Fusion-io: Fiscal 2Q13 Financial Results

Fusion-io, Inc. announced its financial results for its fiscal second quarter ended December 31, 2012.

Fiscal Second Quarter 2013 GAAP Financial Results
Fusion-io reported record revenue of $120.6 million for the fiscal second quarter 2013, up 43% from $84.1 million for the same quarter of 2012 and up 2% from $118.1 million for the preceding quarter. Net income for the fiscal second quarter of 2013 was $1.7 million, or $0.02 per diluted share, compared to a net loss of $5.7 million, or a net loss per diluted share of $0.07, in the fiscal second quarter of 2012. Gross margin for the fiscal second quarter 2013 was 61.8%. Operating margin for the fiscal second quarter 2013 was 5.7%.

Fiscal Second Quarter 2013 Non-GAAP Financial Results
Non-GAAP net income for the fiscal second quarter of 2013 was $13.7 million, or $0.13 per diluted share, compared to non-GAAP net income of $5.6 million, or net income per diluted share of $0.05, in the same quarter of 2012. Non-GAAP gross margin for the fiscal second quarter 2013 was 61.9%. Non-GAAP operating margin for the fiscal second quarter 2013 was 17.8%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release.

"The shift to the cloud from traditional IT, and the shift away from mechanical storage to solid state, are twin catalysts to our business. We are well-positioned to capture opportunities as a growing number of customers decide to migrate away from legacy storage and move to the cloud using new memory architectures," said David Flynn, Fusion-io chairman and CEO. "As early adopters of our technology move to all-flash architectures, the sheer scale of this transformation can lead to lumpiness in deployments quarter to quarter as customers learn to extract the full potential of flash to drive even greater efficiency in their infrastructure."

Dennis Wolf, Fusion-io CFO, added: "Our two largest customers have purchased nearly half a billion from Fusion-io since 2010, representing robust adoption of our technology. There is a lot of potential with these key customers, and the change in our guidance reflects a two-quarter shift in the timing of their bulk purchases. A healthy pipeline for growth, fueled by new products and partnerships, as well as a solid financial position, with more than $365 million in cash and equivalents, will enable us to drive the business forward and create value for our shareholders."

Other Financial Highlights

• Cash and cash equivalents totaled $368.5 million at the end of fiscal second quarter 2013, an increase of $14.6 million compared to the prior quarter-end.
• Deferred revenue at the end of fiscal second quarter 2013 was $38.1 million, an increase of $3.7 million compared to the prior quarter-end.
• Inventory was $74.2 million at the end of fiscal second quarter 2013, an increase of $7.0 million compared to the prior quarter-end.
• Capital expenditures were $3.5 million in fiscal second quarter 2013.

Recent Business Highlights
On January 16, Fusion-io announced its newest product line, Fusion ioScale, providing up to 3.2TB of capacity that is performance tuned for the needs of webscale and cloud datacenters.

Business Outlook for third quarter of FY2013:

• Revenue is expected to be approximately $80 million.
• Non-GAAP gross margin is expected to be in the range of 58 to 60%.
• Non-GAAP operating loss of approximately $10 to $15 million.
• Diluted shares outstanding are expected to be approximately 111 million shares.
• Fiscal Year 2013 guidance:
• Revenue is expected to be approximately $420 to $440 million.
• Non-GAAP gross margin is expected to be in the range of 58 to 60%.
• Non-GAAP operating margin is expected to be approximately 6 to 8%.
• Diluted shares outstanding are expected to be approximately 110 million shares.