Brocade Boasts Big Quarter

Brocade turned in a solid quarter last night, exceeding forecasts and solidifying its position as revenue leader in the Fibre Channel switch space. And even as the SEC investigation into the company remains unresolved, execs anticipate more growth -- and more acquisitions. (See Brocade Posts Q2, Names CFO, and Brocade Eyes SEC Settlement.)

The company substantially exceeded its guidance, announcing net revenue of $182.7 million, up 7 percent sequentially and 26 percent year-on-year. GAAP net income was $13.5 million, or $0.05 per share, up sequentially from $9.7 million, or $.04 per share. However, GAAP net income for last year's second quarter was $21.4 million, or $0.08 per share.

Analysts had estimated revenues of $160.37 million and earnings of $0.05 per share.

Speaking on a conference call last night, Brocade CEO Michael Klayko credited demand for 4-Gbit/s technology with driving growth. "It took us over five years to sell our first million one-gig ports," he explained, adding that the firm recently reached the million mark for 4-Gbit/s ports, just 16 months after it started selling the technology. "We expect the rate of change to new four-gig platforms to accelerate in the second half of the year," he added.

Though Brocade does not break out specific product line performance in its quarterly reports, Richard Deranleau, the vendor's new financial chief, explained that 4-Gbit/s technology accounted for over 90 percent of Brocade's second quarter revenue. "The transition [to 4 Gbit/s] for us has already occurred," he said. (See Brocade Bulks Up 4-Gig Gear, and Brocade Touts Switch, Blade.)