Isilon Reports Earnings

Isilon reported financial results for the fourth quarter and year ended December 31, 2006

February 8, 2007

3 Min Read
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SEATTLE -- Isilon Systems, Inc. (Nasdaq: ISLN - News), the leader in clustered storage, today reported financial results for the fourth quarter and year ended December 31, 2006. Revenue for the fourth quarter was $20.7 million, an increase of 137 percent from $8.7 million in the fourth quarter of 2005, and an increase of 16 percent sequentially compared with $17.8 million in the prior quarter. Revenue for the year ended December 31, 2006 was $62.3 million, up 195 percent from $21.1 million in 2005.

"Our strong fourth quarter performance caps another year of rapid top-line revenue growth, driven by record new customer acquisition and a high rate of repeat business from our existing customers," said Steve Goldman, president and chief executive officer. "This year we broadened our portfolio of clustered storage systems and software products, and our results demonstrate how our value proposition resonates with customers across a broad range of industries. In 2006, Isilon established itself and clustered storage as a compelling new alternative in the storage industry, providing solutions that address the unique challenges created by the exponential growth of digital content and that leverage the broad paradigm shift to clustered computing."

Fourth Quarter and 2006 Highlights

Isilon's focus on delivering clustered storage solutions that provide "pay-as-you-grow" scalability, ease-of-use and simplicity, and high levels of performance and reliability, resulted in a number of business highlights:

  • Isilon acquired 88 new customers in the fourth quarter of 2006, nearly doubling the number acquired in the same quarter the prior year, resulting in a total customer base of 371. Year-over-year, Isilon increased the size of its customer base by 152 percent.

  • Isilon generated more than half of its fourth quarter and full year revenue through reorders from existing customers.

  • Isilon expanded gross margins to 54.2 percent in the fourth quarter of 2006, up from 51.7 percent in the same period of 2005, marking the fifth consecutive quarter of margin growth.

  • Isilon continued to grow its reseller channel with 45 percent of sales in 2006 coming through the channel compared with 27 percent in 2005.

  • Isilon further expanded geographically with international sales accounting for 24 percent of revenue in 2006 compared with 17 percent in 2005.

  • Isilon introduced OneFS® 4.5, the latest version of its clustered operating system software, creating an innovative clustered storage system that delivers one Petabyte of capacity and 10 gigabytes per second of performance in a single file system and single volume. Additionally, Isilon was awarded a patent for core technology of its OneFS operating system.

  • Isilon released SnapshotIQ(TM) and SmartConnect(TM), which, in addition to SyncIQ(TM), deliver a next-generation suite of clustered storage software applications for the enterprise. More than one in three new customers in the fourth quarter purchased one or more of Isilon's new software applications.

  • Isilon began shipping the new Isilon IQ 200 clustered storage system, which combines the benefits of high-end enterprise clustered storage in an affordable and compact solution.

  • Isilon successfully completed its initial public offering on December 20, 2006, raising $105.7 million net of underwriting discounts, commissions and offering expenses.

Isilon Systems Inc.

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