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Brocade: Fiscal 1Q12 Financial Results
This is a Press Release edited by StorageNewsletter.com on Wed, February 22nd, 2012
Jump right to our comments
Record period due to 12% storage Q/Q growth, 63% of global sales
| (in US$ millions) |
1Q11 |
1Q12 |
| Revenues | 545.8 | 560.6 |
| Growth | 3% |
|
| Net income (loss) |
26.9 | 58.6 |
Brocade Communications Systems, Inc. reported financial results for its first fiscal quarter ended January 28, 2012.
It reported first quarter revenue of $561 million, representing an increase of 2% quarter-over-quarter and 3% year-over-year, and resulting in diluted earnings per share of $0.12 on a GAAP basis and diluted earnings per share of $0.20 on a non-GAAP basis.
Summary of Q1 2012 results:
- Storage business revenue, including products and services, was a record $406.4 million, up 12% sequentially and 4% year-over-year. Storage product revenue grew 17% sequentially driven by strong demand across all product segments including the continued ramp of 16Gb FC products.
- Ethernet business revenue, including products and services, was $154.3 million, down 18% quarter-over-quarter and up 1% year-over-year. Revenue from service provider customers was a record $64.5 million in the quarter and was offset by lower enterprise revenue and expected softness in Federal revenue.
- GAAP gross margin was 61.5% and non-GAAP gross margin was 64.8% in Q1 2012, compared to 58.8% and 62.0% in Q1 2011, respectively. The improvement in gross margin was driven by a favorable mix to higher margin storage products, margin expansion in global services and an increase in overall revenue.
- GAAP operating margin was 12.4% and non-GAAP operating margin was 21.5% in Q1 2012, compared to 7.8% and 17.1% in Q1 2011, respectively. The improvement in operating margin was primarily driven by higher gross margin and the increase in revenue.
- Non-GAAP EPS of $0.20 in Q1 2012 was up 22% sequentially and 61% year-over-year.
- Non-GAAP EPS included a tax benefit of approximately $0.03 from the closure of various tax audits in the United States during Q1 2012.
- Brocade generated operating cash flow of $127 million and reduced its term loan by $70 million. The term loan balance was $120 million exiting Q1 2012.
Q1 2012 total SAN port shipments were approximately 1.2 million.
Our comments :
Abstracts of the earnings call transcript:
Mike Klayko, CEO:
"16Gb products accounted for 27% of our total director sales in the quarter."
Dan Fairfax, CFO:
"So in terms of seasonality within our business, the second and third
quarter or the second and third fiscal quarters, you tend to see our
SAN business drop down a little bit and then recover in Q4 and in Q1.
And then if we look at the recent past, record level with SAN business
in Q4, a record level and even higher in Q1. And so we would expect the
same seasonality on the storage side."
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