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Fusion-io Reduces Dependency on Apple and Facebook

Posted on Thursday, Feb 28th 2013

IDC projects that the worldwide big data technology and services market will grow 40% annually from 2010 to 2015 to reach $16.9 billion in 2015. The growth in big data is expected to be about seven times the growth of the overall information and communications technology market. Within the market, the server segment is expected to see annualized growth of 27%. Further, the software market for big data is projected to grow 34% annually, while the most growth will be seen in the storage market at 61% annual growth. Flash memory maker Fusion-io (NYSE:FIO) is among the leading storage solutions provider for big data companies. To cater to the growing demand for storage products, Fusion is expanding their product offerings and seeing strong results.

Fusion-io’s Financials

Fusion-io’s Q2 revenues rose 43% over the year to $120.6 million, ahead of the market’s target of $119.9 million. EPS of $0.13 was also ahead of the Street’s projected earnings of $0.08 per share and the previous year’s loss of $0.07 per share. Fusion’s dependence on Facebook and Apple is reducing, but it remains significant.

Facebook accounted for 34% and Apple 16% of the first half’s revenues. That is a significant decline from a combined share of 65% a year ago. While the company’s previous quarter performance exceeded market expectations, the market was not pleased with their outlook.

For the current quarter, Fusion projecs revenues of $80 million, compared with the Street’s projections of $137.1 million. Fusion projected fiscal year sales of $420 million-$440 million, compared with the market’s target of $530.8 million. Fusion attributed the sales decline in its projections to pressure from Facebook and Apple, which have delayed orders to manage their own financials better. Facebook, for instance, delayed their order by two quarters.

Fusion-io’s Expanding Product Line

Fusion continued to expand their product portfolio and recently announced the launch of ioScale , a product that addresses the growth of big data. ioScale offers up to 3.2 terabytes of capacity and is customized to the needs of webscale and cloud data centers. The rapid increase of big data is causing big challenges in data management, and ioScale offers a solution that features ultra high capacity density; reliable, low-latency performance; reduced power consumption; improved rack densities; and the ability to move to an all-Flash architecture. The company claims that ioScale will be able to deliver four times the performance and more than 10 times the reliability of alternative Flash solutions. Fusion is already seeing traction for the product and has a good pipeline, with several customers at various stages of adoption.

Fusion’s stock is trading at $16.12 with a market capitalization of $1.56 billion. It touched a high of $33.87 in March 2012.

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