SanDisk's pursuit of the enterprise storage market is paying off.
The Milpitas, Calif.-based provider of flash storage products announced an 11 percent year-over-year gain in revenue during the second quarter (2Q14). The company booked sales of $1.63 billion during the quarter, which ended June 29.
SanDisk beat the street by announcing earnings per share of $1.41 (non-GAAP). Wall Street analysts had been expecting $1.39. After adjustments, the company reported a profit (GAAP net income) of $273.9 million, compared to $261.7 million in the year-ago period.
SanDisk CEO Sanjay Mehrotra credited strong SSD sales for the upbeat financials. "SSD solutions comprised 29 percent of our second quarter revenue, compared to 16 percent in the year ago quarter, demonstrating strong progress in driving our strategic priorities," he said in a statement.
During a July 16 conference call, Mehrotra said that SanDisk's "SSD revenue more than doubled on a year-over-year basis and grew over 30 percent sequentially, driven by gains in both SAS and SATA products." During 2Q14, the company launched the "industry's first" 4 TB enterprise-grade SAS SSD, the Optimus MAX and an assortment of second-generation Lightning SSDs, including Ultra, a 12 Gbps high-endurance SAS that can sustain 25 complete drive writes per day, claims SanDisk.
"The new 4 TB MAX SaaS SSD has received a lot of customer interest for replacing legacy 15K and even 10K RTM hard-disk drive in mission-critical storage and data center applications," said Mehrotra. He expects the new products to "contribute to our revenue starting in the second half of the year."
SanDisk's CFO, Judy Bruner, reported that "the strongest revenue growth was in the SSD solutions, which grew 97 percent year-over-year and 9 percent sequentially" resulting in "new record levels for both client and enterprise SSD revenue."
2Q14 was also marked by a major acquisition for the company.
On June 16, the company announced that it was snapping up Fusion-io, the Salt Lake City, Utah-based enterprise flash storage provider, for $1.1 billion. Fusion-io, an early proponent of PCIe-based flash storage for data centers servers, made headlines in 2009 when the company appointed Apple co-founder Steve Wozniak as the firm's Chief Scientist.
Mehrotra said at the time that buy would help accelerate his company's "efforts to enable the flash-transformed data center, helping companies better manage increasingly heavy data workloads at a lower total cost of ownership." In an update of the deal, he said during yesterday's conference call that SanDisk had "received regulatory clearance for this transaction and look forward to closing this acquisition soon."
Shares in SanDisk sank nearly 13 percent after the news, to $94.06 following a disappointing forecast from company executives.
Bruner said the company hopes to generate $1.675 billion to $1.725 billion in sales during the current quarter (3Q14). Analysts had been expecting $1.74 billion in revenue. Mehrotra revealed during the earnings call that the company expects "expect to be somewhat supply-constrained during the second half of the year."
Pedro Hernandez is a contributing editor at InfoStor. Follow him on Twitter @ecoINSITE.
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