EMC Sees Ninth Quarter of Double-Digit Growth in Q1
EMC today reported another quarter of double-digit revenue in Q1, with revenues hitting $5.1 billion. VMware was, once again, a leader in product sales with 25% year-over-year revenue growth.
With continued steady execution, we are well on our way to achieving the financial potential of 2014 consolidated revenue of over $28 billionDavid GouldenEMC's chief financial officer
EMC today announced its ninth consecutive quarter of year-over-year double-digit revenue growth with first-quarter consolidated revenue of $5.1 billion. That's an increase of 11% compared with the same quarter in 2011.
"With continued steady execution, we are well on our way to achieving the financial potential of 2014 consolidated revenue of over $28 billion, which represents compound annual revenue growth of at least 13% from 2010," said David Goulden, EMC's chief financial officer.
In an earnings call this morning, Goulden said EMC had a net income of $587 million, up 23% compared with the year-ago quarter. The company also generated operating cash flow of $1.7 billion and free cash flow of $1.4 billion, increases of 49% and 67% year-over-year, respectively.
U.S. sales represented 52% of EMC's revenue, or $2.6 billion, up 11% year over year.
Overseas revenue for EMC increased 10% to $2.5 billion. The Asia Pacific and Japan region reached an all-time record level, growing 20% compared to last year, the company said. Revenue from Europe, the Middle East and Africa was up 6%, while revenue from the Latin America region grew 20%.
Goulden said demand for EMC's mid-tier storage products, which include the VNX unified storage family and Isilon scale-out NAS, was strong. The company's mid-tier revenue increased 26%, with Isilon NAS business nearly doubling its revenue. The VNX family has brought in just under 6,000 new customers to EMC since being launched in January, 2011, according to Goulden.
In the first quarter we completed what we believe was the largest-capacity single order in the history of storage - 28 petabytes - with a web company," Goulden said of its Isilon NAS product family.
EMC's high-end products, such as its Symmetrix VMAX and DMX lines, saw sales slip significantly during the quarter. High-end system sales were down 10%. Goulden said the lower results reflected unusually high revenue in the first quarter of 2011, versus a significant drop in sales this past quarter.
Demand for EMC's mid-tier storage products, which include the VNX unified storage family and Isilon scale-out NAS, was strong
EMC had that unusually strong first quarter in 2011 due to the introduction of Fully Automated Storage Tiering for Virtual Pools (FAST VP) in conjunction with VMAX. "In that quarter, high end product was up 25% year and a very unusual 12% sequentially," he said. "We're comfortable with how our storage business is trending."
EMC expects its high-end storage revenue to return to the long-term single-digit growth predicted for it, Goulden said.
EMC's VMware subsidiary was once again a star among its products, with $1.05 billion in revenue, up 25% from a year ago. And its RSA Information Security software sales increased 19%.
The Virtual Computing Environment (VCE) Company formed by Cisco and EMC with investments from VMware and Intel also continued to show momentum, EMC said, through sales of its Vblock Converged Infrastructure systems.
Without offering specifics, Goulden said EMC's Greenplum Hadoop file system software also saw good growth over the past quarter. During the quarter, Greenplum became the industry's "first and only enterprise-proven Hadoop solution on a scale-out NAS architecture with Isilon, enabling end-to-end data protection for Hadoop Big Data.
"We are in a truly unprecedented time of transformation," Goulden continued. "IT is transforming with the shift to cloud computing. Businesses are transforming as they better leverage Big Data to deliver greater insight and uncover new opportunities. The new threat environment is transforming the way customers think about trust."
Goulden also said the company would offer more about Project Thunder at its user conference, EMC World, next month.
Project Thunder, which EMC has already said it will announce in the second quarter, involves appliances filled with 15TB or more of PCIe-based NAND flash storage. The appliances will be connected to server farms through the InfiniBand network protocol. The appliances will hold five, 10 or 15 PCIe cards, according to EMC.
"Building flash into many places in the IT infrastructure while fully leveraging it with intelligent automated software that operates across this stack is the real secrete sauce to delivering value," Goulden said. ""What the customer cares about is having the right data at the right time in the right place at the right cost. Making this happen involves servers leveraging flash at one end of the spectrum to high capacity SATA drives in storage arrays at the other."
According to Goulden, EMC expects to repurchase $700 million of the company's common stock in 2012. The weighted average outstanding diluted shares are expected to be 2.22 billion for 2012.
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