Compellent: Fiscal 3Q10 Financial Results

in US$ millions)	3Q09	3Q10	9 mo. 09	9 mo. 10
Revenues	32.2	42.1	89.0	110.4
*Growth*		31%		*24%*
Net income (loss)	2.3	3.3	3.5	2.4

Compellent Technologies, Inc. announced record revenue of $42.1 million for the third quarter ended Sept. 30, 2010. This represents a 31 percent increase from the third quarter in 2009.

Highlights for Q3 2010 include:

Revenue of $42.1 million represents a 15 percent sequential increase over the second quarter 2010.
Gross margin was 55.9 percent compared with 53.6 percent in the second quarter 2010.
GAAP net income was $3.3 million, or $0.10 per share. Non-GAAP net income, which excludes stock-based compensation expense, was $4.9 million, or $0.15 per share.
Total customers grew to 2,303, an increase of 179 from the previous quarter.

"We achieved our best-ever quarterly results for revenue and net income thanks to strong execution by our team and enterprise customers choosing Fluid Data storage over our competitors’ rigid storage architectures," said Phil Soran, president and CEO of Compellent. "Whether deployed for cloud computing or virtual server and desktop infrastructures, Compellent is increasingly the platform of choice for large data centers."

Additional Q3 highlights include:

Revenue totaled $110.4 million for the nine months ended Sept. 30, 2010, which is a $21.4 million, or 24 percent, increase compared to $89.0 million in the same period last year.
Cash and investments totaled $138.8 million compared to $123.8 million at Dec. 31, 2009.
Deferred revenue was $51.2 million, an increase of $13.0 million from Dec. 31, 2009.
Product revenue from new end-users totaled 45 percent on a year-to-date basis compared to 55 percent from existing end-users.

"As we continue to scale deeper into the enterprise, we will build on our heritage of technology leadership," continued Mr. Soran. "We’re excited about the next step for Fluid Data, the first in a series of planned innovations that will begin with a major hardware and software launch this quarter."

Comments

Abstracts of the earnings call transcript:

Phil Soran, president and CEO:
"Over the next few quarters you'll see a series of new product releases that expand upon our Fluid Data architecture and scale beyond our existing platform. This expanded feature set, something I like to call Fluid Data 2, will provide enterprise data centers greater performance, scalability, efficiency, ease of use and reliability, and all will be based upon our existing virtualization and dynamic block architecture. Let me give you three examples how we'll scale our technology to take us into more opportunities.
"First, a key enabling technology for virtualization and the cloud is our enhanced Live Volume. This Compellent exclusive can detect when a hypervisor moves a virtual machine from one server to another and it can automatically migrate the Compellent storage volume to follow the application. For years we have intelligently moved data within an array; now we are automatically moving data between arrays to provide businesses with continuous access to data and high availability. Live Volume works with multiple hypervisors including VMware's vSphere, Microsoft Hyper-V and Citrix XenServer.
"Second of all, our next-generation data centers require tight integration between best-of-breed products to build out cost-effective and secure infrastructures. We recently announced our VMware vSphere client plug-in which allows every VMware customer to manage Compellent storage through vCenter. What used to take hours will now take minutes. The market reaction has been extremely positive.
"Third, a persistent architecture is especially valuable to large enterprises because they could easily add new technologies and scale from terabytes to petabytes without throwing away their previous investment. We will further demonstrate this value in Q4 when we launch our newest version of Storage Center, the largest, most comprehensive hardware and software release in our company history.
"We already have more than 200 customers with installations over 100 terabytes of Compellent storage and several in the petabyte-plus range."

Jack Judd, CFO:
"Our international markets totaled 14% of revenue or $5.9 million during the third quarter of 2010.
"Our current revenue forecast range for the fourth quarter 2010 is $44 million to $46 million. We expect our non-GAAP EPS to be between $0.09 and $0.11, reflecting greater spending in sales, marketing, engineering and our gross margin being within our target range."