Fusion-io: Fiscal 1Q12 Financial Results

Fusion-io, Inc. announced its financial results for the fiscal first quarter ended September 30, 2011.

Fiscal First Quarter 2012 GAAP Financial Results
Fusion-io reported revenue of $74.4 million for the fiscal first quarter of 2012, up 175% from $27.0 million for the same quarter of 2011 and up 4% from $71.7 million for the prior quarter. Net income for the fiscal first quarter of 2012 was $7.2 million, or $0.07 per diluted share. This compared to a net loss of $5.8 million, or a net loss per diluted share of $0.46 in the same quarter of 2011. Gross margin for the fiscal first quarter 2012 was 63.2% compared to 43.0% for the same quarter of 2011. Operating margin for the fiscal first quarter of 2012 was 6.3%.

Fiscal First Quarter 2012
Non-GAAP Financial Results
Non-GAAP net income for the fiscal first quarter of 2012 was $15.1 million, or $0.15 per diluted share. This compares to a non-GAAP net loss of $4.9 million, or a net loss per diluted share of $0.39 in the same quarter of 2011. Non-GAAP gross margin for the fiscal first quarter 2012 was 63.3% compared to 43.0% for the same quarter of 2011. Non-GAAP operating margin for the fiscal first quarter 2012 was 21.7%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release.

"Fusion-io’s industry-leading solutions address the data supply problem enterprises face as they struggle to meet the growing demand to process more data faster," said David Flynn, Fusion-io chairman and chief executive officer. "The acceleration of cloud computing and virtualization is only exacerbating this challenge for IT departments around the globe. We believe we are well positioned to lead the transformation in data delivery by helping organizations deliver the right data, to the right application, at the right time, and doing so with a compelling return on investment."

"Fusion-io delivered strong revenue and earnings growth in the first fiscal quarter, getting us off to a good start in fiscal 2012," said Dennis Wolf, chief financial officer. "Raising our revenue guidance for the fiscal year demonstrates our confidence in our strategy as we continue to make significant investments in our next generation product as well as research and development and sales and marketing to drive long-term sustainable growth."

Other Financial Highlights

• Cash and cash equivalents at the end of the quarter was $201.9 million, a decrease of $17.7 million over the fiscal fourth quarter 2011 following the net cash outlay of $17.6 million in connection with the acquisition of IO Turbine, Inc. that closed on August 11, 2011.
• Inventory balances at the end of the quarter were $71.5 million compared to $35.6 million at the end of the fiscal fourth quarter 2011.
• Capital expenditures were $4.2 million in the quarter compared to $3.0 million in the fiscal fourth quarter 2011.
• Net operating cash flow was $3.1 million for the fiscal first quarter.

Business Highlights

• On October 3, Fusion-io announced the November availability of its next generation ioMemory platform, the ioDrive2, which delivers more capacity, enhanced reliability, and improved performance at a lower cost.
• On August 29, Fusion-io announced its ioCache solution featuring Fusion’s ioTurbine software and customized ioMemory accelerator to deliver affordable performance for virtualizing data-intensive enterprise applications that were previously difficult to migrate to virtualized environments while maintaining performance.
• Fusion-io recently expanded its software sales channel with a new VAR Program to support VARs and partners integrating Fusion-io products into servers from the industry’s leading server OEMs, including Dell, HP, IBM, and Supermicro.

Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding 2012 financial results.

Second quarter of fiscal year 2012:

• Revenue is expected to be approximately $75 million.
• Non-GAAP gross margin is expected to be in the range of 50%.
• Non-GAAP operating margin is expected to be 3 to 5%.
• Diluted shares outstanding is expected to be approximately 106 million shares.

Fiscal Year 2012:
Revenue growth is expected to be approximately 55%.
Non-GAAP gross margin is expected to be approximately 56%.
Non-GAAP operating margin is expected to be in the range of 6 to 8%.
Diluted shares outstanding is expected to be approximately 108 million shares.