Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Robert Eggers

Lloyd A. Carney - Chief Executive Officer, Director, Chairman of Corporate Development Committee and Chairman of Financing Committee

Daniel W. Fairfax - Chief Financial Officer, Principal Accounting Officer and Vice President of Finance

Jason Nolet - Vice President of Data Center Switching and Routing

Jeffery P. Lindholm - Senior Vice President of Worldwide Sales

Ken K. Cheng - Chief Technology Officer and Vice President of Corporate Development & Emerging Business

Analysts

Mark Sue - RBC Capital Markets, LLC, Research Division

Keith F. Bachman - BMO Capital Markets U.S.

Brian Marshall - ISI Group Inc., Research Division

James F. Hillier - UBS Investment Bank, Research Division

Scott Schmitz - Morgan Stanley, Research Division

Jess L. Lubert - Wells Fargo Securities, LLC, Research Division

Rajesh Ghai - Craig-Hallum Capital Group LLC, Research Division

Srinivas Nandury

Alex Kurtz - Sterne Agee & Leach Inc., Research Division

Jayson Noland - Robert W. Baird & Co. Incorporated, Research Division

Matthew S. Robison - Wunderlich Securities Inc., Research Division

Kent Schofield - Goldman Sachs Group Inc., Research Division

Brian T. Modoff - Deutsche Bank AG, Research Division

Rohit N. Chopra - Wedbush Securities Inc., Research Division

Brocade Communications Systems (BRCD) Q3 2013 Earnings Call August 13, 2013 5:30 PM ET

Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to Brocade's Third Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. And now I'd like to turn the program over to our speaker, Rob Eggers, Vice President of Investor Relations with Brocade. Sir, please go ahead.

Robert Eggers

Thank you, Justin. Good afternoon, and welcome to Brocade's Fiscal Third Quarter 2013 Earnings Call. By now, you should have seen our press release and prepared comments, which are available on our website, brcd.com. The press release was also furnished to the SEC and has been distributed by MarketWire.

Before we take your questions, investors should note our comments today may include forward-looking statements regarding Brocade's financial results, plans, market opportunities and business outlook, which are only predictions and involve risks and uncertainties such that actual risk results may vary significantly. These and other risks are set forth in more detail in our Form 10-K for the fiscal year ended October 27, 2012, and in our Form 10-Q for the quarter ended April 27, 2013.

These forward-looking statements reflect beliefs, assumptions, outlook, estimates and predictions as of today, and Brocade expressly assumes no obligation to update any such forward-looking statements. In addition, this presentation may include various third-party estimates regarding the total available market for SAN and IP Networking, as well as other measures, which do not necessarily reflect the view of Brocade. Further, Brocade does not guarantee the accuracy or reliability of any such information or forecast.

This presentation includes non-GAAP financial measures. The most directly comparable GAAP information, and a reconciliation between the non-GAAP and GAAP figures are provided in our Q3 2013 press release, which has been furnished to the SEC on Form 8-K and in our slide presentation and prepared comments on our website, brcd.com.

Here to take your questions are Lloyd Carney, Brocade's CEO; Dan Fairfax, CFO; Jeff Lindholm, Senior VP, Worldwide Sales; Ken Cheng, CTO and VP of Corporate Development; and Jason Nolet, VP, Data Center Switching and Routing.

I will now turn the call over to CEO Lloyd Carney. Lloyd?

Lloyd A. Carney

Thank you, Rob. Good afternoon, everyone, and thank you for listening to today's Q3 conference call. This is a good quarter for Brocade. Revenue came in above our guidance range, and we exceeded our expectations for operating margin, non-GAAP EPS and cash flow. Revenue in the third quarter was $537 million, down 3% from Q3 '12 and down slightly sequentially. Despite the revenue decline, Q3 GAAP EPS was $0.26, up $0.17 year-over-year and non-GAAP EPS of $0.19 in the quarter was up $0.05 year-over-year.

In terms of business highlights, we saw the storage market recovering more quickly than we had expected following a challenging second quarter. This improving storage environment, coupled with continued strong adoption of Gen 5 Fibre Channel, resulted in good SAN product revenue. The storage market is still softer than it was a year ago, but we are receiving positive indications from our partners that end user demand is improving.

Although IP Networking product revenue was up slightly from Q2, it was short of our expectations for the quarter. Most of the shortfall was in federal sales, as certain deals did not close as a result of the challenging federal budget environment. On the positive side, Brocade VDX switch revenue grew nicely in the quarter, and we continue to be on track to reach our goal of an annualized run rate of $100 million in Q4 '13.

We continue to believe that Ethernet Fabrics represent an exciting opportunity for Brocade and a significant differentiator in our product portfolio for data center networking. We also have seen a significant increase in customer wins, network function and virtualization evaluations and trial activities with our software-defined network solutions.

As we stated, our strategy is to continue our focus on data center networking. Within this space, we're prioritizing markets, in which we can be most successful and where we hold a market share position of meaningful size.

Specifically, we will continue to invest in maintaining our considerable installed base in SAN and growing our footprint in data center IP and emerging technologies, such as software-defined networking. We'll also make targeted investments in campus networking focus areas, leading -- focusing around public sector customers.

Public sector customers have specialized technical requirements that are on the core -- at the core of Brocade's compelling value proposition of solid price performance and ease-of-use. We believe that this strategy best leverages our core competencies, product strengths and competitive positioning.

According to IDC, Brocade holds a strong #2 position in worldwide market share in data center networking. In markets such as Japan, Brocade is #2 at 29%, while the #1 competitor's at 31%. Our investments in technology such as Ethernet Fabrics, 40- and 100-gig ethernet, SAN innovations and SDN will provide additional opportunities for market share gains in the data center.

Beyond market share, Brocade is also tied for #2 position in Infonetic's recent Enterprise Networking and Communication Vendor Scorecard. This ranking takes into consideration diverse set of factors, such as market share, innovation, financial stability, product reliability, service and support.

Our positioning speaks to the overall strength of our business on many of the key fronts that will ensure our growth and success in the years to come. On the operational front, we're focusing on improving our profitability and maximizing our return on investments. We'll continue our ongoing efforts to reduce our annualized spending by $100 million by February 2014.

To date, we have cut expenses across the company in nonstrategic areas and have put additional processes in place to ensure we are spending at an appropriate level to support our strategic initiatives. For example, we have eliminated some broader marketing programs and events, aligned the product roadmap through our focused strategy, reduced capital expenditures, and have placed increased scrutiny on headcount replacements.

Using Q1 FY '13 as a baseline, we've achieved nearly $15 million of savings in operating expenses in Q3 and have reduced another $2 million in spending above the line that has benefited both our product and services gross margins. In total, this has resulted in annualized savings of more than $60 million.

In addition, we have recognized a $76.8 million gain during the quarter related to a settlement with A10 Networks of a long-standing lawsuit. This one-time gain has been excluded from our non-GAAP results in the quarter.

We remain committed to a regular share repurchase program, with the goal of reducing number of shares outstanding. During the third quarter, we repurchased more than $100 million of common stock and have since repurchased another $53 million in the fourth fiscal quarter, bringing our total to $240 million of repurchases this fiscal year. This demonstrates the company's strong cash flow and commitment to returning cash to our shareholders.

To summarize, Q2 was a good quarter, in which we exceeded our guidance for revenue, profitability and cash flow. The storage market is showing encouraging signs of recovery, and our progress in Ethernet Fabrics is on track with our goal. We're making great strides on our spending reduction initiatives, and I'm encouraged by both the amount of savings as well as how quickly we've been able to realize these benefits in our financial results.

The efficient use of shareholder cash -- and it is your cash, not ours -- is in our DNA. At our Analyst and Technology Day event on September 25, we will provide additional details about our progress and take you through an updated financial model, as well as our market opportunity assessment. I encourage you to attend in person or participate virtually, and look forward to speaking with you soon.

And now I'd like to turn the call over to Dan, who will give a brief financial review of Q3 and go over [ph] our planning assumptions and outlook for Q4. Dan?

Daniel W. Fairfax

Thank you, Lloyd. In Q3, Brocade reported revenue of $537 million, a decrease of 3% year-over-year and down slightly quarter-over-quarter. We were pleased with the quick recovery of our SAN business and encouraged by the strength of the rebound from Q2, which we saw developing early in Q3.

Despite entering the quarter with a solid pipeline of funded opportunities, federal sales in Q3 were more challenging than we had originally expected. Non-GAAP gross margin was 65.6%, up 190 basis points from Q3 '12 and up 50 basis points quarter-over-quarter. I'm pleased with the strong gross margins in the quarter, led by a favorable product mix and lower manufacturing support overhead spending.

Non-GAAP operating margin was 21.6% in Q3, up 210 basis points from Q3 '12 and up 260 basis points quarter-over-quarter due to the lower spending as we began to realize some of the savings identified as part of our $100 million spending reduction plan. Q3 GAAP diluted earnings per share was $0.26 and non-GAAP diluted earnings per share was $0.19 in the quarter, both up significantly year-over-year.

Finally in Q3, we generated $102 million in operating cash flow and repurchased 17.8 million shares for $101 million. As Lloyd mentioned, subsequent to Q4, we have repurchased an additional 7.8 million shares for $53 million and have approximately $308 million remaining in our board-authorized repurchase program as of August 13.

Since the first quarter of fiscal 2011, we have returned approximately 50% of our free cash flow to our shareholders. Including the $351 million paid on the term loans, we have returned 80% of free cash flow to all investors over that 3-year period.

Looking forward to Q4, we considered a number of factors including the following in setting our outlook: The current macro environment and economy continue to show uncertainty in the near term, specifically in the storage market, the federal government, and in Europe. For Q4, we are expecting total revenue between $545 million and $565 million and non-GAAP EPS of $0.17 to $0.19.

We expect Q4 SAN revenue to be up 1% to 4% quarter-over-quarter, as the current demand for storage is improving but remains softer than last year. We expect our Q4 IP Networking revenue to be up 5% to 12% quarter-over-quarter, driven by an improved U.S. federal order flow, as well as continued growth of nonfederal IP Networking revenue from new products, including our Ethernet Fabric solutions.

We expect non-GAAP operating expenses to be flat to slightly higher quarter-over-quarter, reflecting higher seasonal spending in our fourth quarter, which will be partially offset by some additional savings from our spending initiatives.

At the end of Q3, OEM inventory was just over 1.5 weeks of supply based on our SAN business revenue, lower than OEM inventory levels exiting Q2 '13 and Q3 '12. We expect OEM inventory levels to be between 1 to 2 weeks exiting Q4. Of course, our inventory levels may fluctuate due to both seasonality and large end user order patterns at our OEMs.

Based on the company's performance in Q3 and the outlook for Q4, we expect full year '13 gross margin to be more than 65%, well above the 2-year target model range of 63% to 64%, and FY '13 operating margin to be at the high end of the 2-year target model range of 19.5% to 22%.

We will provide you further detail on the full update for our financial model at our upcoming Analyst Day in September. At that time, we will be able to tell you more about the specific functional areas of our business, where we are investing and also where we will be scaling back. On today's call, we will be pleased to respond to questions on our third quarter results and fourth quarter guidance, but we'll defer answering any in-depth questions on the forward financial model to our Analyst Day.

With that, I will turn the call back over to Justin to begin the question-and-answer session.

Question-and-Answer Session

Operator

[Operator Instructions] And the first question will come from Mark Sue with RBC Capital Markets.

Mark Sue - RBC Capital Markets, LLC, Research Division

It's good to see the strong financial metrics and the positive operating metrics as well. If I could ask just on end demand. What demand component of the better-than-expected revenues was -- is related to the resumption of activity, which did not occur in the second quarter? Or do you feel that this is actually an uptick in demand for 16-gig perhaps on share gains with the 6529? And does the customer inclination to adopt 32-gig Fibre Channel imply actually a good and smooth settling run rate for maybe 16-gig Fibre Channel?

Lloyd A. Carney

Well, as most of you on the call know, Mark, we're -- we tend to be a proxy for the overall storage market, and there's definitely indicators from the broader storage market that there is a rebound in sight. You heard from second quarter, all our major OEM partners pretty much spoke about the second half, they saw a rebound. And what we were seeing is that rebound occurring a little sooner than we thought. And so it's a combination of overall strength in the storage market or increasing strength in the storage market it's in because you're not truly out of the woods until you're out of the woods. And of course, we now have a full suite of 16-gig products out there. We did a great job of meshing around the 32-gig as you just pointed out, so customers know that there is indeed future path along the 32-gig strength. And as you know, 32-gig means that we have 128-gig connectivity between our directors, so we have a really solid roadmap going forward. And that, of course, comforts our customers. So I think what you're seeing in the increase in the storage SAN of revenues is just a reflection of the broader market and the fact that people know that 16-gig is real and there's a 32-gig coming, as you pointed out, and we're seeing that we're benefiting from that.

Mark Sue - RBC Capital Markets, LLC, Research Division

Okay, that's helpful. And then maybe a financial question. Dan, if I look at your free cash flow on an annual basis, it looks like you'll be generating quite a bit of cash, and you've been commendably returning that to the shareholders in the form of a buyback. What's your thoughts about maintaining your debt at current levels? Any urgency to refinance or repay that debt? And also how we should be thinking of the buyback? Is it 60% of your free cash flow? Should that be a recurring program on an ongoing forward basis?

Daniel W. Fairfax

Thanks, Mark, for the question. The current thinking around the debt is that it's structured in 2 bonds, the first due in 2020, the second in 2023. We just recently refinanced those 2023s, changed the structure to an unsecured structure there. So $300 million of the $600 million is secured, $300 million isn't. And we have a call date in January of '15 when it would be economic for us to look at potentially either refinancing or retiring those 2020 bonds. We haven't made any decision on that at this point, but we certainly were pleased to kind of catch the right interest rate when we floated the 2023 notes. In terms of as we look at returning capital to shareholders, we have been focused on that consistently over a number of years now. The board is quite in tune with -- and I think Lloyd kind of punctuated with, that this is shareholders' cash. We want to be good stewards of it. If we see good opportunities to invest that in the business, we will. When we don't, we want to return that to shareholders. And our thinking right now is as long -- along with the refresh of the financial model, we'll give you some more guidance around a return to capital strategy as we look into 2014 and beyond. But at this -- for this call, we don't have anything really new to report there.

Mark Sue - RBC Capital Markets, LLC, Research Division

Okay, that's helpful. Lastly, Dan, just the overhead expense reduction. Was that just dimming the lights a little bit at Brocade or...

Daniel W. Fairfax

Sorry, is it -- it wasn't dimming the lights that made the overhead reduction [indiscernible]. I think a lot of it really stems from our strategic focus, Mark. We had this -- we embarked in this process where we brought a team together. [indiscernible] would be 1, 2 or 3. We told you about that last quarter. We actually brought the top 50 executives back again for the second time last month just to reaffirm the strategy we're on. And once you've narrowed the focus, then it becomes easier to decide where to spend and what not to spend. Because if you have a broader product portfolio, then you have to spend across a much broader space. You narrow the product focus, you narrow the go-to-market focus to public sector data centers, and all of a sudden, it's real clear where we should or shouldn't be spending. And so it is as a result of the strategic effort that the team did and the board endorsed, and we've reaffirmed that we're able to reduce the cost so quickly. And you'll see us continue along that path of ensuring that we adhere to the strategy. And yes, there is some belt tightening that occurred. I mean, we inspect every PO now over $10,000, and we spend $1.2 billion and we're looking at everything over $10,000.

Hiring, my executive team, we decide on every hire that comes into this company. And that's painful, but everybody gets to decide when we hire people or not hire people. There's no automatic refills and so on. So there's some basic housekeeping things that are done. But I think the most important thing in the reduction to date, the $60 million reduction to date, is the strategic work the team did. And it was a team effort. And again, we have reaffirmed it again in the last month that we're on the right path and that's really the benefit.

Operator

Next question is from Keith Bachman with Bank of Montréal.

Keith F. Bachman - BMO Capital Markets U.S.

I have a follow-up from this last question. If you completed $60 million in annual run rate, your target's $100 million, I'm surprised you got to the $60 million so quickly. It should be brought to a vote [ph]. What's the incremental areas of spend reduction? What are the focus areas to get there?

Lloyd A. Carney

Well, so we obtained the $60 million and we have $40 million to go. We made a commitment around September. So we made a commitment to give you a further update in September for the Analyst Day, and we'll do that with the commitment we made of $100 million by February 1, 2014. We made that $100 million because we know we'll make $100 million. And we made the February because we knew we'll get it done prior to that. The areas that we're looking at is -- again, there's fulfillment of the strategic direction, there are -- you can assume that there are things that we do today, markets that we play in today that a year from now we may not be playing in. You can assume that the efficiencies that we've garnered so far that we'll continue to garner efficiencies across the piece. We brought in an executive, Gail England [ph], whose job it is to ensure that we drive efficiency across the organization. Every organization is looking at everything we do, how we do it, and how we can ensure that a year from now, we're more efficient in every department and every organization. So it is -- all the knobs are still accessible to us to turn to get the further $40 million, and we'll be letting you know more details around that in September at the Analyst Day.

Keith F. Bachman - BMO Capital Markets U.S.

Okay. Well, let me ask my second question and then I'll cede the floor. On the ethernet side, when the dust settles, it looks like you will have lost share on the ethernet side. Is it your assumption because you're now focused -- trying to get more focused on specific markets like fed and data center? Did that play a role in your revenues this quarter, or is that still to come? And if so, how long do you think it normalizes before you'll be at a some kind of market [indiscernible] for the ethernet side of your business?

Jason Nolet

Yes. So this is Jason, Keith. You heard the commentary and you probably saw the prepared remarks around federal. That was particularly soft this quarter, and we expect that to see some rebound in the next quarter. But in general, I think, you're on to the theme here, and the theme is that part of how we end up winning in ethernet is to be appropriately focused and narrow and deep in the markets where we're going to play. And our Ethernet Fabrics offering would be the poster child for that, where we decided that in data center ethernet, there's a great opportunity to take share. And we've been growing that business consistently quarter-over-quarter, another 80% this quarter year-over-year. And in fact, that's 4x to 5x the TAM growth rate in that space. So for us, it's about finding that focus, making sure we're credible and deep in the areas of the market that we intend to play in and making sure that we're not too dilutive and being too broad in anything because it is a big market overall and lots of different use cases and segments.

Robert Eggers

Operator, we'll take the next question, please.

Operator

That'll come from Brian Marshall with ISI Group.

Brian Marshall - ISI Group Inc., Research Division

If our math is correct, it looks like the upside in the quarter was pretty evenly split between upside to revenues, maybe $0.02 driven by higher gross margins, and then $0.02 driven by lower-than-expected costs. And so I guess the question is, there's clearly going to be some more upside from a cost-down perspective over the next couple of quarters. But can you talk a little bit about the leverage still left in the gross margin line? Obviously, I think ethernet went from low- to mid-40% gross margins up to around 50% where it is today. Do we have much room there? And were the $2 million cost out in the quarter, did that have to do with ethernet or there's still more opportunities? And then I have a quick follow-on.

Jason Nolet

Yes, there is still some more opportunity on the ethernet side. And we've cited this I think in a number of previous quarters around the VDX product line and the Ethernet Fabric technology. Those products have margins that look a bit more like our SAN product lines in terms of the premium value that we can extract out of the market for that technology. And the faster we grow that product line of that business, the more that's going to contribute to the gross margin opportunity.

Brian Marshall - ISI Group Inc., Research Division

Great. And then a very quick question on the Fibre Channel business. If you look at it starting to cross the 50% threshold, obviously, from a mix standpoint, I guess with the -- not the lion's share, but a big chunk of that opportunity from on upgrade standpoint having been behind us now, what kind of gives you more confidence in the kind of 1% to 4% type growth that we're looking at in the back of the year -- or the next quarter that is? And if could you just give some granularity of kind of what you're seeing out there from the customer base? That would be fantastic.

Lloyd A. Carney

Keith, the -- from an upgrade standpoint, we've just really scratched the surface. I mean, the upgrade bases is figured to be upwards of -- in the billions of dollars, and we're not even -- what we've crossed the threshold on is new installs are going out with new storage infrastructure. So there is a concerted effort by the sales team right now to go after that installed base, to go and mine that installed base. We've really only moved -- the numbers you've seen are really reflecting on sell-in to new infrastructure, not the upgrade. So there's a lot of legs on the upgrade left.

Operator

Next question comes from Amitabh Passi with UBS.

James F. Hillier - UBS Investment Bank, Research Division

It's Jim Hillier for Amitabh. I guess looking at the weakness in the Federal business and the guidance for a bit of a pickup, is it your interpretation that most of the deals that were pushed out in the third quarter can close by the fiscal fourth quarter despite the ongoing sequester? And also any outlook just on where you see budget shaping up as you look at the end of the full year?

Jeffery P. Lindholm

Yes. So -- this is Jeff Lindholm. Yes, we did see projects move out. We do expect a number of them to close in the quarter. We didn't see any lost business or deals going away or share loss in federal despite the fact that it was a challenging quarter. I think as we look at Q4, we're feeling good about the federal business. In fact, last week, we had a federal forum, where we brought in a large number of customers from both civilian and DOD agencies. In fact our event, which was last Tuesday, we saw about 100% growth in attendance in that conference, and there was a very positive set of discussions around that. And I think everybody's interested in getting back to building infrastructure and spending money. We do expect in Q4 that there will be a lot of budget money spent. I think one of the cautions that we feel is that, is there the infrastructure within the government to actually be able to spend that money in the time allotted because there's a lot of backlog of budget to be spent. So that's really kind of the only concern I would say we have, but we've actually built that into the outlook for Q4.

James F. Hillier - UBS Investment Bank, Research Division

Got it. And then also it looks like the overall trends in Europe appear to be somewhat mixed. Could you just talk about the demand transitioning in that region, please?

Lloyd A. Carney

Yes, I think -- well, we certainly are, like everybody, suffering somewhat from the malaise of the European economy, particularly in the southern areas. In the more northern parts of EMEA, we've seen really good participation from those markets. And in fact, in the Fabric area in particular, we've seen really strong performance in northern Europe in the uptake of that technology. So I think we did suffer like everybody from the general economic condition of EMEA, but in the markets that are more vibrant, we are seeing growth, particularly in the areas of things like fabric.

Robert Eggers

Operator, we'll take the next question, please.

Operator

It's from Scott Schmitz with Morgan Stanley.

Scott Schmitz - Morgan Stanley, Research Division

Yes, I just want to follow up on the SAN business. The growth was much better than expected, but ultimately it was just kind of in line with normal seasonal trends. How much -- and then I guess your outlook is slightly below normal seasonality, so just a couple of questions. How much of that was pull forward in the quarter? And is it just the same kind of conservatism on the outlook given the macro uncertainty? Or what kind of holds you back, or what do you think is causing the lower outlook?

Lloyd A. Carney

The most important number that we shared is the inventory. The 2 weeks to 1.5 weeks, so we actually -- we're in much better position right now going into this quarter than we were last quarter, having brought the inventory levels down. We are -- the messaging from our main OEM partners to the market and to us has been back-half rebound. We're seeing some of that now. But their back half includes December, and we don't have that luxury of those last November, December, December being the largest month for them, as a part of our calculus for the end of this year. So we're being prudent in the number we put forward. We feel good based on the backlog we have right now, inventory levels that we have, and fully expect to meet the forecast.

Daniel W. Fairfax

This is Dan. Maybe I'll just add a little extra color in terms of how the inventories developed. We saw demand improve all through the quarter. And then particularly at the end, we saw demand strengthen, so the OEMs pulled down their inventory levels. So we were encouraged that things are righting themselves. Lloyd had made some comments about the overall storage market, which we're tied to inextricably, and so we're a little bit cautious because we haven't seen the green light there that things have returned to normal in storage. But again, we're optimistic that this kind of cycle will pass, and we'll be seeing good business as we go into '14.

Scott Schmitz - Morgan Stanley, Research Division

Okay, great. That's helpful. And then just on the $100 million saving program. Is that truly a savings program? I mean, if I look at the OpEx that you reported, lower $15 million from the January quarter, does that mean that all of it flows through to the bottom line? Or how much do we think about as reinvested in the business?

Lloyd A. Carney

All of it flows through the bottom line. I mean, we -- taking $100 million out will leave us with enough money to run the business efficiently and effectively. So we've made a commitment to the board, made a commitment to our shareholders, yourself included, that $100 million goes to the bottom line. I mean, we are focused on free cash flow. There's nobody in this room who doesn't understand the importance of that, and so it all goes to the bottom line.

Robert Eggers

Operator, we'll take the next question, please.

Operator

That'll come from Jess Lubert with Wells Fargo Securities.

Jess L. Lubert - Wells Fargo Securities, LLC, Research Division

First on the SAN business. I wanted to follow up on the previous question and ask if there's any reason to believe there's been a change in the seasonality of that business going forward. And then it seems like most of the SAN strength in the period actually came from sales of switches, while it seems like sales of directors were a little weaker. So can you help us understand what happened there and how you're thinking about the mix going into Q4?

Lloyd A. Carney

So Jess, let me start, and I think Jason will add a couple of comments to it. So the switch director mix we saw in the quarter was fairly typical of what we see at this time of the year. And we don't see anything changing in that overall seasonality, where we tend to have a strong fourth quarter of SAN revenues, actually peaking in Q1 and then the second and third quarters are down. And that aligns with the cyclicality at our major partners as well. So we don't fundamentally see any change there. And we really think that the disruption we saw came out of end customer buying of storage in our second quarter. And again, as we've said, we've been pleased with the recovery we've seen happen fairly quickly here in the third quarter. So Jason, anything?

Jason Nolet

Nothing to add, actually. That was a great explanation.

Jess L. Lubert - Wells Fargo Securities, LLC, Research Division

And then maybe just following up on the Ethernet side. The Service Provider business appeared to decline sequentially for a third consecutive quarter. Can you help us understand what you're seeing in that market? As a lot of your peers have been seeing strength in this vertical. So I'd be curious to understand if this is just a function of waiting for some deals to ramp. Is it a function of share loss? To what degree do you expect this business to snap back in the October quarter? And how are you feeling about momentum in the carrier vertical?

Jason Nolet

Yes, so this is Jason. So I think in the Service Provider space, in particular, we sell pretty much all of our products into that space. But maybe commenting on the router product line, which was maybe the lightest of the bunch in the quarter, kind of 2 primary use cases there, one is Service Provider transport and the other is Service Provider data center. And we did have weakness in Service Provider transport this quarter. Some of that was a function of large deals pushing out. Other circumstances were particular to a given customer that we've relied on over the last year or 2 for kind of a recurring run rate business there. In the Service Provider data center, we were flat to slightly up, and that's going to be a pronounced area of focus for us going forward for both the Ethernet switching and the routing product lines. And we're very bullish on that market. In the data center switching space, that's a TAM that's growing at 16% to 17% year-over-year; in the routing space, about 30% year-over-year. So that's where we're going to focus our efforts going forward, and we're confident we're going to see growth in both the router and continued momentum in the Ethernet switching line with VDX going forward in that space.

Jess L. Lubert - Wells Fargo Securities, LLC, Research Division

On the transport side, is there any way to quantify how much business slipped out of the quarter? And do you expect that business to close in the October period? Or does that get pushed out to 2014? Do you expect the transport bit to be up sequentially in Q4?

Jason Nolet

Yes, we just -- I would just summarize by saying there is a part of that business for sure we're confident we're going to get in Q4. Other parts of those deals have different circumstances, and I won't comment on the deal specifics here. But I think part of it we're pretty comfortable that we're going to get in Q4. Some of it may move out into '14.

Jeffery P. Lindholm

This is Jeff Lindholm. Just to add one comment to that. One of the structural changes I've made in my organization is really the creation of a senior global SP, Service Provider cloud, a person who's really going to drive our strategy on a global basis so that we can execute consistently in our strategic Service Provider accounts, and we can make sure that we're aligning the activities in the field to embrace the strategic direction we're going in, in terms of cloud and data center so that we're really getting a lot of leverage out of what's coming out from a product position and making sure that we're focused on the right customers to execute the strategy. So this is a new role actually reporting directly into me, so that we plan to dramatically increase the focus on that area of the business.

Jess L. Lubert - Wells Fargo Securities, LLC, Research Division

Jeff, are there any other major changes you're planning in the sales organization that we should be looking for going forward?

Jeffery P. Lindholm

No. I think, certainly, there's been some changes in terms of the team members themselves, but I'm very, very pleased with the team I have in place today. What we're really focused on now is a couple of things, one is making sure that from a structure and activities point of view, we're completely aligned in supporting the strategy of data center and public sector and, as I mentioned, Service Provider cloud. And then we're doing a lot of work in really getting much stronger alignment across marketing, geography, sales organization, channel organization and the global services organization.

Robert Eggers

Operator, we'll take the next question, please.

Operator

That'll come from Rajesh Ghai with Craig Hallum.

Rajesh Ghai - Craig-Hallum Capital Group LLC, Research Division

Dan, I was wondering if you could clarify a couple of things, a couple of conflicting messages in your guidance. On one hand, you talk about uncertainty in the storage market and the U.S. Federal market. On the other hand, in different parts of the presentation, you've talked about storage market showing some recovery and U.S. Federal orders picking up on the LAN side. How should we kind of reconcile the 2?

Daniel W. Fairfax

Yes, I think -- so maybe what I -- I should have put more punctuation between what we saw coming from second quarter into the third quarter. So if we do -- just to roll the clock back briefly, we were surprised, I guess, is the best way to describe it with the downtick in storage revenues in the second quarter. And we tried to set our guidance appropriately. Particularly, having talked extensively with our OEM partners. And then as third quarter developed, we saw a much faster recovery than what we guided you to. So if you recall, the guidance for the quarter, we well exceeded that. So really, my comments went to we saw something happen in the market at the end user that seem to have come and gone fairly quickly. Now we also are still cautious because our partners aren't saying that everything is suddenly back to normal. So that's really kind of the comments around the SAN business, where -- we never believed, and I think we actually had some comments from some -- or questions from some of the analysts on the second quarter conference call, it -- was this the end of SAN, was this somehow Armageddon that's happened? And we said, "No, this is just something that's temporal and will pass." On the Federal side, that business, Jeff and his team largely are in close contact with the end customer agencies and armed services and the different branches there. And so they have good visibility into which deals are actually been approved, which deals are funded, and we really had vetted that pipeline very carefully, which we do every quarter. And I think it's not just unique to us, but we're hearing peers report that some of the business that wasn't -- it didn't look like it was affected by the sequester in terms of actually having dollars appropriated for it, but the deals weren't being released out of the procurement department. So that was really the dynamic we saw there. Now as we look into Q4, we have, again, good visibility into what those opportunities are, where the funding is. And we took appropriate caution from the prior quarter and the results we saw there, and we tried to apply that to our forecast. We do believe that the Federal government will spend more with our products and services than they did last quarter, but it won't be at the same level as the spend in the prior years, we've taken that into account. I don't know, is that helpful, Rajesh?

Rajesh Ghai - Craig-Hallum Capital Group LLC, Research Division

That's very helpful. The other question I had was on the SAN business. Obviously, it did recover this quarter. But if you look at the full year fiscal '13 number and including your Q4 guide, revenue for that is down 2% year-on-year, and that's opposed to a 6% growth that you saw in fiscal '12. I just wanted you to kind of tell us the reasons for the decline in terms of the macro in general, the Fibre Channel market decline. And if possible, if you've seen any impact from Cisco's entry into 16-gig.

Daniel W. Fairfax

So again, I think, kind of the same comments, we saw most of the impact of what we're projecting as our year guidance and the year-over-year compare really hit in the second quarter. We're seeing business recovery. End user demand was -- seemed pretty solid in the quarter we just completed. In the most recent numbers, if we look at what was the impact of our competitor entering the market with new product, the numbers we're seeing from third-party analysts look to us as if we actually increased share despite the fact that they've entered the market with some refreshed products out there. So at this point, the Salesforce, and I'll ask Jeff to make any comments, hasn't reported that they are suddenly under pressure. Pricing was stable in the quarter for SAN products. So things seem to be going our way still. If you think, we now have a fully refreshed product line with the recent release of the 96-port and top-of-rack switch there. And so we're feeling pretty good about the position we have in that space.

Jeffery P. Lindholm

We haven't really seen that kind of price pressure. And I think in the quarter, we had a really nice contribution from the Gen 5 products within SAN as well, so that bodes well going forward.

Robert Eggers

Operator, we'll take the next question, please.

Operator

That'll come from Srini Nandury with Summit Research.

Srinivas Nandury

I have a question back on the 32 GFC. What's the state of the standard? Has it been approved by the FCIA? And when can we expect the [indiscernible] in the market?

Jason Nolet

Yes, this is Jason. I think the standard is close to approval, if not approved. And I can take an action to get back with you on a more precise answer. But it's in the last stages, for sure. And we're in the process of making sure we're making the investments on the ASIC side to be able to field the product as quickly as we can based on the 32-gig standard. And the other thing I'd say is that I think most of the other participants in this ecosystem are doing the same. So the HBA side vendors and a few other competitors we have in the switching and director space, I believe, are also going to make an investment there. So from what we can tell, everybody who's in this ecosystem is here to continue to invest in 32-gig. It's going to be part of that portfolio.

Lloyd A. Carney

As a contrast to when 16-gig was first announced, there was some reluctance in some parties to participate in it. And right now, in the 32-gig front, everybody is all in. Everybody is supportive of it. [indiscernible] kicked off, and they're talking about potentially end of next year, first kind of silicon product. So there's full support for 32-gig out there.

Srinivas Nandury

Okay. I have one more question. I mean, when I was in Detroit [ph], that's looking well [ph] a few weeks ago -- actually, a few months ago. They talked about 64-gig Fibre Channel by using 6 to 4 -- 16-gig GFC links are going to 128 GFC, with the 8 16-gig links. So what's your view on that? And where do you think the market is going there?

Jason Nolet

So both are possible. We do the 64 today with the Inter-Chassis Links between our director products. So that is shipping product capability that customers are enjoying today. And the 4 by 32 to yield 128, as Lloyd mentioned earlier, is also part of the standard, and I would expect everyone who adopts 32 gig to support that configuration as well. That's going to be particularly attractive for the flash array community, right, who need as much bandwidth and as low latency as they can get to make sure that the full value of those flash products is taken advantage of. So we're bullish on that.

Operator

.

Alex Kurtz with Sterne Agee.

Alex Kurtz - Sterne Agee & Leach Inc., Research Division

Just back on the storage strength. Is there any way to, when you speak with the sales force, get a qualitative measure about whether these are sort of catch-up improvements in the storage or the storage spending from customers or this is a -- sort of new projects that people are starting to kick off, that could last going into next year, next calendar year?

Lloyd A. Carney

Well, Alex, I think in being out in the field, there's a combination of both. Most of them are new projects. Most of them are new data center buildouts. And there are markets in this globe where -- in China, for instance, that's growing almost 20%. I mean, the Chinese are building out some of the largest data centers in the world, and they're just copying what we did here in the U.S. So there is a -- if I were to try to quantify it, I'd say most of it is new buildouts. And there are some expansions in existing infrastructure going on. But there's a lot of data center buildouts going on, and it's being driven by this broad data being created at an alarming rate by mobile devices, being driven by governmental mandates in Europe, for instance, because of all the issues around data security. Now everyone wants their own data centers in their own country. You can't have pan-European data centers anymore because of legal requirements they're putting in place. So you're seeing increased buildout even in depressed markets. So there is a big drive for data center buildouts. And a certain percent of that ends up being Fibre Channel because of the ease of use, security and reliability of those Fibre Channel infrastructures.

Alex Kurtz - Sterne Agee & Leach Inc., Research Division

And just on a related note. We get a lot of questions from investors about the future of AWS and what Microsoft is doing and Rackspace, and obviously, that's potentially going to put pressure on some of your customers that sell in the high end. That's at least how some of the thinking goes out there. How do you guys see that shaping up for Brocade? And is there a way that you can participate in some of these larger public clouds as they try to offer higher-level services?

Lloyd A. Carney

It's -- funny enough, 2 of those [indiscernible] Rackspace are 2 new customers for us this quarter. I'm going to turn it over to Ken to talk about what we're doing there with those customers.

Ken K. Cheng

Yes. So Alex, this is Ken. So we are seeing certainly a lot of the storage and content being moved to the cloud because of the fact that it is dynamic in nature and you can create an elastic infrastructure. So what we are seeing is that these large cloud service providers and Infrastructure-as-a-Service providers are increasingly looking at infrastructure which is scaled out and also looking for virtual infrastructures which are elastic. So in both of those cases, we see at -- and our Vyatta virtual router become a perfect fit for these customers. So as these infrastructure card providers are building out their infrastructures, increasing and improving their services, they are more likely to come to us to look for infrastructure for storage, for networking, as well as [indiscernible] services.

Robert Eggers

Operator, we'll take the next question, please.

Operator

That'll be from Jayson Noland with Robert Baird.

Jayson Noland - Robert W. Baird & Co. Incorporated, Research Division

Housekeeping question first, I think, for Dan. Headcount was down about 83 people quarter-on-quarter. I would guess that's going to come down again in F Q4. Is there a certain part of the business that is being deemphasized? I know marketing was mentioned, but it seems like it would be more broad than that.

Daniel W. Fairfax

So we intend to give more color around the headcount changes as we shift the focus in the business on the September Analyst Day meeting, when we brief you there. I mean, I think what I can share right now is we tend to have -- the largest groups of our employees are in sales, marketing and engineering, and you can expect that. That's where most of the changes happen within the business just by kind of core statistics there. But what -- I guess I'd go back to the comments that Lloyd made when we opened the call. What we're doing within the business right now is we have some normal attrition, as all companies do in the Valley, certainly, all of our peers face this. And when we have an opportunity to take dollars that were being spent, in one position, we look at it before we recommit it back there. And we've been able to fairly effectively -- very effectively shift our spending already, just taking advantage of those natural trends within the business. But we'll give you a more full briefing on that in a few weeks.

Jayson Noland - Robert W. Baird & Co. Incorporated, Research Division

Okay. And a question on VDX. High gross margin, about 15% of IP Networking now, nice growth rate and headed toward that $100 million run rate, one of the more exciting areas of Brocade broadly, really. If you could talk, Jason, about why you're winning a little more of the deal pipeline, just some more color on VDX would be great.

Jason Nolet

Yes, it is really a function of the differentiation that we have in that offer. And that differentiation is around improved automation, improved efficiency and reliability compared to legacy data center LAN architectures and products. And we've been telling the same story for the last 3 years in this space now and have been very consistent about reasserting those value props because we're constantly testing that with customers and prospects. But that's the reason that we're winning. And obviously, the data center network at large is a place of great transformation right now. There's a lot of activity around next-generation data centers and modernization of data centers. We heard this in spades at the Federal Summit that Jeff talked about that we attended. Modernization of data center was like job one for these guys. And so we're getting a lot of swings at the ball there because as customers look at how they modernize, you go to the next-generation architecture, they are looking for best-in-breed technology at every layer in the stack. And that includes the Ethernet network, and that's where the fabric really plays well.

Jeffery P. Lindholm

I would add to that, I think one of the other key things is it's unique versus some of the other offers out there in terms of its multi-vendor interoperability, so we can go into multi-vendor environments and support a variety of feeding switch infrastructure that's really independent of the other vendors.

Robert Eggers

Operator, we'll take the next question, please.

Operator

That'll come from Matt Robison with Wunderlich Securities.

Matthew S. Robison - Wunderlich Securities Inc., Research Division

So following up just the last one. The success on the Ethernet Fabric was offset by what looks like, about a more than 23% decline in the rest of the Ethernet switch offering. And I was wondering if that reflects the new focus or if we should mostly just attribute that to Federal. And I guess kind of related to the overall mix in the IP category was interesting to see the other category actually up year-over-year and sequentially. I was curious if there's any kind of last time buy activity or anything like that going on in that space.

Daniel W. Fairfax

You should really attribute it largely to Federal. That was the big challenge for us in the quarter. And then as I mentioned in the router space and especially for Service Provider transport use cases, we saw some deals push out, but nothing more systemic than that.

Matthew S. Robison - Wunderlich Securities Inc., Research Division

So the other category, some of the -- I'm kind of expecting the hardware-based ADC business to be deemphasized. That wasn't reflected in that business being up sequentially.

Daniel W. Fairfax

Actually, not in the last quarter. It was a solid quarter for the load-balancing business.

Operator

Kent Schofield with Goldman Sachs.

Kent Schofield - Goldman Sachs Group Inc., Research Division

One clarification on the SAN/ASP stability. Was that a Q-on-Q and a year-on-year statement? And then just a little bit, I think more importantly, as you look at Gen 5 now reaching 60%-plus of switch and director revenues, what sort of impact should we think about for ASPs reaching that level going forward? What does that mean kind of for that business?

Daniel W. Fairfax

So my comment, Kent, was really pricing quarter-over-quarter. We've been in a relatively benign pricing environment even on a year-over-year basis. Much of which, at that time, we were the only vendor in the market with these newer products. So we were able to charge a premium for them, and that worked out through the mix and the balance of the portfolio. I think as we look forward, we can look -- again, we can take a little bit of lesson from history. As our major competitor starts to populate their field with product and we compete more head-to-head, we tend to see more price -- pricing interaction with them. So we'd speculate we would see some impact to pricing in the future, but we haven't put any specific guidance out there at this point in time.

Kent Schofield - Goldman Sachs Group Inc., Research Division

Okay. And then this could be more for the Analyst Day in September, but as we think about the remaining savings, thus far, it seems that you've been able to do it without any sort of, kind of commensurate revenue impact. But going forward, as we think about modeling and giving you guys $100 million savings, should we be thinking about some sort of revenue impact?

Daniel W. Fairfax

We'll give you more details on that at the Analyst Day in September. But the thing to take most careful note of is that free cash flow a year from now will be improved from where it is today. So whatever we do to get to the $100 million, we're going to be focused on generating and improving our free cash flow. So you heard Jason talk about the margin benefits we get from the Ethernet Fabric, the fact that those margins look a lot like the SAN margins. And we have a focused effort on selling that product, having good success in selling that product, 80% year-over-year growth on track for the $100 million. That's going to have an impact on our margin. And you'll see us continue this efficiency focus. It's not just a one-off effort. $100 million is not in of itself the finish line. $100 million is it's half along the way. And so you'll see us strive for savings beyond $100 million within the organization. Look to see us really continuing this focus on efficiency across the organization. But again, in September Analyst Day, you'll get more details from us and exactly what the models look like.

Robert Eggers

Operator, we'll take the next question, please.

Operator

.

That'll be from Brian Modoff with Deutsche Bank.

Brian T. Modoff - Deutsche Bank AG, Research Division

A question really more on the higher level. What do you think your growth rate is going forward? If you look at the quarter, it was certainly better than expected, but the growth rate both sequentially and year-on-year was still negative. How do you see -- when do you see having more of a positive trend? And what do you think your sustainable growth rate is for your various businesses?

Lloyd A. Carney

So I think, Brian, what you're seeing us go through right now is we're rightsizing the organization. We're getting down to our fighting weight, right? We're getting to where we have the right infrastructure, the right spend and the right focus on the data center market, on the software-defined networking market, which everyone was talking about SDN space. We've had more downloads and more deployments in the SDN space, any other vendor in the marketplace. So where the puck is going, where the market is going, virtualized network appliances, we have the #1 share there also. So we're refocusing our investments. And you'll see us -- as we get out of this next 3, 4 months, you'll see us get to where there is a little bit more predictability around our growth rate. In February -- I mean, in September at the Analyst Day, we'll give you the information you need to generate your models for next year. We expect to see some growth for next year, but we're still working numbers. What we've seen, coming back from the sales force so far, from OEM partners, give us reason to be optimistic. And we're going through this process of rightsizing, getting down to the right structure, the right focus areas in order to go take on next year. We think next year is going to be a good year for us. You'll hear more about that in September.

Robert Eggers

Operator, we have time for one last question.

Operator

.

That'll come from Rohit Chopra with Wedbush.

Rohit N. Chopra - Wedbush Securities Inc., Research Division

I wanted to just follow up on the Ethernet switching business. At least one of your competitors actually had a pretty decent quarter, both year-over-year and sequentially. They sell into government and they sell their switches as well, so they didn't blame government. And I just wanted to know if there was competition maybe on the Ethernet side, did have some implications that maybe you did see some of that. And then my other question was back to AWS and Rackspace. Can you just talk about the revenue model there? I just want to get a sense if you're just selling directly to them or do you actually touch their end users. And maybe just talk about the exclusivity, if there is any, with those 2 companies at least.

Ken K. Cheng

Okay. This is Ken. Let me just start with your -- second part of your question. So we are seeing a variety of business models with specifically a set of customer like Rackspace. You can look at Rackspace as both a channel for us and also as -- Rackspace is also an end user for us. So we sell our infrastructure equipment both physical and virtual to Rackspace for them to build out the infrastructure. At the same time, they offer services based on our virtual appliances. So they are both a sell-through channel, as well as an end user. In the case of AWS, you see a slightly different model where customers are bringing our virtual appliances, our virtual routers to AWS or they can buy it off the AWS App Store. So I think this is probably typical of emerging technology you are going to see the business models evolve and you're going to see a lot of different types of most models emerging.

Lloyd A. Carney

On the IP front, just want to reinforce that where we're most focused right now, where we're making the biggest investment this company has made probably in its history is in the VDX space. And we had very good growth year-over-year in that space. You're on track to do the $100 million that we committed to. And we're actually very well-positioned there. On the Federal space, we have a strong Federal team, but probably over half my federal team is in place for less than a year. I mean, we went on a big hiring binge in that space because we're underrepresented in that market space. Even in our traditional SAN business, I have 80% market share worldwide in SAN; internal space is up 50%. So this kind of reflects on just the lack of focus we had over the year. So we're rebuilding that team. Now when you're in the rebuilding effort, you have people who are incumbents, like some of the competitors you may have spoke of who had incumbent business, who had backlogs, who were able to ship against those backlogs. We're building new capabilities in the federal space and winning new deals and new opportunities. It would take, let's say, 4, 6 quarters because you have to get in the right cycle, you've got to get designed in and then you get the provisioning process going. So we fully expect with the leader we have there, Anthony Robbins, to have a much more predictable federal business going forward as we take advantage of the investments we made there now. I think Anthony joined maybe 6 quarters ago or 7 quarters ago and hired most of his guys in the last year. We're going to see the benefit of their work going forward. So no apologies really for it, it's just a matter of fact where we were, new teams, new deals that we're kind of queued up behind. And the new deals don't get priority, keeping the lights on get priority as they go through that provisioning process of signing up all these appeals [ph]. So we fully expect to see that rebound. But in the IT Ethernet space that's most important to us, where the design requires a new class of data centers, so data centers where you have virtualized your servers, you have virtualized your storage, you need scale-out servers, scale-out storage, you need scale-out network infrastructure, we have the best product there, and we're making a lot of strides. Jeff talked about the Northern European space. In the U.K. market last quarter, I mean, they did as much in that market as we did in some much bigger geographies only because of the focus they had in that space. So we know we can sell it there, we know we can be successful there and that's where we're making the bets.

Jeffery P. Lindholm

This is Jeff again. Some of the work that Anthony's really been focused on since he arrived on the scene is to really get away from a position we had in the past. We had a lot of concentration on a small number of federal agencies, so we've been doing a lot of work on diversifying into civilian and a broadening footprint into other DoD areas. And that work is well underway. We're making a lot of progress there. And as we do, it will just continue to improve our growth and predictability in fed.

Lloyd A. Carney

Thank you for your time and attention in our call today. This is an exciting time for Brocade. Now we continue to execute well in delivering a world-class portfolio of software and other products for data center networking. Believe that we're ready to seize the opportunity in front of us with a focused strategy and team. We look forward to sharing more with you about our specific plans and accomplishments at our Analyst and Technology Day event on September 25. Thank you.

Operator

.

Thank you. That does conclude today's conference. We do thank you for your participation today.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Brocade Communications Systems Management Discusses Q3 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts