Brocade: Fiscal 2Q09 Financial Results

(in US$ millions)	2Q08	2Q09	6 mo. 08	6 mo. 09
Revenues	354.9	506.3	702.7	937.9
*Growth*		+43%		*+33%*
Net income (loss)	91.4	(63.1)	111.2	(89.1)

Brocade Communications Systems, Inc. reported financial results for its second fiscal quarter, which ended May 2, 2009. Brocade reported Q2 revenues of $506.3 million, a 17% quarter on quarter growth and a 43% year on year growth.

Commenting on Brocade’s second quarter financial results, Michael Klayko, Brocade CEO, said: “Brocade had another outstanding quarter where we achieved record revenues driven by strong customer demand for our end-to-end networking solutions. We are executing well to our long-term business-growth strategy with the rapid integration of the Foundry business, securing new routes-to-market for our IP networking portfolio, and leveraging our OEM and channel partner relationships to expand our footprint in the industry.”

Second Fiscal Quarter 2009 Financial Highlights
and Additional Financial Information

In Q2 09, Brocade achieved record revenue of $506.3 million, a
17% quarter on quarter growth and a 43% year on year growth.
Brocade reported GAAP net loss of $63.1 million or $(0.16) per
share diluted, and net income of $47.1 million or $0.11 per share
diluted on a non-GAAP basis.
Brocade’s total installed base of SAN ports was approximately 21.8 million.
In Q2 09, Average Selling Price (ASP) declines were in the low single digits compared to Q1 09.
In Q2 09, net stock-based compensation expense was $40.1 million.
Brocade’s GAAP effective tax rate was 28.2%, and its non-GAAP effective tax-rate was 32.1% in Q2 09.

brocade_2q09_540
(1) Based on Brocade estimates of adjustment for OEMs taking delivery of
internationally bound shipments in the United States, end-user demand
was 51% domestic and 49% international.
(2) On a As If combined company basis.

Second Fiscal Quarter 2009 Business Highlights

Partnership Announcements

Brocade announced that IBM will rebrand and sell a set of Brocade enterprise IP networking products through the IBM global sales force and authorized IBM Business Partners, extending the existing relationship between Brocade and IBM for storage area networking products;
Brocade became the manufacturing and marketing partner for the new HP Virtual Connect 8 Gbps 24-port Fibre Channel module to provide leading storage area network connectivity within the new HP BladeSystem Matrix virtualization offering;
Brocade announced the new Brocade Technology Alliance Partner Program to develop new business opportunities and long-term strategic alliances by delivering comprehensive, proven, and customized joint technology solutions to enterprises and service providers.

Product Introductions

Brocade unveiled one of the industry’s only end-to-end Fibre Channel over Ethernet (FCoE)-based solution that brings the Fibre Channel standard and Converged Enhanced Ethernet (CEE) together;
Brocade announced Brocade IronView Network Manager (INM) integration with Microsoft Forefront ‘Stirling’ to simplify network management and enhance security.

Executive and Corporate Leadership

Brocade added to its leadership ranks with the appointment of Barbara Spicek as its new Vice President of Worldwide Channels, further signifying the company’s commitment to bolster its global sales and high-touch customer engagements through a network of go-to-market partners;
Brocade was honored by the San Francisco Business Times as a ‘Best Place to Work’ in the San Francisco Bay Area for 2009.

Customer Wins