EMC Corporation today reported record financial results for both the fourth-quarter and full-year 2011. For the fourth quarter, the company achieved all-time record quarterly consolidated revenue, net income and EPS on a GAAP and non-GAAP basis and all-time record operating cash flow and free cash flow. Full-year 2011 results were highlighted by all-time record consolidated revenue, net income, EPS, operating cash flow and free cash flow that each exceeded prior company outlook. The results were also highlighted by all-time record quarterly and full-year gross margins on a GAAP and non-GAAP basis.
Fourth-quarter consolidated revenue was $5.6 billion, an increase of 14% compared with the year-ago quarter. Fourth-quarter GAAP net income attributable to EMC increased 32% year over year to $832.0 million. Fourth-quarter GAAP earnings per weighted average diluted share increased 31% year over year to $0.38. Non-GAAP1 net income attributable to EMC for the fourth quarter was $1.07 billion, an increase of 16% compared with the year-ago quarter. Fourth-quarter non-GAAP1 earnings per weighted average diluted share were $0.49, an increase of 17% year over year.
For the full-year 2011, consolidated revenue was $20.0 billion, an increase of 18% year over year; GAAP net income attributable to EMC increased 30% year over year to $2.5 billion; and GAAP earnings per weighted average diluted share were $1.10, up 25% year over year. Non-GAAP2 net income attributable to EMC for 2011 was $3.4 billion, an increase of 24% year over year, and non- GAAP2 earnings per weighted average diluted share were $1.51, an increase of 20% year over year.
During the fourth quarter, EMC generated operating cash flow and free cash flow3 of $2.2 billion and $1.9 billion, increases of 44% and 55% year over year, respectively. For 2011, EMC generated operating cash flow of $5.7 billion and free cash flow3 of $4.4 billion, increases of 25% and 29% year over year, respectively. For the quarter and full-year, EMC expanded GAAP and non-GAAP gross margin and operating margin percentages on a year-over-year basis. The company ended the year with $10.8 billion in cash and investments.
Joe Tucci, EMC Chairman and Chief Executive Officer, said, “EMC had a strong and record-breaking 2011. There’s no doubt that cloud computing is completely transforming the IT industry and that Big Data promises to have a similarly profound effect on transforming the way we work and live. Our customers and partners have these transformations in their sights and are embracing EMC’s vision, strategy and best-of-breed portfolio to capitalize on them and realize the full potential of their information assets.”
David Goulden, EMC Executive Vice President and Chief Financial Officer, said, “In 2011 we once again executed our triple play – simultaneously taking market share, reinvesting for growth and delivering improved earnings. With this momentum, we entered 2012 exceptionally well positioned to maintain our operational excellence, execute our growth strategy, and continue delivering our triple play results. We expect to grow over two times faster than our estimate of IT spending growth to achieve 2012 consolidated revenue of $22 billion, GAAP EPS of $1.24 and non-GAAP EPS of $1.70.”
Fourth-Quarter and Full-Year 2011 Highlights
For the fourth quarter, EMC’s Information Storage business increased revenue 12% year over year. Within this, EMC’s high-end Symmetrix storage product portfolio revenue increased 11% compared with the year-ago quarter and mid-tier storage products4 revenue grew 24% year over year. Fourth-quarter revenue from VMware (NYSE: VMW) increased 27% year over year and revenue from EMC’s RSA Information Security business grew 16% year over year.
Fourth-quarter highlights also included strong revenue growth for both the EMC VNX unified storage family, which was selected by nearly 2,000 new customers in the quarter, and the company’s Backup Recovery Systems (BRS) portfolio. Within the BRS portfolio, the combined annualized revenue run rate for EMC Data Domain and EMC Avamar in the quarter exceeded $2 billion. Additionally, revenue from EMC’s Isilon portfolio once again more than doubled year over year. During the quarter, EMC continued to experience strong customer demand for its consulting and professional services to help build out their cloud architectures, and for EMC Greenplum solutions to leverage their Big Data assets. Finally, VCE, the Virtual Computing Environment Company formed by Cisco and EMC with investments from VMware and Intel, continued to close in on the company’s billion-dollar annualized revenue run-rate target as customer adoption of Vblock Converged Infrastructure Platforms increased significantly on a year-over-year basis.
EMC’s consolidated fourth-quarter revenue from the United States reached an all-time record of $3.0 billion, an increase of 16% year over year, representing 54% of consolidated fourth-quarter revenue. Revenue from EMC’s business operations outside of the United States reached an all-time record $2.6 billion, an increase of 12% year over year, representing 46% of consolidated fourth-quarter revenue. Within this, revenue increased 6%, 26% and 26% year over year, respectively, in EMC’s Europe, Middle East and Africa; Asia Pacific and Japan; and Latin America regions.
Throughout 2011, EMC strengthened its technology leadership and services expertise in cloud computing and Big Data, advanced its competitive lead, and gained market share. Numerous strategic initiatives contributed to these achievements, including sustained aggressive investment in research and development, totaling 11% of annual consolidated 2011 revenue. The introduction of new products such as the EMC VNX unified storage and EMC Symmetrix VMAX families and products from EMC’s Isilon, Data Domain and Avamar portfolios contributed to market share gains and the expansion of the company’s addressable market in 2011. Additionally, EMC further strengthened alignment with strategic partners as demonstrated by the strong momentum of VCE and expanded relationships with technology, solutions and service providers around the world. In 2011, more than 1,700 partners began selling EMC products for the first time, significantly expanding the company’s partner ecosystem.