Brocade  today reported financial results for its first fiscal quarter ended January 28, 2012. Brocade reported first quarter revenue of $561 million, representing an increase of 2% quarter-over-quarter and 3% year-over-year, and resulting in diluted earnings per share of $0.12 on a GAAP basis and diluted earnings per share of $0.20 on a non-GAAP basis.

Summary of Q1 2012 results:

    Storage business revenue, including products and services, was a record $406.4 million, up 12% sequentially and 4% year-over-year. Storage product revenue grew 17% sequentially driven by strong demand across all product segments including the continued ramp of our industry leading 16 gigabit-per-second Fibre Channel products.
    Ethernet business revenue, including products and services, was $154.3 million, down 18% quarter-over-quarter and up 1% year-over-year. Revenue from Service Provider customers was a record $64.5 million in the quarter and was offset by lower Enterprise revenue and expected softness in Federal revenue.
    GAAP gross margin was 61.5% and non-GAAP gross margin was 64.8% in Q1 2012, compared to 58.8% and 62.0% in Q1 2011, respectively. The improvement in gross margin was driven by a favorable mix to higher margin Storage products, margin expansion in Global Services and an increase in overall revenue for the company.
    GAAP operating margin was 12.4% and non-GAAP operating margin was 21.5% in Q1 2012, compared to 7.8% and 17.1% in Q1 2011, respectively. The improvement in operating margin was primarily driven by higher gross margin and the increase in revenue.
    Non-GAAP EPS of $0.20 in Q1 2012 was up 22% sequentially and 61% year-over-year.

Brocade Communications Systems Inc