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Fusion-io Well Positioned In A Data-Hungry World

Posted on Friday, Dec 16th 2011

According to an IDC report, increasing deployment of virtualized data centers has resulted in enterprises shifting their focus from improving capital efficiency to improving operational efficiency. These organizations’ IT departments are looking for solutions that help to improve data capacity efficiency, and they are moving away from the traditional rotating magnetic media such as hard disk drives (HDDs) to solid state drives (SSDs) that use NAND flash memory and advanced controller technology to create a faster storage device. The recent quarter results, this SSD market was dominated by the recently listed Fusion-io.

Fusion-io’s Financials
Fusion-io (NYSE:FIO) saw Q1 revenues grow 175% over the year to $74.4 million with EPS of $0.15. The market expecting revenues of $64.3 million with earnings of $0.03 per share. For the current quarter, Fusion-io expects revenues of $75 million with an operating margin of 3%-5%. They expect to end the year with revenues growing 55% over the year to $305.7 million and operating margins of 6%-8%. The Street was expecting revenues of $69 million for the quarter and revenue growth of 47% for the year.

Fusion-io’s Expanding Product Line
Fusion-io continued to expand their product line and recently launched their next generation ioMemory platform, the ioDrive2. The ioDrive2 offers higher capacity and improved reliability at a lower cost. They also released their ioCache solution, which features their ioTurbine software and customized ioMemory accelerator to deliver cost-effective performance for virtualizing data-intensive enterprise applications.

Fusion-io Grows Internationally
Recently Fusion-io expanded their software sales channel by extending their Technical Alliance Program to help strategic partners and value-added resellers (VARs) to integrate Fusion-io products into servers from their strategic OEM partners, which include players such as Dell, HP, IBM, and others. The expansion will help their partners create new infrastructures and turn-key appliances to accelerate enterprise applications, databases, cloud computing, and virtualization.

Through the program, they recently entered into a reseller agreement with Digital China to offer Fusion-io solutions in China. Digital China is a major IT services provider in China. The partnership will result in the two working together to offer a systems-level approach to NAND flash solutions to help enterprises meet their growing data needs. Digital China will not only sell their ioMemory technology, but also offer caching software for virtualization management through the recent acquistion of ioTurbine, and their data decentralization management platform, ioSphere.

The stock is trading at $22.47 with a market capitalization of $1.87 billion. It reached a high of $41.74 in November this year, significantly ahead of its IPO price of $19 per share. The company also recently filed for a secondary offering to sell 8.8 million shares at an issue price of $33 each.

Chart forFusion-io, Inc. (FIO)

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