Brocade: Fiscal 4Q09 Financial Results

Brocade Communications reported financial results for its fourth fiscal quarter and full fiscal year ended October 31, 2009. Brocade’s quarterly revenues increased 31 percent year-over-year to $521.8 million and annual revenues increased 33 percent year-over-year to over $1.95 billion.

“Fiscal 2009 was a transformational year as Brocade became one of only two end-to-end networking solutions providers in the industry,” said Michael Klayko, CEO of Brocade. “Brocade also delivered exceptionally strong year-over-year revenue growth and increased its account penetration in the Ethernet networking market while growing share in the storage networking market.”

Klayko continued: “In addition, Q4 saw tremendous momentum as we exceeded the Street’s consensus non-GAAP EPS estimates for the seventeenth consecutive quarter, delivered the fastest sequential revenue growth of any large networking vendor, and generated strong cash flows. Looking at 2010, we expect to continue our momentum as we execute our strategy of delivering the highest levels of performance, quality, innovation and choice to the IT market.”

Financial Highlights and Additional Financial Information

• Fiscal year 2009 revenue was $1,952.9 million, increasing 33% over fiscal year 2008.
• Q4 revenue was $521.8 million, increasing 31% year-over-year and 6% sequentially.
• Q4 total Storage Area Networking (SAN) port shipments were approximately 1.0 million.
• Q4 SAN Average Selling Price (ASP) declines were in the low single digits.
• Q4 effective GAAP tax rate was (24.9)%; non-GAAP effective tax-rate was 25.3%.
• Q4 Adjusted EBITDA was $130.6 million, increasing from $119.3 million in Q3.
• Q4 non-GAAP operating margin was 22.7%, increasing from 20.3% in Q3.

Notes
1) Based on Brocade estimates of adjustment for partners taking delivery of internationally bound shipments in the United States, end-user demand was 53% domestic and 47% international.
2) On an ‘As If’ combined Brocade basis with respect to Q4 2008.
3) Q4 2009 is the third full quarter of combined operations post acquisition of Foundry.