Investor Presentation

Transcription

1 Investor Presentation Suresh Vasudevan, Chief Executive Officer Anup Singh, Chief Financial Officer As of February 27, 2014

2 Safe Harbor 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 Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information concerning our financial outlook, 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, global economic conditions 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. 1

3 Founding Thesis: Opportunity for a Ground-Up Design of Storage Umesh Maheshwari Founder, CTO Suresh Vasudevan CEO Varun Mehta Founder, VP of Engineering DAS Monolithic Storage Modular Storage Flash Cloud 1980s 1990s 2000s Today 2

4 Investment Highlights and Nimble Storage Snapshot Disruptive platform built on two foundational innovations: CASL, flash-optimized file system InfoSight, cloud-based management $18B market opportunity* Significant and broad-based traction Diverse base of enterprises and service providers Broad set of workloads Exceptional revenue growth with scalable margin profile Experienced technology and management team *Source: Based on company estimates from IDC and Gartner data Cumulative Customer Base 2,645 1, FY12 FY13 FY14 Revenue Growth ($M) +134 % $53.8 $14.0 $1.7 $125.7 FY11 FY12 FY13 FY14 3

5 Flash and Disk are Complementary The key is to efficiently optimize both performance and capacity, and be flexible and media-agnostic as flash and disk evolve over time Component Flash Disk Need for Flash Varies Greatly Random IOPS/$ X 1X Sequential IO/$ 1X 3X Capacity/$ 1X 15X Endurance Poor Proven Analytics VDI File/Print OLTP Archives Low High 4

6 Enterprises Today are Overwhelmed Exacerbating Trends Virtualization Cloud Computing Mobility Big Data Social and Collaboration Poor Application Performance Increasing Demands of Data Growth VM / Application Data Management Complexity Compute Network Storage 20X 10X Same %* CAGR CRM ERP ERP CRM *Source: IDC, The Digital Universe in 2020, sponsored by EMC 5

7 Our Innovative Platform CASL Flash-optimized file system software InfoSight Cloud-based management Efficiency Scale-to-Fit Integrated Protection Ease of Operations Significantly better performance/$ and capacity/$ Non-disruptive, flexible scaling to massive scale Rapid backup and recovery Predictive support and operational simplicity 6

8 CASL: Designed from the Ground Up Operating Systems Hypervisors Replication Snapshots Compression Cloning Thin Provisioning Multi-tenancy File System Software Application Integration Data Management Functionality Key Decisions in Ground-Up Design 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

9 CASL: A Breakthrough File System Traditional File Systems / Tiering CASL Innovations Nimble Advantage Fixed blocks: No compression Inline Compression, using variable blocks Uses 30-70% less disk and flash resources Fast random writes need a flash tier Inline Serialization of all incoming write IO Uses low-cost HDDs to deliver SSD-like write performance Fast reads by migrating between tiers wastes flash More Flash More Disk Dynamic Caching to serve reads from flash SSD (Flash) Cache Disk Uses substantially less, lowcost flash to accelerate reads Copy-based snapshots waste capacity and degrade performance Pointer-Based Snapshots Integrated, rapid backup and recovery Scale-Up OR Limited Scale-Out Scale-to-Fit: Scale-up, deep and scale-out Non-disruptive scaling in least-cost increments CASL is more performance and capacity efficient and easy to scale, while delivering integrated data protection 8

10 Transforming Storage Efficiency at a Large Bank Challenges Competitor Hybrid Disk-Flash Solution VS. Nimble Nimble Advantage Storage costs were 30% of the capital budget Core project drivers: Performance scaling Storage budget Datacenter footprint 6 Racks Phase 1: Exchange ½ Rack 1.5x usable capacity and 50% lower capital costs 10x lower power and cooling costs Dramatically simpler storage management 3 Racks Phase 2: SQL Databases ¾ Rack 2.5x performance and 2x usable capacity at much lower capital costs 75% lower power and cooling costs Dramatically simpler storage management 9

11 Transforming Data Protection at a Global Consulting Firm Rethinking infrastructure at all of their 11 sites Challenges Aging storage infrastructure in their main data centers: Boston and Chicago Nimble Approach Inadequate data protection in 9 remote sites: Tapes for backup Offsite tape copies for disaster recovery 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 9 Remote Sites Boston Data Center Chicago Data Center 10

12 Traditional Storage Management is Inefficient and Expensive Existing Approach!? # Q&A Diagnostics Logs Vendor Support Customers 11

13 Traditional Storage Management is Inefficient and Expensive Existing Approach?! # Vendor 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 12

14 InfoSight: Cloud-Based Management Nimble Approach Comprehensive Telemetry Between 12 and 70M sensors per array, daily Data collected every 5 minutes and on-demand Analysis and Automation Systems modeling Correlations, trending, and projections Customer Benefits Storage Management SaaS Offering Monitoring and alerting Visualization, capacity planning, performance management Proactive Wellness Vast majority of cases opened by Nimble Secure, on-demand system access Leveraging pervasive network connectivity and big data analytics to automate support and enable cloud-based management 13

15 InfoSight Impact In 2HFY14 Proactive Support Prevents Problems Predicting Customers Storage Expansion Needs 92 % of the cases automatically opened by Nimble % of support cases auto-closed by Nimble customers expanded capacity customers expanded flash customers upgraded controllers 14

16 Market Response Has Led to Rapid Growth in Our Installed Base Cumulative Customer Base Number of Large Enterprises * 2, ,095 FY12 FY13 FY14 Number of Service Providers FY12 FY13 FY14 27 *Company estimates of Global 5,000 customers FY12 FY13 FY14 15

17 Broad Appeal FY14 Diversified Workloads * FY14 Diversified Market Verticals 90% 80% 20% Other 14% Service Provider & Services 70% 60% 50% 40% 30% 20% 4% Legal 4% Energy 8% Manufacturing 12% Financial Services 12% Hi Tech 10% 0% VMware SQL Exchange VDI File / Print Sharepoint HyperV Web Apps Oracle *Y axis represents % of systems in the field that handle this type of workload 8% Healthcare 8% State/Local Gov t 10% Education 16

18 Land and Expand Strategy: 2-Year Bookings After Initial Sale Name Q Q Q Q Q Q Q Q Q Q Q Q Q Q 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 Average: All Customers 2.16X 1X Top 50 Customers* 4.10X 1X Customer46 Customer47 Customer48 Initial Sale Total: Year 1 and 2 Initial Sale Total: Year 1 and 2 Customer49 Note: Bookings defined as a purchase order received; statistics as of Jan 31, 2014 Customer50 * Top 50 of all customers that have been Nimble Storage customers for 4 or more quarters; Of the 50, 18 customers have 8 quarters of history. 17

19 Highly Leveraged Go to Market Approach >900 cumulative channel partners channel sales reps and channel SEs trained in FY14 51% of opportunities in FY14 originated by channel FY12 FY13 FY14 18

20 Competitive Landscape Legacy Monolithic (e.g., VMAX) Modular Dell EQL/CML EMC VNX NetApp FAS HP 3PAR Mainstream Applications VDI File/Print OLTP Real-Time Analytics Exchange CRM SQL Modern Flash in Server All-Flash Arrays Flash-Optimized Hybrid Tape; Low-cost RAID/NAS Archives Tape; Low-cost RAID; NAS; Object Storage 19

21 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

22 Rapid Revenue Growth Annual Revenue ($M)* Quarterly Revenue ($M) $125.7 $ % $33.4 $28.5 $1.7 $14.0 $53.8 $8.2 $11.0 $14.6 $20.2 $22.1 FY11 FY12 FY13 FY14 Product Revenue Support and Service Revenue Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Product Revenue Support and Service Revenue *Fiscal year ends on January 31 21

23 Growth Drivers Customers Cumulative Customer Base 2,645 1, FY12 FY13 FY14 Land and Expand 2-Year Bookings * After Initial Sale Average Across All Customers % New vs. Existing Customer Bookings Existing customers New customers Initial Sale Year 1 Year 2 Total 25 % 34 % FY13 FY14 75 % 66 % Number of Deals >$100K % FY12 FY13 FY14 *Defined as the dollar value of a purchase order received; statistics as of Jan 31,

24 Attractive Gross Margin Profile Annual Gross Margin * Product and Support and Service Gross Margin * 65.4% 68.1% 62.3% 65.4% 41.9% 55.5% 24.7% FY12 FY13 FY14 FY13 FY14 *Reflects Non-GAAP Gross Margin; see appendix for reconciliation Product Gross Margin Support and Service Gross Margin 23

25 Investing Aggressively for Continued Growth Research and Development * $8 $15 $32 55% 28% 26% FY12 FY13 FY14 Head Count Sales and Marketing * FY12 FY13 FY14 $ Millions $71 $39 $13 FY12 FY13 FY14 % of Revenue 90% 72% 57% FY12 FY13 FY14 Head Count FY12 FY13 FY14 $ Millions FY12 FY13 FY14 % of Revenue *Reflects Non-GAAP Research and Development and Sales and Marketing, which excludes stock based compensation expense. See appendix for reconciliation. 24

26 Demonstrating Operating Leverage Improving Operating Margin * FY12 FY13 FY14 Cash Flow From Operations and Free Cash Flow % of Revenue ** Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Q3FY14 Q4FY14 5% -8% -27% -47% v -75% -83% Operating Cash Flow as % of Total Revenue -114% Free Cash Flow as % of Total Revenue * Reflects Non-GAAP Operating Margin, which excludes stock based compensation expense. See appendix for reconciliation ** Free cash flow is defined as net cash from operating activities plus cash used to purchase property and equipment 25

27 Business Model FY13 FY14 Q4FY14 Long-Term Model Gross Margin * 62% 65% 67% 63% 65% R&D as % of Revenue * 28% 26% 24% 11% 13% S&M as % of Revenue * 72% 57% 53% 28% 31% G&A as % of Revenue * 9% 9% 11% 5% 6% Non-GAAP Operating Margin * -47% -27% -21% 16% 20% *Reflects Non-GAAP Gross Margin, R&D, S&M, G&A and Operating Margin, see appendix for reconciliation 26

28 Our Strategic Priorities Customers Continue expansion into large enterprise and service provider customers Technology Platform Build on our broad technology foundation to further extend our differentiation, broaden feature coverage, and further expand our target market Sales and Marketing Invest aggressively to deepen sales coverage within existing territories, expand internationally, and drive continued channel leverage People Build best-in-class company founded on recruiting and retaining the industry s best talent 27

29 Positioned To Lead In the Flash-Optimized Storage Era 1980s DAS 1990s Monolithic Storage 2000s Modular Storage Today Flash-Optimized Storage Providing Our Customers with the Industry s Most Efficient Data Storage Platform 28

30 GAAP to Non-GAAP Reconciliation ($ in thousands) FY12 FY13 FY14 4QFY14 GAAP Product Gross Profit 7,880 32,499 76,581 25,626 % GAAP Product Gross Margin 60.1% 65.3% 67.9% 69.0% (+) Stock-based Compensation Non-GAAP Product Gross Profit 7,890 32,547 76,813 25,728 Non-GAAP Product Gross Margin 60.2% 65.4% 68.1% 69.2% GAAP Support and Service Gross Profit (145) 891 4,941 2,113 % GAAP Support and Service Gross Margin -16.1% 21.9% 38.2% 46.4% (+) Stock-based Compensation Non-GAAP Support and Service Gross Profit (114) 1,005 5,409 2,323 Non-GAAP Support and Service Gross Margin -12.7% 24.7% 41.9% 51.0% GAAP Gross Profit 7,735 33,390 81,522 27,739 % GAAP Gross Margin 55.2% 62.0% 64.8% 66.5% (+) Stock-based Compensation Non-GAAP Gross Profit 7,776 33,552 82,222 28,051 % Non-GAAP Gross Margin 55.5% 62.3% 65.4% 67.2% GAAP Research and Development 7,903 16,135 35,247 11,510 (-) Stock-based Compensation ,049 1,354 Non-GAAP Research and Development 7,635 15,261 32,198 10,156 GAAP Sales and Marketing 12,863 39,851 75,107 23,777 (-) Stock-based Compensation 244 1,029 3,674 1,703 Non-GAAP Sales and Marketing 12,619 38,822 71,433 22,074 GAAP General and Administrative 3,756 5,168 13,737 5,265 (-) Stock-based Compensation , Non-GAAP General and Administrative 3,489 4,629 12,011 4,532 GAAP Operating Expenses 24,522 61, ,091 40,552 (-) Stock-based Compensation 779 2,442 8,449 3,790 Non-GAAP Operating Expenses 23,743 58, ,642 36,762 GAAP Operating Loss (16,787) (27,764) (42,569) (12,813) % of Revenue -120% -52% -34% -31% (+) Stock-based Compensation 820 2,604 9,149 4,102 Non-GAAP Operating Loss (15,967) (25,160) (33,420) (8,711) % of Revenue -114% -47% -27% -21% Net Cash Provided by (Used in) Operating Activities (14,841) (18,754) (6,742) 2,185 % of Revenue % -35% -5% 5% (-) Property and Equipment, Net 1,303 3,954 13,613 5,461 Free Cash Flow (16,144) (22,708) (20,355) (3,276) % of Revenue % -42% -16% -8% 29