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Volterra Semiconductor Corporation (VLTR)
Q3 2009 Earnings Call
October 19, 2009 5:30 pm ET
Mike Burns – Chief Financial Officer
Jeffrey Staszak – President and Chief Executive Officer
Alex Gauna - JMP Securities
Joanne Feeney - FTN Capital Markets
Vernon Essi - Needham & Company
[Unidentified Analyst] for Patrick Wang - Wedbush Morgan Securities
Arnab Chanda - Roth Capital Partners
Christopher Longiaru - Sidoti and Company
Nick Aberle - Caris & Company
Ramesh Misra - Brigantine Advisors LLC
Evan Wang for Tore Svanberg - Thomas Weisel Partners
John Vinh - Collins Stewart LLC
Gus Richard - Piper Jaffray & Co.
Previous Statements by VLTR
» Volterra Semiconductor Corporation Q2 2009 Earnings Call Transcript
» Volterra Q1 2009 Earnings Call Transcript Introductory Remarks
» Volterra Semiconductor Corporation Q4 2008 Earnings Call Transcript
At this time I would like to turn the conference over to Mike Burns, Chief Financial Officer. Please go ahead sir.
Thanks and welcome everyone to Volterra’s third quarter 2009 conference call. Joining me today is Volterra President and CEO, Jeff Staszak.
We issued a press release today with our financial results, which is available on the Investor section of our website at Volterra.com.
On this call, we’re going to discuss certain non-GAAP financial measures which exclude the effect of stock-based compensation expense net of tax. We’ve provided a GAAP to non-GAAP reconciliation that’s also available on the Investor section of our website. Unless we specifically state otherwise, our guidance refers to non-GAAP.
Our remarks will contain forward-looking statements that are based on the company’s current views and expectations that are subject to several risks and uncertainties. Please refer to today’s press release, our annual report 10-K filed with the SEC on March 4, 2009 and our most recent 10-Q filed with the SEC on August 4 for specific risk factors that may cause actual results to differ materially from the forward-looking statements. Volterra undertakes no obligation to update or to revise the forward-looking statements.
With that I’ll turn the call over to Jeff to provide an overview of the business and our results.
Thanks Mike. Good afternoon and thanks for joining us today. First I’ll provide a short recap of the Q3 ’09 financials. I’ll then give a short update on our four focused markets, and following this I’ll talk about Q4 ’09 and provide guidance for the quarter. Finally I’ll hand it over to Mike to review the details of our financial performance for the quarter, and then we will open it up for any additional questions you may have.
In Q3 ’09 revenue came in at the high end of our revised guidance at $29.7 million versus $30.6 million in Q3 ’08 and $22.8 million in Q2 ’09. Non-GAAP EPS was $0.19 versus $0.25 in Q3 ’08 and $0.10 in Q2 ’09. Non-GAAP gross margins were up from 59.1% in Q2 to 59.7% in Q3. Margins continued to improve due to product mix, heavy emphasis on company-wide yield improvement activities and cost reductions with all of our suppliers.
As I mentioned in our last call, we expected growth in the second half ’09 as new product cycles and customer launches kicked in, specifically in our server, storage and graphics markets. We are continuing to get very good visibility from our customers and are receiving orders to reflect reality in the current economic environment. I continue to be optimistic that we will see growth in Q4 and in 2010 as new products and customer platforms continue to launch and the economy continues to recover.
Now I’d like to talk about our four focused markets and our current and future business opportunities within those markets. The current macroeconomic situation appears to be improving and should have an additional positive impact on our business. And our long term growth and profitability prospects remain very strong as we stick to our proven strategy of gaining market share, adding new customers and further penetrating our existing base of customers as new products and platforms are launched in these four target markets.
In server and storage we indicated in our last call that our revenue would be up in servers and storage in Q3. Revenue was up 18% from Q3 ’09 due to the continuation of the Intel Thurley platform ramp and the new AMD six core Opteron Refresh. We expect to see continued growth in servers and storage in Q4 as our customers continue to launch new products based on these two platforms.
Our fifth generation products for the Intel Thurley and AMD based platforms have been well received because our customers increased their total system efficiency demands and added more memory on these new servers to support the latest multi-core processors. This new generation of products enable us to provide the highest efficiency requirements in the industry while saving considerable board area.
At the last Q2 earnings call I explained how we expanded our position on HP servers with the launch of their new G6 server platforms where we are providing integrated power solutions. Many new rack and blade server based models launched in the first half ’09 using Volterra power management solutions. These high-volume, high-density server models at HP allowed us to expand our server market share at the two largest enterprise server companies, delivering the best energy savings in the industry to their customers.
In Q3 we continued this expansion with HP’s launch of their new G6 AMD Opteron brand of servers. HP launched five of these new servers, all powered with Volterra integrated power solutions.