Fusion-io: Fiscal 2Q12 Financial Results

Fusion-io, Inc. announced its financial results for its fiscal second quarter ended December 31, 2011.

Fiscal 2Q12 GAAP Financial Results
Fusion-io reported revenue of $84.1 million for the fiscal second quarter of 2012, up 169% from $31.2 million for the same quarter of 2011 and up 13% from $74.4 million for the prior quarter. Net loss for the fiscal second quarter of 2012 was $5.7 million, or a net loss per diluted share of $0.07. This compared to a net loss of $2.5 million, or a net loss per diluted share of $0.19 in the same quarter of 2011. Gross margin for the fiscal second quarter 2012 was 51.0% compared to 58.7% for the same quarter of 2011. Operating margin for the fiscal second quarter was a loss of 4.8%.

Fiscal 2Q12 Non-GAAP Financial Results
Non-GAAP net income for the fiscal second quarter of 2012 was $5.6 million, or $0.05 per diluted share. This compares to a non-GAAP net loss of $1.0 million, or a net loss per diluted share of $0.08 in the same quarter of 2011. Non-GAAP gross margin for the fiscal second quarter 2012 was 51.1% compared to 58.8% for the same quarter of 2011. Non-GAAP operating margin for the fiscal second quarter 2012 was 7.8%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release.

"Fusion-io is at the forefront in developing sophisticated software architectures that leverage existing hardware and our ioMemory solutions to significantly improve datacenter efficiency," said David Flynn, Fusion-io chairman and chief executive officer. "We believe these innovations in the acceleration of modern computing infrastructure will fundamentally advance enterprise IT."

"Our execution this past quarter was again quite strong and we emerge with a healthy balance sheet that provides us with strategic flexibility," said Dennis Wolf, chief financial officer. "We are in the process of transitioning to our next generation ioDrive2 product that we believe will enable us to offer our customers greater performance at a more attractive price point and increase awareness and adoption of our solutions."

Other Financial Highlights

• In November 2011, Fusion-io completed a follow-on public offering in which it issued and sold three million shares of common stock, raising $94.0 million, net of expenses.
• Cash and cash equivalents at the end of the quarter were $307.4 million, an increase of $105.5 million over the prior quarter.
• Inventory balances at the end of the fiscal second quarter were $65.0 million, a decrease of $6.6 million over the prior quarter.
• Deferred revenue at the end of the fiscal second quarter was $15.9 million, an increase of $4.6 million from the prior quarter.
• Capital expenditures were $6.1 million in the fiscal second quarter and $10.3 million in the first six months of fiscal 2012.
• Net operating cash flow was $13.5 million for the fiscal second quarter and $16.6 million in the first six months of fiscal 2012.

Business Highlights

• On January 5, 2012, Fusion-io announced that it achieved over one billion input and output operations per second (IOPS) in a technology demonstration while previewing the company’s Auto Commit Memory (ACM) extension. ACM leverages the unique architecture of Fusion’s ioMemory subsystem to significantly reduce latency and system overhead in transferring data.
• On December 19, 2011, Fusion-io announced that Shane V. Robison had joined the company’s Board of Directors. Mr. Robison was executive vice president and chief strategy and technology officer of Hewlett-Packard company from May 2002 until his retirement in November 2011.
• On December 8, 2011, Fusion-io announced that it had entered into a reseller agreement with Digital China, provider of integrated IT services in China, to expand access to Fusion-io software and hardware technologies in the region.
• On November 15, 2011, Fusion-io announced its 10 TB ioDrive Octal, which features double the ioMemory capacity and density by integrating eight 1.28 TB MLC ioMemory modules in a single double-wide PCIe device.

Business Outlook
Third quarter of fiscal year 2012:

• Revenue is expected to be approximately $85 million.
• Non-GAAP gross margin is expected to be in the range of 50%.
• Non-GAAP operating margin is expected to be breakeven to 5%.
• Diluted shares outstanding is expected to be approximately 115 million shares.

Fiscal Year 2012:

• Revenue growth is expected to be 65 to 70%.
• Non-GAAP gross margin is expected to be 54 to 56%.
• Non-GAAP operating margin is expected to be approximately 8%.
• Diluted shares outstanding is expected to be approximately 110 million shares.