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February 25, 2009

Brocade revenue up 24% in Q1

OEM revenue accounted for 76% of total revenue

By CBR Staff Writer

SAN vendor Brocade has reported a net loss of $26.03m for the first quarter 2009, compared to net income of $19.84m in the year-ago quarter, on revenue up 24% at $431.59m. The loss was attributed to higher operating costs. During the quarter, the company also completed the acquisition of networking hardware vendor Foundry Networks for approximately $3 billion.

Operating income fell 51% to $22.03m, while diluted net loss per share was $0.07 compared to $0.05 in the same period last year. The total installed base of SAN ports was approximately 20.4m.

The company said product revenue increased 22% to $362.6m and services revenue grew 38% to $69m. OEM revenue accounted for 76% of total revenue, compared to 88% in the prior-year quarter, while channel or direct revenue accounted for 24% of the total, compared to 12% in the same period last year. Domestic revenue accounted for 64%, while international revenue accounted for 36%, compared to 62% and 38%, respectively, in the year-ago quarter.

Michael Klayko, chief executive at Brocade, said: Brocade achieved another strong quarter in terms of revenues and better-than-expected operating margins. These results were fueled by a healthy mix of products and services, including IP networking solutions from our recently integrated Foundry business.

For the fiscal 2010, the company expects revenue between $2.1 billion and $2.2 billion, but it said a successful integration of Foundry Networks could raise the revenue to a range of $2.2 billion to $2.6 billion.

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