AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 31/10/2026
Moat63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Seven generations of delivered non-disruptive upgrades, historical higher renewals and substantial contractual commitments support an installed-base switching advantage. Competing incumbents possess similar relationship and switching advantages, limiting its breadth.
durability · 2/4 · Repeated upgrade delivery and seven-year customer leases support multiyear persistence. They do not establish superiority after contracts expire, particularly as competing technologies improve.
customer dependency · 3/4 · Continuity for running production systems and accepted non-cancelable obligations support meaningful operating and contractual dependence. Operational dependence is partly inferred; customer migration costs and installed-base retention rates are undisclosed.
erosion resilience · 2/4 · Successive product upgrades and subsequent revenue growth demonstrate resilience so far. Improving alternatives and disclosed aggressive competitor discounting constrain confidence. Fusion adoption and a second hyperscaler design win show progress, but a design win does not guarantee sales.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Actual first-half fiscal 2027 price increases establish observed pricing action. Revenue grew and management reported strong demand, but quarterly GAAP gross margin declined to 68.4% from 70.2%. Outcomes are mixed: realized price magnitude, concessions and price-versus-volume contributions remain undisclosed.
retention · 3/4 · Historical higher Evergreen renewals directly support repeat demand; successive upgrade continuity, non-cancelable commitments and audited NPS provide additional indirect support. These disclosures do not establish retention following price increases or permit calculation of a retention rate.
margin resilience · 2/4 · Historical renewal growth and efficiencies supported subscription margins, and fiscal 2026 operating profit exceeded target. More recently, product and subscription margins faced actual pressure, with some first-half product-margin support attributable to lower amortization and royalties. Earlier cheaper materials also helped. This supports mixed resilience without isolating pricing power.
contractual freedom · 2/4 · Implemented price increases demonstrate some discretion over selling prices. Non-cancelable customer obligations establish committed demand, but the passages do not establish unilateral repricing rights or escalators within existing contracts. Potentially less favorable renewal terms further limit confidence in freedom over terms.
Predictability98
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 8.40
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.61
- observedAnnualPeriods
- 5.00
Financial strength92
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope. An original fully reconciled nonnegative liability partition proves the existing endpoint grade across every permitted borrowing amount and original rounding interval. The bounded component does not estimate a debt amount or leverage ratio.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 68.31
- borrowingLowerBound
- 0.00
- borrowingUpperBound
- 284.44
- Interest coverage (x)
- 34.02
- Current ratio (x)
- 1.60
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- 3.15
- 3-year average SBC / revenue (%)
- 12.72
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2026 operating cash generation rose to $880.1 million, but first-half fiscal 2027 operating cash flow fell to $43.8 million while repurchases consumed $153.0 million and the completed acquisition cost $125.9 million. A triggered approximately $1.1 billion supply commitment adds exposure if contract manufacturers do not purchase the volume. Rising RSU expense and unproven acquisition returns temper the positive cash-generation history; these commitments are not treated as realized losses.
incentive alignment · 3/4 · Actual performance equity payouts and granted multiyear market-based awards demonstrate implementation. Performance-linked compensation, holding requirements, ownership guidelines and clawbacks support alignment. Rising equity expense and missing executive ownership data limit confidence in net shareholder outcomes; granted conditional awards are not assumed earned or vested.
execution · 3/4 · Fiscal 2026 revenue and non-GAAP operating profit exceeded established targets, audited NPS reached 84, and subsequent reported revenue grew materially. Seven-generation upgrade delivery, reported Fusion adoption and the second hyperscaler design win corroborate execution. Assessment partly uses indirect operating evidence; adoption and design wins do not establish future investment returns.
governance · 2/4 · Eight of ten independent directors, disclosed compensation safeguards and actual meeting attendance support functioning oversight. The combined chairman and CEO role, classified board and restrictions on stockholder action temper those positives. Actual advisory compensation approval is acknowledged without treating it as proof of effective oversight or assuming an election proposal's outcome.
Evidence
FlashArray has evolved through seven generations of controllers, a 100x increase in density, and a transition to all-NVMe flash-all delivered to customers non-disruptively through our Evergreen service.
Business: FlashArray upgrade history · Filed 25/03/2026
•Non-Disruptive Upgrades - We have the ability to upgrade both hardware and software non-disruptively, resulting in continuous online improvement, without creating disruption or affecting running production systems.
Business: non-disruptive hardware and software upgrades · Filed 25/03/2026
46,458
704
2031
34,889
410
Thereafter
10,377
—
Total future lease payments
$
251,688
$
3,226
Less: imputed interest
(35,545)
(333)
Present value of total lease liabilities
$
216,143
$
2,893
Lessor Arrangement
We, as a lessor, have entered into non-cancelable arrangements to lease our storage and data management solutions and subscription services.
Lease note: issuer as lessor, non-cancelable customer arrangements · Filed 25/03/2026
The arrangements include multiple seven-year leases that commenced during fiscal 2025 and 2026, or will commence in the first quarter of fiscal 2027, with total net consideration of $340.3 million.
Lease note: seven-year customer leases and consideration · Filed 25/03/2026
Total remaining performance obligations (RPO) which is contracted but not recognized revenue was $4.1 billion at the end of the second quarter of fiscal 2027, of which $44.5 million relates to a lessor arrangement.
Revenue note: second-quarter fiscal 2027 remaining performance obligations · Filed 04/09/2026
RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods.
Revenue note: composition of remaining performance obligations · Filed 04/09/2026
The increase in subscription services gross margin for fiscal 2024 compared to fiscal 2023 was driven by higher subscription services revenue growth from sales of Evergreen//One and higher renewals in Evergreen subscriptions coupled with continued focus on operational efficiencies.
Fiscal 2024 MD&A: higher Evergreen renewals and subscription efficiencies · Filed 01/04/2024
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.
Competition risk: named established storage competitors · Filed 04/09/2026
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.
Competition risk: competing incumbents' relationships and switching advantages · Filed 04/09/2026
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.
Competition risk: improving all-flash products and alternative technologies · Filed 04/09/2026
Further, some of our competitors offer their storage products either at significant discounts or even for free in competing against us.
Competition risk: competitors offering discounted or free storage products · Filed 05/06/2026
In response to these cost increases, we raised our prices during the first half of fiscal year 2027, and if component costs or other supply chain-related costs continue to increase, we may need to increase prices again in the future.
Supply-chain risk: actual first-half fiscal 2027 price increases · Filed 04/09/2026
"Demand remains strong across our solutions portfolio despite historic industry price increases in the first half of FY’27.
Second-quarter fiscal 2027 earnings release: CFO demand commentary · Filed 26/08/2026
Notes to Condensed Consolidated Financial Statements (Unaudited) Disaggregation of Revenue The following table depicts the disaggregation of revenue by geographic area based on the billing address of our customers and is consistent with how we evaluate our financial performance (in thousands): Second Quarter of Fiscal First Two Quarters of Fiscal 2026 2027 2026 2027 United States $ 577,036 $ 688,409 $ 1,107,694 $ 1,427,799 Rest of the world 283,966 497,489 531,793 810,995 Total revenue $ 861,002 $ 1,185,898 $ 1,639,487 $ 2,238,794 Long-Lived Assets by Geographic Area Long-lived assets, which are comprised of property and equipment, net, by geographic area are summarized as follows (in thousands): At the End of Fiscal 2026 Second Quarter of Fiscal 2027 United States $ 569,932 $ 661,089 Rest of the world 17,090 26,861 Total long-lived assets $ 587,022 $ 687,950 26 Table of Contents Item 2.
Revenue note: fiscal 2027 quarterly and first-half revenue comparisons · Filed 04/09/2026
811,388
68.4
%
$
17,009
$
828,397
69.9
%
$
604,336
70.2
%
$
16,607
$
620,943
72.1
%
(a) GAAP gross margin is defined as GAAP gross profit divided by revenue.
Second-quarter earnings release: comparative GAAP gross margins · Filed 26/08/2026
$
106,370
$
136,287
$
29,917
28
%
$
207,652
$
261,307
$
53,655
26
%
% of Subscription services revenue
26
%
27
%
25
%
27
%
Total cost of revenue
$
256,666
$
374,510
$
117,844
46
%
$
498,998
$
704,074
$
205,076
41
%
% of Total revenue
30
%
32
%
30
%
31
%
Product gross margin
66
%
65
%
64
%
65
%
Subscription services gross margin
74
%
73
%
75
%
73
%
Total gross margin
70
%
68
%
70
%
69
%
The slight decrease in product gross margin during the second quarter of fiscal 2027 when compared to the second quarter fiscal 2026 was primarily due to increase in component pricing, partially offset by royalties from hyperscaler shipments.
MD&A: product gross margin and component-cost pressure · Filed 04/09/2026
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.
MD&A: subscription gross-margin decline and its drivers · Filed 04/09/2026
In March 2026, our compensation committee reviewed our corporate performance for fiscal 2026, which was achieved as follows: (i) full year revenue of $3.663 billion, against a target of $3.516 billion, (ii) full year non-GAAP operating profit of $635 million, against a target of $598 million, and (iii) an audited NPS of 84, against a target range of 78 to 84.
Executive compensation: fiscal 2026 results against targets and audited NPS · Filed 01/05/2026
50 Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Fiscal Year Ended 2025 2026 Net cash provided by operating activities $ 753,598 $ 880,085 Net cash used in investing activities $ (218,200) $ (108,069) Net cash used in financing activities $ (509,779) $ (644,787) Operating Activities Net cash provided by operating activities consists of net income, adjusted for non-cash items and changes in operating assets and liabilities.
MD&A: fiscal 2025 and fiscal 2026 operating cash flows · Filed 25/03/2026
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands, unaudited): First Two Quarters of Fiscal 2026 2027 Net cash provided by operating activities $ 496,093 $ 43,816 Net cash provided by (used in) investing activities $ 17,993 $ (230,537) Net cash used in financing activities $ (342,146) $ (281,822) Operating Activities Net cash provided by operating activities consists of net income, adjusted for non-cash items and changes in operating assets and liabilities.
MD&A: first-half fiscal 2027 cash flows · Filed 04/09/2026
The following table summarizes the stock repurchase activity for the second quarter and first two quarters of fiscal 2026 and 2027 (in thousands except for per share amounts): Second Quarter of Fiscal First Two Quarters of Fiscal 2026 2027 2026 2027 Number of shares repurchased and retired 772 932 3,264 2,214 Average price per share (1) $ 54.70 $ 74.01 $ 49.66 $ 69.13 Aggregate purchase price (1) $ 42,227 $ 68,962 $ 162,114 $ 153,039 20 Table of Contents EVERPURE, INC.
Equity note: actual share repurchases · Filed 04/09/2026
Business Combination 1touch Acquisition On May 7, 2026, we acquired all outstanding equity interests in 1touch, an innovator in data intelligence and orchestration that provides a comprehensive, unified view of enterprise information, for total cash consideration of $125.9 million.
Business combination note: completed 1touch acquisition and cash consideration · Filed 04/09/2026
Long-Term Supply Arrangements
During the second quarter of fiscal 2027, certain conditions of one of our long-term supply arrangements were met, triggering the commitment to acquire approximately $1.1 billion of component supply through calendar year 2027.
Commitments note: triggered component-supply purchase commitment · Filed 04/09/2026
We would be obligated to purchase amounts to fulfill the commitment if they are not purchased by our contract manufacturers.
Commitments note: issuer obligation for unpurchased component commitments · Filed 04/09/2026
Stock-based compensation expense related to RSUs was $89.1 million and $103.6 million during the second quarter of fiscal 2026 and 2027, and $166.3 million and $189.2 million during the first two quarters of fiscal 2026 and 2027.
Equity compensation note: comparative RSU compensation expense · Filed 04/09/2026
Listed below are highlights of our compensation policies and practices: WHAT WE DO WHAT WE DON’T DO •Primarily performance-based cash and equity incentives •Caps on performance-based cash and equity incentive compensation related to the corporate performance factor •100% independent directors on our compensation committee •Independent compensation consultant engaged by our compensation committee •Annual review and approval of our compensation strategy •Significant portion of compensation based on corporate performance metrics •Three-year equity vesting period for PSUs •Stock ownership guidelines •Policy regarding incentive compensation clawback •No “single trigger” change of control payments or benefits •No post-termination retirement or pension-type non-cash benefits •No perquisites other than those available to our employees generally •No tax gross-ups for change of control payments or benefits PERFORMANCE-BASED EXECUTIVE OFFICER PAY The chart below shows the pay components and mix for our Chief Executive Officer for fiscal 2026 (based on base salary, target cash bonus and grant date fair value of equity award at target).
Proxy: compensation policies, independent oversight, ownership guidelines and clawback · Filed 01/05/2026
For our equity program, we significantly exceeded our revenue and TCV Subscription Sales targets, resulting in a 187% payout for the fiscal 2026 performance-based restricted stock unit (PSU) awards.
Proxy: fiscal 2026 performance equity payout · Filed 01/05/2026
In fiscal 2024, 2026, and 2027, we granted 4.2 million, 1.2 million and 0.7 million LTP Awards, respectively, contingent on achieving specified market capitalization or stock price thresholds measured over approximately three- to five-year periods.
Equity compensation note: actual long-term performance award grants · Filed 04/09/2026
In each case, vested shares are subject to continued service and a one-year post-vest holding period.
Equity compensation note: continued-service and post-vesting holding requirements · Filed 04/09/2026
•8 of 10 directors are independent.
Proxy: board independence · Filed 01/05/2026
During our last fiscal year, each director attended 75% or more of the aggregate of the meetings of our board of directors and of the committees on which he or she served.
Proxy: actual director meeting attendance · Filed 01/05/2026
•Charles Giancarlo, our Chairman and Chief Executive Officer (our CEO);
Proxy: combined chairman and chief executive roles · Filed 01/05/2026
•establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time;
Governance risk: classified board provision · Filed 04/09/2026
•prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
Governance risk: prohibition of stockholder action by written consent · Filed 04/09/2026
•prohibit stockholders from calling a special meeting of our stockholders;
Governance risk: prohibition of stockholder-called special meetings · Filed 04/09/2026
Stockholders approved, on an advisory basis, the compensation of Everpure’s named executive officers, as described in the definitive proxy statement.
Annual meeting results: actual advisory approval of executive compensation · Filed 12/06/2026
The adoption of Fusion continues to grow, reaching more than 600 customers since its introduction.
Stockholder letter: reported Fusion customer adoption · Filed 01/05/2026
In August 2026, we secured a second hyperscaler design win.
Quarterly filing: second hyperscaler design win · Filed 04/09/2026
Further, even if we do secure additional hyperscaler design wins, a design win does not guarantee sales.
Hyperscaler risk: design wins do not guarantee sales · Filed 04/09/2026
If our customers renew their contracts, they may renew on terms that are less economically beneficial to us.
Subscription renewal risk: potentially less favorable renewal terms · Filed 04/09/2026
Lower material pricing, including flash, has also favorably impacted gross margins.
Fiscal 2024 MD&A: lower material prices supported gross margins · Filed 01/04/2024
The slight increase in product gross margin during the first two quarters of fiscal 2027 when compared to the first two quarters of fiscal 2026 was primarily due to lower amortization of intangible assets and to a lesser extent royalties from hyperscaler shipments, partially offset by increase in component pricing.
MD&A: first-half product-margin improvement and accounting, royalty and component drivers · Filed 04/09/2026
