Nimble Storage Announces Second Quarter 2016 Results

SAN JOSE, Calif., Aug. 25, 2015 /PRNewswire/ -- Nimble Storage (NYSE: NMBL), the flash storage solutions company, today reported financial results for the fiscal second quarter 2016.  The Company has released a discussion of these results by posting the current Shareholder Letter on its website at http://investors.nimblestorage.com.

"As the storage industry continues to experience disruption from architectural shifts, our core belief that only the Adaptive Flash Platform can consolidate and dynamically optimize every enterprise application running across the data center remains our guiding principle," said Suresh Vasudevan, chief executive officer, Nimble Storage. "Q2 provided clear evidence of our continuing momentum. We added 690 new customers, a new quarterly record, delivered a broad range of enterprise-grade capabilities with Nimble OS 2.3, and were recognized with two prestigious awards, an industry award for the most innovative flash memory technology and an IT professional innovation leader award for hybrid HDD/SSD arrays."

"Q2 was another quarter of strong financial execution. Our industry leading gross margins reached another record high at 67.8%. We continued to drive improvement in our operating leverage, as operating margins improved by 11 percentage points compared to Q2 FY2015, while generating record cash flow from operations which was 19% of revenue this quarter," said Anup Singh, chief financial officer.

Financial Highlights:

• Total revenue increased 49% to $80.1 million, up from $53.8 million in the second quarter of fiscal 2015. Excluding fluctuations in foreign currency, revenue would have been $82.8 million representing a 54% increase over the second quarter of fiscal 2015.
• Non-GAAP gross margin for the second quarter of fiscal 2016 was 67.8% compared to 67.4% in the second quarter of fiscal 2015.
• Non-GAAP operating loss was $7.2 million or negative 9% of revenue for the second quarter of fiscal 2016, compared to a loss of $10.7 million or negative 20% of revenue in the second quarter of fiscal 2015.
• GAAP net loss for the second quarter of fiscal 2016 was $30.1 million, or $0.38 per basic and diluted share, compared with a net loss of $26.1 million, or $0.37 per basic and diluted share in the second quarter of fiscal 2015.
• Non-GAAP net loss for the second quarter of fiscal 2016 was $7.8 million, or $0.10 per basic and diluted share, compared with a net loss of $10.9 million, or $0.15 per basic and diluted share in the second quarter of fiscal 2015.
• Cash flow from operations was $14.9 million or 19% of revenue for the second quarter of fiscal 2016, compared to $2.8 million or 5% of revenue in the second quarter of fiscal 2015. Free cash flow was $9.0 million or 11% of revenue for the second quarter of fiscal 2016, compared to negative $1.3 million or negative 2% of revenue in the second quarter of fiscal 2015.

Forward Outlook:  

Nimble Storage provides guidance based on current market conditions and expectations. For the third quarter of fiscal 2016, Nimble Storage expects: 

• Total revenue in the range of $86.0 to $88.0 million
• Non-GAAP operating loss in the range of $5.0 to $6.0 million
• Non-GAAP net loss per basic and diluted share in the range of $0.08 to $0.09 based on weighted average shares outstanding of approximately 80.0 million

Business Highlights

• Executive Appointments Fortify Leadership Bench Strength. Leonard Iventosch joined the company's leadership team as vice president of worldwide channels. The company also announced the return of Mike Munoz who will serve as vice president of worldwide alliances.
• Nimble Delivers Full Benefits of Storage Consolidation with Enterprise-grade Enhancements to the Adaptive Flash Platform.
  • All-Flash Service Level Provides Dynamic Performance and Capacity. The all-flash service level meets the most stringent latency demands – its responsiveness is ideal for transaction processing, data warehouse/business intelligence, and VDI deployments. And unlike flash-only arrays, service levels can be dynamically changed on the fly from operation in one service level to a different service level as workload demands fluctuate over time.
  • A Single Platform for Optimizing Enterprise-wide Applications. Additional capabilities introduced include software-based encryption and a REST API-based extensibility framework, which complement existing enterprise functionality, including VM-level monitoring and reporting and integrated data protection.
• Obtained Federal Information Processing Standard Certification. Nimble completed a Federal Information Processing Standard (FIPS) 140-2 certification from the U.S. government's National Institute of Standards and Technology (NIST) for its OpenSSL FIPS Object Module, Nimble Storage SmartSecure. Nimble can now fully address the stringent security mandates of federal customers and partners with the Adaptive Flash platform.
• Named Most Innovative Flash Memory Technology. The Flash Memory Summit Awards Committee named Nimble a Best of Show winner in the "Most Innovative Flash Memory Technology" category.
• Recognized by IT Professionals as Technology Innovator. IT professionals voted Nimble as the 2015 Innovation Leader for Hybrid HDD/SSD Array in IT Brand Pulse's most recent brand leader survey.

Conference Call Information
As previously announced, Nimble Storage will host a live question & answer conference call and webcast today at 5:00 p.m. ET (2:00 p.m. PT) to discuss its financial results for the second quarter fiscal 2016.

Interested parties may access the call by dialing (888) 455-2238 in the U.S. or (719) 325-2434 from international locations.  In addition, a live audio webcast of the conference call will be available on the Nimble Storage Investor Relations website at http://investors.nimblestorage.com.  The live webcast will be archived and available on this site for 45 days.   A replay of the conference call will be available for 45 days. To access the replay, please dial 888-203-1112 and enter pass code 7056092. Callers outside the U.S. and Canada should dial 719-457-0820 and enter pass code 7056092.

Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, Nimble Storage has disclosed in this release and the accompanying tables non-GAAP financial measures that are not calculated in accordance with generally accepted accounting principles in the United States, or GAAP. The Company provides non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow and adjusted EBITDA. In computing these non-GAAP financial measures, the Company excludes the effects of stock-based compensation, which is a recurring expense for the Company.  The Company has provided a reconciliation below of non-GAAP financial measures to the most directly comparable GAAP financial measures.

The Company discloses these non-GAAP financial measures because they are key measures used by the Company's management and board of directors to understand and evaluate operating performance and trends, to prepare and approve the annual budget and to develop short-term and long-term operational and compensation plans. In particular, the exclusion of certain expenses in calculating non-GAAP financial measures can provide a useful measure for period-to-period comparisons of the Company's business. Accordingly, the Company believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company's operating results in the same manner as the Company's management and board of directors.

Non-GAAP financial measures have limitations as analytical tools and, as such, should not be considered in isolation or as substitutes for analysis of the Company's results as reported under GAAP. Some of these limitations are:

• Non-GAAP financial measures do not consider the potentially dilutive impact of equity-based compensation, which is an ongoing expense for the Company; and
• Other companies, including companies in our industry, may calculate non-GAAP financial measures differently, which reduces their usefulness as comparative measures.

Forward Looking Statements

This press release contains "forward-looking" statements that are based on our management's beliefs and assumptions and on information currently available to management.  We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements other than statements of historical fact contained in this press release, including information concerning our future financial results, business plans, strategy and objectives, potential growth and market opportunities, competitive position and industry environment.

Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors including, but not limited to, those related to our future financial performance which is inherently uncertain, unforeseen delays in product development or introduction, uncertainty around market acceptance of our solutions, our ability to increase sales of our solutions, our ability to attract and retain customers and to sell additional solutions to our existing customers, our ability to develop new solutions and bring them to market in a timely manner, pricing pressure (as a result of competition or otherwise), introduction of new technologies and products by other companies, our ability to maintain, protect and enhance our brand and intellectual property, the effectiveness of our channel partners and sales team, our ability to convert leads into sales, our ability to recruit new or keep our existing key talent, global economic conditions, fluctuations in foreign currency rates and our ability to continue to expand our business and manage our growth.  Moreover, we operate in very competitive and rapidly changing environments, and new risks may emerge from time to time.  It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Further information on these and other factors that could affect our financial results are included in our filings with the Securities and Exchange Commission and may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although our management believes that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur.  Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations, except as required by law.

Nimble Storage Resources

• Nimble Storage Website
• Case Studies and Videos
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• Visit Nimble Storage on Facebook
• Visit the NimbleConnect Community

About Nimble Storage
Nimble Storage (NYSE: NMBL) is redefining the storage market with its Adaptive Flash platform. Nimble's flash storage solutions enable the consolidation of all workloads and eliminate storage silos by providing enterprises with significant improvements in application performance and storage capacity. At the same time, Nimble delivers superior data protection, while simplifying business operations and lowering costs. At the core of the Adaptive Flash platform is the patented Cache Accelerated Sequential Layout (CASL) architecture and InfoSight, an automated cloud-based management and support system that maintains storage system peak health. More than 6,200 enterprises, governments, and service providers have deployed Nimble's flash storage solutions across 51 countries. For more information about Nimble Storage, visit www.nimblestorage.com and follow us on Twitter: @nimblestorage.

Nimble Storage, the Nimble Storage logo, CASL, InfoSight, SmartStack and NimbleConnect are trademarks or registered trademarks of Nimble Storage. Other trade names or words used in this document are the properties of their respective owners.

Press Contact:
Kristalle Cooks
408-514-3313
[email protected]

Investor Relations Contact:
Edelita Tichepco
408-514-3379
[email protected]

SOURCE Nimble Storage

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