Violin Memory finished its hunt for a buyer without a deal. It did land a few partnerships, while shedding a quarter of its workforce and closing few sales of its all-flash storage arrays.
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Violin Thursday night reported revenue of $10.9 million, down from $12.5 million the previous quarter and $20.5 million a year ago. Only $4.3 million came from product sales, despite playing in a rapidly emerging flash storage array market. Violin lost $25.6 million for the quarter compared to a loss of $46.8 million the previous year. For the full year of 2015, Violin’s revenue of $50.9 million declined from $79 million in 2014. Its 2015 loss of $99 million was actually less than 2014 when it lost $108.9 million.
Violin CEO Kevin DeNuccio blamed the poor quarter results partially on the company’s exploration of a sale. The plan now is to cut staff – a process already underway – and try to push sales through its Flash Storage Platform (SFP) 7000 arrays and new partnerships to achieve profitability in 18 to 24 months.
“The strategic evaluation process and related media coverage impacted sales as it created a wait-and-see-what-happens mindset with some customers,” DeNuccio said on the Violin Memory earnings call.
DeNuccio said Violin explored strategic relationships with at least 15 companies over the last four or five months, but received no formal offers acquisition offers. He said Violin did sign a formal partnership offer “with one of the largest technology bellwethers” that could lead to an OEM relationship. DeNuccio said he expects a formal announcement over the next few months. He added that there are three more “relationships in various stages of development” that might lead to reseller or OEM deals.
“We are concluding the formal review of our strategic alternative process and we will focus on these new relationships,” he said.
Violin reduced headcount by 25% since last Oct. 31, going from 349 employees to 263 with most of the reduction hitting the sales team.
DeNuccio said there is still time for Violin to turn things around because the flash storage market is still in its early days, but admitted 2015 was a rough year.
“In the technology startup world, this would have been a rocket ship takeoff,” he said. “However, for Violin, anyway you look at it, we have just completed a very challenging year. It has been a year of navigating through a completely overhauled product line transition coupled with the launch of high value producing software in an industry-leading management suite. Despite the challenges of the quarter and fiscal year, we have put in place a new base of technology and customers from which to build the Violin business.”