Commenting on Brocade's third quarter financial results, Michael Klayko, Brocade CEO, said:

"We are very pleased with our financial performance which delivered a 35 percent year-over-year revenue growth and a healthy sequential increase in gross margins during a seasonally and economically challenging quarter. The traction Brocade has made in both new and existing partnerships, the opportunities we see in our core markets, combined with our continued product and technology innovation all demonstrate that we are executing on our well-defined strategy and make us optimistic for both the near- and long-term future."

Recent Business Highlights

Partnership Announcements

Brocade announced that it has expanded its strategic business alliance with Net One Systems, the largest independent network integrator in Japan, to help enable the two companies to better address high-growth, emerging opportunities in the data center and service provider networking segments in Japan, particularly in the areas of virtualization and cloud computing.

http://newsroom.brocade.com/article_display.cfm?article_id=1001

Brocade announced that the Brocade 4 and 8 Gbps Fibre Channel (FC) host bus adapters (HBAs) have been successfully tested on the HP ProLiant server platform, and the HP StorageWorks Modular Storage Array (MSA) and Enterprise Virtual Array (EVA) disk storage platforms. The new Brocade 8000 Fibre Channel over Ethernet (FCoE) switch, which enables the consolidation of storage and IP networking ports at the server edge, will also be offered by HP to its customers.

http://newsroom.brocade.com/article_display.cfm?article_id=913

Brocade announced it had completed testing and interoperability qualification of its server connectivity solutions, or HBAs, by all leading storage manufacturers, including HP, EMC, IBM, Hitachi Data Systems, LSI Corporation and Xiotech.

http://newsroom.brocade.com/article_display.cfm?article_id=924

Brocade announced a global Alliance Partner Network channel program designed to attract storage and IP networking channel resellers with a more selective, profitable alternative to existing channel programs.

http://newsroom.brocade.com/article_display.cfm?article_id=904

Brocade announced two strategic North American distribution partners, Avnet Technology Solutions and Tech Data Corporation, to help expand its existing data center distribution network to enterprise IP networking products via channel reseller partners.

http://newsroom.brocade.com/article_display.cfm?article_id=906

Brocade announced a Server Connectivity Certification Program for Assured Compatibility of Brocade HBAs in Multi-Vendor, Heterogeneous Environments.

http://newsroom.brocade.com/article_display.cfm?article_id=888

Product Introductions

Brocade introduced a number of new products and features at Interop that span all layers of the network, reinforcing Brocade's commitment to continuous IP networking innovation. Specifically, Brocade announced the:

Brocade TurboIron® 24X 10 Gigabit Ethernet (GbE) top-of-rack switch

Brocade ServerIron® ADX Series Application Delivery Controllers (ADCs)

Brocade FastIron® CX Series of Power over Ethernet Plus (PoE+)-ready switches

http://newsroom.brocade.com/article_display.cfm?article_id=876

Executive Leadership

Brocade appointed Amanda Giddins as its new EMEA Channel Sales Director, further signifying Brocade's commitment to drive business opportunities across the geography and bolster the channel.

http://newsroom.brocade.com/article_display.cfm?article_id=942

Customer Wins

Brocade showcased several data center and enterprise IP networking customer wins, including the San Diego Super Computer Center (SDSC), Mizuno, a number of Independent Operating Companies (IOCs), Insight Investment, Denit Hosting Solutions and Purewire.

SDSC - http://newsroom.brocade.com/article_display.cfm?article_id=888

Mizuno - http://newsroom.brocade.com/article_display.cfm?article_id=922

IOCs - http://newsroom.brocade.com/article_display.cfm?article_id=932

Insight Investment - http://newsroom.brocade.com/article_display.cfm?article_id=943

Denit Hosting Solutions - http://newsroom.brocade.com/article_display.cfm?article_id=944

Purewire - http://newsroom.brocade.com/article_display.cfm?article_id=950

Third Fiscal Quarter 2009 Financial Highlights and Additional Financial Information

Revenue of $493.3 million, reflecting 35% year-over-year growth and a 3% sequential decline.

GAAP net loss of $21.0 million or $(0.05) per share diluted, and net income of $55.4 million or $0.12 per share diluted on a non-GAAP basis.

Total quarterly SAN ports shipped was approximately 0.9 million.

SAN Average Selling Price (ASP) declines were in the mid single digits.

Net stock-based compensation expense was $43.3 million.

Effective GAAP tax rate was (1,977)%; non-GAAP effective tax-rate was 29.2%.