Everpure (PSTG) BofA Securities 2024 Global Technology Conference summary

Key financial and operational highlights

• Achieved double-digit revenue growth and outperformed on both top line and operating profit in Q1, with strong product revenue driven by Global Enterprise and FlashBlade portfolio.

• FlashBlade//E targeted at replacing disk and lower storage tiers, while Evergreen//One saw lighter results in Q1 but robust pipeline for the year.

• Progress made on hyperscaler and AI opportunities, with ongoing discussions and co-engineering efforts.

• Warranty and software support for hyperscaler solutions are being structured for 10-year terms, enhancing TCO benefits.

• Commercial strategy may prioritize gross margin over top-line growth for hyperscaler deals.

Technology and industry trends

• All-flash storage is now more cost-effective than disk, even if disks were free, due to lower power, higher reliability, and reduced human intervention.

• DirectFlash Modules (DFMs) offer significant density, reliability, and efficiency advantages, with upcoming 150 TB and 300 TB modules further improving performance and reducing costs.

• Hyperscalers face challenges in developing their own flash solutions due to the complexity of flash management and rapid generational changes.

• Power consumption is now a primary driver for hyperscaler storage decisions, as GPU deployments increase data center energy needs.

• The transition from disk to flash is expected to accelerate as hyperscalers recognize the operational and cost benefits.

AI and market outlook

• High-performance storage is essential for AI workloads, especially for inference, which is expected to drive the next major storage wave over the next five to seven years.

• AI-related storage demand will ramp gradually as enterprises deploy inference applications across their organizations.

• The company is engineering new products and co-developing with hyperscalers to address both high-performance and bulk storage needs in AI and GPU cloud markets.

• Evergreen//One is positioned as a flexible, storage-as-a-service solution that allows customers to scale up or down as needed, reducing risk and improving agility.

• The mix of AI and hyperscaler revenue is expected to be fluid and significant, but precise projections are not possible due to the evolving market.