SonicWALL Q2 2009 Earnings Call Transcript

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2009-07-23 15:33:27.0

Tags: J.P. Morgan Chase & Co., Cash Flow, SonicWall, Call Transcript, Earnings, Question, North America, Operational Accounting, Personal Finance, Finance, Seeking Alpha

Question-and-Answer Session

Kelly Blough

Operator, could you please poll for questions?

Operator

Sure. (Operator's Instructions) We'll take our first question from Sterling Auty with J.P. Morgan.

Sterling Auty - J.P. Morgan

Hi, thanks. Sorry about the background noise. Two quick questions, one, can you give us some color about geographics? Were any regions particularly strong or particularly challenging? And then when looking at September quarter, the followup question is on cash flow, what are you thinking here sequentially should happen with the cash flow?

Matt Medeiros

So thank you for the question, Sterling. North America sales out an also sales overall are very encouraging. You see continued issues with (inaudible) China, Asia, look to be continuing to maintain their pace. Let me have Rob answer your question regarding cash flow.

Robert D. Selvi

Yeah. I mean in general we would expect cash flow to normalize in the 10-20% of revenue range and we're a little bit above the high end of that range this quarter based on strong contribution from profitability as well as good contribution from accounts receivable which as I mentioned was very efficient in the quarter, and inventory, as well as deferred revenue.

Sterling Auty - J.P. Morgan

Alright thanks, guys.

Operator

We'll take our next question from Joel Fishbein with Lazard.

Joel Fishbein - Lazard Capital Markets

Good afternoon, everybody. I just have a few quick questions. First, Matt, on the product side license side we saw a nice uptake this quarter. Can you give us a little bit more color around the overall environment and the buying patterns? I know you want to stay cautious. It was clear in your commentary, but any thought there would be helpful.

Matt Medeiros

Well you know, Joel, in North America we saw a pretty good demand market and some encouraging signs that at all ranges of our product, both the low end and also the enterprise product. So North America we definitely feel that there was some decent traction in Q2. Our pipeline for Q3 looks good, but again the pipeline I think everyone's pipeline is judged on its ability to close within a quarter.

In Europe as I mentioned I do think that there's still suffering in trying to understand how this recession is really affecting the business environment there. So I'm having a difficult time reading how bad seasonality along with just the uncertainty of the economy in Europe is really going to affect us.

 

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