5 Ideas for Apple’s Cash Hoard in 2012

November 30, 2011

TheStreet Repost

Flash memory maker Fusion-IO(FIO_) is one of Apple’s largest suppliers. The company already has a relationship outside of being a supplier to Apple though. The Chief Data Scientist of the Salt Lake City-based company is none other than Steve Wozniak, who co-founded Apple along with Jobs and Ron Wayne in 1976.

Fusion-IO has been of the most successful tech IPOs this year, rising 46% year-to-date. The company reported quarterly earnings earlier this month, with revenues growing 175% year-over-year to $74.4 million. For the full year, Fusion-IO expects revenue growth of approximately 55%.

Written by Chris Ciaccia in New York.


FOOL REPOST: The 5 Best IPOs of 2011

November 29, 2011

Fusion isn’t just science fiction
Data-storage start-up Fusion-io has been off to a galloping start, even though it fell more than 25% last week from its peak on Nov. 17. Are investors worried that their peers are a little overeager for a company with a triple-digit P/E? The company’s got the Woz on board, but there’s precious little financial history to analyze. Its solid-state solution seems to bechallenging some major players, but don’t forget that computer hardware, especially hard drives, is a brutally competitive industry. There are a lot of questions surrounding this company, but a lot of potential.

Read the entire post here:  MOTLEY FOOL:  The 5 Best IPOs of 2011


FIO POST-IPO ANALYSIS: MUST READING

June 10, 2011

(repost from bobdark @ seeking alpha)

Regarding your comment:

“And yes, it’s true that FIO has sold 12,000 server cards in the last two years, at $3,000 per card. And it’s true that Dell (DELL), IBM (IBM) and HP (HPQ) ship nine million servers per year, but that’s a different business”

Dell and HP both provide the Fusion-io cards as options for most of their server offerings. I think you are underestimating the revenue that this will generate as companies increasingly will opt for the built-in cards.

Its tempting to think that all IPOs are overpriced like Linked-In and don’t have a future, but before making a call on this, it is important to investigate the technology involved with this and the direction for data storage and what Fusion-io will be able to do in terms of research and moving ahead of the competition with this cash injection. There is an awful lot of potential here when considering the inevitable replacement of millions of platter-based storage in Enterprise data centers as the Infiniband and ISCSI networking along with the energy costs will make traditional storage obsolete in the same way that LCDs made monitors obsolete – the price/performance/space curve for flash is moving faster than mechanical disk storage.

Unlike Linked-In and many of the “tech” IPOs, Fusion-IO is a hard-core technology company based on sophisticated engineering rather than just an Internet store front with clever marketing. This means that the bulk of retail investors probably don’t understand the implications of the technology as it is not simple to understand the differentiation of Fusion-IO from the other SSD vendors who are mostly encumbered by a much slower bus architecture (i.e. SATA III at 6 Gbps (0.75 GBps) vs PCIE-at up to 16 GBps for an Octal card (over 20 times faster). It’s a good thing in that it keeps the IPO from being a bubble due to lack of interest, although it does mean it may take some time before it really takes off.

The most successful IPOs are not necessarily the most well-known when launched, just the most innovative and the most profitable over the long-haul. The focus of Fusion-io to this point has not been on profitability but on gaining market share and building a reputation. I speak from experience as a database developer that they have established a reputation for amazing performance with very large databases enabling real-time simulation and data-analysis applications with a few cards that simply are not possible with hundreds of mechanical disks.

No doubt in mind that they will be extremely profitable and more large customers will come. I suspect that Google may be looking at Fusion-IO as they utilize a distributed database architecture using thousands of servers like MySpace and Facebook. Fusion-IO is also developing technology to leverage the higher speed PCIE SSD across Infiniband which will support high-availability network storage for large database servers and virtualization data centers in the Cloud.

Fusion-IO has established a very good reputation and is the leader in PCIE-SSD, with the capital from the IPO, they have a good chance of staying one step ahead of the competition and their partnership with the hardware and storage vendors also gives them an edge.


FUSION-IO UPDATE: LAST POST BEFORE IPO THURSDAY

June 8, 2011

from SEEKING ALPHA (repost)

Backed by venture firms NEA and Lightspeed, Fusion-io (FIO) markets a next generation storage memory platform that boosts data access speeds. The company plans to raise $209 million in its IPO by offering 12.3 million shares at a proposed price range of $16 and $18; it had originally filed to offer shares at $13 to $15 before boosting the price range by 21% in a sign of strong deal demand.

At the midpoint of the upwardly revised range, Fusion-io would be valued at $1.7 billion. Fusion-io plans to price today (Wednesday) after the market close and list on the NYSE on Thursday under the ticker symbol FIO. Goldman, Sachs & Co., Credit Suisse, Morgan Stanley and J.P. Morgan are the lead underwriters on the deal, which is one of three deals scheduled to price on this week’s US IPO calendar.

Background

Fusion-io seeks to address what it refers to as the “data supply problem,” or low levels of server utilization caused by the widening gap between processing and storage performance. It markets a data decentralization platform that helps enterprises improve processing capabilities by relocating “active” data from centralized storage to servers, thereby improving processing capabilities by up to 10x and significantly reducing costs. Its platform, which bundles proprietary hardware and software, has been shipped to over 1,500 end users since inception, including companies such as Facebook and Apple (AAPL), as well as OEMs like Dell (DELL), HP (HPQ) and IBM (IBM).

Financials

Fusion-io booked $126 million in the nine months ended March 30, 2011, quadrupling the $25 million generated in the year-ago period. Facebook accounted for 47% of revenue, while its ten largest customers accounted for 91%. The company turned profitable with $7 million in EBITDA but remained cash flow negative (-$2 million) due to increasing levels of inventory. It expects to drive further growth by adding software capabilities, deepening customer relationships, growing its sales force and expanding internationally (18%).

Risks

Fusion-io has experienced rapid growth throughout its relatively short operating history, highlighting the value of its first-to-market data storage platform. That said, it carries execution risk as a small company with an accumulated deficit of $70 million. Furthermore, most of its business is derived from large-scale data storage installation projects rather than repeat purchases, resulting in highly volatile financial results, which is magnified by its high degree of customer concentration. For example, Fusion-io expects revenue to fall sequentially in the FY4Q11 following large orders by Facebook in the 3Q. Lastly, it competes with traditional storage/software vendors, as well as various privately held companies that are developing similar technology.

Outlook

With a unique product and massive addressable market opportunity, Fusion-io should spark investor interest, especially in the wake of acquisitions of fast-growing storage and networking companies such as Compellent, Isilon, Netezza and 3PAR. Fusion-io may also benefit from its connection with Facebook amidst ongoing buzz in the social media space following Groupon’s (GRPNrecent IPO filing.


Fusion-io raises IPO range: $16 – $18

June 7, 2011

Fusion-io, which offers a next generation storage memory platform that boosts data access speeds, raised the proposed price range for its upcoming IPO on Tuesday. The company now plans to price its 12.3 million share IPO between $16 and $18, up 21% from the previous $13-$15 range. Fusion-io, which was founded in 2005 and booked $136 million in sales for the 12 months ended March 31, 2011, plans to list on the NYSE under the symbol FIO. Goldman, Sachs & Co., Credit Suisse, and Morgan Stanley are the lead underwriters on the deal. It is expected to price during the week of June 6.


Why Fusion-io IPO Will Sizzle

May 29, 2011

1) the “competitors coming to market” only validate the technology — and each of the vendors supposedly coming to market has baggage .  example: virident does not work on msft operating systems. tms is full height only. etc.  so here we now have another 100 sales reps running around finding deals for FIO — that’s what i see happening.

2) managing flash is rocket science and FIO has sucked up the best flash engineering talent over the past 18 months.

3) they get better component pricing advantage — volume and relationships w/ best-of-breed mftrs

4) the real competition is Violin and the centralized storage space

5) after the IPO, spending will be unlimited in terms of IP and sales landgrab — i anticipate scorched earth here

6) so whatever the market becomes in terms of gross dollars:  FIO will still get the largest share

7) secret weapon: http://news.dice.com/2011/05/27/mechanical-bulls-didnt-scare-any-geeks-at-interop/