Fusion-io: Fiscal 3Q14 Financial Results

Fusion-io, Inc. announced its financial results for its fiscal third quarter ended March 31, 2014.

• Revenue of $100.5 million
• GAAP Gross Margin of 51.0% and Non-GAAP Gross Margin of 52.4%
• GAAP Net Loss per Diluted Share: $0.29
• Non-GAAP Net Loss per Diluted Share: $0.10
• Cash and Cash Equivalents: $225.1 million

Fusion-io reported revenue of $100.5 million for the fiscal third quarter of 2014, compared to $87.7 million for the same quarter of 2013.

Net loss for the fiscal third quarter of 2014 was $30.7 million, or a net loss per diluted share of $0.29, compared to a net loss of $20.0 million, or a net loss per diluted share of $0.21, in the fiscal third quarter of 2013.

Gross margin for the fiscal third quarter of 2014 was 51.0%.

Operating margin for the fiscal third quarter of 2014 was a negative 30.1%.

Non-GAAP net loss for the fiscal third quarter of 2014 was $10.5 million, or a net loss per diluted share of $0.10, compared to non-GAAP net loss of $3.2 million, or a net loss per diluted share of $0.03 in the same quarter of 2013. Non-GAAP gross margin for the fiscal third quarter of 2014 was 52.4%. Non-GAAP operating margin for the fiscal third quarter of 2014 was a negative 16.7%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release.

“We are pleased to deliver 6% sequential revenue growth this quarter while making investments in the team, technology and partnerships that we believe will drive the business forward,” said Shane Robison, Fusion-io chairman and CEO. “In Q3, we evolved our solutions-based go-to-market strategy through close collaboration with our OEM and ISV partners to offer our customers significant performance gains while lowering their datacenter operating expense.”

Ted Hull, Fusion-io CFO, added: “We have a healthy balance sheet with $225 million in cash and cash equivalents that gives us strategic flexibility to invest in our market-leading in-server acceleration solutions as well as in the growth of our all-flash and hybrid appliances. Our ability to offer end-to-end flash memory solutions creates value for customers and differentiates us in the industry, while further diversifying our business.“

Other financial highlights

• Cash and cash equivalents totaled $225.1 million at the end of fiscal third quarter 2014, a decrease of $18.8 million from the prior quarter-end.
• Inventory was $72.7 million at the end of fiscal third quarter 2014, a decrease of $7.7 million from the prior quarter-end.
• Capital expenditures were $2.9 million in fiscal third quarter 2014 and $8.7 million fiscal year-to-date.
• Cash used in operations was $18.8 million in fiscal third quarter 2014 and $22.9 million fiscal year-to-date.

Recent busines highlights

• On April 15, it announced collaboration with Microsoft to optimize performance for new in-memory capabilities built into SQL Server 2014. Fusion ioMemory fits natively with SQL Server 2014 to provide a 4x improvement in transactions per second and a significant reduction in data latencies that translates to faster insights at lower costs for Microsoft customers.
• On April 2, it announced collaboration with Oracle on the development of flash-aware interfaces for MySQL, including NVM Compression and Atomic Writes, interfaces which allow MySQL to deliver up to 4x more flash endurance by streamlining commands to help optimize databases for persistent flash memory architectures.
• On April 2, it also announced partnerships with Percona and MariaDB/SkySQL and the availability of NVM Compression, a breakthrough software feature unique to Fusion-io that enables applications like databases to leverage the native capabilities of flash as a memory to reduce the amount of space needed to store data without hindering performance.
• In early February, it announced the availability of Fusion ioVDI software for VMware Horizon View hosted virtual desktop environments, as well as comprehensive updates to its suite of virtualization solutions which maximize performance and efficiency from in-server to hybrid flash acceleration.
• On February 6, it announced that the all-flash ION Accelerator appliance and ioControl Hybrid Storage appliance are being offered as fully integrated solutions from Fusion-io VARs for accelerating enterprise applications including Oracle, SAP HANA, and SQL Server, as well as virtualization workloads.

Outlook for fourth quarter of fiscal year 2014:

• Revenue is expected to be in-line to slightly up sequentially.
• Non-GAAP gross margin is expected to be 52 to 54%.
• Non-GAAP operating margin of approximately negative 13 to 17%.
• Diluted shares outstanding are expected to be approximately 108 million shares.

  To read the earnings call transcript