Isilon 3Q10 Earnings Call Transcript

Here are abstracts of Isilon Sytems’ 3Q10 earnings call transcript following the publication yesterday of the company’s financial results:

Bill Richter, CFO:
"Geographically, 75% revenue [in 3Q10] was generated in North America and 25% came from our international locations, a mix that was roughly flat with Q2. North America was $40.7 million, APAC was $6.7 million and EMEA was $6.5 million. If you remember from last quarter, our EMEA business was softer than our other territories. So we are pleased to see it grow 44% sequentially over Q2. Overall, the channel drove 64% of revenue in Q3.
"The channel mix was slightly down from Q2, but in dollar terms channel revenue was in an all time record price for Isilon. Breaking out North America separately, the channel generated 54% of revenue. This compares to 59% in Q2 and 47% in Q3 of 2009.
"In Q3, sales of our add-on software applications contributed 14% of total revenue mix, or $7.4 million. Add-on software application revenue was up 123% over the same period last year and at 14%, the mix is at an all time high for Isilon, driven largely by the introduction of our two new software applications, InsightIQ and SmartPools.
"In Q3, we acquired 96 new customers. New customer product revenue mix was 25% in the third quarter compared to 28% in Q2 and 31% in the same period a year ago.
"In terms of vertical market contributions, three crossed the 10% mark; media and entertainment at 37%, life sciences at 16% and internet and service providers at 11%. The Federal Government, carriers and manufacturing were all in the mid-single digits.
"Our non-verticalized business was 21% and is represented by customers using Isilon to support virtualized environments, backup and archived requirements, business continuance and a range of other horizontal IT solutions.
"From a top line perspective, we are now raising our outlook for a full year revenue growth to be in the high 50% range. Implicit in this outlook is Q4 revenue in the $59 to $60 million range."

Sujal Patel, president and CEO:
"Webtrend’s one of the world’s leading Web Analytics companies is using Isilon’s new unified scale-out solution to create a single point of management for all of their NFS based virtual machines and all of their iSCSI based Microsoft databases.
"This quarter, Isilon secured a hard fought multi-petabyte win at a Fortune 100 energy company.
"We predominantly compete against the two independent storage leaders NetApp and EMC and within those two, we largely compete against NetApp."

At the question:
"Any thoughts around, though the recent announcements around – you guys possibly hiring a catalyst or any other recent rumblings out there to the extent you can provide any thoughts around that."

Sujal Patel answered:
"In terms of our policy we never comment on rumors and speculation."