may reduce our prices and write down or write off excess or obsolete inventory, which in turn could result in lower gross margins. Alternatively, insufficient supply levels may lead to shortages that exacerbate other risk factors and result in delayed revenue, reduced product margins or lost sales opportunities altogether.
Our sales efforts involve educating our customers about the use and benefits across our data storage platform (Pure Platform) and often involve an evaluation process that can result in a lengthy sales cycle, particularly for larger customers. We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales. In addition, purchases are frequently subject to our customers’ budget constraints, multiple approvals and unplanned administrative and other delays. These factors can lead to unpredictable and extended closing times of sales to our customers. For example, in fiscal 2025, we experienced extended closing times for larger Evergreen//One opportunities and our business has been impacted by increased customer budget scrutiny of IT spending decisions. Some of our customers make large concentrated purchases to complete or upgrade specific data storage deployments. A substantial portion of our quarterly sales typically occurs during the last several weeks of the quarter, which we believe largely reflects customer buying patterns of products similar to ours and other technology products generally. As a result, our revenue and operating results have and may continue to fluctuate from quarter to quarter.
We are devoting significant resources toward developing flash storage solutions for hyperscalers. We recently secured a design win with a major hyperscale customer, but there can be no assurance that our efforts will be successful or lead to any sales.
We are devoting significant resources in our efforts to develop flash storage solutions for hyperscalers, and recently secured a design win with a major hyperscaler. A design win means the customer has tested our solution, verified that it meets the customer’s requirements, and qualified our solution for the customer’s use. Achieving a design win with a major hyperscaler requires us to dedicate significant resources and investment in pursuit of a single customer opportunity without any guarantee of revenue. While we believe the opportunity to sell our solutions to hyperscalers that replace their bulk disk and hybrid disk storage is significant, and that sales to hyperscalers may in the future account for a significant portion of our revenue, we may never generate any revenue from such sales.
Further, while we expect our recent hyperscaler design win will lead to meaningful revenue contribution beginning in our fiscal year 2027, a design win does not guarantee sales to a given customer. Even after we have secured a design win, a customer could choose to delay or cancel purchasing or licensing our technology and services. It is therefore difficult to predict the volume and timing of sales, if any, that will follow from any design win that we secure.
The evolving market for data storage products makes it difficult to forecast demand for our Pure Platform.
The market for data storage products is rapidly evolving. Changes in the application requirements, data center infrastructure trends and the broader technology landscape result in evolving customer requirements for capacity, scalability and other enterprise features of storage systems. Our future financial performance depends on our ability to adapt to competitive dynamics and emerging customer demands and trends, such as the opportunities created by the recent advances in artificial intelligence (AI). We continue to expand and evolve our Pure Platform to compete directly with hard disk systems, and that strategy may take longer than we anticipate or may not succeed due to unforeseen factors. We may be unable to capture significant storage workloads for AI environments and hyperscalers. The enhancement of all-flash storage products by incumbent vendors and changes or advances in alternative technologies or adoption of cloud storage offerings that do not utilize our Pure Platform could adversely affect the demand for our Pure Platform.
Offerings from large public cloud providers are expanding quickly and serve as alternatives to our Pure Platform for a variety of customer workloads. Since these providers are known for developing storage systems internally, this trend reduces the demand for storage systems like ours. It is difficult to predict customer adoption rates of new offerings, customer demand for our Pure Platform or the future growth rate and size of our addressable market. Reduced demand for our Pure Platform caused by technological challenges, alternative technologies and products or any other reason would result in a lower revenue growth rate or decreased revenue, either of which would negatively impact our business and operating results.
We face intense competition from a number of established companies that sell competing storage products, including Dell EMC, HP Enterprise, Hitachi Vantara, IBM, and NetApp. We also compete against cloud providers and vendors of hyperconverged products, which combine compute, networking and storage. These providers are growing and expanding their product offerings, potentially displacing some demand for our products. In addition, some of our competitors offer bundled products and services in order to reduce the initial cost of their storage products. Further, some of our competitors offer their storage products either at significant discounts or even for free in competing against us. Our competitors may have:
Many of our competitors have developed or acquired storage technologies with features or data reduction technologies that directly compete with our Pure Platform or have introduced business programs designed, among other things, to compete with our innovative programs, such as our Evergreen Storage model. We expect our competitors to continue to improve their products, reduce their prices and introduce new offerings that may, or may claim to, offer greater value compared to our Pure Platform. These developments may render our products or technologies obsolete or less competitive. These and other competitive pressures may prevent us from competing successfully against our competitors.
Many of our competitors benefit from established brand awareness and long-standing relationships with key decision makers at our current and prospective customers. Our competitors often leverage these existing relationships to discourage customers from evaluating or purchasing our Pure Platform. Additionally, most of our prospective customers have existing storage products supplied by our competitors who have an advantage in retaining the customer because, among other things, the incumbent vendor already understands the customer’s IT infrastructure, user demands and needs, or the customer is concerned about actual or perceived costs of switching to a new vendor and technology. If we are unable to sell our Pure Platform to new customers or persuade existing customers to continue purchasing our Pure Platform, we will not be able to maintain or increase our market share and revenue, which would adversely affect our business and operating results.
As a result of these risks, we cannot assure investors that we will be able to obtain a sufficient supply of key product components in the future or that the cost of these components will not increase. If our component supply is disrupted or delayed, or if we need to replace our suppliers, there can be no assurance that additional components will be available when required or that components will be available on favorable terms, which could extend our manufacturing lead times, increase the costs of our components and harm our business, operating results and financial condition. We may not be able to continue to procure components at reasonable prices, which may impact our business negatively or require us to enter into longer-term contracts to obtain components. Even if we enter into such long-term contracts, our suppliers may fail to perform their contractual obligations or may otherwise be unable to supply components in the quantities or at the prices agreed upon. Any of the foregoing disruptions could exacerbate other risk factors, increase our costs and decrease our gross margins, harming our business, operating results and financial condition.
We rely on contract manufacturers and component vendors, some of which are located outside the United States. The importation of our products and the underlying components may be affected by changes in applicable tariffs, trade agreements, and trade policies, and expose us to risks associated with doing business globally. The United States and other countries in our supply chain or in which we have sales have imposed, and may impose additional, tariffs, duties, quotas, or other restrictions or regulations, or may adversely adjust prevailing tariff levels, quotas, duties, or other restrictions or regulations. Countries impose, modify and remove tariffs and other trade restrictions in response to a variety of factors, including economic and political conditions, which make it impossible for us to predict future developments regarding tariffs and other trade restrictions. Additionally, changes in U.S. policy have and may continue to lead to significant changes in tariffs for imported goods. The imposition of tariffs on our products or their underlying components may require us to raise our prices, which may result in the loss of customers and harm our business and results of operations, or we may choose to pay for these tariffs without raising prices which may negatively impact our results of operations and profitability.
Our sales efforts involve educating our customers about the use and benefits across our data storage platform (Everpure Platform) and often involve an evaluation process that can result in a lengthy sales cycle, particularly for larger customers and hyperscalers. We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales. In addition, purchases are frequently subject to our customers’ budget constraints, multiple approvals and unplanned administrative and other delays. These factors can lead to unpredictable and extended closing times of sales to our customers. Some of our customers make large concentrated purchases to complete or upgrade specific data storage deployments. A substantial portion of our quarterly sales typically occurs during the last several weeks of the quarter, which we believe largely reflects customer buying patterns of products similar to ours and other technology products generally. As a result, our revenue and operating results have and may continue to fluctuate from quarter to quarter.
We are devoting significant resources toward developing flash storage solutions for hyperscalers, but there can be no assurance that our efforts will lead to meaningful revenue, operating margin or cash flow, or additional hyperscaler design wins.
We are devoting significant resources toward expanding our sales to our existing hyperscale customer and to additional hyperscale customers. Achieving a hyperscaler design win requires us to dedicate significant resources and investment in pursuit of a single customer opportunity without any guarantee of revenue. Additionally, we may be obligated to fulfill NAND flash purchase commitments if our hyperscale customer reduces its demand for our flash storage solutions. While we believe the opportunity to sell our solutions to our existing hyperscale customer and additional hyperscalers is significant, and that sales to hyperscalers may in the future account for a significant portion of our revenue, there can be no assurance that our efforts will lead to meaningful revenue, operating margin or cash flow, or additional hyperscaler design wins. Further, even if we do secure additional hyperscaler design wins, a design win does not guarantee sales. Our existing, and potential future, hyperscale customers could choose to delay or cancel purchasing or licensing our technology and services. It is therefore difficult to predict the volume and timing of sales, if any, that will follow from any design win that we secure. Moreover, if our existing hyperscale customer were to delay, reduce or cancel its purchases from us, our business, operating results, cash flows and financial condition would be adversely affected.
The evolving market for data storage and data management products makes it difficult to forecast demand for our Everpure Platform.
The market for data storage and data management products is rapidly evolving. Changes in the application requirements, data center infrastructure trends and the broader technology landscape result in evolving customer requirements for capacity, scalability and other enterprise features of storage systems. Our future financial performance depends on our ability to adapt to competitive dynamics and emerging customer demands and trends, such as the opportunities created by the recent advances in artificial intelligence (AI). We continue to expand and evolve our Everpure Platform to compete directly with hard disk systems, and that strategy may take longer than we anticipate or may not succeed due to unforeseen factors. We may be unable to capture significant storage workloads for AI environments and hyperscalers. The enhancement of all-flash storage products by incumbent vendors and changes or advances in alternative technologies or adoption of cloud storage offerings that do not utilize our Everpure Platform could adversely affect the demand for our products.
Offerings from large public cloud providers are expanding quickly and serve as alternatives to our Everpure Platform for a variety of customer workloads. Since these providers are known for developing storage systems internally, this trend reduces the demand for storage systems like ours. It is difficult to predict customer adoption rates of new offerings, customer demand for our Everpure Platform or the future growth rate and size of our addressable market. Reduced demand for our Everpure Platform caused by technological challenges, alternative technologies and products or any other reason would result in a lower revenue growth rate or decreased revenue, either of which would negatively impact our business and operating results.
We face intense competition from a number of established companies that sell competing storage products, including Dell EMC, HP Enterprise, Huawei, Hitachi Vantara, IBM, and NetApp. We also compete against cloud providers and vendors of hyperconverged products, which combine compute, networking and storage. These providers are growing and expanding their product offerings, potentially displacing some demand for our products. In addition, some of our competitors offer bundled products and services in order to reduce the initial cost of their storage products. Further, some of our competitors offer their storage products either at significant discounts or even for free in competing against us. Our competitors may have:
Many of our competitors have developed or acquired storage technologies with features or data reduction technologies that directly compete with our Everpure Platform or have introduced business programs designed, among other things, to compete with our innovative programs, such as our Evergreen Storage model. We expect our competitors to continue to improve their products, reduce their prices and introduce new offerings that may, or may claim to, offer greater value compared to our Everpure Platform. These developments may render our products or technologies obsolete or less competitive. These and other competitive pressures may prevent us from competing successfully against our competitors.
Many of our competitors benefit from established brand awareness and long-standing relationships with key decision makers at our current and prospective customers. Our competitors often leverage these existing relationships to discourage customers from evaluating or purchasing our Everpure Platform. Additionally, most of our prospective customers have existing storage products supplied by our competitors who have an advantage in retaining the customer because, among other things, the incumbent vendor already understands the customer’s IT infrastructure, user demands and needs, or the customer is concerned about actual or perceived costs of switching to a new vendor and technology. If we are unable to sell our Everpure Platform to new customers or persuade existing customers to continue purchasing our Everpure Platform, we will not be able to maintain or increase our market share and revenue, which would adversely affect our business and operating results.
If we do not manage the supply of our products and their components efficiently, our results of operation could be adversely affected.
Managing the supply of our products and underlying components is complex and has become increasingly difficult, in part, due to component quality and inflationary pressure. In addition, we must invest to scale our supply chain, including to ensure a sufficient supply of flash, in connection with our recent hyperscaler design win. Our third-party contract manufacturers procure components and build our products based on our forecasts, and we generally do not hold inventory for a prolonged period of time. Our forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and analyses from our sales and marketing organizations, adjusted for overall market conditions. In order to reduce manufacturing lead times and plan for adequate component supply, we may issue orders for components and products that are non-cancelable and non-returnable. Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to make accurate forecasts and effectively manage the supply of our products and components. If we have excess supply, we may reduce our prices and write down or write off excess or obsolete inventory, which in turn could result in lower gross margins. Alternatively, insufficient supply levels may lead to shortages that exacerbate other risk factors and result in delayed revenue, reduced product margins or lost sales opportunities altogether. If we are unable to effectively manage our supply and inventory, including the supply of flash necessary to fulfill potential hyperscaler demand, our results of operations could be adversely affected.
Our future success is highly dependent upon our ability to establish and maintain successful relationships with our partners, including value-added resellers, service providers and systems integrators. In addition to selling our PureEverpure Platform, our partners may offer installation, post-sale service and support in their local markets. In markets where we rely on partners more heavily, we have less contact with our customers and less control over the sales process and the quality and responsiveness of our partners. As a result, it may be more difficult for us to ensure the proper delivery and installation of our PureEverpure Platform or the quality or responsiveness of the support and services being offered. Moreover, because our success depends on our partner relationships, we have recently increased our partner incentive compensation arrangements.arrangements which we expect to negatively impact revenue. However, there can be no assurance that this increased incentive compensation will result in a corresponding increase in our sales. Any failure on our part to effectively identify, train and manage our channel partners and to monitor their sales activity, as well as the customer support and services provided to our customers, could harm our business, operating results and financial condition.
Our partners may choose to discontinue offering our PureEverpure Platform or may not devote sufficient attention and resources toward selling our PureEverpure Platform. We typically enter into non-exclusive, written agreements with our channel partners. These agreements generally have a one-year, self-renewing term, have no minimum sales commitment and do not prohibit our channel partners from offering competing products and services. Additionally, our competitors may provide incentives to our existing and potential channel partners to use, purchase or offer their products and services or to prevent or reduce sales of our products and services. The occurrence of any of these events could harm our business, operating results and financial condition.
Building and maintaining brand recognition and customer goodwill is critical to our success. On occasion, our competitors’ marketing efforts have included negative or misleading statements about us and our PureEverpure Platform. If we are unable to effectively respond to our competitors’ marketing efforts and protect our brand and customer goodwill now or in the future, our business will be adversely affected.
Sales to governmental agencies may in the future account for a significant portion of our revenue and pose additional challenges and risks to our sales efforts. Governments have and may continue to impose restrictions or requirements that must be complied with in order for us to sell to certain governmental customers. Government demand and payment for our PureEverpure Platform may be impacted by public sector budgetary cycles and funding reductions or delays, such as an extended federal government shutdown, which may adversely affect public sector demand for our PureEverpure Platform. We sell our offerings to governmental agencies through our channel partners, and these agencies may have statutory, contractual or other legal rights to terminate contracts with our distributors and resellers for convenience or due to a default, and any such termination may adversely impact our results of operations. Governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our PureEverpure Platform, which would adversely impact our revenue and results of operations, or institute fines or civil or criminal liability if the audit uncovers improper or illegal activities. Finally, governments may require certain products to be manufactured in the United States andor other relatively high-cost manufacturing locations, and we may not manufacture all products in locations that meet these requirements, affecting our ability to sell to certain governmental agencies.
We operate in a dynamic environment characterized by rapidly changing technologies and industry standards and technological obsolescence. To compete successfully, we must design, develop, market and sell new or enhanced storage and data management offerings that provide increasingly higher levels of performance, capacity, functionality and reliability and meet our customers’ expectations, which is a complex and uncertain process. We believe that we must continue to dedicate significant resources to our research and development efforts and innovateinnovative business models such as Evergreen//One to improve our competitive position. We continue to expand our large capacity data storage offerings to compete directly with hard disk systems. Our investments may take longer to generate revenue or may generate less revenue than we anticipate. The introduction of new storage offerings by our competitors, or the emergence of alternative technologies or industry standards could render our PureEverpure Platform obsolete or less competitive.
As we introduce new or enhanced Pure Platform offerings, we must successfully manage their launch and customer adoption. If we are not able to successfully manage the development and release of new or enhanced Pure Platform offerings, our business, operating results and financial condition could be harmed. Similarly, if we fail to introduce new or enhanced Pure Platform offerings, such as new or improved software features, that meet our customers’ needs in a timely or cost-effective fashion, we may lose market share and our operating results could be adversely affected.
We offer our PureEverpure Platform on a subscription basis, including our hardware and software products through Evergreen//One and Cloud Data Services.One. Our subscription offerings are relatively new to the storage market and will continue to evolve, and we may not be able to compete effectively, drive continued revenue growth or maintain profitability with these business models. Our subscription offerings require different accounting of our customer transactions, such as changing how we recognize revenue and capitalize commissions, among other things. In addition, our subscription offerings require compliance with additional regulatory, legal and trade licensing requirements in some countries and entail incremental operational, technical, legal and other costs. Continued market acceptance of subscription offerings depends on our ability to create a seamless customer experience and optimally price our offerings in light of market conditions, our costs and customer demand. Additionally, subscription models may unfavorably impact the pricing of and demand for our on-premise offerings, which could reduce our revenues and profitability. If we do not successfully execute our subscription offering strategy, our financial results could be negatively impacted.
Our PureEverpure Platform is highly technical and may contain defects or bugs, which could cause data unavailability, loss, breach or corruption that might, in turn, result in liability and harm to our reputation and business.
Our PureEverpure Platform is highly technical and complex and is often used to store information critical to our customers’ business operations. Our PureEverpure Platform may contain errors, defects or security vulnerabilities that could result in data unavailability, loss, corruption or other harm to our customers. Some errors in our PureEverpure Platform may only be discovered after it has been installed and used by customers. We have, from time to time, identified vulnerabilities in our PureEverpure Platform. Despite our efforts to detect and remediate actual and potential vulnerabilities in our systems, we cannot be certain that we will be able to address any such vulnerabilities, and there may be delays in developing and deploying patches and other remedial measures to adequately address vulnerabilities. We may also incur unexpected costs replacing defective hardware or ensuring that hardware remains interoperable and upgradable. Any of these errors, defects, bugs or security vulnerabilities may leave us, our PureEverpure Platform and our customers susceptible to exploitation, including by malicious actors, which could result in a loss of revenue, injury to our reputation, loss of customers or increased service and warranty costs, and adversely affect our business and operating results. In addition, errors or failures in the products of third-party technology vendors may be attributed to us and may harm our reputation.
If we are unable to ensure that our PureEverpure Platform interoperates with third party operating systems, software applications and hardware, we may lose or fail to increase our market share.
Our PureEverpure Platform must interoperate with our customers’ infrastructure, specifically networks, servers, software and operating systems, which are offered by a wide variety of vendors. When new or updated versions of these operating systems or applications are introduced, we may need to develop updated versions of our software so that our PureEverpure Platform continues to interoperate properly. We may not deliver or maintain interoperability quickly, cost-effectively or at all as these efforts require capital investment and engineering resources. If we fail to maintain compatibility of our PureEverpure Platform with these infrastructure components, our customers may not be able to fully utilize our PureEverpure Platform, and we may, among other consequences, lose or fail to increase our market share and experience reduced demand for our PureEverpure Platform, which may harm our business, operating results and financial condition.
Our PureEverpure Platform must conform to industry standards in order to be accepted by customers.
Generally, our PureEverpure Platform comprises only a part of an IT environment. The servers, network, software and other components and systems deployed by our customers must comply with established industry standards in order to interoperate and function efficiently together. We depend on companies that provide other systems in this ecosystem to conform to prevailing industry standards. These companies are often significantly larger and more influential in driving industry standards than we are. Some industry standards may not be widely adopted or implemented uniformly and competing standards may emerge that our customers prefer. If larger companies do not conform to the same industry standards that we do, or if competing standards emerge, sales of our PureEverpure Platform could be adversely affected, which may harm our business.
Our ability to successfully market and sell our PureEverpure Platform depends in part on ease of use and the quality of our customer experience, and any failure to offer high-quality technical services and support could harm our business.
Once our customers deploy our PureEverpure Platform, they depend on our customer experience organization to drive non-disruptive upgrades and resolve technical issues. Our ability to provide effective technical services largely depends on our ability to attract, train and retain qualified personnel, as well as engage with qualified support partners that provide a similar level of customer support. In addition, our sales process is highly dependent on our reputation and on recommendations and reviews from our existing customers. We may need to provide customized installation and configuration services to our customers before our PureEverpure Platform is fully operational in their environments. Any failure to maintain, or a market perception that we do not maintain, high-quality technical services and support could harm our reputation, our ability to sell our PureEverpure Platform to existing and prospective customers and our business.
Our gross margins fluctuate from period to period due primarily to our component costs, product costs,pricing, customer mix and product mix. A variety of factors may cause our gross margins to fluctuate and make them difficult to predict, including, but not limited to:
•changes in customer,customer mix (including our hyperscale customer), geographic mix, or product mix, including the relative sales of our lower product gross margin FlashBlade//E, FlashArray//E, and FlashArray//C solutions;
During fiscal 2026, the cost of our components increased significantly, and we anticipate continued component pricing volatility throughout fiscal 2027. Elevated global demand for the components used in our products has made future cost fluctuations highly unpredictable. We maintain supply agreements with our component suppliers that help mitigate, but do not eliminate, significant component cost volatility. While we implemented product price increases during the first quarter of fiscal 2027 to help offset these rising expenses, ongoing component cost volatility has placed, and may continue to place, downward pressure on our gross margins.
Our strategy is to continue investing in marketing, sales, support and research and development. We believe continuing to invest heavily in our business, including investments to scale operations to support our recent hyperscaler design win,customer, is critical to our future success and meeting our growth objectives. We anticipate that our operating expenses will continue to increase in absolute terms. Even if we achieve or maintain significant revenue growth, we may experience losses, forgoing near-term profitability on a U.S. GAAP basis.
•our ability to develop, introduce and ship new Pure Platform offerings that meet customer requirements and to effectively manage product transitions;
•the impact of inflation on labor and other costs, fluctuations in the exchange rates between the U.S. dollar and foreign currencies, other adverse economic conditionsconditions, and the impact of public health epidemics or pandemics; and
The sales prices of our Pure Platform offerings may fluctuate or decline, which may adversely affect our gross margins and operating results.
The sales prices of our offerings may fluctuate or decline for a variety of reasons, including competitive pricing pressures, discounts, the introduction of competing products or services or promotional programs, a change in our mix of products and services, cost of components, supply chain constraints, inflation and other adverse economic conditions. As a result of the increase in our component costs during fiscal 2026, we raised our prices during the first quarter of fiscal year 2027. Due to the uncertainty around our component costs, we may be required to raise our prices again in the future.
The sales prices of our offerings may fluctuate or decline for a variety of reasons, including competitive pricing pressures, discounts, the introduction of competing products or services or promotional programs, a change in our mix of products and services, cost of components, supply chain constraints, inflation and other adverse economic conditions. We expect competition to increase in the future, thereby leading to increased pricing pressures. Larger competitors may reduce the price of products or services that compete with ours or may bundle them with other products and services. Additionally, although we price our offerings predominantly in U.S. dollars, currency fluctuations in certain countries and regions may negatively impact actual prices that partners and customers are willing to pay in those countries and regions. Furthermore, we anticipate that our product prices willmay decrease over product life cycles. If we are required to decrease our prices to be competitive and are not able to offset this decrease by increases in the volume of sales or the sales of new products with higher margins, our gross margins and operating results could be adversely affected.
We expect that our future growth will continue to place strain on our managerial, administrative, operational, financial and other resources. We will incur costs associated with this future growth prior to realizing the anticipated benefits, and the return on these investments may be lower than, or develop slower than we expect or may never materialize. Investors should not consider our revenue growth in prior periods as indicative of our future performance. In future periods, we may not achieve similar percentage revenue growth rates as we have achieved in some past periods. If we are unable to maintain adequate revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability. If we are unable to manage our growth successfully, we may not be able to take advantage of market opportunities or release new Pure Platform offerings in a timely manner, and we may fail to satisfy customer expectations, maintain product quality, execute on our business plan or adequately respond to competitive pressures, each of which could adversely impact our growth and affect our business and operating results.
Existing customers may not renew their subscription services agreements after the initial period and, given changing customer purchasing preferences, we may not be able to accurately predict our renewal rates. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their available budget and the level of their satisfaction with our PureEverpure Platform, customer support and pricing compared to our competitors. If our customers renew their contracts, they may renew on terms that are less economically beneficial to us. If our customers do not renew their agreements or renew on less favorable terms, our revenue may grow more slowly than expected, if at all.
Our sales from our Evergreen//One, Evergreen//Flex and Cloud Block Store subscription and consumption offerings as a percentage of our total sales are difficult to predict and we expect they will fluctuate over time. With a traditional CapEx sale, a large portion of revenue is recognized as product revenue when the order is fulfilled. By contrast, revenue for our subscription and consumption offerings is recognized over the term of the relevant contract period and the majority of revenue is included in subscription services revenue. An increase in sales from our subscription and consumption offerings as a percentage of total sales may have a near-term negative impact on both quarter-over-quarter and year-over-year product and total revenue growth rate comparisons. By contrast, a relative decrease in sales of our subscription and consumption offerings as a percentage of total sales may have a near-term positive impact on both quarter-over-quarter and year-over-year product and total revenue growth rate comparisons. As such, we expect fluctuations in sales of our subscription and consumption offerings to impact both product and total revenue growth.
We intend to continue investing in our business growth and may require additional funds to support business initiatives, including the need to develop new PureEverpure Platform offerings or enhance our existing PureEverpure Platform offerings, enhance our operating infrastructure and acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we undertake in the future could involve additional restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to support our business growth and to respond to business challenges could be significantly limited and our prospects and financial condition could be harmed.
Management's Discussion & Analysis (MD&A)
New heading “Subscription Net Dollar Retention (NDR)”
Largest changes
“In August 2020, we entered into a Credit Agreement with a consortium of financial institutions and lenders that provides for a five-year, senior secured revolving credit facility of $300.0 million (Credit Facility). Proceeds from the Credit Facility may be used for general corporate purposes and working capital. The Credit Facility expires, absent default or early termination by us, on August 24, 2025. In March 2023, we amended the Credit Facility to transition LIBOR to the Secured Overnight Financing Rate (SOFR) effective April 1, 2023. …”see in full comparison
Wesee in full comparisonarebegan as aglobalproviderleaderofinflash-based storage systems. Over time, we have evolved into a company that delivers a cloud experience with an intelligent, unified storage and data management platform (the Everpure Platform) that virtualizes data across on-premises, hybrid, public cloud, and edge environments into a single storage layer with consistent control, built-in automation and continuous modernization. We are executing amissionfocused strategy toredefine the storage experience by simplifying how people manage, consumemodernize andinteractsimplifywithdatadata.center infrastructure for customers as AI adoption increases and power, space, and operational constraints intensify. Our vision of an all-flash data center integrates our foundation of simplicity and reliability with four major market trends that are impacting all organizationslarge and small: (1) the shifttotowards modernizingtoday’sdata infrastructure with all-flash technology; (2) theincreasegrowth of modern cloud-native applications; (3) increasing demandto consumefor data storage delivered as a service; and (4) increasing demand for data storage to supporttheacceleratingacceleration in artificial intelligenceAI adoption while managing rising energy costs.
“We are subject to certain affirmative and negative covenants, including a Consolidated Net Leverage Ratio not to exceed 3.5:1 (which may be increased to 4:1 for the first six consecutive fiscal quarters after a qualified acquisition, as defined in the Credit Agreement) measured as of the last day of each fiscal quarter. As of the end of fiscal 2026, there were no outstanding borrowings and we were in compliance with all covenants under the Credit Facility.”see in full comparison
“During fiscal 2024, we recognized $33.6 million of restructuring and impairment costs related to severance and other termination benefits associated with a workforce realignment that was initiated in the fourth quarter of fiscal 2024, and the cease use of our former headquarters during the second quarter of fiscal 2024.”see in full comparison
We believe our existing cash, cash equivalents, marketable securities and revolving credit facility will be sufficient to fund our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors including our sales growth, the timing and extent of capital spending to support development efforts including investments to scale operations in support of oursee in full comparisonrecenthyperscaledesigncustomerwinandwithcaptureMeta,additional growth opportunities, the timing and extent of strategic inventory purchases to mitigate the impact of tariffs, higher commodity pricing, and supply chain disruptions, growth of our Evergreen//One offering, the addition or closure of office space, the timing of new product introductions, our share repurchases, the timing of renewal and/or repayment of borrowings under the revolving credit facility, and cash payments for tax withholding obligations for equity awards held by employees. We may continue to enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property and other licensing rights. For example, during the first quarter of fiscal 2027 we entered into a definitive agreement to acquire 1touch. We may enter into equipment financing arrangements and seek additional equity or debt financing in the future.
“U.S. Dollar denominated borrowings under the Credit Facility will bear interest, at our option, at a base rate, subject to a floor of 0%, plus a margin ranging from 0% to 0.50%, or the term Secured Overnight Financing Rate (SOFR) rate (based on one, three or six-month interest periods), subject to a floor of 0%, plus a margin ranging from 0.875% to 1.50%. Interest is payable quarterly in arrears with respect to base rate borrowings and at the end of the interest period with respect to term SOFR borrowing. …”see in full comparison
Full comparison: every changed paragraph (59)
The following discussion of our financial condition and results of operations covers fiscal 2026 and fiscal 2025 items and year-over-year comparisons between fiscal 2026 and fiscal 2025. Discussions of fiscal 2024 items and year-over-year comparisons between fiscal 2025 and fiscal 2024. Discussions of fiscal 2023 items and year-over-year comparisons between fiscal 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended February 4,2, 2024,2025, that was filed with the SEC on AprilMarch 1,27, 2024.2025.
Everpure, formerly known as Pure Storage, is a global technology company providing an integrated storage and data management platform. Data is foundational to our customers’ business transformation and increasingly central to their operational resilience and competitive differentiation. As data volumes expand and artificial intelligence (AI) becomes more deeply embedded in customers' operations, the ability to store, manage, govern, and derive greater value from their data is becoming as important as the infrastructure used to store it.
Data is foundational to our customers, and we are focused on delivering innovative and differentiated data storage solutions and services that enable customers to fully realize the value of their data.
We arebegan as a globalprovider leaderof inflash-based storage systems. Over time, we have evolved into a company that delivers a cloud experience with an intelligent, unified storage and data management platform (the Everpure Platform) that virtualizes data across on-premises, hybrid, public cloud, and edge environments into a single storage layer with consistent control, built-in automation and continuous modernization. We are executing a missionfocused strategy to redefine the storage experience by simplifying how people manage, consumemodernize and interactsimplify withdata data.center infrastructure for customers as AI adoption increases and power, space, and operational constraints intensify. Our vision of an all-flash data center integrates our foundation of simplicity and reliability with four major market trends that are impacting all organizations large and small: (1) the shift totowards modernizing today’s data infrastructure with all-flash technology; (2) the increasegrowth of modern cloud-native applications; (3) increasing demand to consumefor data storage delivered as a service; and (4) increasing demand for data storage to support theaccelerating acceleration in artificial intelligenceAI adoption while managing rising energy costs.
With the Everpure Platform, customers can build their own Enterprise Data Cloud (EDC), an architectural approach to storage and data management that allows organizations to centrally manage a virtualized cloud of data with unified control — spanning on-premises, hybrid, and public cloud environments — enabling intelligent, autonomous data management and consistent governance across the entire environment.
Our Pure Platform supporting structured and unstructured data, at scale and across any data workloads in on premises, cloud and hosted environments makes it possible for customers to construct their Enterprise Data Clouds. This allows them to serve a variety of data workloads including mission-critical production, test and development, analytics, disaster recovery, backup and restore, artificial intelligence and machine learning with a single consistent, highly automated and agile cloud operating model.
We derive revenue primarily from the salesales of our integrated storage hardware and embedded licensed software products and servicesstorage-as-a-service offerings that comprise our PureEverpure Platform. OurProduct Pure Platform primarilyrevenue includes sales of our FlashArray and FlashBlade solutions, royalties from hyperscaler shipments, and sales of Portworx by Everpure term software licenses. Subscription services revenue includes sales of our portfolio of EvergreenEvergreen, subscriptionPortworx servicesby offerings.Everpure, Subscriptionand servicesEverpure alsoCloud includeconsumption ourand subscription-based offerings, support and maintenance, and professional services offerings such as installation and implementation consulting services.
Provided that all other revenue recognition criteria have been met, we typically recognize product revenue for our integrated storage hardware products upon transfer of control to our customers and the satisfaction of our performance obligations. For Evergreen//Flex, product revenue is recognized upon the commencement of the underlying subscription services. Products are typically shipped directly by us to customers, and our channel partners generally do not stock our inventory. Royalties from hyperscaler shipments of third party hardware that provide the customer a perpetual license to use our functional intellectual property (IP) are recognized when the revenue is earned based upon shipments by our supply chain partners. Revenue from Portworx term software licenses, which grant customers the right to use our functional IP for a specified period, is recognized at the point in time the software activation keys are made available to the customer for download at commencement of the initial or renewal term. For Evergreen//Flex, product revenue is recognized upon the commencement of the underlying subscription services. We expect our product revenue may vary from period to period based on, among other things, the timing and size of orders andorders, delivery of productsproducts, hyperscaler shipments by our supply chain partners and the impact of significant transactions.
We generally recognize revenue from the fair value of subscription services provided ratably over the contractual service period or on a consumption basis based on the minimum usage commitment as well as usage above the commitment amount and professional services as delivered. We expect our subscription services revenue to continue to increase and continuein-line to grow faster thanwith our productoverall revenuegrowth rate as more customers choose to consume our storage solutions as a service and our existing Evergreen subscription customers renew and expand their offerings.
Cost of product revenue primarily consists of costs paid to our third-party contract manufacturers, which includes the costs of our raw material components, and personnel costs associated with our supply chain operations. Personnel costs consist of salaries, bonuses and stock-based compensation expense. Our cost of product revenue also includes allocated overhead costs, adjustments to inventory and purchase commitments based on forecasted demand, product warranty costs, amortization of intangible assets pertaining to developed technology, and freight. Allocated overhead costs consist of certain employee benefits and facilities-related costs. We expect our cost of product revenue to increase in absolute dollars as our product revenue increases.
Cost of subscription services revenue primarily consists of personnel costs associated with delivering our subscription and professional services, part replacements, allocated overhead costs, depreciation of infrastructure used to deliver our subscription services, amortization of intangible assets pertaining to developed technology, and amortization of capitalized internal-use software. We expect our cost of subscription services revenue to increase in absolute dollars, as our subscription services revenue increases.
Research and Development. Research and development expenses consist primarily of employee compensation and related expenses, prototype expenses, depreciation associated with assets acquired for research and development, data center and cloud services costs, third-party engineering and contractor support costs, as well as allocated overhead. We expect our research and development expenses to increase in absolute dollars. Key incremental investments will focus on accelerating density of our direct flash modules, andincreasing increasingthe operational scale of our supply chain partners to support expected production deployment ramp in connection with our hyperscale design win for large production deployments startingfor inour fiscalhyperscaler 2027.customer, and accelerating product development.
Sales and Marketing. Sales and marketing expenses consist primarily of employee compensation and related expenses, sales commissions, marketing programs, travel and entertainment expenses as well as allocated overhead. Marketing programs consist of advertising, events, corporate communications and brand-building activities. We expect our sales and marketing expenses to increase in absolute dollars.dollars, including investments to capture additional growth opportunities, in particular, in the enterprise market.
General and Administrative. General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources, facilities, IT and fees for third-party professional services as well as amortization of intangible assets pertaining to defensive technology patents and allocated overhead. We expect our general and administrative expenses to increase in absolute dollars.dollars, including investments in back-office systems to support continued business growth.
Other income (expense), net consists primarily of interest income related to cash, cash equivalents and marketable securities, interest expense related to our debtdebt, gains from an equity security, and gains (losses) from foreign currency transactions.
Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and current federal and state income taxes in the United States. Our foreign subsidiaries earn a profit margin based upon transfer pricing principles which require an arm’s length return. Our foreign subsidiaries’ sales and marketing expenses are expected to increase over time as we grow, resulting in higher pre-tax foreign earnings and higher foreign income taxes.
The increase in product revenue during fiscal 2026 compared to fiscal 2025 was primarily driven by sales to enterprise customers of FlashArray//XL, FlashArray//X, and our //E family of solutions as well as royalties from hyperscaler shipments.
The slight increase in product revenue during fiscal 2025 compared to fiscal 2024 was primarily driven by sales of our FlashBlade//E and FlashArray//E solutions. The increase in subscription services revenue during fiscal 20252026 compared to fiscal 20242025 was largely driven by increases in sales of our Evergreen//One consumption and subscription-based offerings and renewals of our Evergreen subscription services across our installed base and increased revenue from our Evergreen//One offering.base.
During fiscal 20252026 compared to fiscal 2024,2025, total revenue in the United States grew by 12% from $2.0$2.2 billion to $2.2$2.5 billion, while total rest of the world revenue grew by 13%25% from $851.3$960.8 million to $960.8$1.2 million.billion.
Subscription AnnualAnnualized Recurring Revenue (ARR)
We use Subscription ARR as a key business metric to evaluate the underlying performance of subscription services.services as of a point in time. Subscription ARR is not indicative of future revenue as events or circumstances that impact future revenue such as (i) future non-renewals or cancellations of existing contracts or renewals of expired contracts, (ii) expansion, contraction and churn of existing customers or the acquisition of new customers, and (iii) changes in customers' on-demand consumption of our subscription services are not reflected in Subscription ARR. Subscription ARR should be viewed independently of revenue, deferred revenue and remaining performance obligations and is not intended as a substitute for any of these items.
Subscription ARR is calculated as the annualized recurring contract value of all active, non-cancelable customer subscription agreements with subscription terms of any length at the end of a fiscal quarter, plus on-demand billings for the quarter multiplied by four. The contract values are the contracted amounts in effect at the end of a fiscal quarter and do not contemplate any adjustments made in accordance with ASC 606 such as the proportionate allocation of the contracted subscription amounts to other performance obligations based on standalone selling prices for contracts that have multiple performance obligations or vice versa that are reflected in subscription services revenue under U.S. generally accepted accounting principles. On-demand billings represent billings for consumption by our customers' most recent usage of our subscription services above the minimum usage commitment.
Subscription ARR is calculated as the total annualized contract value of all active customer subscription agreements at the end of a fiscal quarter, plus on-demand revenue for the quarter multiplied by four. Contract values are established prior to any adjustments made in accordance with ASC 606.
The year-over-year growth in our Subscription ARR at the end of fiscal 20252026 was 21%16% compared to growth of 25%21% in fiscal 2024.2025. Year-over-yearThe decline in year-over-year growth in subscription ARR to 21%16% at the end of fiscal 2026 was primarily impacted by lowerlonger Totalterm Contract Value (TCV) salesrenewals of our Evergreen//One. subscription offerings.
Subscription Net Dollar Retention (NDR)
We use Subscription NDR as an indicator of our ability to successfully expand and grow revenue within our existing customer base on an annual basis. Our Subscription NDR, which approximates the year-over-year percentage growth in ARR from the same cohort of existing customers across comparable fiscal periods, was 117% and 113% for the fiscal years ended 2025 and 2026. Our Subscription NDR is calculated by dividing the current fiscal year-end ARR by the corresponding prior year-end ARR, for those customers with an active ARR balance as of a year ago. Current fiscal year-end ARR includes existing customer expansion, net of contraction and churn, but excludes ARR from new customers acquired in the current fiscal year period.
Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $2.6$3.7 billion at the end of fiscal 2025,2026, and primarily includes non-cancelable Total Contract Value (TCV) sales for our storage-as-a-service offerings, including Evergreen//One, Evergreen//Flex, and Everpure Cloud Block Store consumption and subscription based offerings, as well as $41.1$228.5 million of non-cancelable product orders. RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods. Product orders are generally cancelable until delivery has occurred, and as such, unfulfilled product orders that are cancelable are excluded from RPO. Cancelable orders will fluctuate depending on numerous factors.
TCV sales for our storage-as-a-service offerings is a key business metric we use to evaluate the performance of our consumption and subscription based offerings. TCV sales for these offerings include recurring subscription fees, any non-recurring charges such as initial setup fees, and any other billable services directly tied to the execution of the underlying service contract. The year-over-yearYear-over-year growth in RPO to 40% at the end of fiscal 2026 when compared to 14% at the end of fiscal 2025 comparedwas todriven 31%primarily atby the endexecution of fiscallarge 2024deals wasand primarily due to lower TCV salesstrength of our Evergreen//One.Forever TCV sales ofand Evergreen//One was impacted by both extended closing timelines for larger Evergreen//One opportunities and increased conversion to a traditional sale of our higher velocity Evergreen//One opportunities.offerings.
The slight increase in product gross margin during fiscal 2026 when compared to fiscal 2025 was primarily due to product mix and, to a lesser extent, royalties from hyperscaler shipments, partially offset by higher component costs. Additionally, due to higher component costs, we are expecting product gross margin to sequentially decline in the first quarter of fiscal 2027 and normalize on a full year basis.
The decrease in product gross margin during fiscal 2025 when compared to fiscal 2024 was primarily due to increasing sales of our FlashBlade//E, FlashArray//E, and FlashArray//C solutions as customers’ transition their cost-sensitive workloads from traditional disk solutions to flash. We also experienced higher QLC component costs that were partially offset by lower excess and obsolete charges.
The increase in subscriptionSubscription services gross margin remained relatively consistent during fiscal 20252026 when compared to fiscal 2024 was2025 primarily driven by (i) lower depreciation expense from increasing the estimated useful lives of assets supporting our Evergreen//One offering during the third quarter of fiscal 2025 and (ii) continued optimization and increased efficiencies in our technical services operations, combined with cost benefits from automating our service logistics workflows that support delivery of our Evergreen subscription services to our installed base. Our Evergreen//One offering, supported by our own infrastructure, demonstrate a longer estimated life as a result of deriving benefits from our technology and Evergreen support. These lower costs werebase, partially offset by additionalamortization stock-basedof capitalized software costs for the development of Everpure Fusion and Everpure Cloud Azure Native and higher employee compensation resultingand fromrelated a modification of our fiscal 2024 performance restricted stock units (PRSUs).costs.
Stock-based compensation expense in fiscal 2025 included $36.6 million relating to a modification of our fiscal 2024 PRSUs that was recognized in the first quarter of fiscal 2025, contributing to higher stock-based compensation expense when compared to fiscal 2024. Refer to Note 11 of Part II, Item 8 of this Annual Report on Form 10-K for further information.
In addition, operatingOperating expenses during fiscal 2025 were positively impacted as a result of the workforce alignment that we initiated in the fourth quarter of fiscal 2024.
The increase in research and development expense during fiscal 20252026 compared to fiscal 20242025 was primarily driven by an increase in employee compensation and related costs, including stock-based compensation,compensation and, to a lesser extent, an increase in outsideequipment services costs,depreciation, and higher data center and cloud servicesfacilities-related costs.
The increase in sales and marketing expense during fiscal 20252026 compared to fiscal 20242025 was primarily duedriven toby an increase in employee compensation and related costs, including stock-basedsales compensationcommission expense, from growth in headcount and higher bookings achievement and, to a lesser extent, higher costs for sales and marketing events, and higher travel costs.
The increase in general and administrative expense during fiscal 20252026 compared to fiscal 20242025 was primarily duedriven toby higheran increase in employee compensation and related costs, including stock-based compensation.compensation, from growth in headcount.
During fiscal 2025, we recognized $15.9 million of restructuring and impairment costs. We recognized $9.5 million ofin incremental restructuring costs primarily relatedassociated towith one-time severance and other termination benefits associatedrelated withto a workforce alignment plan that was initiated in the workforcefourth realignmentquarter planof discussedfiscal below.2024. We also recognized $6.4 million in incremental abandonment and impairment charges related to certain leases associated with our former corporate headquarters.headquarters that we ceased use in the second quarter of fiscal 2024. The incremental impairment charge was due to a revision to the underlying sublease assumptions during the first quarter of fiscal 2025.
During fiscal 2024, we recognized $33.6 million of restructuring and impairment costs related to severance and other termination benefits associated with a workforce realignment that was initiated in the fourth quarter of fiscal 2024, and the cease use of our former headquarters during the second quarter of fiscal 2024.
The increase in other income (expense), net during fiscal 20252026 compared to fiscal 20242025 was primarily duedriven by higher net foreign exchange gains as the U.S. dollar weakened relative to certain foreign currencies and gain from the sale of an increaseequity security, partially offset by a decrease in interest income from a largerlower balance in cash, cash equivalents and marketable securities and a higherlower interest rate environment, partially offset by higher net foreign exchange losses as the U.S. dollar strengthened relative to certain foreign currencies.environment.
The increasedecrease in provision for income taxes during fiscal 20252026 compared to fiscal 20242025 was primarily driven by a decrease in U.S. taxable income due to anthe increaseenactment inof profitsthe generatedOne inBig ourBeautiful foreignBill jurisdictions.Act (OBBBA), which removed the requirement for domestic research and development capitalization under Section 174.
At the end of fiscal 2025,2026, we had cash, cash equivalents and marketable securities of $1.5 billion. Our cash and cash equivalents primarily consist of bank deposits and money market accounts. Our marketable securities generally consist of highly rated debt instruments of the U.S. government and its agencies, debt instruments of highly rated corporations, debt instruments issued by foreign governments, asset-backed securities, and asset-backedmunicipal securities.bonds.
We believe our existing cash, cash equivalents, marketable securities and revolving credit facility will be sufficient to fund our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors including our sales growth, the timing and extent of capital spending to support development efforts including investments to scale operations in support of our recent hyperscale designcustomer winand withcapture Meta,additional growth opportunities, the timing and extent of strategic inventory purchases to mitigate the impact of tariffs, higher commodity pricing, and supply chain disruptions, growth of our Evergreen//One offering, the addition or closure of office space, the timing of new product introductions, our share repurchases, the timing of renewal and/or repayment of borrowings under the revolving credit facility, and cash payments for tax withholding obligations for equity awards held by employees. We may continue to enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property and other licensing rights. For example, during the first quarter of fiscal 2027 we entered into a definitive agreement to acquire 1touch. We may enter into equipment financing arrangements and seek additional equity or debt financing in the future.
At the end of fiscal 2025,2026, we had non-cancelable contractual purchase obligations of $540.1$565.8 million, of which $385.9$418.8 million is short-term.payable within twelve months. These purchase obligations primarily includes non-cancelable inventory purchase commitments with contract manufacturers and suppliers, software service contracts,contracts and hosting arrangements.
In June 2025, we entered into a Credit Agreement with a consortium of financial institutions and lenders that provides for a five-year, senior unsecured revolving credit facility of $500.0 million (Credit Facility) that expires on June 10, 2030, unless otherwise extended. Proceeds from borrowings under the Credit Facility may be used for general corporate purposes and working capital. The Credit Facility replaced our prior $300.0 million revolving credit facility in which the outstanding borrowings of $100.0 million was repaid in full and terminated effective June 10, 2025.
U.S. Dollar denominated borrowings under the Credit Facility will bear interest, at our option, at a base rate, subject to a floor of 0%, plus a margin ranging from 0% to 0.50%, or the term Secured Overnight Financing Rate (SOFR) rate (based on one, three or six-month interest periods), subject to a floor of 0%, plus a margin ranging from 0.875% to 1.50%. Interest is payable quarterly in arrears with respect to base rate borrowings and at the end of the interest period with respect to term SOFR borrowing. We are also obligated to pay an ongoing commitment fee on undrawn amounts at a rate ranging from 0.075% to 0.20% per annum, payable quarterly in arrears. The respective margins will fluctuate based on the then-applicable Consolidated Net Leverage Ratio (as defined in the Credit Agreement) and, if available, our debt rating.
We are subject to certain affirmative and negative covenants, including a Consolidated Net Leverage Ratio not to exceed 3.5:1 (which may be increased to 4:1 for the first six consecutive fiscal quarters after a qualified acquisition, as defined in the Credit Agreement) measured as of the last day of each fiscal quarter. As of the end of fiscal 2026, there were no outstanding borrowings and we were in compliance with all covenants under the Credit Facility.
In August 2020, we entered into a Credit Agreement with a consortium of financial institutions and lenders that provides for a five-year, senior secured revolving credit facility of $300.0 million (Credit Facility). Proceeds from the Credit Facility may be used for general corporate purposes and working capital. The Credit Facility expires, absent default or early termination by us, on August 24, 2025. In March 2023, we amended the Credit Facility to transition LIBOR to the Secured Overnight Financing Rate (SOFR) effective April 1, 2023. The annual interest rates applicable to loans under the Credit Facility are, at our option, equal to either a base rate plus a margin ranging from 0.50% to 1.25% or term SOFR (based on one, three, or six-month interest periods), subject to a floor of 0%, plus a margin ranging from 1.50% to 2.25%. Interest on revolving loans is payable quarterly in arrears with respect to loans based on the base rate and at the end of an interest period in the case of loans based on term SOFR (or at each three-month interval, if the interest period is longer than three months). We are also required to pay a commitment fee on the unused portion of the commitments ranging from 0.25% to 0.40% per annum, payable quarterly in arrears.
The outstanding balance of $100.0 million at the end of fiscal 2025 bore weighted-average interest at an annual rate of approximately 6.59% based on a one-month term SOFR period resulting in interest expense of $6.6 million during fiscal 2025.
Loans under the Credit Facility are collateralized by substantially all of our assets and subject to certain restrictions and two financial ratios measured as of the last day of each fiscal quarter: a consolidated leverage ratio not to exceed 4.5:1 and an interest coverage ratio not to be less than 3:1. We were in compliance with all covenants under the Credit Facility at the end of fiscal 2025.
At the end of fiscal 20242025 and 2025,2026, we had outstanding letters of credit in the aggregate amount of $7.7$7.2 million and $7.2$13.0 million in connection with our facility leases. The letters of credit are collateralized by either restricted cash or the Credit Facilityleases and a certain employee-related benefit, that mature on various dates through SeptemberDecember 2030.2031. Of the $13.0 million outstanding as of the end of fiscal 2026, $2.0 million is issued under the Credit Facility.
In Februaryfiscal 2024,2026, our Board of Directors authorized aan $250.0additional $650.0 million increase to repurchase shares of our common stock under our share repurchase program, of which $21.5$329.0 million remained available at the end of fiscal 2025. In February 2025, our Board of Directors authorized an additional $250.0 million to repurchase shares of our common stock, increasing the total remaining authorization amount to $271.5 million.2026. The authorization allows us to repurchase shares of our common stock opportunistically and will be funded from available working capital. Repurchases may be made at management’s discretion from time to time on the open market through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The share repurchase program does not obligate us to acquire any of our common stock, has no end date, and may be suspended or discontinued by us at any time without prior notice. During fiscal 2025,2026, we repurchased and retired 6.7approximately 5.6 million shares of common stock at an average purchase price of $55.57$60.93 per share for an aggregate repurchase price of $373.8$342.5 million.
During fiscal 2026, we withheld approximately 4.2 million shares to cover $271.7 million in tax withholding obligations.
In June 2024, we extended the net-share settlement of equity awards to the majority of our employees by withholding shares upon vesting to satisfy tax withholding obligations whereas previously, shares were sold to cover such tax withholding obligations. This change resulted in the withholding of approximately 3.5 million shares to cover $208.8 million in tax withholding obligations during fiscal 2025 compared to 0.9 million shares to cover $30.0 million in tax withholding obligations during fiscal 2024.
CashNet cash provided by operating activities consists of net income, adjusted for non-cash items and changes in operating assets and liabilities. Non-cash items primarily included stock-based compensation and depreciation and amortization. The year-over-year increase in net cash provided by operating activities was primarily driven by higher net income of $132.0$137.0 million, when excluding non-cash items, partially offset by a decrease of $56.1$10.5 million from changes in operating assets and liabilities. The decrease from changes in operating assets and liabilities were primarily impacted by prepaymentshigher deferred revenue driven by renewal of our Evergreen subscription services across our installed base, and lower payments for certainemployee softwarecompensation. licensePartial offsets to operating cash inflows were increased billings from growth in revenue, increased inventory purchases to mitigate the impact of tariffs, higher component pricing and subscriptionsupply services,chain partiallydisruptions, offsetand by lowerhigher deferred commissions and accounts receivable due to timing of collections.commissions.
Net cash used in investing activities during fiscal 20252026 was driven by $226.7$264.3 million in capital expenditures and the purchase of a strategic investment.investment, partially offset by net proceeds of $110.7 million in marketable securities and $52.5 million from the sale of an equity security. Key capital expenditures included investments for: (a)data center expansion to support testing of new products and services, includinginvestments forto ourscale recentoperations designin win with Meta; (b) accelerating densitysupport of our directhyperscale flash modules;customer, and (c) developing our Pure Fusion v2 solution. Cash outflows were partially offset by maturities and net salesfunding of marketableinitiatives securitiesaimed ofat $41.4accelerating million.Evergreen//One subscription growth.
Net cash providedused byin investing activities during fiscal 20242025 was driven by maturities$226.7 andmillion net sales of marketable securities of $193.4 million, partially offset byin capital expenditures and the purchase of $195.2a millionstrategic relatinginvestment. toKey capital expenditures included test equipment for new product innovation, and equipment supporting our growing Evergreen//One offering, asinvestments wellto asscale theoperations in support of our hyperscale customer, and construction ofcosts related to our headquarters facility. Cash outflows were partially offset by maturities and net sales of marketable securities of $41.4 million.
Net cash used in financing activities during fiscal 20252026 was primarily driven by cash outflows related to share repurchases of $374.0$342.6 million, and tax withholding remittances on vesting ofvested equity awards of $206.6$270.9 million, and repayment of the $100.0 million outstanding on our former credit facility that terminated in June 2025, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan (ESPP) of $51.7$56.0 million, and the exercise of stock options of $27.2$18.4 million. The year-over-year increase in tax withholding remittances on vestedvesting of equity awards was dueprimarily todriven extendingby thehigher net-sharestock settlement of equity awards to satisfy tax withholding obligations to the majority of our employees in June 2024 whereas previously, shares were sold to cover such tax withholding obligations.prices.
Net cash used in financing activities during fiscal 20242025 was primarily driven by cash outflows related to the repayment of the principal amount of the Convertible Senior Notes of approximately $575.0 million, share repurchases of $135.8$374.0 million, and tax withholding remittances on vestedvesting of equity awards of $30.0$206.6 million, partially offset by proceeds from borrowing under the Credit Facility of $100.0 million, issuance of common stock under our ESPP of $45.1$51.7 million, and the exercise of stock options of $39.8$27.2 million.
OurWe generate revenue isfrom derivedtwo fromsources: (1) product revenue which includes sales of our integrated storage hardware and embedded licensed software productsproducts, royalties from hyperscaler shipments, and sale of Portworx by Everpure term licenses and (2) subscription services which alsoincludes includessales of our storage-as-a-service consumption and subscription-based offerings, support and maintenance and professional services. We enter into contracts with customers that may include combinations of these products and subscription services, resulting in arrangements containing multiple promised performance obligations.
What changed in the latest 10-Q
Risk Factors
Largest changes
“To support component procurement for our hyperscale customers who purchase products from our contract manufacturers, we have in some cases entered into agreements with component suppliers under which the supplier commits to sell a specified volume of components directly to contract manufacturers. Under these supply agreements, if the contract manufacturer does not purchase the full volume the supplier has committed to sell, we are obligated to purchase the unfulfilled portion. …”see in full comparison
Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, data privacy, securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in the United States. For example, the European Union has adopted certain directives to facilitate the recycling of electrical and electronic equipment sold in the European Union, including the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment directive and the Waste Electrical and Electronic Equipment directive. The European Union has also adopted the Cyber Resilience Act (Regulation (EU) 2024/2847), which establishes mandatory cybersecurity requirements for products with digital elements placed on the EU market, with certain reporting obligations taking effect in September 2026 and full compliance required by December 2027. Failure to comply with the Cyber Resilience Act requirements, as they become effective, could result in fines of up to €15 million or 2.5% of worldwide annual turnover, whichever is higher.see in full comparison
“In addition, to scale our supply chain, we must manage our supply and inventory effectively, including ensuring a sufficient supply of flash to support our hyperscaler customer. If our hyperscale customer reduces its demand for our flash storage solutions, we may be obligated to fulfill component purchase commitments. If we are unable to effectively manage our supply and inventory, including the supply of flash necessary to fulfill potential hyperscaler demand, our results of operations could be adversely affected.”see in full comparison
In addition, we depend on our contract manufacturers and other third parties to provide sufficient component availability for our products and services. Our third-party contract manufacturers procure components and build our products based on our forecasts, and we generally do not hold inventory for a prolonged period of time. Our forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and analyses from our sales and marketing organizations, adjusted for overall market conditions.see in full comparisonIn order toTo reduce manufacturing lead times and plan for adequate component supply, we may issue orders for components and products that are non-cancelable and non-returnable. Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to make accurate forecasts and effectively manage the supply of our products and components.If we have excess supply, we may reduce our prices and write down or write off excess or obsolete inventory, which in turn could result in lower gross margins. Alternatively, insufficient supply levels may lead to shortages that exacerbate other risk factors and result in delayed revenue, reduced product margins or lost sales opportunities altogether.
We are devoting significant resources toward expanding our sales tosee in full comparisonour existing hyperscale customer and to additionalhyperscale customers. In August 2026, we secured a second hyperscaler design win. Achieving a hyperscaler design win requires us to dedicate significant resources and investment in pursuit of a single customer opportunity without any guarantee of revenue. Additionally, we may be obligated to fulfillNAND flashcomponent purchase commitments ifourhyperscalecustomercustomersreducesreduceitstheir demand for our flash storagesolutions.solutions below our current expectations and their contractual obligations to their contract manufacturers. While we believe the opportunity to sell our solutions toour existing hyperscale customer and additionalhyperscalers is significant, and that sales to hyperscalers may in the future account for a significant portion of our revenue, there can be no assurance that our efforts will lead to meaningful revenue, operating margin or cash flow, or that we will succeed in securing additional hyperscale customers. Further, even if we do secure additional hyperscaler design wins, a design win does not guarantee sales. Ourexisting, and potential future,hyperscale customers could choose to delay or cancel purchasing or licensing our technology and services. It is therefore difficult to predict the volume and timing of sales, if any, that will follow from any design win that we secure. Moreover, if any of ourexistinghyperscalecustomer were tocustomers delay, reduce or cancelitstheir purchases from us, or if we are unable to fulfill our order commitments to these customers, our business, operating results, cash flows and financial condition would be adversely affected.
Managing the supply of our products and underlying components is complex and has become increasingly difficult, in part, due to componentsee in full comparisonquality,quality issues, component scarcity, increased global demand, and inflationary pressure. Our supply chain has been, and may continue to be adversely impacted by component cost increases. In response to these cost increases, we raised our prices during the firstquarterhalf of fiscal year 2027, and if component costs or other supply chain-related costs continue to increase, we may need tofurtherincrease prices again in the future. Any such price increase may result in reduced sales or the loss of customers, and adversely impact our business and results of operations. We enter into agreements with our suppliers to provide components at specified prices, volume, and timing. Our suppliers have in thepast,past sought, and may in thefuture,futureseekseek, to renegotiate the terms of our supply agreements. Furthermore, in the current environment of increased global demand and component scarcity, suppliers may lack the capacity to allocate the necessary volume of components to meet our manufacturing requirements. If our suppliers fail to perform their obligations or if they are unable or refuse to provide components to us at the specified prices, volumes, or at the times that we have agreed upon,or if they are simply unable to allocate the volume of components that we need,we may be unable to secure alternate supply on commercially reasonable terms or within our required timeframes. As a result, we could face component shortages, higher component costs, manufacturing disruptions, longer customer leadtimes andtimes, delays in shipping our products, or lost sales opportunities altogether.Such a disruption could cause us to miss revenue opportunities, damage our relationships with customers and partners, and negatively impact our reputation.A significant or sustained supply chain failure of this nature could adversely affect our business, financial condition, product margins, results of operations, prospects, customer relationships and partners, negatively impact our reputation, and could require us to incur significant cash outlays and increase our working capital requirements.
Full comparison: every changed paragraph (18)
•If we fail to develop and introduce new or enhanced data storage and management offerings successfully, our ability to attract and retain customers could be harmed.
Managing the supply of our products and underlying components is complex and has become increasingly difficult, in part, due to component quality,quality issues, component scarcity, increased global demand, and inflationary pressure. Our supply chain has been, and may continue to be adversely impacted by component cost increases. In response to these cost increases, we raised our prices during the first quarterhalf of fiscal year 2027, and if component costs or other supply chain-related costs continue to increase, we may need to further increase prices again in the future. Any such price increase may result in reduced sales or the loss of customers, and adversely impact our business and results of operations. We enter into agreements with our suppliers to provide components at specified prices, volume, and timing. Our suppliers have in the past,past sought, and may in the future,future seekseek, to renegotiate the terms of our supply agreements. Furthermore, in the current environment of increased global demand and component scarcity, suppliers may lack the capacity to allocate the necessary volume of components to meet our manufacturing requirements. If our suppliers fail to perform their obligations or if they are unable or refuse to provide components to us at the specified prices, volumes, or at the times that we have agreed upon, or if they are simply unable to allocate the volume of components that we need, we may be unable to secure alternate supply on commercially reasonable terms or within our required timeframes. As a result, we could face component shortages, higher component costs, manufacturing disruptions, longer customer lead times andtimes, delays in shipping our products, or lost sales opportunities altogether. Such a disruption could cause us to miss revenue opportunities, damage our relationships with customers and partners, and negatively impact our reputation. A significant or sustained supply chain failure of this nature could adversely affect our business, financial condition, product margins, results of operations, prospects, customer relationships and partners, negatively impact our reputation, and could require us to incur significant cash outlays and increase our working capital requirements.
In addition, to scale our supply chain, we must manage our supply and inventory effectively, including ensuring a sufficient supply of flash to support our hyperscaler customer. If our hyperscale customer reduces its demand for our flash storage solutions, we may be obligated to fulfill component purchase commitments. If we are unable to effectively manage our supply and inventory, including the supply of flash necessary to fulfill potential hyperscaler demand, our results of operations could be adversely affected.
In addition, we depend on our contract manufacturers and other third parties to provide sufficient component availability for our products and services. Our third-party contract manufacturers procure components and build our products based on our forecasts, and we generally do not hold inventory for a prolonged period of time. Our forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and analyses from our sales and marketing organizations, adjusted for overall market conditions. In order toTo reduce manufacturing lead times and plan for adequate component supply, we may issue orders for components and products that are non-cancelable and non-returnable. Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to make accurate forecasts and effectively manage the supply of our products and components. If we have excess supply, we may reduce our prices and write down or write off excess or obsolete inventory, which in turn could result in lower gross margins. Alternatively, insufficient supply levels may lead to shortages that exacerbate other risk factors and result in delayed revenue, reduced product margins or lost sales opportunities altogether.
To support component procurement for our hyperscale customers who purchase products from our contract manufacturers, we have in some cases entered into agreements with component suppliers under which the supplier commits to sell a specified volume of components directly to contract manufacturers. Under these supply agreements, if the contract manufacturer does not purchase the full volume the supplier has committed to sell, we are obligated to purchase the unfulfilled portion. Because purchases by contract manufacturers under these arrangements are driven in part by contracted demand from their hyperscale customers, a reduction in such demand or an event of default from contracted commitments from their hyperscale customers could obligate us to purchase components that otherwise would have been purchased by the contract manufacturer. As a result, we could experience excess component supply, increased inventory levels, and additional costs. In such circumstances, we may reduce our prices and write down or write off excess or obsolete inventory, which in turn could result in lower gross margins. The price at which we may be required to purchase components under these arrangements is fixed, or is set within a pre-agreed range, for an extended period in advance of the applicable purchase and does not adjust based on then-current market conditions. Because the volume of our purchase commitments under these arrangements can be substantial, if the market price for the applicable components declines significantly below our committed price before or during the period in which we are required to purchase, we could be obligated to purchase a large volume of components at prices that are significantly above prevailing market prices, which could adversely affect our gross margins, results of operations and cash flows.
We are devoting significant resources toward expanding our sales to our existing hyperscale customer and to additional hyperscale customers. In August 2026, we secured a second hyperscaler design win. Achieving a hyperscaler design win requires us to dedicate significant resources and investment in pursuit of a single customer opportunity without any guarantee of revenue. Additionally, we may be obligated to fulfill NAND flashcomponent purchase commitments if our hyperscale customercustomers reducesreduce itstheir demand for our flash storage solutions.solutions below our current expectations and their contractual obligations to their contract manufacturers. While we believe the opportunity to sell our solutions to our existing hyperscale customer and additional hyperscalers is significant, and that sales to hyperscalers may in the future account for a significant portion of our revenue, there can be no assurance that our efforts will lead to meaningful revenue, operating margin or cash flow, or that we will succeed in securing additional hyperscale customers. Further, even if we do secure additional hyperscaler design wins, a design win does not guarantee sales. Our existing, and potential future, hyperscale customers could choose to delay or cancel purchasing or licensing our technology and services. It is therefore difficult to predict the volume and timing of sales, if any, that will follow from any design win that we secure. Moreover, if any of our existing hyperscale customer were tocustomers delay, reduce or cancel itstheir purchases from us, or if we are unable to fulfill our order commitments to these customers, our business, operating results, cash flows and financial condition would be adversely affected.
We rely on contract manufacturers and component vendors, somemany of which are located outside the United States. The importation of our products and the underlying components may be affected by changes in applicable tariffs, trade agreements, and trade policies, and expose us to risks associated with doing business globally. The United States and other countries in our supply chain or in which we have sales have imposed, and may impose additional, tariffs, duties, quotas, or other restrictions or regulations, or may adversely adjust prevailing tariff levels, quotas, duties, or other restrictions or regulations. Countries impose, modify and remove tariffs and other trade restrictions in response to a variety of factors, including economic and political conditions, which make it impossible for us to predict future developments regarding tariffs and other trade restrictions. Additionally, changes in U.S. policy have and may continue to lead to significant changes in tariffs for imported goods. The imposition of tariffs on our products or their underlying components may require us to raise our prices, which may result in the loss of customers and harm our business and results of operations, or we may choose to pay for these tariffs without raising prices which may negatively impact our results of operations and profitability.
Our future success is highly dependent upon our ability to establish and maintain successful relationships with our partners, including value-added resellers, service providers and systems integrators. In addition to selling our Everpure Platform, our partners may offer installation, post-sale service and support in their local markets. In markets where we rely on partners more heavily, we have less contact with our customers and less control over the sales process and the quality and responsiveness of our partners. As a result, it may be more difficult for us to ensure the proper delivery and installation of our Everpure Platform or the quality or responsiveness of the support and services being offered. Moreover, because our success depends on our partner relationships, we have recently increased our partner incentive compensation arrangements which we expect to negatively impact revenue. However, there can be no assurance that this increased incentive compensation will result in a corresponding increase in our sales. Any failure on our part to effectively identify, train and manage our channel partners and to monitor their sales activity, as well as the customer support and services provided to our customers, could harm our business, operating results and financial condition.
If we fail to develop and introduce new or enhanced data storage and management offerings successfully, our ability to attract and retain customers could be harmed.
We operate in a dynamic environment characterized by rapidly changing technologies and industry standards and technological obsolescence. To compete successfully, we must design, develop, market and sell new or enhanced data storage and data management offerings that provide increasingly higher levels of performance, capacity, functionality and reliability and meet our customers’ expectations, which is a complex and uncertain process. We believe that we must continue to dedicate significant resources to our research and development efforts and innovative business models such as Evergreen//One to improve our competitive position. We continue to expand our large capacity data storage offerings to compete directly with hard disk systems. Our investments may take longer to generate revenue or may generate less revenue than we anticipate. The introduction of new storage offerings by our competitors, or the emergence of alternative technologies or industry standards could render our Everpure Platform obsolete or less competitive.
•changes in customer mix (including our hyperscale customercustomers), geographic mix, or product mix, including the relative sales of our lower product gross margin FlashBlade//E, FlashArray//E, and FlashArray//C solutions;
The cost of our components increased significantly during fiscal 2026 and the first quarterhalf of fiscal 2027, and we anticipate continued component pricing volatility through the remainder of fiscal 2027. Elevated global demand for the components used in our products has made future cost fluctuations highly unpredictable. We maintain supply agreements with our component suppliers that help mitigate, but do not eliminate, significant component cost volatility. While we have implemented product price increases to help offset these rising expenses, ongoing component cost volatility has placed, and may continue to place, downward pressure on our gross margins.
Our strategy is to continue investing in marketing, sales, support and research and development. We believe continuing to invest heavily in our business, including investments to scale operations to support our hyperscaler customer,customers, is critical to our future success and meeting our growth objectives. We anticipate that our operating expenses will continue to increase in absolute terms. Even if we achieve or maintain significant revenue growth, we may experience losses, forgoing near-term profitability on a U.S. GAAP basis.
The sales prices of our offerings may fluctuate for a variety of reasons, including competitive pricing pressures, discounts, the introduction of competing products or services or promotional programs, a change in our mix of products and services, cost of components, supply chain constraints, inflation and other adverse economic conditions. As a result of the recent increase in our component costs, we raised our prices during the first quarterhalf of fiscal year 2027 and may be required to raise our prices again in the future.
Our ability to increase our revenue depends on our ability to attract, motivate, and retain qualified sales, engineering and other key employees, including our management. These positions may require candidates with specific backgrounds in software and the storage industry, and competition for employees with such expertise is intense. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. To the extent that we are successful in hiring to fill these positions, we may need a significant amount of time to train new employees before they are effective and efficient in performing their jobs. If we are unable to adequately address these challenges, our ability to recruit and retain employees and to ensure employee productivity could be negatively affected. From time to time, there may be changes in our management team, which could create short term uncertainty. For example, in fiscal 2026, we have hired a new chief financial officer and chief revenue officer. All of our employees, including members of our management team and executive officers, are generally employed on an at-will basis, which means that they could terminate their employment with us at any time. If we are unable to attract, motivate and retain qualified sales, engineering and other key employees, including our management or if they are unable to work effectively, our business and operating results could suffer.
On July 4,In 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States; while certain provisions reduced our current tax expense, future interpretations or changes in guidance could materially affect our cash tax obligations, deferred tax positions, and effective tax rate over time.
Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, anti-bribery laws, import/export controls, data privacy, securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in the United States. For example, the European Union has adopted certain directives to facilitate the recycling of electrical and electronic equipment sold in the European Union, including the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment directive and the Waste Electrical and Electronic Equipment directive. The European Union has also adopted the Cyber Resilience Act (Regulation (EU) 2024/2847), which establishes mandatory cybersecurity requirements for products with digital elements placed on the EU market, with certain reporting obligations taking effect in September 2026 and full compliance required by December 2027. Failure to comply with the Cyber Resilience Act requirements, as they become effective, could result in fines of up to €15 million or 2.5% of worldwide annual turnover, whichever is higher.
The trading price of our common stock has been, and will likely continue to be, highly volatile. Since shares of our common stock were sold in our initial public offering in October 2015 at a price of $17.00 per share, our closing stock price has ranged from $8.76 to $98.70,$118.16, through JuneAugust 1,31, 2026. Some of the factors, many of which are beyond our control, affecting our volatility may include:
Management's Discussion & Analysis (MD&A)
Largest changes
“•In March 2026, we extended Evergreen//One support to FlashBlade//EXA, providing a flexible pay-as-you-go model for high-performance AI training and inference, and also announced the general availability of Everpure™ FlashArray™ support for Microsoft Azure Local.”see in full comparison
“The slight decrease in subscription services gross margin during the second quarter and first two quarters of fiscal 2027 when compared to the second quarter and first two quarters of fiscal 2026 was primarily driven by higher part replacements cost, depreciation of assets supporting the growth of our Evergreen//One offering, amortization of capitalized software costs for the development of Everpure Fusion and Everpure Cloud Azure Native and employee compensation and related costs.”see in full comparison
During thesee in full comparisonfirstsecond quarter of fiscal 2027 compared to thefirstsecond quarter of fiscal 2026, total revenue in the United States grew39%19% from$530.7$577.0 million to$739.4$688.4 million while total rest of the world revenue grew27%75% from$247.8$284.0 million to$313.5$497.5 million. During the first two quarters of fiscal 2027 compared to the first two quarters of fiscal, total revenue in the United States grew 29% from $1.1 billion to $1.4 billion while total rest of the world revenue grew 52% from $531.8 million to $811.0 million.
“The decrease in provision (benefit) for income taxes during the second quarter and first two quarters of fiscal 2027 when compared to the second quarter and first two quarters of fiscal 2026 was primarily driven by a lower estimated annual effective tax rate and discrete tax benefits recognized in the respective periods, including certain tax benefits associated with the acquisition of 1touch.”see in full comparison
“The decrease in provision for income taxes during the first quarter of fiscal 2027 when compared to the first quarter of fiscal 2026 was primarily attributable to the enactment of the One Big Beautiful Bill Act (OBBBA), specifically the provisions related to Section 174, which eliminated the requirement to capitalize domestic research and development expenditures.”see in full comparison
The slightsee in full comparisondecreaseincrease insubscription servicesproduct gross margin during the firstquartertwo quarters of fiscal 2027 when compared to the firstquartertwo quarters of fiscal 2026 was primarilydrivenduebyto lower amortization ofcapitalizedintangiblesoftware costs for the development of Everpure Fusionassets andEverpuretoCloudaAzurelesserNativeextentandroyaltieshigherfromemployeehyperscalercompensationshipments,andpartiallyrelatedoffsetcosts.by increase in component pricing.
Full comparison: every changed paragraph (40)
•We announced a design win with a second top-five hyperscaler, leveraging our advanced DirectFlash® architecture to drastically lower operational costs and reclaim vital power and rack space for hyperscale workloads.
•During //Accelerate 2026, we unveiled the Data-Primacy Architecture - Everpure Data Intelligence for automated data discovery and governance.
•In March 2026, we extended Evergreen//One support to FlashBlade//EXA, providing a flexible pay-as-you-go model for high-performance AI training and inference, and also announced the general availability of Everpure™ FlashArray™ support for Microsoft Azure Local.
•In April 2026, we announced Pure1 + Veeam Anomaly Awareness Workflow, which is a new integration unifying Everpure Pure1 and Veeam Backup & Replication (VBR).
•In April 2026, we also updated our ticker symbol (NYSE: P), reflecting our expansion from a storage provider to a leader in the future of data management.
•In May 2026, we completed the strategic acquisition of 1touch, an innovator in data intelligence and orchestration, adding data security posture management (DSPM), advanced data discovery, classification, and semantic context capabilities to the Everpure Platform.
Other income (expense), net consists primarily of interest income related to cash, cash equivalents and marketable securities, interest expense related to our revolving credit facility, unrealized gains (losses) from mark-to-market adjustments on an equity security, and gains (losses) from foreign currency transactions.
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business and current income taxes in the United States. Our foreign subsidiaries earn a profit margin based upon transfer pricing principles which require an arm’s length return. Our foreign subsidiaries’ sales and marketing expenses are expected to increase over time as we grow, resulting in higher pre-tax foreign earnings and higher foreign income taxes.
The increase in product revenue during the second quarter and first quartertwo quarters of fiscal 2027 compared to the second quarter and first quartertwo quarters of fiscal 2026 was primarily driven by an increase in customer demand for our FlashArray and FlashBlade solutions across all of our key geographic areas and customer basebase, andparticularly our large enterprise customers, as well as increased pricing with a mix shift to higher performance configurations with terabyte capacity up across our portfolio, and to a lesser extent, royalties from hyperscaler shipments.
The increase in subscription services revenue during the second quarter and first quartertwo quarters of fiscal 2027 compared to the second quarter and first quartertwo quarters of fiscal 2026 was largely driven by increases in sales of our Evergreen//One consumption, subscription-based offerings and renewals of our Evergreen subscription services across our installed base.
During the firstsecond quarter of fiscal 2027 compared to the firstsecond quarter of fiscal 2026, total revenue in the United States grew 39%19% from $530.7$577.0 million to $739.4$688.4 million while total rest of the world revenue grew 27%75% from $247.8$284.0 million to $313.5$497.5 million. During the first two quarters of fiscal 2027 compared to the first two quarters of fiscal, total revenue in the United States grew 29% from $1.1 billion to $1.4 billion while total rest of the world revenue grew 52% from $531.8 million to $811.0 million.
The year-over-year growth in our Subscription ARR at the end of the firstsecond quarter of fiscal 2026 was 18%. The increase in year-over-year growth to 19%20% at the end of the firstsecond quarter of fiscal 2027 was driven by our increasedcontinued salesgrowth of Evergreen subscription-based offerings.offerings and strong renewal activity during the quarter.
Total remaining performance obligations (RPO) which is total contracted but not recognized revenue was $3.8$4.1 billion at the end of the firstsecond quarter of fiscal 2027, and primarily includes non-cancelable Total Contract Value (TCV) sales for our storage-as-a-service offerings, including Evergreen//One, Evergreen//Flex, and Everpure Cloud consumption and subscription-based offerings, as well as $51.4$44.5 million relates to a lessor arrangement. RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods. Product orders are generally cancelable until delivery has occurred, and as such, unfulfilled product orders that are cancelable are excluded from RPO. Cancelable orders will fluctuate depending on numerous factors.
TCV sales for our storage-as-a-service offerings is a key business metric we use to evaluate the performance of our consumption and subscription based offerings. TCV sales for these offerings include recurring subscription fees, any non-recurring charges such as initial setup fees, and any other billable services directly tied to the execution of the underlying service contract. Year-over-year growth in RPO to 41%44% at the end of the firstsecond quarter of fiscal 2027 when compared to 40% at the end of fiscal 2026 was driven by both growth of TCV sales for our storage-as-a-service offerings, and strong renewals of our Evergreen subscriptions.
The increaseslight decrease in product gross margin during the firstsecond quarter of fiscal 2027 when compared to the firstsecond quarter of fiscal 2026 was primarily due to price increases and shiftsincrease in productcomponent mixpricing, towardspartially higheroffset performance FlashArray and FlashBlade solutions and to a lesser extent,by royalties from hyperscaler shipments.
The slight decreaseincrease in subscription servicesproduct gross margin during the first quartertwo quarters of fiscal 2027 when compared to the first quartertwo quarters of fiscal 2026 was primarily drivendue byto lower amortization of capitalizedintangible software costs for the development of Everpure Fusionassets and Everpureto Clouda Azurelesser Nativeextent androyalties higherfrom employeehyperscaler compensationshipments, andpartially relatedoffset costs.by increase in component pricing.
The slight decrease in subscription services gross margin during the second quarter and first two quarters of fiscal 2027 when compared to the second quarter and first two quarters of fiscal 2026 was primarily driven by higher part replacements cost, depreciation of assets supporting the growth of our Evergreen//One offering, amortization of capitalized software costs for the development of Everpure Fusion and Everpure Cloud Azure Native and employee compensation and related costs.
The increase in research and development expense during the second quarter and first quartertwo quarters of fiscal 2027 when compared to the second quarter and first quartertwo quarters of fiscal 2026 was primarily driven by an increase in employee compensation and related costs, including stock-based compensation, from growth in headcount and, to a lesser extent, an increase in equipment depreciation and facilities-related costs.depreciation.
The increase in sales and marketing expense during the second quarter and first quartertwo quarters of fiscal 2027 when compared to the second quarter and first quartertwo quarters of fiscal 2026 was primarily driven by an increase in employee compensation and related costs, including sales commission expense and stock-based compensation, from growth in headcount and higher bookings achievement.achievement, and to a lesser extent, an increase in marketing and advertising activities, and third-party professional services.
The increase in general and administrative expense during the second quarter and first quartertwo quarters of fiscal 2027 when compared to the second quarter and first quartertwo quarters of fiscal 2026 was primarily driven by an increase in employee compensation and related costs, including stock-based compensation, from growth in headcount, and, to a lesser extent, an increase in third-party professional services, including acquisition-related transaction costs.
The decrease in other income (expense), net during the second quarter and first quartertwo quarters of fiscal 2027 when compared to the second quarter and first quartertwo quarters of fiscal 2026 was primarily due to higherunrealized gains from mark-to-market adjustments on an equity security during the first two quarters of fiscal 2026, and to a lesser extent, lower net foreign exchange losses as the U.S. dollar strengthened relative to certain foreign currencies.currencies and lower interest income from lower cash and cash equivalents balances.
Provision (Benefit) for Income Taxes
The decrease in provision (benefit) for income taxes during the second quarter and first two quarters of fiscal 2027 when compared to the second quarter and first two quarters of fiscal 2026 was primarily driven by a lower estimated annual effective tax rate and discrete tax benefits recognized in the respective periods, including certain tax benefits associated with the acquisition of 1touch.
The decrease in provision for income taxes during the first quarter of fiscal 2027 when compared to the first quarter of fiscal 2026 was primarily attributable to the enactment of the One Big Beautiful Bill Act (OBBBA), specifically the provisions related to Section 174, which eliminated the requirement to capitalize domestic research and development expenditures.
At the end of the firstsecond quarter of fiscal 2027, we had cash, cash equivalents and marketable securities of $1.5$1.0 billion. Our cash and cash equivalents primarily consist of bank deposits and money market accounts. Our marketable securities generally consist of highly rated debt instruments of the U.S. government and its agencies, debt instruments of highly rated corporations, debt instruments issued by foreign governments, asset-backed securities, and municipal bonds.
We believe our existing cash, cash equivalents, marketable securities and revolving credit facility will be sufficient to fund our operating and capital needs for at least the next 12 months. Our future capital requirements will depend on many factors including our sales growth, the timing and extent of capital spending to support development efforts including investments to scale operations in support of our hyperscale customercustomers and capture additional growth opportunities, the timing and extent of strategic inventorycomponent purchases driven by supply chain constraints, higher commodity pricing, growth of our Evergreen//One offering, the addition or closure of office space, the timing of new product introductions, our share repurchases, the timing of repayment of borrowings under the revolving credit facility, and cash payments for tax withholding obligations for equity awards held by employees. In addition, we may be obligated under our long-term supply agreements to purchase components that our contract manufacturers do not, which could increase our cash requirements. We may continue to enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property and other licensing rights. For example, on May 7, 2026, we completed the acquisition of 1touch. We may enter into other financing arrangements and seek additional equity or debt financing in the future.
We are subject to certain affirmative and negative covenants, including a Consolidated Net Leverage Ratio not to exceed 3.5:1 (which may be increased to 4:1 for the first six consecutive fiscal quarters after a qualified acquisition, as defined in the Credit Agreement) measured as of the last day of each fiscal quarter. As of the end of the firstsecond quarter of fiscal 2027, there were no outstanding borrowings and we were in compliance with all covenants under the Credit Facility.
At the end of fiscal 2026 and the firstsecond quarter of fiscal 2027, we had outstanding letters of credit in the aggregate amount of $13.0 million and $16.6 million in connection with our facility leases and a certain employee-related benefit, that mature on various dates through December 2031. Of the $13.0 million and $16.6 million outstanding as of the ends of fiscal 2026 and the firstsecond quarter of fiscal 2027, $2.0 million and $4.9 million is issued under the Credit Facility.
Our Board of Directors has authorized up to $1.8 billion under our share repurchase program. At the end of the firstsecond quarter of fiscal 2027, $244.9$176.0 million remained available for future share repurchases under our current repurchase authorization. The authorization allows us to repurchase shares of our common stock opportunistically and will be funded from available working capital. Repurchases may be made at management’s discretion from time to time on the open market through privately negotiated transactions, transactions structured through investment banking institutions, block purchase techniques, 10b5-1 trading plans, or a combination of the foregoing. The share repurchase program does not obligate us to acquire any of our common stock, has no end date, and may be suspended or discontinued by us at any time without prior notice. During the firstsecond quarter of fiscal 2027, we repurchased and retired approximately 1.30.9 million shares of common stock at an average purchase price of $65.59$74.01 per share for an aggregate repurchase price of $84.1$69.0 million.
During the firstsecond quarter of fiscal 2027, we withheld approximately 1.61.0 million shares to cover $101.0$74.3 million in tax withholding obligations.obligations related to equity awards vested.
Net cash provided by operating activities consists of net income, adjusted for non-cash items and changes in operating assets and liabilities. Non-cash items primarily included stock-based compensation and depreciation and amortization. The year-over-year decrease in net cash provided by operating activities was primarily driven by a decrease of $177.7$625.4 million from changes in operating assets and liabilities, partially offset by higher net income of $38.1$65.1 million and higher stock-based compensation of $25.8$68.2 million. The decrease from changes in operating assets and liabilities were primarily impacted by higherstrategic paymentscomponent for employee compensation, including commission payments pertainingpurchases to overachievementsupport incustomer demand and secure component supply to support the fourth quartergrowth of fiscalour 2026, and increased payments for inventory purchases.business.
Our primary source of cash from operating activities during the first quartertwo quarters of fiscal 2026 and 2027 were from cash collections from billings for sales of our product and subscription services.
Our primary uses of cash from operating activities during the first quartertwo quarters of fiscal 2026 and 2027 were payments to our contract manufacturers, payments for employee compensation, and general corporate operating expenditures.
Net cash used in investing activities during the first quartertwo quarters of fiscal 2027 was driven by $68.4$169.7 million in capital expenditures, $125.3 million in acquisition of 1touch, partially offset by net proceeds of $23.0$65.4 million in marketable securities. Key capital expenditures included investments for equipment supporting deployments of our Evergreen//One offering, data center expansion to support testing of new products and services, including for our hyperscale business, and leasehold improvements related to our new office leases.
Net cash usedprovided inby investing activities during the first quartertwo quarters of fiscal 2026 was driven by $72.3net proceeds of marketable securities of $152.4 million, partially offset by $134.4 million in capital expenditures. Key capital expenditures included investments for: (a) equipment supporting deployments of our Evergreen//One offering,offering; (b) data center expansion to support testing of new products and services, including for our hyperscale solution design win,win; and (c) developing our Pure Fusion v2 solution. Cash outflows were also impacted by net purchases of marketable securities of $39.4 million.
Net cash used in financing activities during the first quartertwo quarters of fiscal 2027 was primarily driven by cash outflows related to tax withholding remittances on vested equity awards of $102.9$173.3 million and share repurchases of $84.1$153.1 million, partially offset by proceeds from the issuance of common stock under our employee stock purchase plan (ESPP) of $30.0 million, and the exercise of stock options of $6.6$15.2 million. The year-over-year increase in tax withholding remittances on vested equity awards was primarily driven by higher stock prices.
Net cash used in financing activities during the first quartertwo quarters of fiscal 2026 was primarily driven by cash outflows related to share repurchases of $119.9$162.2 million and tax withholding remittances on vested equity awards of $61.3$117.5 million, and repayment of the $100.0 million outstanding on our former credit facility that terminated in June 2025, partially offset by proceeds from the issuance of common stock under our ESPP of $27.2 million, and the exercise of stock options of $5.4$13.5 million.
We deem an accounting policy to be critical if the nature of the estimate or assumption it incorporates is subject to material level of judgment related to matters that are highly uncertain and changes in those estimates and assumptions are reasonably likely to materially impact our condensed consolidated financial statements. Refer to Note 2 of Part I, Item I of this Quarterly Report on Form 10-Q for the summary of significant accounting policies. In addition, see “Critical Accounting Policy and Estimates” in our latest Form 10-K for our fiscal year ended February 1, 2026. There have been no material changes to our critical accounting policies and estimates since thisour Form 10-K was filed on March 25, 2026.
Investors and others should note that we announce material business and financial information through our investor relations website at www.investors.everpuredata.com, SEC filings, public conference calls and webcasts, and press releases, including earnings press releases. We also announce business and financial information through our newsroom website (https://www.everpuredata.com/company/newsroom.html), blog (http://blog.everpuredata.com), LinkedIn (linkedin.com/company/everpure-data), X (x.com/EverpureData), Facebook (@purestorage), Instagram (@purestorage) and YouTube (@everpure-data). It is possible that the information we post on these channels could be deemed to be material information. Therefore, we encourage investors to follow these channels, in addition to our SEC filings, public conference calls and webcasts, and press releases. The information we publish through these channels is not incorporated by reference into this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
P insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 26 filings (7 insiders, 30 trade dates, 2,848,435 shares, about $265.9M; 20 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -2,848,435 (purchases minus sales); net value about -$265.9M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-02 | Chu Mona |
Open-market sale | 2,852 | $140.20 | $399.9K |
| 2026-09-25 | Colgrove John |
Open-market sale |
6,100 | $127.10 | $775.3K |
| 2026-09-25 | Colgrove John |
Open-market sale |
9,600 | $126.00 | $1.2M |
| 2026-09-25 | Colgrove John |
Open-market sale |
25,006 | $125.15 | $3.1M |
| 2026-09-25 | Colgrove John |
Open-market sale |
34,383 | $124.47 | $4.3M |
| 2026-09-25 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-25 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-25 | Colgrove John |
Open-market sale |
24,911 | $123.20 | $3.1M |
| 2026-09-24 | Singh Ajay |
Open-market sale | 42,930 | $124.17 | $5.3M |
| 2026-09-24 | Colgrove John |
Open-market sale |
1,800 | $116.64 | $210.0K |
| 2026-09-24 | Colgrove John |
Open-market sale |
67,903 | $115.24 | $7.8M |
| 2026-09-24 | Colgrove John |
Open-market sale |
30,297 | $117.54 | $3.6M |
| 2026-09-24 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-24 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-22 | Colgrove John |
Open-market sale |
66,892 | $110.15 | $7.4M |
| 2026-09-22 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-22 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-22 | Colgrove John |
Open-market sale |
33,108 | $111.39 | $3.7M |
| 2026-09-21 | Colgrove John |
Open-market sale |
97,866 | $110.33 | $10.8M |
| 2026-09-21 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-21 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-09-21 | Colgrove John |
Open-market sale |
2,134 | $111.12 | $237.1K |
| 2026-09-20 | Singh Ajay |
Shares withheld for tax | 9,821 | $104.14 | $1.0M |
| 2026-09-20 | Colgrove John |
Shares withheld for tax |
15,956 | $104.14 | $1.7M |
| 2026-09-20 | Giancarlo Charles H |
Shares withheld for tax | 30,036 | $104.14 | $3.1M |
| 2026-09-20 | Robbiati Tarek |
Shares withheld for tax | 33,860 | $104.14 | $3.5M |
| 2026-09-20 | Chu Mona |
Shares withheld for tax | 2,864 | $104.14 | $298.3K |
| 2026-09-10 | Giancarlo Charles H |
Open-market sale |
24,372 | $95.63 | $2.3M |
| 2026-09-10 | Giancarlo Charles H |
Open-market sale |
4,605 | $96.34 | $443.6K |
| 2026-09-10 | Giancarlo Charles H |
Open-market sale |
41,023 | $94.66 | $3.9M |
| 2026-09-10 | Colgrove John |
Open-market sale |
3,411 | $96.37 | $328.7K |
| 2026-09-10 | Colgrove John |
Open-market sale |
32,413 | $94.50 | $3.1M |
| 2026-09-10 | Colgrove John |
Open-market sale |
14,176 | $95.62 | $1.4M |
| 2026-09-10 | Colgrove John |
Open-market sale |
3,424 | $96.37 | $330.0K |
| 2026-09-10 | Colgrove John |
Open-market sale |
32,428 | $94.50 | $3.1M |
| 2026-09-10 | Colgrove John |
Open-market sale |
14,148 | $95.63 | $1.4M |
| 2026-08-14 | Colgrove John |
Gift |
64,815 | — | — |
| 2026-08-14 | Colgrove John |
Gift |
64,815 | — | — |
| 2026-08-14 | Colgrove John |
Open-market sale |
4,400 | $115.86 | $509.8K |
| 2026-08-14 | Colgrove John |
Open-market sale |
18,924 | $116.74 | $2.2M |
| 2026-08-14 | Colgrove John |
Open-market sale |
34,178 | $117.83 | $4.0M |
| 2026-08-14 | Colgrove John |
Open-market sale |
7,313 | $118.40 | $865.9K |
| 2026-08-13 | Colgrove John |
Open-market sale |
9,454 | $116.27 | $1.1M |
| 2026-08-13 | Colgrove John |
Open-market sale |
2,872 | $115.16 | $330.7K |
| 2026-08-13 | Colgrove John |
Open-market sale |
45,906 | $117.13 | $5.4M |
| 2026-08-13 | Colgrove John |
Open-market sale |
39,668 | $117.87 | $4.7M |
| 2026-08-13 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-08-13 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-08-13 | Colgrove John |
Open-market sale |
900 | $112.56 | $101.3K |
| 2026-08-13 | Colgrove John |
Open-market sale |
1,200 | $113.88 | $136.7K |
| 2026-08-12 | Colgrove John |
Open-market sale |
10,293 | $113.65 | $1.2M |
| 2026-08-12 | Colgrove John |
Open-market sale |
948 | $112.72 | $106.9K |
| 2026-08-12 | Colgrove John |
Open-market sale |
36,984 | $111.77 | $4.1M |
| 2026-08-12 | Colgrove John |
Open-market sale |
38,333 | $111.24 | $4.3M |
| 2026-08-12 | Colgrove John |
Open-market sale |
6,520 | $110.19 | $718.4K |
| 2026-08-12 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-08-12 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-08-12 | Colgrove John |
Open-market sale |
6,922 | $108.92 | $753.9K |
| 2026-08-11 | Colgrove John |
Gift |
100,000 | — | — |
| 2026-08-11 | Colgrove John |
Gift |
100,000 | — | — |
Well-known investors holding P (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 3,655,134 | $288.0M | 0.4% | Reduced 3% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,954,941 | $144.5M | 0.05% | Reduced 41% |
| Two Sigma Investments | 2026-06-30 | 1,683,982 | $132.7M | 0.1% | Added 2% |
| JANA Partners (Barry Rosenstein) | 2026-06-30 | 989,196 | $77.9M | 4.1% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 910,346 | $71.7M | 0.05% | Reduced 1% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 833,423 | $65.7M | 0.04% | Reduced 16% |
| ARK Investment Management (Cathie Wood) | 2026-06-30 | 397,952 | $31.4M | 0.2% | Reduced 7% |
| D. E. Shaw & Co. | 2026-06-30 | 365,682 | $28.8M | 0.02% | Reduced 43% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 61,034 | $4.8M | 0.01% | Reduced 5% |
| Bridgewater Associates | 2026-06-30 | 5,962 | $469.7K | 0.0% | New position |
| Polen Capital Management | 2026-06-30 | 3,828 | $301.6K | 0.0% | New position |