Q2 2011 Earnings Call
July 20, 2011 8:30 am ET
David Goulden - Chief Financial Officer and Executive Vice President
Joseph Tucci - Chairman, Chief Executive Officer, President, Member of Mergers & Acquisitions Committee and Member of Finance Committee
Tony Takazawa - VP
Louis Miscioscia - Collins Stewart LLC
Brian Freed - Wunderlich Securities Inc.
Maynard Um - UBS Investment Bank
Deepak Sitaraman - Crédit Suisse AG
Benjamin Reitzes - Barclays Capital
Alex Kurtz - Sterne Agee & Leach Inc.
Aaron Rakers - Stifel, Nicolaus & Co., Inc.
Amit Daryanani - RBC Capital Markets, LLC
Toni Sacconaghi - Sanford C. Bernstein & Co., Inc.
Mark Moskowitz - JP Morgan Chase & Co
Ittai Kidron - Oppenheimer & Co. Inc.
Previous Statements by EMC
» EMC's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» EMC's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» EMC Corporation Management Discusses Q3 2010 Earnings Conference Call
Thank you. Good morning. Welcome to EMC's call to discuss our financial results for the second quarter of 2011. Today, we are joined by EMC Chairman and CEO, Joe Tucci; and David Goulden, EMC Executive Vice President and CFO. David will provide a few comments about the results we released this morning, He will highlight some of EMC's activities this quarter and discuss our outlook for 2011. Joe will then spend some time discussing his view of what is happening in the market, EMC's execution of the strategy and how EMC is positioned to help customers on a journey to the cloud and in their efforts to handle the growth of Big Data. After the prepared remarks, we will then open up the lines to take your questions.
I would like to point out that we will be referring to non-GAAP numbers in today's presentation unless otherwise indicated. The reconciliation of our non-GAAP comments to our GAAP results can be found in the disclosure today, in our press release, supplemental schedules and the slides that accompany our presentation.
I would also like to point out that we are using a new basis of presentation this quarter and while it takes a bit of a different format than the previous schedules, I would like to assure you that all the reconciliation information is still available or calculable for your analysis purposes. All these are available for download within the Investor Relations section of emc.com. As always, we have provided detailed financial tables in our news release and on our corporate website. These schedules include a lot of financial information, so we do encourage you to take a look at them.
The call this morning will contain forward-looking statements. And information concerning factors that could cause actual results to differ can be found in EMC's filings with the U.S. Securities and Exchange Commission. And lastly, I will note that an archive of today's presentation will be available following the call.
With that, it's now my pleasure to introduce David Goulden. David?
Thanks, Tony. Good morning, and thank you for joining us today. I'm pleased to report another quarter of record results. We achieved record second quarter revenues of $4.85 billion, up 20% from last year, as revenue growth improved from Q1 across all of our reporting segments. We achieved record Q2 non-GAAP EPS of $0.35, up 25% from Q2 of last year. And we continue to improve both non-GAAP gross margin and non-GAAP operating margin, both quarter-on-quarter and year-on-year.
These results are further evidence that our strategy is on target, and we continue to execute on our triple play. We're gaining market share, investing for the future and improving profitability. Our unwavering focus on providing customers with the right technology to transform their IT and get the most from their data is resonating with our customers and winning us new ones. We have innovated and invested to stay in front of these needs and continue to do so day in and day out.
It is this focus on innovation that has earned us our market-leading position, which continues to get stronger. There is no other company in IT with our combination of best-of-breed technology for both the virtualization and infrastructure layers that enable cloud computing and for unlocking the value contained within Big Data that surround us. Given that we're still close to the beginning than at the end of this fundamental shift to cloud computing, we continue to invest and innovate in the right areas to ensure we take full advantage of the massive opportunity that lies ahead.
Now let's take a closer look at how these opportunities are driving the financial results across our various businesses, starting with Information Storage.
Growth in our Information Storage revenue was strong, up 19% to $3.6 billion. Within Information Storage, we saw the year-on-year growth rate changes we expected from the high-end and from the mid-tier, as our high-end product growth moderates to 15% while our mid-tier product growth accelerated to 27%. This acceleration was driven by the strong results from our new VNX Family. We're clearly gaining share across our portfolio for traditional data center workloads, for cloud deployments and for Big Data workloads as well. As we continue to seek out the most efficient and intelligent ways to handle these massive volumes of data, customers of all sizes and across all industries look to us for the best solutions for their unique IT storage requirements.
In the high end, it is our unique suitability for emerging needs that is driving our share gains. While customers continue to choose VMAX because its capabilities for mission-critical uses in traditional data center implementations, they're increasingly selecting VMAX for new use cases as well. VMAX's enterprise class reliability, availability and serviceability appeal to service provider customers who're implementing VMAX to cloud services where its service levels are mission critical. VMAX's tiered storage capabilities, leveraged by fully automated tiering software, offer a total cost of ownership that competes with and is displacing incumbent Tier 2 vendors. VMAX is also finding its way to new customers through VPLEX. VPLEX's ability to full storage resources from multiple data centers is a value proposition competitors cannot match and which opens doors for additional EMC solutions.