They had a large number of galleys and other ships that were rather unsuited for atlantic warfare. But the majority were indeed the large and rather seaworthy galleons. There is, however, truth to the notion that many of their ships were not ready initially. But the operation was 'just' postponed (there was quite a stirring in the royal quaters of course) until they got fixed.
The main problem for the Spanish can be said to be their doctrine for naval warfare.
Galleons were hardy ships. Strong hulls, tall towers and a wide body. Perfect for boarding and carrying lots of troops for said boarding. Hence the Spanish wanted to use their ships in that manner.
The doctrine said that the galleon should come alongside it's enemy, give it a single devastating broadside, then board. That would play perfectly into the strengths of the galleon.
The English had however designed a lighter, faster and more maneuverable galleon, the Fast Galleon (relative term though). This ship had a much lower freeboard, and not such much in terms of towers (also called castles, as in forecastle as that part of the ship is still called). They were practically designed to fight gunbattles against galleons. And English doctrine showed this, as they should NOT seek to board, but rather pummel their enemy to pieces.
Also the Fast Galleon carried a much more uniform armament, amking her much easier to control once in battle, the captain would know more or less when he could expect a broadside to be ready ect ect.
It is also a bit of a myth that the victory was an upset. Perhaps it was so for the people there at the time, but the English actually held an advantage in number of guns, quality of guns and in training.
Now what happens when a faster more nimble enemy does not want to get caught? He stays uncaught. Meanwhile he can lash out at the slower brute, who does not even try to hit back for fear of losing the allpowerful single broadside (Spanish loading could take as long as 15 minutes).
So teh English ships had more or less free reign to blast the Spanish ships from afar. But the galleon is a as mentioned a sturdy design and only few ships actually fell to this prior to the fireships. But still, if the English had cooperated better (the sole area where the Spanish seem to have had an advantage), they could have devastated two of the Spanish squadrons, which would have ended the campaign right there.
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