Sun Microsystems Q107 Quarterly Results Release: Investor Relations
Sun Microsystems Q107 Quarterly Results Release: Investor Relations
Sun Microsystems Q107 Quarterly Results Release: Investor Relations
Speakers
Bret Schaefer VP, Investor Relations Jonathan Schwartz CEO & President Mike Lehman CFO & Executive VP, Corporate Resources
Slide 2
* Total Operating Expenses includes SG&A, R&D, Purchase IPRD, Restructuring, & Intangible Impairment charges.
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Slide 7
Our Strategy
Software Servers
Network.com
Services
Storage
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Revenue
PRODUCTS/SERVICES
Year/Year Growth % $4,000
29% 17% 4% (4)% (1)% 36% 35% 21% 36% 34% 17% 39%
Revenue (millions)
4% 36%
(2)% 35%
4% 37%
37%
$1,000
66%
64%
65%
64%
65%
63%
63%
64%
66%
61%
$0
Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
Products Revenue (% of Total) Services Revenue (% of Total)
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Revenue
P ROD UC TS /S E RV IC ES
Year/Year Growth %
70% 60%
63%
50%
43% 42% 39% 41% 40% 40% 35%
47%
44% 45% 43% 31% 23% 21% 15% 6% 1% 1% -5% -19% -29% -30% -9% -11% 8% 6% 7% 7% 7% 6% 6% 7% 4% 5% 5% 3% 3% 2% 0% -2% 0% -3% -5% -7% -10% -13% 15% 31% 25% 20% 15%
25% 23%
-16% -20%
-48% -53%
Q100 Q200 Q300 Q400 Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
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Services Revenue
TOTAL SERVICES REVENUE
Year/Year Growth % of Total Revenue $1,500
23%
Revenue (millions)
20% 21%
6% 23%
0% 22%
0% 26%
7% 18%
22%
$500 76% 78% 77% 78% 74% 82% 78% 79% 76% 79%
$0
Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
Support Services Revenue (% of Total Services) Client Solutions/Edu Services Revenue (% of Total Services)
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Gross Margin
PRODUCTS/SERVICES
42.9% 42.2%
Products Margin up 1.6 pts Q/Q Services Margin down 1.2 pts Q/Q Total Margin up 0.7 pts Q/Q
42.6% 43.0% 42.8% 43.5%
$2,000 39.4%
1,639
$1,500
1,421 1,224
37.9%
1,128
42.1%
1,198
42.3%
1,087
40.1%
1,231 1,202
41.5% 45.4%
1,367
1,388
46.1% 44.9%
43.6% 42.4%
$1,000
$500 40.1% 43.4% 42.1% 42.1% 41.4% 43.3% 42.0% 43.4% 41.1% 42.7%
$0
Q404
Q105 * Q205
Q305
Q405
Q106
Q206
Q306
Q406
Q107
Gross Margin %
Fiscal Quarter
($ millions)
$958
$300 $518 $541 $523 $543 $473 $416 $447 $450 $472 $439 $0 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
R&D SG&A Slide 13
* Total Operating Expenses differ from SG&A and R&D Expenses because Total Operating Expenses includes IPRD, Restructuring, & Intangible Impairment charges.
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Demand Metrics
Book to Bill Ratio & Backlog
Balance (millions)
Q106* 0.97
Q406* 1.04
Q107 0.96
14%
12% 10% 2%
14%
10%
$1,408
$1,851
$1,869
Fiscal Quarter
Includes STK & SBYN balance commencing in Q106
* Q106/Q406 Book to Bill & Backlog is based on Sun Standalone only (excludes restatement for STK & SBYN) ** Book to Bill Ratio assumes Services ratio 1:1. *** Services Backlog based on 3 month backlog horizon
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Deferred Revenue
PRODUCTS/SERVICES
Year/Year Growth % $2,500 14% 1% 12% 10% 2%
Revenue (millions)
79%
75%
78%
74%
75%
74%
75%
22%
24%
21%
25%
22%
26%
25%
26%
25%
Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
Products Deferred Revenue (% of Total) Services Deferred Revenue (% of Total)
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Revenue - Geo
U.S./In t'l Americas/EMEA/ APAC
$4,000
U.S. up 12% Y/Y Int'l Americas up 54% Y/Y EMEA up 17% Y/Y APAC up 20% Y/Y 3,828
3,110
$3,000
16% 35% 5% 37% 4% 44% 42%
3,337 2,628
17%
2,841 2,627
18% 37% 6% 40% 19% 38% 5% 37%
2,974
17%
3,177
17%
17%
3,189
17%
2,726
17%
16%
$2,000
38% 6% 40%
$1,000
40%
$0
Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
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Appendix
18
Metrics
80 60 40 20 0
46%
16% (3)%
8%
9% 2%
14% (6)% 6% 7%
Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter
53% 105% 327% 36% 160% 197% 109% 93% 81% 54%
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quarter of fiscal 2006, and our gross margin remained strong, affirming Sun's business strategy and focus on innovation. Announced agreement to acquire identity management implementation specialist Neogent Rose to #3 in the IDC worldwide server report and grew server market share and server factory revenue versus competitors; maintained #1 position in worldwide UNIX server revenue and shipments (Q2CY06) Grew faster than HP, IBM, EMC and Dell in the disk storage market and extended our lead in the tape storage market, according to IDC (Q2CY06) 51% of purchasers from the Try and Buy evaluation program self identified as new customers to Sun
Architecture and composite applications and create the Accenture Innovation Center for Sun Solutions > Honored with the top prize in The Wall Street Journal 2006 Technology Innovation Awards for Dynamic Tracing (DTrace) technology, a key feature in the SolarisTM 10 Operating System (OS) > Ranked sixth in the 2006 InformationWeek 500 and won the InformationWeek Supply Chain Innovation award; Also recognized by Procuri for "Excellence in Strategic Sourcing" > Recognized at the the International SuperComputing Conference for the 7th largest supercomputer in the world, located at the Tokyo Institute of Technology
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Sun Fire x64 and CoolThreadsTM server line were each placed in the visionary quadrant in Gartner's latest Magic Quadrant reports for both Application Servers and Online Transaction Processing DBMS Servers > JavaTM technology listed as number 5 in an InformationWeek cover story titled "What's The Greatest Software Ever Written?"
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server in a single 4U chassis Introduced the Sun BladeTM 8000 Modular system, which allows customers to cut server and service costs by up to 60%, power and cooling costs by up to 62%, and footprint in half versus competing rackmount servers Introduced the Sun Fire X4500 Server, new hybrid storage and server offering optimized for Web 2.0 environments, that delivers the remarkable performance of a four-way x64 server and ultra-high storage density with up to 24 TB in 4U of rack space Announced systems, storage and software products for Solaris 10 Operating System that demonstrate Sun's ability to help customers improve efficiency and reduce costs, while protecting their data, including Solaris Trusted Extensions Added 16,000 new Java Enterprise System infrastructure software subscribers, a 25% increase from Q1FY06, to approach 1.2 million subscribers.
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(x86, 2 chip) Tops Woodcrest by 38% Sun Fire X2200 M2 Sun Best x4600 Fire SPECfp_rate2000 (x86, single-node SPECjAppServer2004 Best 2 chip) Tops Woodcrest by 38%
Sun Fire V890 Sun Tops x4600 Fire on Domino 7 R6iNotes Notesbench Best single-node SPECjAppServer2004 * See Benchmark Disclosures at the end of this presentation Sun Fire V890 Tops on Domino 7 R6iNotes Notesbench
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15.5%
Based on worldwide total server revenue market share and revenue. Source: IDC's Worldwide Quarterly Server Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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0.7
13.4%
-0.4
Based on worldwide total disk storage revenue market share and revenue. Source: IDC's Worldwide Quarterly Disk Storage Systems Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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48.4%
Based on worldwide x86 server revenue market share and revenue. Source: IDC's Worldwide Quarterly Server Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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3.7
43.2%
Based on worldwide user provisioning revenue market share and revenue. Source: August 2006 Gartner Dataquest Worldwide Market Share: User Provisioning, CY 2005; Slide To read Gartner market share information, visit: http://www.gartner.com. Sun calculated Y/Y Revenue Growth % and Market Share Point Change.
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Sun Solaris
40,000 20,000 0
37,322 32,289 30,536 32,15633,307 32,252 29,681 32,635 29,080 33,228 27,10427,692 29,233 26,071 28,777 24,113
Q204
Q304
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Calendar Quarter
Source: IDCs Worldwide Quarterly Server Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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Sun's Worldwide Total Server Shipments Continued to Grow Y/Y and Q/Q
110,000 100,000 90,000 80,000 70,000 60,000 50,000
81,050 83,911 76,579 95,512 95,415 107,064
Q2 CY04
Q3 CY04
Q4 CY04
Q1CY05
Q2CY05
Q3CY05
Q4CY05
Q1CY06
Q2CY06
Calendar Quarter
Source: IDCs Worldwide Quarterly Server Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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Q304
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Calendar Quarter
IBM Dell HP Fujitsu/Fujitsu Siemens Sun
Calendar Quarter
Source: IDCs Worldwide Quarterly Server Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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Q304
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Calendar Quarter
Sun NCR IBM HP Fujitsu/Fujitsu Siemens
0% Q204
Q304
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Calendar Quarter
Sun HP IBM Dell Apple
Source: IDCs Worldwide Quarterly Server Tracker, August 2006 (Q2CY06 corresponds to Sun's Q4FY06 as market share data lags one quarter)
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Fiscal Quarter
Cumulative Downloads
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Sun Success Metrics Sun Continued to Power Network Services; Drove System Infrastructure Needs
2 Billion Java Card Technology Cumulative Deployments
TM
2,000 1,750 1,500 1,250 1,000 750 500 250 0 Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
+129 +42
Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107
Fiscal Quarter * Q107 Total includes 628K Java ES (Suites); 564K Core JES
TM
2004
2005
2006
Source: Java.com statistics on webapps # of users who initiated downloads September 2006
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LHS BSCS iX Wireless Billing E25K 1,264,490 invoices/hr, 72 1.8 GHz US-IV+,578 GB, StoreEdge 3510FC, Solaris 10; HP Integrity Superdome 1,000,000 invoices/hr. See www.lhsgroup.com. SPEC, SPECjAppServer reg tm of Standard Performance Evaluation Corporation. See www.spec.org as of 09/13/06. Sun Blade 8000 (10 Sun Blade X8400, 80 cores, 40chips) and 1 Sun Fire E6900 (48 cores, 24 chips) 6662.98 SPECjAppServer2004 JOPS@Standard. 20 IBM HS20 (40 cores, 40 chips) and IBM p5 570 (16 cores, 8chips) 4368.02 SPECjAppServer2004 JOPS@Standard. 4 HP rx6600 (32 cores, 16 chips) and HP 9000 Superdome (64 cores, 32 chips) 4915.49 SPECjAppServer2004 JOPS@Standard. SPEC, SPECfp reg tm of Standard Performance Evaluation Corporation. See www.spec.org as of 8/15/06. Sun Fire X2200 (4 cores, 2 chips, Solaris 10), 117 SPECfp_rate2000. HP DL360 G5 (4 cores, 2 chips, RHEL), 84.7 SPECfp_rate2000. SPEC, SPECjAppServer reg tm of Standard Performance Evaluation Corporation. See www.spec.org as of 8/16/06. One Sun Fire X4600 (16 cores, 8 chips) 1000.86 SPECjAppServer2004 JOPS@Standard. NotesBench R6iNotes Sun Fire V890 (8 chips, 2 cores/[email protected] USIV+, 64GB), 4 Partitions, Solaris 10, Lotus Domino 7.0, 40000 users, $7.19 per user, 33862NotesMark tpm, 324ms avg rt. See www.notesbench.org as of 8/11/06.
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