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Fusion-io Reports 59% Year-Over-Year Revenue Growth in Fiscal First Quarter 2013



 Fusion-io Reports 59% Year-Over-Year Revenue Growth in Fiscal First Quarter
                                     2013

PR Newswire

SALT LAKE CITY, Oct. 24, 2012

SALT LAKE CITY, Oct. 24, 2012 /PRNewswire/ -- Fusion-io, Inc. (NYSE: FIO)
today announced its financial results for its fiscal first quarter ended
September 30, 2012. 

  o Revenue: $118.1 million
  o GAAP Gross Margin of 59.4% and Non-GAAP Gross Margin of 59.5%
  o GAAP Net Earnings per Diluted Share: 4 cents
  o Non-GAAP Net Earnings per Diluted Share: 14 cents
  o Operating Cash Flow: $28.7 million

Fiscal First Quarter 2013 GAAP Financial Results
Fusion-io reported record revenue of $118.1 million for the fiscal first
quarter 2013, up 59% from $74.4 million for the same quarter of 2012 and up
11% from $106.6 million for the preceding quarter. Net income for the fiscal
first quarter of 2013 was $3.9 million, or $0.04 per diluted share, compared
to net income of $7.2 million, or $0.07 per diluted share, in the fiscal
first quarter of 2012. Gross margin for the fiscal first quarter 2013 was
59.4%.  Operating margin for the fiscal first quarter 2013 was 7.2%.

Fiscal First Quarter 2013 Non-GAAP Financial Results
Non-GAAP net income for the fiscal first quarter of 2013 was $14.9 million, or
$0.14 per diluted share, compared to non-GAAP net income of $15.1 million, or
$0.15 per diluted share in the same quarter of 2012. Non-GAAP gross margin for
the fiscal first quarter 2013 was 59.5%. Non-GAAP operating margin for the
fiscal first quarter 2013 was 19.5%. A complete reconciliation of GAAP to
non-GAAP results is set forth in the attachment to this press release.

"We are pleased with our execution in the first quarter and our ability to
continue to capture market share," said David Flynn, Fusion-io chairman and
chief executive officer.  "Our innovative use of flash memory technology in
our portfolio of software defined data acceleration solutions is yielding
significant performance and efficiency improvements for our customers' data
centers.  We believe the economic benefits enabled by flash technology and
Fusion-io software become only more compelling over time."

Dennis Wolf, Fusion-io chief financial officer, added: "Our 59% year-over-year
revenue growth, approximately $29 million in operating cash flow, and
approximately $350 million in cash and cash equivalents as of the end of the
quarter put us in a healthy financial position to be able to continue to
invest in growth."

Other Financial Highlights

  o Cash and cash equivalents totaled $353.9 million at the end of fiscal
    first quarter 2013, an increase of $32.7 million compared to the prior
    quarter-end.
  o Deferred revenue at the end of fiscal first quarter 2013 was $34.5
    million, an increase of $5.6 million compared to the prior quarter-end.
  o Inventory was $67.2 million at the end of fiscal first quarter 2013, an
    increase of $7.7 million compared to the prior quarter-end.
  o Capital expenditures were $5.2 million in fiscal first quarter 2013.

Recent Business Highlights

  o On August 27, Fusion-io announced that its Fusion ioTurbine virtualization
    caching software now offers intelligent application caching for the Linux
    guest operating system, in addition to supporting the Microsoft Windows
    guest operating system.
  o On August 21, Fusion-io and NetApp announced that the companies had
    entered into a resale agreement whereby NetApp will resell Fusion-io
    ioMemory platform products and server caching software products, Fusion
    ioTurbine, for virtualized environments, and Fusion-io directCache for
    non-virtualized environments.

Business Outlook
The following statements are based on current expectations. These statements
are forward-looking, and actual results may differ materially. These
statements supersede all prior statements regarding fiscal 2013 financial
results.

Second quarter of fiscal year 2013:

  o Revenue is expected to be essentially flat sequentially.
  o Non-GAAP gross margin is expected to be in the range of 56 to 58%.
  o Non-GAAP operating margin is expected to be approximately 10%.
  o Diluted shares outstanding are expected to be approximately 112 million
    shares.

Fiscal Year 2013 guidance remains unchanged, as follows:

  o Revenue growth is expected to be in the range of 45 to 50%.
  o Non-GAAP gross margin is expected to be in the range of 56 to 58%.
  o Non-GAAP operating margin is expected to be approximately 12%.
  o Diluted shares outstanding are expected to be approximately 114 million
    shares.

Non-GAAP Financial Measures
Fusion-io uses certain non-GAAP financial measures in this release. Generally,
a non-GAAP financial measure is a numerical measure of a company's
performance, financial position, or cash flows that either excludes or
includes amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance with
generally accepted accounting principles in the United States of America, or
GAAP. Reconciliation between non-GAAP and GAAP measures can be found in the
accompanying tables and on the investor relations page of our website at
www.fusionio.com. Non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the same
captions and may differ from non-GAAP financial measures with the same or
similar captions that are used by other companies.

Fusion-io's management uses the non-GAAP financial measures in the
accompanying schedules to gain an understanding of Fusion-io's comparative
operating performance and future prospects, and utilizes these measures in its
internal financial statements for purposes of its internal budgets and
financial goals. Management also believes that the exclusion of the items
described below provides an additional measure of the company's operating
results and facilitates comparisons of Fusion-io's core operating performance
against prior periods and business model objectives. Management believes that
investors should have access to the same set of tools that management uses to
analyze Fusion-io's results. These non-GAAP measures should be considered in
addition to results prepared in accordance with GAAP, but should not be
considered a substitute for or superior to GAAP. Fusion-io endeavors to
compensate for the limitation of the non-GAAP measures presented by also
providing the most directly comparable GAAP measures and descriptions of the
reconciling items and adjustments to derive the non-GAAP measures.  

For all periods presented:

  o Non-GAAP gross margin is calculated as non-GAAP gross profit divided by
    GAAP revenue. Non-GAAP gross profit consists of GAAP gross profit
    excluding the effects of stock-based compensation expense.
  o Non-GAAP operating margin is calculated as non-GAAP income from operations
    divided by GAAP revenue. Non-GAAP income from operations consists of GAAP
    income from operations excluding the effects of stock-based compensation
    expense, amortization of intangible assets, and acquisition related costs.
  o Non-GAAP net income is calculated as GAAP net income excluding the effects
    of stock-based compensation expense, changes in the fair value of a common
    stock repurchase derivative liability, amortization of intangible assets,
    acquisition related costs, a tax benefit for the reversal of valuation
    allowance as a result of the IO Turbine acquisition, and tax provision
    adjustments related to stock-based awards.
  o Non-GAAP net income per diluted share is calculated as non-GAAP net income
    divided by GAAP weighted-average diluted shares outstanding.

The accompanying tables provide more details on the GAAP financial measures
that are most directly comparable to the non-GAAP financial measures described
above and the related reconciliations between these financial measures. With
respect to our expectations under "Business Outlook" above, reconciliation of
non-GAAP guidance measures to corresponding GAAP measures is not available
without unreasonable efforts on a forward-looking basis due to the high
variability and low visibility with respect to the charges which are excluded
from these non-GAAP measures. The effects of stock-based compensation expense
specific to non-employee common stock options are directly impacted by
unpredictable fluctuations in our stock price. We expect the variability of
the above charges to have a significant impact on our GAAP financial results.

Today's Conference Call
Fusion-io will host an investor conference call and live webcast today,
Wednesday, October 24, 2012, at 5:00 p.m. EDT to discuss these financial
results. To access the conference call, dial 1.800.446.2782 or 1.847.413.3235
for international callers. The access code is 3348 6319. A listen-only live
webcast will be accessible on the investor relations page of our website at
www.fusionio.com and will be archived and available on this site for at least
three months. A telephone replay of the conference call will be available
through Wednesday, October 31, 2012. To access the replay, please dial
1.888.843.7419 or 1.630.652.3042 for international callers. The access code is
3348 6319. This press release and the financial information discussed on
today's conference call are available on the investor relations page of our
website at www.fusionio.com.

About Fusion-io
Fusion-io delivers the world's data faster. Our Fusion ioMemory platform and
software defined storage solutions accelerate virtualization, databases, cloud
computing, big data and performance applications. From e-commerce retailers to
the world's social media leaders and Fortune Global 500 companies, our
customers are improving the performance and efficiency of their data centers
with Fusion-io technology to accelerate the critical applications of the
information economy.

Note on Forward-looking Statements
Certain statements in this release may constitute "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934 and
Section 27A of the Securities Act of 1933, including, but are not limited to,
statements concerning financial guidance for our second fiscal quarter of 2013
and our full fiscal year 2013, assumptions underlying the expected benefits
and value of our products and solutions to our customers and end users, our
continued focus and investment on innovation, expanding our customer and
reseller base and investing in our growth, our expectations concerning our
technologies, products and solutions, including our ioMemory platform and
software products, our expectations concerning our recently announced
collaboration with NetApp, and our beliefs concerning the market for and
benefits of our products and solutions. These statements are based on current
expectations and assumptions regarding future events and business performance
and involve certain risks and uncertainties that could cause actual results to
differ materially from those contained, anticipated, or implied in any
forward-looking statement, including, but not limited to, risks associated
with changes in the demand for our products, our expectation that large and
concentrated purchases by a limited number of customers will continue to
represent a substantial majority of our revenue and our ability to sustain or
increase our revenue from our large customers or offset the discontinuation of
concentrated purchases by our larger customers with purchases by new or
existing customers, the continued adoption by customers of our ioMemory
platform products, growing our sales through OEMs, resellers and channel
partners and maintaining our relationships with OEMs, resellers and channel
partners, including the timely qualification of our products for promotion and
sale by our OEMs, long and unpredictable sales cycles, changes in the
competitive dynamics of our markets, including the potential for increased
pressure on the pricing of our products, reduced gross margins, increased
sales and marketing expenses, the potential that we or our customers may not
realize the benefits we currently expect from our acquisition of IO Turbine,
our ability to develop or acquire new products to meet customer needs and
expectations, including additional software solutions to be integrated with
our storage memory products, our acquisition and strategic partner strategy
and disruptions in our business, operations and financial results as a result
of acquisitions and strategic partner relationships, as well as the risks
inherent in the integration and combination of complex products and
technologies from acquisitions, undetected errors, defects or security
vulnerabilities in our products, worldwide economic conditions and the impact
these conditions have on levels of spending on datacenter technology like
ours, and such other risks set forth in the registration statements and
reports that Fusion-io files with the U.S. Securities and Exchange Commission,
which are available on the Investor Relations section of our website at
www.fusionio.com. You should not rely upon forward-looking statements as
predictions of future events. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot
guarantee that the future results, levels of activity, performance or events
and circumstances reflected in the forward-looking statements will be achieved
or will occur. Fusion-io undertakes no obligation to update publicly any
forward-looking statement for any reason after the date of this press release.

Contacts:
Investor Relations: Nancy Fazioli, ir@fusionio.com, 408-416-5779
Media Relations: Robert Brumfield, bbrumfield@fusionio.com, 917-224-7769

 

Fusion-io, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                                                Three Months Ended
                                                September 30,
                                                2011           2012
Revenue                                         $ 74,385       $ 118,115
Cost of revenue (1)                             27,354         47,994
Gross profit                                    47,031         70,121
Operating expenses:
Sales and marketing (1)                         17,477         25,020
Research and development (1), (3)               11,152         21,568
General and administrative (1), (4)             13,737         15,084
Total operating expenses                        42,366         61,672
Income from operations                          4,665          8,449
Other income (expense):
Interest income                                 49             114
Interest expense                                (46)           (30)
Other income (expense) (2)                      795            (29)
Income before income taxes                      5,463          8,504
Income tax benefit (expense) (5), (6)           1,726          (4,571)
Net income                                      $   7,189      $     3,933
Net income per share:
Basic                                           $     0.09     $       0.04
Diluted                                         $     0.07     $       0.04
Weighted-average number of shares used in per
share amounts:
Basic                                           82,008         94,221
Diluted                                         103,454        108,425
(1) Includes stock-based compensation
expenses, as follows:
Cost of revenue                                 $        27    $        109
Sales and marketing                             1,103          2,134
Research and development                        1,619          4,427
General and administrative                      7,027          7,219
Total stock-based compensation expenses         $   9,776      $   13,889
(2) Includes other income related to changes
in the fair value of a common stock repurchase  $    (761)     $             -
derivative liability
(3) Includes amortization of intangible assets  $      365     $        656
(4) Includes acquisition related costs          $   1,320      $             -
(5) Includes tax benefit for reversal of
valuation allowance as a result of the IO       $ (2,782)      $             -
Turbine acquisition
(6) Includes tax provision adjustments related  $           -  $   (3,563)
to stock-based awards

 

 

Fusion-io, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                June 30,     September 30,
                                                2012         2012
 Assets
 Current assets:
 Cash and cash equivalents                      $ 321,239    $        353,893
 Accounts receivable, net                       56,720       65,671
 Inventories                                    59,457       67,203
 Prepaid expenses and other current assets      9,224        8,597
 Total current assets                           446,640      495,364
 Property and equipment, net                    31,245       33,892
 Intangible assets, net                         8,164        7,508
 Goodwill                                       54,777       54,777
 Other assets                                   194          370
 Total assets                                   $ 541,020    $        591,911
 Liabilities and Stockholders' Equity
 Current liabilities:
 Accounts payable                               $     9,765  $          23,779
 Accrued and other current liabilities          29,187       31,633
 Deferred revenue                               20,715       25,427
 Total current liabilities                      59,667       80,839
 Deferred revenue, less current portion         8,154        9,052
 Other liabilities                              12,276       12,782
 Commitments and contingencies
 Stockholders' equity:
 Common stock                                   19           19
 Additional paid-in capital                     531,478      555,836
 Accumulated other comprehensive (loss) income  (15)         8
 Accumulated deficit                            (70,559)     (66,625)
     Total stockholders' equity                 460,923      489,238
     Total liabilities and stockholders' equity $ 541,020    $        591,911

 

 

Fusion-io, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                          Three Months Ended
                                                          September 30,
                                                          2011       2012
Operating activities:
Net income                                                $ 7,189    $ 3,933
Adjustments to reconcile net income from operating
activities:
Depreciation and amortization                             1,592      3,188
Stock-based compensation                                  8,983      13,889
Excess tax benefit from stock-based awards                -          (4,385)
Deferred taxes                                            (2,782)    -
Other non-cash items                                      (762)      -
Changes in operating assets and liabilities:
Accounts receivable, net                                  10,645     (8,951)
Inventories                                               (35,920)   (7,746)
Prepaid expenses and other assets                         526        457
Accounts payable                                          14,104     14,014
Accrued and other liabilities                             220        8,658
Deferred revenue                                          (701)      5,610
Net cash provided by operating activities                 3,094      28,667
Investing activities:
Business acquisition, net of cash acquired                (17,578)   -
Proceeds from the sale of property and equipment          1          -
Purchases of property and equipment                       (4,222)    (5,175)
Net cash used in investing activities                     (21,799)   (5,175)
Financing activities:
Repayment of capital lease obligations                    (79)       -
Proceeds from exercises of stock options                  69         4,279
Issuance of restricted stock awards and restricted stock  -          (1,055)
units, net of repurchases
Proceeds from issuance of common stock under employee     1,052      1,459
stock purchase plan
Excess tax benefit from stock option exercises            -          4,385
Net cash provided by financing activities                 1,042      9,068
Effect of exchange rate changes on cash and cash          (66)       94
equivalents
Net (decrease) increase in cash and cash equivalents      (17,729)   32,654
Cash and cash equivalents at beginning of period          219,604    321,239
Cash and cash equivalents at end of period                $ 201,875  $ 353,893

 

 

Fusion-io, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
                                                        Three Months Ended
                                                        September 30,
                                                        2011       2012
Reconciliation of Gross Profit and Gross Margin on a
GAAP Basis to Gross Profit and Gross Margin on a
Non-GAAP Basis:
Gross profit on a GAAP basis                            $ 47,031   $   70,121
Stock-based compensation                                27         109
Gross profit on a non-GAAP basis                        $ 47,058   $   70,230
Revenue                                                 $ 74,385   $ 118,115
    Gross margin on a GAAP basis                        63.2%      59.4%
    Gross margin on a non-GAAP basis                    63.3%      59.5%
Reconciliation of Operating Income and Operating
Margin on a GAAP Basis to Operating Income and
Operating Margin on a Non-GAAP Basis:
Operating income on a GAAP basis                        $   4,665  $     8,449
Stock-based compensation                                9,776      13,889
Amortization of intangible assets                       365        656
Acquisition related costs                               1,320      -
Operating income on a non-GAAP basis                    $ 16,126   $   22,994
Revenue                                                 $ 74,385   $ 118,115
    Operating margin on a GAAP basis                    6.3%       7.2%
    Operating margin on a non-GAAP basis                21.7%      19.5%
Reconciliation of Net Income on a GAAP Basis to Net
Income on a Non-GAAP Basis:
Net income on a GAAP basis                              $   7,189  $     3,933
Stock-based compensation                                9,776      13,889
Other income related to changes in the fair value 
    of a common stock repurchase derivative liability   (761)      -
Amortization of intangible assets                       365        656
Acquisition related costs                               1,320      -
    Tax benefit for reversal of valuation allowance as
a result
        of the IO Turbine acquisition                   (2,782)    -
    Tax provision adjustments related to stock-based    -          (3,563)
awards
Net income on a non-GAAP basis                          $ 15,107   $   14,915

 

 

Fusion-io, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(in thousands, except per share data)
(unaudited)
                                                            Three Months Ended
                                                            September 30,
                                                            2011       2012
Reconciliation of Diluted Net Income per Share on a GAAP
Basis to Diluted Net Income per Share on a Non-GAAP Basis:
Diluted net income per share on a GAAP basis                $ 0.07     $ 0.04
Stock-based compensation                                    0.10       0.12
Other income related to changes in the fair value 
    of a common stock repurchase derivative liability       (0.01)     -
Amortization of intangible assets                           0.01       0.01
Acquisition related costs                                   0.01       -
    Tax benefit for reversal of valuation allowance as a
result
        of the IO Turbine acquisition                       (0.03)     -
    Tax provision adjustments related to stock-based        -          (0.03)
awards
Diluted net income per share on a non-GAAP basis            $ 0.15     $ 0.14

 

SOURCE Fusion-io, Inc.

Website: http://www.fusionio.com
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