StorageMojo

A week after writing What’s with Isilon they announced revised results for several past quarters.

In a long and boring press release the company discussed the impact. The money quote:

he Company estimates that $7.0 million of the approximately $67.4 million of previously reported revenue from the fourth quarter of 2006 through the second quarter of 2007 is expected to be adjusted. Approximately $3.0 million of the adjusted revenue will be recorded in periods subsequent to the second quarter of 2007. Approximately $2.1 million of the adjustment is not expected to be recorded as revenue, and approximately $1.9 million of the adjustment will be reversed and recorded as revenue only to the extent that products are sold through to end-user customers and collection is reasonably assured and all other criteria for the recognition of revenue are met.

It seems prior management got a wee bit aggressive with revenue recognition.

The StorageMojo take
Isilon’s value proposition is unchanged even though the stock price has been hammered. What we still need to see is what they’ve done in the last 9 months. It may not be safe to assume that all the accounting issues are closed.

The bigger issue is the underlying health of the company. If they are growing, winning new customers and keeping old ones, then the revenue games will not much matter. That is the next chapter in Isilon’s reporting. I’ll be very interested to read it.

Disclosure: I don’t own Isilon stock.

Comments welcome, as always.