Achieves Record Revenue for the Fiscal Fourth Quarter of $71.7 Million
Announces Agreement to Acquire Virtualization Software Provider IO Turbine
SALT LAKE CITY--(BUSINESS WIRE)--Fusion-io, Inc. (NYSE:FIO), a provider of a next-generation shared data decentralization platform, today announced its financial results for the fiscal fourth quarter and fiscal year ended June 30, 2011.
“We believe our significant year-over-year growth emphasizes increasing industry recognition that storing data close to the CPU where it is processed finally addresses the data supply problem”
Fiscal Fourth Quarter 2011 GAAP Financial Results
Fusion-io reported revenue of $71.7 million for the fiscal fourth quarter of 2011, up 556% from $10.9 million for the same quarter of 2010 and up 7% from $67.3 million for the prior quarter. Net income for the fiscal fourth quarter of 2011 was $5.8 million, or $0.06 per diluted share. This compared to a net loss of $(11.9) million, or a net loss per diluted share of $(1.00) in the same quarter of 2010. Gross margin for the fiscal fourth quarter 2011 was 66.2% compared to 46.8% for the same quarter last year. Operating margin for the fiscal fourth quarter of 2011 was 13.4%.
Fiscal Fourth Quarter 2011 Non-GAAP Financial Results
Non-GAAP net income for the fiscal fourth quarter of 2011 was $13.2 million, or $0.15 per diluted share. This compares to a non-GAAP net loss of $(11.2) million, or $(0.94) per diluted share, for the same quarter of 2010. Non-GAAP gross margin for the fiscal fourth quarter of 2011 was 66.2% compared to 46.8% for the same quarter of 2010. Non-GAAP operating margin for the fiscal fourth quarter 2011 was 20.3%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release.
“We believe our significant year-over-year growth emphasizes increasing industry recognition that storing data close to the CPU where it is processed finally addresses the data supply problem,” said David Flynn, Chairman and Chief Executive Officer of Fusion-io. “Fusion-io offers a simple, efficient, cost-effective platform that integrates within existing architectures to meet the data demands faced by modern enterprises as they seek to accelerate databases and applications and to virtualize their infrastructure. Fusion-io remains focused on hardware innovation, but our software is what differentiates our platform solution. With the acquisition of IO Turbine, we will add yet another powerful software component to our platform that elegantly minimizes complexity, further amplifying the performance of ioMemory in VMware virtualized environments and expands our addressable market.”
Fiscal 2011 GAAP Financial Results
Revenue for fiscal year 2011 was $197.2 million, up 445% from $36.2 million in fiscal year 2010. Net income was $4.6 million, or $0.06 per diluted share. This compared to a net loss of $(32.5) million, or $(2.95) per diluted share, for the fiscal year 2010. Gross margin for the fiscal year 2011 was 57.4% compared to 55.8% for fiscal year 2010. Operating margin for the fiscal year 2011 was 4.9%.
Fiscal 2011 Non-GAAP Financial Results
Non-GAAP net income was $16.3 million, or $0.20 per diluted share. This compares to a non-GAAP net loss of $30.5 million, or $(2.77) per diluted share, for the fiscal year 2010. Gross margin was 57.4% compared to 55.8% for fiscal year 2010. Non-GAAP operating margin for the fiscal year 2011 was 9.3%.
“In our first quarter as a public company, we achieved strong results driven by the healthy demand for our solutions,” said Dennis Wolf, Chief Financial Officer of Fusion-io. “We believe we are well positioned to move the business forward in the coming years as we expand our customer base while continuing to make disciplined investments to fuel growth.”
Financial Highlights
On June 9, 2011, Fusion-io completed its initial public offering, raising $218.9 million, net of expenses.
Cash, cash equivalents and short-term investments at the end of the quarter were $219.6 million, an increase of $198.4 million over the fiscal fourth quarter 2010.
Net cash used in operations was $8.3 million for the fiscal fourth quarter and $9.9 million for fiscal year 2011.
Capital expenditures were $3.0 million in the fiscal fourth quarter and $13.0 million for fiscal year 2011.
Business Highlight
Fusion-io today separately announced the signing of a definitive agreement to acquire IO Turbine, Inc., a provider of caching solutions for virtual environments, based in San Jose, California. Under terms of the agreement, Fusion-io will pay approximately $95 million, subject to purchase price adjustments. The consideration is payable in cash and stock, provided that the cash portion may not exceed $35 million. On a non-GAAP basis, the transaction is expected to be dilutive to fiscal year 2012 earnings by approximately two cents and accretive to fiscal year 2013. The transaction is expected to close by the end of August 2011, subject to final closing conditions.
Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding 2012 financial results.
First quarter of fiscal year 2012, inclusive of the acquisition of IO Turbine:
Revenue is expected to be $60 to $65 million.
Non-GAAP gross margin is expected to be approximately 58%.
Non-GAAP operating margin is expected to be 3 to 5%.
Diluted shares outstanding is expected to be approximately 106 million shares.
Fiscal Year 2012, inclusive of the acquisition of IO Turbine:
Revenue growth is expected to be approximately 40%.
Non-GAAP gross margin is expected to be in the target range of 56 to 58%.
Non-GAAP operating margin is expected to be in the range of 5 to 7%.
Non-GAAP effective tax rate is expected to be approximately 10%.
Diluted shares outstanding is expected to be approximately 112 million shares.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables and on the investor relations page of our website at www.fusionio.com. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies.
Fusion’s management uses the non-GAAP financial measures in the accompanying schedules to gain an understanding of Fusion’s comparative operating performance and future prospects, and utilizes these measures in its internal financial statements for purposes of its internal budgets and financial goals. Management also believes that the exclusion of the items described below provides an additional measure of the Company’s operating results and facilitates comparisons of the Company’s core operating performance against prior periods and business model objectives. Management believes that investors should have access to the same set of tools that management uses to analyze Fusion’s results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Fusion-io endeavors to compensate for the limitation of the non-GAAP measures presented by also providing the most directly comparable GAAP measures and descriptions of the reconciling items and adjustments to derive the non-GAAP measures.
For all periods presented:
Non-GAAP gross margin is calculated as non-GAAP gross profit divided by GAAP revenue. Non-GAAP gross profit consists of GAAP gross profit excluding the effects of stock-based compensation expense.
Non-GAAP operating margin is calculated as non-GAAP income (loss) from operations divided by GAAP revenue. Non-GAAP income (loss) from operations consists of GAAP income (loss) from operations excluding the effects of stock-based compensation expense.
Non-GAAP net income (loss) is calculated as GAAP net income (loss) excluding the effects of stock-based compensation expense, changes in the fair value of a common stock repurchase derivative liability, and changes in the fair value of a preferred stock warrant.
Non-GAAP net income (loss) per diluted share is calculated as non-GAAP net income (loss) divided by GAAP weighted-average diluted shares outstanding.
The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures. With respect to our expectations under “Business Outlook” above, reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures. The effects of stock-based compensation expense specific to non-employee common stock options and the fair value of the common stock repurchase derivative liability are directly impacted by unpredictable fluctuations in our stock price. In addition, estimates of future amortization expense related to the intangible assets acquired in the IO Turbine acquisition will be dependent on the future completion of the valuation of the identifiable intangible assets. We expect the variability of the above charges to have a significant impact on our GAAP financial results.
Today's Conference Call
Fusion-io will host an investor conference call and live webcast today, Thursday August 4, 2011, at 4:30 p.m. EDT to discuss these financial results. To access the conference call, dial (866) 203-2528 or (617) 213-8847 (international) and enter pass code 79007559. A listen-only live webcast will be accessible on the investor relations page of our website at www.fusionio.com and will be archived and available on this site for at least three months. A telephone replay of the conference call will be available through Tuesday, August 9, 2011. To access the replay, please dial (888) 286-8010 or (617) 801-6888 (international) and enter pass code 41669030. This press release and the financial information discussed on today's conference call are available on the investor relations page of our website at www.fusionio.com.
About Fusion-io
Fusion-io has pioneered a next generation storage memory platform for shared data decentralization that significantly improves the processing capabilities within a datacenter by relocating process-critical, or "active", data from centralized storage to the server where it is being processed, a methodology referred to as data decentralization. Fusion's integrated hardware and software solutions leverage non-volatile memory to significantly increase datacenter efficiency and offers enterprise grade performance, reliability, availability and manageability. Fusion's data decentralization platform can transform legacy architectures into next generation datacenters and allows enterprises to consolidate or significantly reduce complex and expensive high performance storage, high performance networking and memory-rich servers. Fusion's platform enables enterprises to increase the utilization, performance and efficiency of their datacenter resources and extract greater value from their information assets.