Isilon: Fiscal 1Q08 Financial Results

in US$ millions)	1Q07	1Q08
Revenues	17.8	24.1
*Growth*		35%
Net income (loss)	6.9	10.1

Isilon Systems announced its financial results for the first quarter of 2008 that ended March 31, 2008. Revenue for the first quarter was $24.1 million, an increase of 35 percent compared with $17.8 million in the first quarter of 2007.

“I am encouraged by these results as we emerge from the challenges of the past few quarters,” said Sujal Patel, President and Chief Executive Officer, Isilon Systems. “Despite recent business headwinds and a seasonally slower first quarter, we witnessed record levels of repeat purchases from existing customers, reflecting Isilon’s strong value proposition and the modular, ‘pay as you grow,’ architecture of our clustered storage systems.”

Financial results for the first quarter of 2008 included the following:

Gross margin for the first quarter of 2008 was 53.5 percent, compared with 48.1 percent in the first quarter last year. On a non-GAAP basis, gross margin for the first quarter was 53.7 percent, compared with 48.2 percent in the first quarter last year.
Loss from operations for the first quarter of 2008 was $10.8 million, compared with $8.0 million in the first quarter last year. On a non-GAAP basis, loss from operations for the first quarter of 2008 was $9.5 million, compared with $7.5 million in the first quarter last year.
Net loss for the first quarter of 2008 was $10.1 million, or $0.16 per share, compared with net loss of $6.9 million, or $0.11 per share, in the first quarter last year. Non-GAAP net loss for the first quarter was $8.8 million, or $0.14 per share, compared with non-GAAP net loss of $6.4 million, or $0.11 per share in the first quarter last year.
At March 31, 2008, cash, cash equivalents and marketable securities were $78.6 million, compared with $85.9 million at the end of 2007, and the company had no outstanding debt.
Operating results for the first quarter of 2008 were impacted by $2.8 million, or $0.04 per share, in professional fees and expenses related to the Audit Committee’s independent review, which concluded at the end of the first quarter.

Comments

Abstracts from Form 10-Q:

"The number of new customers added for the three months ended March 31, 2008 was 51 representing a 31% decrease from the number of new customers added in the comparable period in the prior year; however since the first quarter of 2007, our total number of customers has increased 67%."

"We have not been profitable in any fiscal period since we were formed. We experienced a net loss of $10.1 million for the three months ended March 31, 2008, and $6.9 million for the three months ended April 1, 2007. As of March 31, 2008, our accumulated deficit was $112.7 million."