Fusion-io’s Flash Madness Slows Down as Apple and Facebook Trim Orders
Shares of Fusion-io, the company that uses flash memory to enhance servers in data centers, are falling like crazy. Seems forecasts for the coming quarter came in below the aggressive projections of Wall Street analysts.
Having risen more than 3 percent to $20.09 on the New York Stock Exchange today, Fusion’s shares fell by more than 17 percent to $16.79 in after-hours trading after the company said it expects slower revenue growth as major customers Facebook and Apple slowed orders. CFO Dennis Wolf claimed the timing of orders from those two companies slipped by two quarters. Together Facebook and Apple account for 51 percent of Fusion’s business.
I just got off the phone with CEO David Flynn, who told me that having two customers account for so much of its business was always a risk. But? When Fusion first IPO’d in 2011, Apple and Facebook accounted for 70 percent of sales, so it could have been worse. “We knew there was going to be some risk with customer concentration,” he said. “Over time the concentration will work itself out,” Flynn told me.
As yet, no other single customer accounts for more than 10 percent of revenue, and therefore requires disclosure. But five of the 10 customers that bought more than $1 million in Fusion-io products in the last quarter also bought its newer product ioScale. Also, sales in Europe grew 100 percent year on year, while sales in the Asia Pacific region grew 130 percent.
Fusion-io reported per-share earnings of 2 cents in the quarter, versus 7 cents a year ago. Revenue rose more than 40 percent to $120.6 million. The results fell short of analyst expectations, which called for earnings of 8 cents on $120.3 million.