Isilon: Fiscal 1Q10 Financial Results

Isilon Systems, Inc. announced its financial results for the quarter ended March 31, 2010.

Revenue for the quarter was $39.3 million, up 5% sequentially compared to $37.5 million in the fourth quarter of 2009 and up 46% from $26.9 million in the first quarter of 2009.  

"I am pleased with the continued progress Isilon made in the first quarter," said Sujal Patel, president and chief executive officer, Isilon Systems. "We saw sales improvement in EMEA and Asia, succeeded in growing our channel business, and broadened our footprint within new and existing enterprise customers," said Patel. "This strong business execution and increasing leverage provides us a strong position from which to continue to pursue our vision of meeting the long-term data management needs of enterprise IT buyers."

Financial results for the first quarter of 2010
included the following:  

• Gross margin for the first quarter of 2010 was 62.0%, compared with 57.6% in the fourth quarter of 2009 and 40.3% in the first quarter of 2009. Gross margin for the first quarter of 2009 was reduced by 14 percentage points due to an inventory write-down of $3.8 million.
• Net income for the first quarter of 2010 was $1.1 million, or $0.02 per diluted share, compared with net income of $0.1 million, or $0.00 per diluted share in the fourth quarter of 2009.  Net loss in the first quarter of 2009 was $10.4 million, or $0.16 per diluted share.  Non-GAAP net income for the first quarter of 2010 was $2.9 million, or $0.04 per diluted share, compared with non-GAAP net income of $1.6 million, or $0.02 per diluted share in the fourth quarter of 2009.  Non-GAAP net loss in the first quarter of 2009 was $8.9 million, or $0.14 per diluted share. GAAP and non-GAAP net loss for the first quarter of 2009 includes $3.8 million, or $0.06 per diluted share, related to an inventory write-down.  
• Cash flows generated from operations in the first quarter of 2010 were $9.9 million compared with $2.5 million in the fourth quarter of 2009 and negative $0.6 million in the first quarter of 2009.  
• The Company adopted two recently issued accounting standards related to revenue arrangements with software elements and multiple-deliverable revenue: ASU 2009-13 and ASU 2009-14, on a prospective basis effective January 1, 2010. The adoption of these standards had a minor impact on our results, reducing revenue and net income by approximately $0.2 million with a corresponding increase to deferred revenue on the balance sheet.