Isilon: Fiscal 3Q08 Financial Results

Isilon Systems announced its financial results for the third quarter ended September 30, 2008.

Revenue for the third quarter was $30.3 million, up 8 percent sequentially compared with $28.2 million in the second quarter of 2008. Revenue increased 40 percent compared with $21.6 million in the third quarter of 2007.

“In the third quarter, our solid execution in growing revenue and driving increased operating leverage in our business generated significant bottom line improvement and positive cash flows,” said Sujal Patel, President and Chief Executive Officer, Isilon Systems. “Our customers are deriving significant value from Isilon’s ‘pay-as-you-grow’ clustered storage solutions which provide the flexibility to align capital expenditures directly with the inevitable growth of file-based data.”

During the third quarter, Isilon released its OneFS 5.0 operating system software and the new Accelerator-x. “In addition to our strong operational performance in the quarter, Isilon released its fifth generation clustered systems, setting the standard for scale-out file storage in the enterprise,” said Patel.

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

• Gross margin for the third quarter of 2008 was 57.2 percent, compared with 56.9 percent in the second quarter of 2008. Gross margin in the third quarter last year was 55.7 percent. On a non-GAAP basis, gross margin for the third quarter was 57.3 percent, compared with 57.0 percent in the second quarter of 2008. Non-GAAP gross margin in the third quarter last year was 55.9 percent.
• Loss from operations for the third quarter of 2008 was $5.2 million, compared with $6.4 million in the second quarter of 2008. Loss from operations in the third quarter last year was $8.3 million. On a non-GAAP basis, loss from operations for the third quarter of 2008 was $3.6 million, compared with $4.9 million in the second quarter of 2008. Non-GAAP loss from operations in the third quarter last year was $7.0 million.
• Net loss for the third quarter of 2008 was $4.8 million, or $0.08 per share, compared with net loss of $5.8 million, or $0.09 per share, in the second quarter of 2008. Net loss in the third quarter last year was $7.2 million, or $0.12 per share. Non-GAAP net loss for the third quarter was $3.3 million, or $0.05 per share, compared with non-GAAP net loss of $4.3 million, or $0.07 per share, in the second quarter of 2008. Non-GAAP net loss in the third quarter last year was $5.9 million, or $0.10 per share.
• As of September 30, 2008, cash, cash equivalents and marketable securities were $76.7 million, compared with $75.1 million as of June 30, 2008.