FalconStor’s So-So Earnings Call for Innovation in 2011
Disk-base data protection company FalconStor had its earnings call this week, which reflects an earlier decline for the company, but also some optimistic growth outlook throughout Q4, 2011. The company reports a record of $26.5 million in revenues in the fourth quarter, which represents an increase of 18% compared to the same period in 2009, with $22.4 million. Overall however, the company reported a yearly revenue decline of 7% from $89.5 million last year to $82.8 million in 2010.
“The Company closed the year with $37.3 million in cash, cash equivalents, and marketable securities. Cash flow from operations for the fourth quarter of 2010 was $4.2 million and for the full year 2010 cash flow from operations was ($1.7) million. Deferred revenue at December 31, 2010 was $23.5 million, an increase of 6% compared with the same period a year ago.”
FalconStor’s 7% yearly revenue fall can be attributed to a number of factors, most notably due because of weak Q3 earnings and the circumstances involving former CEO and President ReiJane Huai’s public resignation. FlaconStor however is doing well with its recovery efforts so far, and it even had a new product launch this week. The company announced its new cloud data recovery product RecoverTrac, which offers physical/ virtual environment DR automation.
The recovery efforts are being led by newly installed CEO James McNiel, who’s had to do a bit of clean up before shifting FalconStor in a revised direction. “We’re changing our parenting style,” he tells us in a brief interview. One of the pivot points for McNiel and FalconStor’s new charge is maturing from a startup mentality, and improving the company from the inside out. “One of my focuses is on our employees, and we place a lot of emphasis on open communication and sharing the vision, and understanding what the overall culture is.”
It’s all part of McNiel’s larger goals to leverage the innovation FalconStor is known for, from a product perspective. Assessing new products on an internal level has been an introspective way to address their customer’s needs. Doing things like force-ranking usability points for its product line, FalconStor’s been able to improve its corporate structure as well as its services. It’s getting FalconStor back on track, with McNiel telling us of plans for several releases in 2011, including their Bluestone technology sometime in the third quarter.
FalconStor may be growing, but so are its competitors. EMC also recently had its earnings call and expects revenues to grow by 65% by 2014. Microsoft has also seen some immense growth for Q4, particularly on the mobile front.
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