All-flash array vendor Violin Memory recorded less revenue and a great loss than expected last quarter. Still, its earnings report was better than the previous quarter.
Violin’s first quarterly earnings report as a public company last November was a train wreck. It’s poor revenue and guidance surprised investors and the storage industry, causing its stock price to plummet and a large investor to call for the company to put up a “for sale” sign. The board fired CEO Don Basile less than a month later and hired Kevin DeNuccio to replace him in early February.
Violin Thursday reported revenue of $28 million for the fourth quarter of 2013 and $108 million for the year. Its losses were $56 million for the quarter and $150 million for the year. Quarterly revenue was up 22 percent from last year but down from $28.3 million from the previous quarter. For the year, revenue increased 46 percent over 2012 but the quarterly and yearly losses were greater than the previous quarter and year.
DeNuccio outlined his plans for a turnaround on Thursday’s earnings call. Those plans consist mainly of reducing expenses by selling off its PCIe flash business and cutting staff related to that business. DeNuccio has revamped the Violin management team. He brought in Eric Herzog from EMC to head marketing and business development and Tim Mitchell from Avaya to take over global field operations.
DeNuccio said Violin will have new flash hardware and software products in the next few months. “We expect to make one of the most significant product announcements in our history,” he said.
He defended the decision to sell the PCIe business launched a year ago by saying “It was clear that we grew too much, too fast. Now it’s a matter of how do we get the company into a size that is manageable, and how do we focus on an area that we are successful in?”
Violin was the all-flash array revenue leader in 2012 according to Gartner, but new entrees from large players such as EMC, NetApp, Hitachi Data Systems, IBM, Dell and Hewlett-Packard changed the market in 2013.
“We have formidable competitors,” DeNuccio said. “We’re at the top of the pyramid, and we compete with the big boys. But we’re confident that our technology is unique enough and we can establish ourselves running the critical applications for our customers to allow us to compete at that level.”