EMC Executive Vice President and CFO David Goulden Discusses EMC's Q3 2009 Financial Results
EMC announced third-quarter financial results on October 22, 2009. EMC Executive Vice President and CFO David Goulden, discusses the results below. Additional information regarding EMC's financial results is available here.
October 22, 2009
How would you characterize EMC's third-quarter 2009 financial performance?
David Goulden: EMC achieved solid third quarter results. It is encouraging to see that our focused efforts resulted in good sequential revenue growth, improving profitability and strong free cash flow in what continues to be a challenging economic and IT spending environment.
Can you comment on the global IT spending environment?
David Goulden: As you may recall, during our second-quarter earnings report we noted that IT spending was becoming more stable and predictable heading into the second half of 2009. While we did not expect a big pickup in the economy or IT spending plans, we believed that customers were becoming increasingly confident about spending their budgets. What we experienced in the third quarter of 2009 was in line with our expectations in this regard. There has not been a noticeable improvement in IT spending plans for 2009, but we did see customers continue to move forward and spend more of their budgets. There was steady customer activity with a more normal ramp during the third quarter, similar to what we saw in the second quarter of 2009—this is good to see. Based upon what we have seen through three quarters this year, things are playing out pretty much as we expected, so our view on the IT spending environment remains unchanged. We still expect overall IT spending to be down in the very high single to very low double-digits for 2009.
How is customer interest in the high-end EMC Symmetrix V-Max line?
David Goulden: While there is still some pressure on demand for big-ticket IT items, customer adoption of the EMC Symmetrix V-Max high-end storage system is ahead of target and proceeding extremely well. The V-Max is popular because it is a highly-differentiated information storage platform with exceptional quality and features, and it is also aligned with customer priorities such as consolidation, virtualization and improved efficiency. The V-Max is clearly strengthening and extending EMC's leadership in the high end of the storage market.
Can you provide an update on the integration of EMC's acquisition of Data Domain?
David Goulden: Data Domain is now an integral part of a newly-formed division within EMC. For the full third-quarter, the Data Domain business was up about 40% year over year. This is a great result in a transition quarter and ahead of our acquisition plan. Data Domain growth has been strong throughout 2009 and year-to-date growth is over 40%. The EMC Avamar business also continued to experience significant double-digit growth in the third quarter and is up over 50% on a year-to-date basis. Together, this continued growth demonstrates excellent focus and execution by the teams, highlights the strategic value of this acquisition and is indicative of the strength and leadership we have in this market.
Any insight into the rest of 2009?
David Goulden: We are clearly pleased with our third-quarter results. The breadth and depth of our technology and solutions portfolio allows us to assist customers in achieving strong ROI for their current IT projects while helping them to effectively and efficiently move towards re-architecting their data centers for the future. Although the economy remains unsettling and the spending environment is challenging, we are encouraged with the signs of stabilization we are seeing and believe that our strategy and portfolio position us exceptionally well to be successful in the marketplace. Our execution this year has been very good and we are making a lot of headway on cost efficiencies and important investments for our future. We remain focused on meeting our short-term objectives and positioning ourselves competitively for longer-term success.
EMC Corporation (NYSE: EMC) is the world's leading developer and provider of information infrastructure technology and solutions that enable organizations of all sizes to transform the way they compete and create value from their information. Information about EMC's products and services can be found at www.EMC.com
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This document contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) our ability to protect our proprietary technology; (iv) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (v) fluctuations in VMware, Inc.’s operating results and risks associated with trading of VMware stock; (vi) competitive factors, including but not limited to pricing pressures and new product introductions; (vii) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (viii) component and product quality and availability; (ix) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (x) insufficient, excess or obsolete inventory; (xi) war or acts of terrorism; (xii) the ability to attract and retain highly qualified employees; (xiii) fluctuating currency exchange rates; (xiv) the impact of any expense reduction initiatives; and (xv) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any forward-looking statements in this document after the date of this document.