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Strategies & Market Trends : The New Economy and its Winners
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To: Bill Harmond who wrote (11038)4/7/2002 5:18:36 PM
From: Wizard  Read Replies (4) of 57684
 
Funny thing this Ashok... The SW12000 represented a tiny % of overall revenues last quarter due to it only being fully-tested by a couple of OEM's while many others weren't yet GA at quarters end. They said deferred revenues are going to go down in the April quarter because of the SW12000 going fully-GA in 'late March' and they said they are entering the April quarter with 'significant backlog' for that product... It is quite obvious that this means there is SW12000 in deferred revenues. I am not sure why Ashok can't listen to BRCD's public conference call but I guess he doesn't have time to simply re-ask that same question (and beat a dead horse) as it came up multiple times on the call. They said they are beginning a steep ramp in SW12000 beginning with $10mm this quarter (April) and entered this quarter with 'significant' backlog... Brocade generated free cash flow of $55.6mm so it is tough to bitch about their revenue recognition when cash flow is much higher than net income. Moreover, even if it weren't, you have to give them some slack given that they are at the very start of the revenue ramp? I don't see the point in challenging Brocades January quarter revenue rec when the amount of SW12000 recognized, if any, was immaterial. Since they have shipped hundreds of units, it would be perfectly legit to recognize a small amount from the early qualified, earlier-sold product, especially when proper accounting calls for booking reserves for potential returns anyway... Barrons does it again...
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