Fusion-io: Fiscal 4Q12 Financial Results

Fusion-io, Inc. announced its financial results for its fiscal fourth quarter and fiscal year ended June 30, 2012.

Highlights:

• Revenue: $359.3 million in fiscal 2012 (an increase of 82% over fiscal 2011)
• GAAP Net Loss per Diluted Share: 6 cents in fiscal 2012 (compared to earnings of 6 cents in fiscal 2011);
• Non-GAAP Net Earnings per Diluted Share: 35 cents in fiscal 2012 (compared to 20 cents in fiscal 2011)
• Operating Cash Flow: $34.8 million in fiscal 2012 (compared to a use of $9.9 million in fiscal 2011)
• GAAP Gross Margin of 57.5% and Non-GAAP Gross Margin of 57.6% for the fiscal fourth quarter 2012

Fiscal Fourth Quarter 2012 GAAP Financial Results
Fusion-io reported record revenue of $106.6 million for the fiscal fourth quarter of 2012, up 49% from $71.7 million for the same quarter of 2011 and up 13% from $94.2 million for the prior quarter. Net loss for the fiscal fourth quarter of 2012 was $2.4 million, or a net loss per diluted share of $0.03, compared to net income of $5.8 million, or $0.06 per diluted share in the same quarter of 2011. Gross margin for the fiscal fourth quarter 2012 was 57.5%. Operating margin for the fiscal fourth quarter was a loss of 0.9%.

Fiscal Fourth Quarter 2012 Non-GAAP Financial Results
Non-GAAP net income for the fiscal fourth quarter of 2012 was $9.8 million, or $0.09 per diluted share. This compared to non-GAAP net income of $13.2 million, or $0.15 per diluted share, in the same quarter of 2011. Non-GAAP gross margin for the fiscal fourth quarter 2012 was 57.6%. Non-GAAP operating margin for the fiscal fourth quarter 2012 was 11.2%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release.

"Fusion-io delivered another record revenue quarter with great execution across the company, and we are pleased with the momentum we have going into the next fiscal year," said David Flynn, Fusion-io chairman and CEO. "We believe we are still in the early stages of demonstrating the transformative potential of software defined storage solutions that deliver greater performance and efficiency for customers at a fraction of the cost of legacy systems."

Fiscal 2012 GAAP Financial Results
Revenue for fiscal year 2012 was $359.3 million, up 82% from $197.2 million in fiscal year 2011. Net loss for fiscal year 2012 was $5.6 million, or a net loss of $0.06 per diluted share. This compared to net income of $4.6 million, or $0.06 per diluted share, for fiscal year 2011. Gross margin for fiscal year 2012 was 55.7%. Operating margin for fiscal year 2012 was a net loss of 1.5%.

Fiscal 2012 Non-GAAP Financial Results
Non-GAAP net income for fiscal year 2012 was $37.5 million, or $0.35 per diluted share. This compares to non-GAAP net income of $16.3 million, or $0.20 per diluted share, for fiscal year 2011. Non-GAAP gross margin for the fiscal year 2012 was 55.8%. Non-GAAP operating margin for fiscal year 2012 was 11.6%.

"Fusion-io’s 82% revenue growth and 130% non-GAAP net income growth over the prior year reflect a strong fiscal year 2012.  We reported record cash flow from operations, and we exit the fiscal year with a healthy balance sheet that gives us strategic flexibility," said Dennis Wolf, Fusion-io CFO. "Our goal for the coming year is to continue to execute on our growth strategy while furthering our technology leadership."

Other Financial Highlights

• Cash and cash equivalents totaled $321.2 million at the end of fiscal 2012, compared to $219.6 million at the end of fiscal 2011.
• Deferred revenue at the end of fiscal 2012 was $28.9 million, compared to $12.0 million at the end of fiscal 2011.
• Inventory was $59.5 million at the end of fiscal 2012, compared to $35.6 million at the end of fiscal 2011.
• Capital expenditures were $7.4 million in fiscal fourth quarter 2012 and $24.0 million for fiscal 2012.

Recent Business Highlights

• On August 1, announced its new ION Data Accelerator software that transforms customers’ preferred server platforms into powerful shared ioMemory application acceleration appliances.
• On July 30, announced that it is working closely with storage industry leader NetApp to provide solutions using server-side flash and caching software products that integrate with the NetApp Virtual Storage Tier.
• Systems vendor partners HP, Dell and IBM all qualified and launched products based on the Fusion ioDrive2 in May, June and July, respectively.
• On July 10, announced that it has collaborated with Princeton University to design a new subsystem called Extended Memory as part of its Software Development Kit (SDK). The Extended Memory feature intelligently tiers data between available DRAM in the system and the persistent NAND flash tier, making it much more affordable for organizations to greatly expand the size of their in-memory data sets with a powerful software-driven solution.
• On June 11, announced that it had entered into an OEM relationship with Cisco whereby Fusion ioMemory will be architected into the Cisco Unified Computing System Server to amplify in-server performance in all UCS B-series blade servers.

Business Outlook

First quarter of fiscal year 2013:

• Revenue is expected to modestly increase from fiscal Q4.
• Non-GAAP gross margin is expected to be in the range of 56 to 58%.
• Non-GAAP operating margin is expected to be approximately 10%.
• Diluted shares outstanding is expected to be approximately 110 million shares.

Fiscal Year 2013:

• Revenue growth is expected to be in the range of 45 to 50%.
• Non-GAAP gross margin is expected to be in the range of 56 to 58%.
• Non-GAAP operating margin is expected to be approximately 12%.
• Non-GAAP tax rate is expected to be approximately 35 to 40%.
• Diluted shares outstanding is expected to be approximately 114 million shares.
• Capital Expenditures are expected to be in the range of $20 to $25 million.