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Nimble Storage: Fiscal 2FQ15 Financial Results

Revenue up 89% with net loss increasing 150%

(in $ million) 2Q14 2Q15 6 mo. 14 6 mo. 15
Revenues 28.5 53.8 50.6 100.3
Growth   89%   87%
Net income (loss) (10.4) (26.1) (19.7) (45.7)

Nimble Storage, Inc. reported financial results for the fiscal second quarter 2015.

During Q2, our Adaptive Flash platform launch underscored the breadth and comprehensive nature of our approach to leveraging flash, particularly when contrasted against more narrowly focused tiered hybrid storage offerings or flash-only offerings,” said Suresh Vasudevan, CEO, Nimble Storage. “We added a record 663 new end customers during the quarter, ending with a total of 3,756 end customers, an increase of 115% from Q2 of last year. During the last four quarters, we added a total of over 2,000 new end customers as we continued to increase our share of market. We also closed a record number of deals with a value over $100K during Q2, including the largest deal in our history.”

Q2 was a great quarter for us. We reported record revenue of $53.8 million, ahead of our guidance of $49 to $51 million. Our gross margin was also a record high at 67.4%, and remains best of breed in the storage industry. We remain very pleased with the progress we are making towards achieving our long-term financial goals,” said Anup Singh, CFO, Nimble Storage.

Fiscal Second Quarter 2015 Financial Results:

  • Revenue: Total revenue for the second quarter of fiscal 2015 was $53.8 million, compared to $28.5 million in the second quarter of fiscal 2014, representing growth of 89% year-over-year.
  • Non-GAAP Gross Margin: Second quarter non-GAAP gross margin of 67.4%, compared to 64.3% in the second quarter of fiscal 2014.
  • Non-GAAP Operating Margin: Second quarter non-GAAP operating margin was negative 20%, compared to negative 30% in the second quarter of fiscal 2014.
  • GAAP Net Loss: Second quarter net loss was $0.37 per basic and diluted share, compared with a net loss of $0.51 per basic and diluted share in the fiscal second quarter of 2014.
  • Non-GAAP Net Loss: Second quarter non-GAAP net loss was $0.15 per basic and diluted share, compared with a non-GAAP net loss of $0.15 per basic and diluted share in the fiscal second quarter of 2014.

For the fiscal third quarter of 2015, Nimble Storage expects:

  • Revenue in the range of $56 to $58 million; the midpoint of this range reflects 71% growth compared to the prior year period
  • Non-GAAP operating loss of $11 to $12 million; the midpoint of this range represents negative 20% operating margin compared to negative 24% in the prior year period
  • Non-GAAP net loss of $0.16 to $0.17 per share
  •  Weighted average basic shares outstanding of approximately 73 million

Financial objectives remain:

  • driving strong revenue growth and increasing our market share
  • maintaining industry leading gross margins and
  • steadily progressing towards our long-term target financial model of 16%-20% operating margin by delivering sequential improvement in operating margin every year.

The company remains on track to achieve break-even on a non-GAAP basis by the end of our next fiscal year (FY16).

Recent Business Highlights:

  • Redefines Storage Market With Adaptive Flash Platform – Delivers Enterprise Scale Performance with New CS700 Series Arrays and All-Flash Shelf. Adaptive Flash platform provides the performance of flash-only arrays and the capacity of hybrid arrays with the introduction of the CS700 Series arrays and All-Flash Shelf delivering up to 500,000 IO/s, 64TBs of flash, and a petabyte of capacity. By minimizing performance and capacity tradeoffs, Nimble’s Adaptive Flash platform enables the consolidation of all workloads and eliminates storage silos. The CS700 Series array and All-Flash Shelf are available.
  • Extends Industry-Leading Performance Efficiency with New Adaptive Flash Arrays. Announced upgrades to its CS-Series arrays with the introduction of two families: CS300 and CS500. Like high-end CS700 array, they leverage the company’s Adaptive Flash CPU-driven architecture and the newest version of Intel’s high-performance CPU architecture. The new arrays deliver 50% more performance than the CS200 and CS400 families that they are replacing. Like the recently announced CS700, the CS300 and CS500 arrays can be combined with All-Flash Shelf to support tens of terabytes of flash in a scale-out cluster. Adaptive Flash platform eliminates performance and capacity tradeoffs, providing the performance of flash-only arrays and the capacity of hybrid arrays. The CS300 and CS500 are available.
  • Was Recognized by CRN as a 2014 Emerging Vendor. The annual list identifies up-and-coming technology vendors that have introduced innovative products, creating opportunities for channel partners in North America to create high-margin, cutting-edge solutions for their customers. Nimble’s channel-centric model continues to be a driver of the company’s growth and has launched within several new regions, including Singapore, Thailand, Philippines, Malaysia and throughout EMEA. Nimble launched a two-tier distribution model in North America, transitioning 100% of all resellers to purchase through distribution.
  • Named Top Workplace By the Bay Area News Group for the Second Consecutive Year. For the second consecutive year, the firm has ranked in the top 10, placing seventh this year and up two spots from the previous listing. In addition, CEO, Suresh Vasudevan, was selected as the winner of the Special Recognition Award for Leadership for mid-size companies in the Bay Area.

Comments

Public company Nimble Storage continues to operate like a start-up, investing to push revenue and to get market share on the crowded market of storage subsystems with flash, rather than trying to be profitable.

Quarterly sales increase 89% Y/Y and 16% Q/Q, ahead of guidance, and are expected to continue to grow next three-month period. The company will probably largely surpass $200 million in revenue for current fiscal year, to be compared to $126 million for the former one, but with heavier losses ($43 million in FY14).

For the most recent quarter, net loss is up 151% Y/Y  and 33% Q/Q and this negative trend will not stop next quarter.

The company never was profitable since its inception, before and after $168 million IPO last December.

During the quarter, Nimble Storage added 663 new customers, which now stands at a total of 3,750, channel partners being key contributors. The number of unique partners account execs that closed deals doubled from a year ago. Deals where channel partner contribution was deemed to have been 75% or greater also doubled compared to a year ago.

Installed base of large enterprises grew by 81% compared to the same quarter of the previous year and the company said to have now 13 of the Top 100 and 53 of the Top 500 enterprises as customers. Installed base of cloud service providers grew faster, by 119% compared to the same period one year ago.

Customers more than doubled their initial spend over a two-year timeframe when measured across the entire installed base. Global 5,000 customers increased their spend by 3.3 times and cloud service providers by 3.5 times over a two-year timeframe after the initial purchase.

The Californian firm records 444 deals greater than $100,000 over the last 12-month period, an increase of 86% compared to the same statistic last year.

Across EMEA and AsiaPac, it now has teams in 19 countries and distribution arrangements in 26 additional ones. This translated into international bookings growth of 121% compared to 2FQ14.

Cash flow is currently $206 million, an increase of $1.5 million during the last the quarter.

It counts now 735 employees, an increase of 67 for the quarter and 271 during the last 12 months.

Nimble Storage is on track to release its OS 2.2, which has FC functionality, by the end of fiscal year.

To read the earnings call transcript

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