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Investor Presentation Suresh Vasudevan, Chief Executive Officer Anup Singh, Chief Financial Officer January 2014
Safe Harbor
1
This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently
available to management. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information concerning our
business plans and objectives, potential growth opportunities, competitive position, industry environment and potential market opportunities.
Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors including, but not limited to, those related to our future financial performance,
market acceptance of our solutions, our ability to increase sales of our solutions, including to attract and retain customers and to selling additional solutions to our existing customers, our ability
to develop new solutions and bring them to market in a timely manner, pricing pressure (as a result of competition or otherwise), our ability to maintain, protect and enhance our brand and
intellectual property, and our ability to continue to expand our business and manage our growth. Moreover, we operate in very competitive and rapidly changing environments, and new risks
may emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Further information on these and other factors that
could affect our financial results are included in our filings we make with the Securities and Exchange Commission, and may cause our actual results, performance or achievements to differ
materially and adversely from those anticipated or implied by our forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although our management believes that the expectations reflected in our forward-looking statements are
reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will be achieved or occur.
Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any
forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations, except as required by law.
In addition to GAAP financial information, this presentation includes certain non-GAAP financial measures. The non-GAAP measures have limitations and you should not consider them in
isolation or as a substitute for our GAAP financial information. There are limitations to the use of non-GAAP measures. For example, bookings and free cash flow are not substitutes for
revenues or cash provided by operations. In addition, non-GAAP operating expenses exclude the impact of stock-based compensation expense, which is a recurring expense for us. See the
Appendix for a reconciliation of these non-GAAP financial measures to their nearest GAAP equivalent.
Founding Thesis: Opportunity for a Ground-Up Design of Storage
2
DAS Monolithic Storage
Modular Storage
Today 1980s 1990s 2000s
Cloud Flash
Suresh
Vasudevan
CEO
Varun Mehta
Founder, VP of
Engineering
Umesh
Maheshwari
Founder, CTO
Investment Highlights and Nimble Storage Snapshot
3 3
Disruptive platform built on two foundational innovations: CASL, flash-optimized file system
InfoSight, cloud-based management
Significant and broad-based traction Diverse base of enterprises and service providers
Broad set of workloads
$18B market opportunity*
Exceptional revenue growth with scalable margin profile
Experienced technology and management team
174
780
2,121
Q3FY12 Q3FY13 Q3FY14
Cumulative Customer Base
$1.7
$14.0
$53.8
$33.7
$84.0
FY11 FY12 FY13 9MoFY13 9MoFY14
+284%
Revenue Growth
+150%
*Source: Based on company estimates from IDC and Gartner data
Need for Flash Varies Greatly
Analytics
VDI
File/Print
OLTP
Archives
Flash and Disk are Complementary
Component Flash Disk
Random IOPS/$ 30-100X 1X
Sequential IO/$ 1X 3X
Capacity/$ 1X 15X
Endurance Poor Proven
Low High
The key is to efficiently optimize both performance and capacity, and be flexible and
media-agnostic as flash and disk evolve over time
4
Enterprises Today are Overwhelmed
5
20X Compute
10X Network
Poor Application Performance
Storage Same
40-45%*
CAGR
Increasing Demands of Data Growth
Cloud Computing Virtualization Big Data Social and Collaboration
Exacerbating Trends
Mobility
VM / Application Data Management Complexity
CRM
ERP
CRM
ERP
*Source: IDC, The Digital Universe in 2020, sponsored by EMC
CASL Flash-optimized
file system software
InfoSight Cloud-based
management
Our Innovative Platform
6
Rapid backup
and recovery
Non-disruptive, flexible
scaling to massive scale
Predictive support and
operational simplicity
Significantly better
performance/$ and capacity/$
Integrated Protection Scale-to-Fit Ease of Operations Efficiency
Key Decisions in
Ground-Up Design
CASL: Designed from the Ground Up
How do we:
Leverage flash for
performance?
Leverage disk for capacity?
Be media-agnostic and
flexible as the relative merits
of flash and disk evolve?
Leapfrog incumbents on data
management?
7
Snapshots
Replication
Compression Data Management
Functionality
Application
Integration Hypervisors
Operating
Systems
Cloning
Thin Provisioning
Multi-tenancy
File System
Software
Traditional File Systems / Tiering Nimble Advantage CASL Innovations
CASL: A Breakthrough File System
8
Uses 30-70% less disk and
flash resources
Inline Compression,
using variable blocks
Fixed blocks: No compression
Fast random writes need a flash tier
Uses low-cost HDDs to deliver
SSD-like write performance
Inline Serialization of
all incoming write IO
Disk
SSD (Flash) Cache
More Disk
More Flash
Dynamic Caching to
serve reads from flash Uses substantially less, low-cost flash to accelerate reads
Fast reads by migrating between tiers wastes flash
Copy-based snapshots waste capacity and degrade performance
Pointer-Based
Snapshots
Integrated, rapid backup
and recovery
Non-disruptive scaling
in least-cost increments
Scale-to-Fit: Scale-up,
deep and scale-out Scale-Up OR Limited Scale-Out
CASL is more performance and capacity efficient and easy to scale, while delivering integrated data protection
Transforming Storage Efficiency at a Large Bank
9
Storage costs were 30% of the capital budget
Core project drivers:
• Performance scaling
• Storage budget
• Datacenter footprint
Challenges
1.5x usable capacity and 50%
lower capital costs
10x lower power and cooling costs
Dramatically simpler storage
management
Phase 1: Exchange ½ Rack
6 Racks
2.5x performance and 2x usable
capacity at much lower capital costs
75% lower power and cooling costs
Dramatically simpler storage
management
Phase 2: SQL
Databases ¾ Rack
3 Racks
Competitor Hybrid
Disk-Flash Solution Nimble Advantage Nimble VS.
Nimble chosen as the platform for all 11 sites
Each site protected with hourly snapshots for rapid recovery
Data replicated between offices for cost-effective and simple DR
Significant savings on storage and bandwidth
Nimble Approach
Transforming Data Protection at a Global Consulting Firm
10
Boston Data Center
Chicago Data Center
9 Remote Sites
Inadequate data protection in 9 remote sites:
• Tapes for backup
• Offsite tape copies for disaster recovery
Aging storage infrastructure in their main data centers: Boston and Chicago
Challenges
Rethinking infrastructure at all of their 11 sites
Traditional Storage Management is Inefficient and Expensive
11
Vendor Support Customers
Q&A
Diagnostics
Logs
? # !
Existing Approach
Traditional Storage Management is Inefficient and Expensive
12
In a connected world
why can’t vendors
proactively monitor
customer deployed
systems?
With modern data
analytics tools
can vendors predict
and prevent problems
before they occur?
x1,000s of Customers
? ! #
Existing Approach
Vendor
InfoSight: Cloud-Based Management
13
Between 12 and 70M sensors per array, daily
Data collected every 5 minutes and on-demand
Comprehensive
Telemetry
Systems modeling
Correlations, trending, and projections
Analysis and
Automation
Leveraging pervasive network connectivity and big data analytics to automate support and enable cloud-based management
Vast majority of cases opened by Nimble
Secure, on-demand system access
Proactive Wellness
Monitoring and alerting
Visualization, capacity planning, performance management
Storage Management
SaaS Offering
Nimble Approach Customer Benefits
InfoSight Impact In Q3FY14
14
Predicting Customers’ Storage Expansion Needs
customers
expanded capacity
106 20 customers
expanded flash
7 customers
upgraded controllers
Proactive Support Prevents Problems
92%
82%
of the cases
automatically
opened by Nimble
of support cases
auto-closed
by Nimble
Product Insights Enhance Competitiveness
CS210 platform enhancements
Numerous performance enhancements
Market Response Has Led to Rapid Growth in Our Installed Base
15
Q3FY12 Q3FY13 Q3FY14
Q3FY12 Q3FY13 Q3FY14
+235%
Cumulative Customer Base Large Enterprises*
Service Providers
174
780
2,121
Q3FY12 Q3FY13 Q3FY14
*Company estimates of Global 5,000 customers
+292%
Broad Appeal
16
Q3 Diversified Workloads*
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
VMware SQL Exchange File / Print VDI Sharepoint HyperV Oracle Web Apps
7% Manufacturing
7% Healthcare 7%
Services
9% State/Local
Gov’t
11% Education
13% Financial Services
13% High Tech 19%
Other
4% Legal
4% Energy
6% Service Provider
9 Months FY14 Diversified Market Verticals
*Y axis represents % of systems in the field that handle this type of workload
Land and Expand Strategy: 2-Year Bookings After Initial Sale
17
Name Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014
Customer1
Customer2
Customer3
Customer4
Customer5
Customer6
Customer7
Customer8
Customer9
Customer10
Customer11
Customer12
Customer13
Customer14
Customer15
Customer16
Customer17
Customer18
Customer19
Customer20
Customer21
Customer22
Customer23
Customer24
Customer25
Customer26
Customer27
Customer28
Customer29
Customer30
Customer31
Customer32
Customer33
Customer34
Customer35
Customer36
Customer37
Customer38
Customer39
Customer40
Customer41
Customer42
Customer43
Customer44
Customer45
Customer46
Customer47
Customer48
Customer49
Customer50
Initial Sale Total: Year 1 and 2
2.23X
1X
Top 50 Customers*
Initial Sale Total: Year 1 and 2
4.36X
1X
Average: All Customers
Note: Bookings defined as a purchase order received; statistics as of Oct 31, 2013
* Top 50 of all customers that have been Nimble Storage customers for 4 or more quarters; Of the 50, 19 customers have 8 quarters of history, as described in the Registration Statement
Highly Leveraged Go to Market Approach
18
>780 cumulative channel partners
813 channel sales reps and
channel SEs trained in
the first 9 months of FY14
50% of opportunities in the
first 9 months of FY14
originated by channel 85
328
786
Q3FY12 Q3FY13 Q3FY14
Competitive Landscape
Tape; Low-cost RAID; NAS; Object Storage
Flash-Optimized Hybrid
Flash in Server
All-Flash Arrays
Tape; Low-cost RAID/NAS
Monolithic (e.g., VMAX)
Archives
Mainstream Applications
Real-Time Analytics
Modular
Legacy
VDI
File/Print
OLTP
Modern
Dell EQL/CML
EMC VNX
NetApp FAS
HP 3PAR
19
Exchange
CRM
SQL
Financial Highlights
Strong revenue growth with an attractive and expanding margin profile
Significant “land and expand” opportunity
Investments to expand differentiation and capitalize on large market opportunity
Improving operating leverage and cash flow from operations
Attractive long term financial model
20
$8.2 $11.0
$14.6
$20.2 $22.1
$28.5
Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14
Product Revenue Support and Service Revenue
Quarterly Revenue
Rapid Revenue Growth
21
Annual and Last 9 Months Revenue*
$33.4
$1.7
$14.0
$53.8
$33.7
FY11 FY12 FY13 9MoFY13 9MoFY14
$84.0
Product Revenue Support and Service Revenue
+ 284%
+ 150%
*Fiscal year ends on January 31
Growth Drivers
22
174
780
2,121
Q3FY12 Q3FY13 Q3FY14
Cumulative Customer Base
Customers
% New vs. Existing Customer Bookings
100 54
69
0
100
200
Initial Sale Year 1 Year 2 Total
2-Year Bookings* After Initial Sale Average Across All Customers
223
New customers
Existing customers
68%
32%
9MoFY14
Land and Expand
74%
9MoFY13
26%
*Defined as a purchase order received; statistics as of Oct 31, 2013
18% Growth vs. PY
Q3 FY14 Average Deal Size
Sales
% of Bookings by Deal Size
61% 29%
9MoFY14
72%
24%
9MoFY13
Deal Size
4%
10%
>$250k
<$100k
$100k - $250K
Attractive Gross Margin Profile
23
55.5%
62.3%
64.5%
FY12 FY13 9MoFY14
65.2% 67.5%
30.6%
36.9%
9MoFY13 9MoFY14
Product Gross Margin Support and Service Gross Margin
Annual and Last 9 Months Gross Margin* Product and Support and Service Gross Margin*
*Gross Margin is a Non-GAAP financial measure, see appendix for reconciliation
$13
$39 $49
FY12 FY13 9MoFY14
$8 $15
$22
FY12 FY13 9MoFY14
Investing Aggressively for Continued Growth
51
157
Q4FY12 Q3FY14
Head Count
90% 72%
59%
FY12 FY13 9MoFY14
% of Revenue Head Count
24
$ Millions
$ Millions
75
276
Q4FY12 Q3FY14
Research and Development*
Sales and Marketing*
55%
28% 26%
FY12 FY13 9MoFY14
% of Revenue
~3X
~3X
*Research and Development and Sales and Marketing are Non-GAAP financial measures, see appendix for reconciliation
-114%
-47%
-29%
FY12 FY13 9MoFY14
Demonstrating Operating Leverage
25
v
Cash Flow From Operations and Free Cash Flow % of Revenue **
Improving Operating Margin*
Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14
-75%
-1%
-83%
-15%
Cash From Operations as% of Revenue
Free Cash Flow as % ofRevenue
*Operating Margin is a Non-GAAP financial measure, see appendix for reconciliation **Free cash flow is defined as net cash from operating activities plus cash used to purchase property and equipment
Business Model
26
FY13 9 Months FY14 Long-Term Model
Gross Margin* 62% 65% 63%–65%
R&D as % of Revenue* 28% 26% 11%–13%
S&M as % of Revenue* 72% 59% 28%–31%
G&A as % of Revenue* 9% 9% 5%–6%
Non-GAAP Operating Margin* -47% -29% 16%–20%
*Gross Margin, R&D, S&M, G&A and Operating Margin are Non-GAAP financial measures, see appendix for reconciliation
Sales and Marketing Invest aggressively to deepen
sales coverage within existing territories, expand internationally, and drive continued
channel leverage
Customers Continue expansion into
large enterprise and service provider customers
People Build best-in-class company
founded on recruiting and retaining the industry’s best talent
Our Strategic Priorities
27
Technology Platform Build on our broad technology
foundation to further extend our differentiation, broaden feature coverage,
and further expand our target market
Positioned To Lead In the Flash-Optimized Storage Era
28
1980s DAS
1990s Monolithic Storage
2000s Modular Storage
Today Flash-Optimized Storage
Providing Our Customers with the Industry’s Most Efficient Data Storage Platform
Appendix
GAAP to Non-GAAP Reconciliation
30
($ in thousands) FY12 FY13 9MoFY13 9MoFY14
GAAP Product Gross Profit 7,880 32,499 20,282 50,955
% GAAP Product Gross Margin 60.1% 65.3% 65.1% 67.4%
(+) Stock-based Compensation 10 48 19 130
Non-GAAP Product Gross Profit 7,890 32,547 20,301 51,085
Non-GAAP Product Gross Margin 60.2% 65.4% 65.2% 67.5%
GAAP Support and Service Gross Profit (145) 891 695 2,828
% GAAP Support and Service Gross Margin -16.1% 21.9% 27.5% 33.8%
(+) Stock-based Compensation 31 114 77 258
Non-GAAP Support and Service Gross Profit (114) 1,005 772 3,086
Non-GAAP Support and Service Gross Margin -12.7% 24.7% 30.6% 36.9%
GAAP Gross Profit 7,735 33,390 20,977 53,783
% GAAP Gross Margin 55.2% 62.0% 62.3% 64.0%
(+) Stock-based Compensation 41 162 96 388
Non-GAAP Gross Profit 7,776 33,552 21,073 54,171
% Non-GAAP Gross Margin 55.5% 62.3% 62.6% 64.5%
GAAP to Non-GAAP Reconciliation
31
($ in thousands) FY12 FY13 9MoFY13 9MoFY14
($ in thousands) 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY14
GAAP Research and Development 7,903 16,135 11,015 23,737
(-) Stock-based Compensation 268 874 579 1,695
Non-GAAP Research and Development 7,635 15,261 10,436 22,042
GAAP Sales and Marketing 12,863 39,851 24,362 51,330
(-) Stock-based Compensation 244 1,029 672 1,971
Non-GAAP Sales and Marketing 12,619 38,822 23,690 49,359
GAAP General and Administrative 3,756 5,168 3,238 8,472
(-) Stock-based Compensation 267 539 375 993
Non-GAAP General and Administrative 3,489 4,629 2,863 7,479
GAAP Operating Expenses 24,522 61,154 38,615 83,539
(-) Stock-based Compensation 779 2,442 1,626 4,659
Non-GAAP Operating Expenses 23,743 58,712 36,989 78,880
GAAP Operating Loss (16,787) (27,764) (17,638) (29,756)
% of Revenue -120% -52% -52% -35%
(+) Stock-based Compensation 820 2,604 1,722 5,047
Non-GAAP Operating Loss (15,967) (25,160) (15,916) (24,709)
% of Revenue -114% -47% -47% -29%
Net Cash Used in Operating Activites (6,094) (3,648) (5,115) (3,898) (4,875) (3,780) (272)
% of Revenue -75% -33% -35% -19% -22% -13% -1%
(-) Property and Equipment, Net 658 670 1,202 1,424 1,884 1,515 4,726
Free Cash Flow (6,752) (4,318) (6,316) (5,322) (6,759) (5,295) (4,998)
% of Revenue -83% -39% -43% -26% -31% -19% -15%