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“Our DataDomain unit has significantly reduced our backup and restore burden. Tape usage, which previously required weekly manual intervention, is now reduced to an occasional rotation for off-site storage. Even with our wide variety of data, including everything from e-mail to already compressed data sets, we are seeing an aggregate 10x compression ratio. The increased capacity and flexibility our DataDomain unit provides allows us more backup options for our departmental users and has made backups and restores an order of magnitude faster.” — Scott Karlin
Manager, Computing Facilities, Department of Computer Science, Princeton University

Press Release

Data Domain, Inc. Reports Third Quarter Financial Results

Revenue Increases 21% Compared to Second Quarter 2007, and 189% Compared to Third Quarter 2006

SANTA CLARA, Calif. — October 23, 2007 — Data Domain, Inc. (Nasdaq: DDUP) today announced results for its third quarter ended September 30, 2007. Net revenue for the third quarter of 2007 was $32.0 million, an increase of 21% from the second quarter of 2007 and an increase of 189% from the third quarter of 2006. Net revenue for the nine months ended September 30, 2007 was $78.7 million, an increase of 176% from the nine months ended September 30, 2006.

Data Domain posted a GAAP net loss for the third quarter of 2007 of $880,000, or $0.02 per share. This compares to a GAAP net loss of $1.2 million, or $0.11 per share in the immediately preceding second quarter of 2007, and a GAAP net loss of $934,000, or $0.12 per share in the third quarter of 2006.

Excluding the impact of stock-based compensation and related payroll taxes in all periods, the non-GAAP net income for the third quarter of 2007 was $2.6 million, or $0.04 per fully diluted share, compared to a non-GAAP net loss of $607,000, or $0.08 per share, in the third quarter of 2006.

"Data Domain's strong revenue growth in the third quarter reinforces the continuing demand for our industry-leading technology and the rapid expansion of our market," commented Frank Slootman, president and chief executive officer of Data Domain. "During the past quarter, Data Domain added approximately 228 new customers, bringing its cumulative customer count to approximately 1,200 worldwide since it first began shipping its Enterprise Protection Storage systems in 2004."

"In addition to exceeding our revenue plan for the quarter, we had a gross margin of 70%, and generated positive cash flow from operations again this quarter, while increasing our number of employees by 60," added Michael Scarpelli, chief financial officer of Data Domain.

Recent Highlights
Data Domain's focus on delivering its industry-leading technologies to an increasingly broad spectrum of enterprises worldwide was reflected in a number of key business initiatives and recent milestones.

Data Domain introduced a new version of its file system software that significantly broadens system support for a wide range of nearline workloads and use cases beyond its core data protection markets.
Announced a new strategic partnership with Vizioncore, a leading provider of management tools for VMware virtual environments. Through its partnership with Vizioncore, Data Domain has significantly strengthened the value proposition it offers to VMware users for protection of their virtualized environments.
During the third quarter, 228 new Data Domain customers were acquired, more than in any single quarter in the company's history.
Strong sales of Data Domain's top-of-line DD580 system (first introduced during the second quarter of 2007) underscore the company's penetration of increasingly larger enterprises.

Conference Call Information
Data Domain will host a conference call for analysts and investors to discuss its third quarter results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The dial-in number for this conference call is 800-638-5439 (617-614-3945 international) and the call identification number is 24057102. A live webcast of the conference call will be accessible from the Investor Relations section of the Company's website at www.datadomain.com. Following the webcast, an archived version will be available on the company's website for 30 days. To hear the replay, parties in the United States and Canada should call 1-888-286-8010 and enter passcode 25044662. International parties can access the replay at 1-617-801-6888 and should enter passcode 25044662.

Use of Non-GAAP Financial Information
Data Domain has supplemented the financial measures contained in this press release that are provided in accordance with generally accepted accounting principles ("GAAP") with non-GAAP financial measures. Data Domain believes that these non-GAAP financial measures better reflect its core operating results and thus are appropriate to enhance the overall understanding of its past financial performance and its prospects for the future. These adjustments to Data Domain's GAAP results are made with the intent of providing both management and investors a more complete understanding of Data Domain's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate Data Domain's financial results, develop budgets and manage expenditures. The method Data Domain uses to produce non-GAAP financial results may differ from the methods used by other companies. Data Domain's reference to these non-GAAP financial results should be considered in addition to results that are prepared under current accounting standards but should not be considered as a substitute for, or superior to, the financial results that are presented as consistent with GAAP. Reconciliation of the non-GAAP financial measures to the nearest GAAP financial measures is included in the financial measures attached hereto.

ABOUT DATA DOMAIN
Data Domain® is a leading provider of deduplication storage appliances for disk-based backup and network-based disaster recovery. Approximately 1,200 companies worldwide have purchased Data Domain's storage systems to reduce costs and simplify data management. Data Domain delivers the performance, reliability and scalability to address the data protection needs of enterprises of all sizes. Data Domain's products integrate into existing customer infrastructures and are compatible with leading enterprise backup software products. To find out more about Data Domain, visit www.datadomain.com. Data Domain is headquartered at 2421 Mission College Blvd., Santa Clara, CA 95054 and can be contacted by phone at 1-866-933-3873 or by e-mail at sales@datadomain.com.

Forward Looking Statements
This press release contains forward-looking statements regarding the continuing demand for our industry-leading technology and the rapid expansion of our market, our penetration of increasingly larger enterprises, our support of a wide range of nearline workloads and use cases beyond our core data protection markets, and the strengthened value proposition we offer to VMware users for protection of their virtualized environments. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs or develop new or enhanced products to meet those needs; market acceptance of our products; our ability to scale our distribution channels; our ability to recruit and retain personnel; our ability to compete in our industry; our ability to maintain and expand relationships with technology partners; our ability to protect our intellectual property; shortages or price fluctuations in our supply chain and the performance of our contract manufacturer; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. More information about these and other risks that may impact our business are set forth in the "Risk Factors" section of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Data Domain and the Data Domain logo are trademarks or registered trademarks of Data Domain, Inc. All other trademarks used or mentioned herein belong to their respective owners.

A copy of this press release can be found on the Investor Relations page of Data Domain's website at www.datadomain.com

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations

GAAP to Non-GAAP Reconciliation

GAAP to Non-GAAP Reconciliation

Condensed Consolidated Statements of Cash Flows

Contact Information

Data Domain

Michael P. Scarpelli
Chief Financial Officer
408.980.4800
ir@datadomain.com

Home > News > Press Release

Press Releases Media Coverage Events Newsletter Media & Analyst Center Industry Overview Awards “Our DataDomain unit has significantly reduced our backup and restore burden. Tape usage, which previously required weekly manual intervention, is now reduced to an occasional rotation for off-site storage. Even with our wide variety of data, including everything from e-mail to already compressed data sets, we are seeing an aggregate 10x compression ratio. The increased capacity and flexibility our DataDomain unit provides allows us more backup options for our departmental users and has made backups and restores an order of magnitude faster.” — Scott Karlin Manager, Computing Facilities, Department of Computer Science, Princeton University	Press Release Data Domain, Inc. Reports Third Quarter Financial Results Revenue Increases 21% Compared to Second Quarter 2007, and 189% Compared to Third Quarter 2006 SANTA CLARA, Calif. — October 23, 2007 — Data Domain, Inc. (Nasdaq: DDUP) today announced results for its third quarter ended September 30, 2007. Net revenue for the third quarter of 2007 was $32.0 million, an increase of 21% from the second quarter of 2007 and an increase of 189% from the third quarter of 2006. Net revenue for the nine months ended September 30, 2007 was $78.7 million, an increase of 176% from the nine months ended September 30, 2006. Data Domain posted a GAAP net loss for the third quarter of 2007 of $880,000, or $0.02 per share. This compares to a GAAP net loss of $1.2 million, or $0.11 per share in the immediately preceding second quarter of 2007, and a GAAP net loss of $934,000, or $0.12 per share in the third quarter of 2006. Excluding the impact of stock-based compensation and related payroll taxes in all periods, the non-GAAP net income for the third quarter of 2007 was $2.6 million, or $0.04 per fully diluted share, compared to a non-GAAP net loss of $607,000, or $0.08 per share, in the third quarter of 2006. "Data Domain's strong revenue growth in the third quarter reinforces the continuing demand for our industry-leading technology and the rapid expansion of our market," commented Frank Slootman, president and chief executive officer of Data Domain. "During the past quarter, Data Domain added approximately 228 new customers, bringing its cumulative customer count to approximately 1,200 worldwide since it first began shipping its Enterprise Protection Storage systems in 2004." "In addition to exceeding our revenue plan for the quarter, we had a gross margin of 70%, and generated positive cash flow from operations again this quarter, while increasing our number of employees by 60," added Michael Scarpelli, chief financial officer of Data Domain. Recent Highlights Data Domain's focus on delivering its industry-leading technologies to an increasingly broad spectrum of enterprises worldwide was reflected in a number of key business initiatives and recent milestones. Data Domain introduced a new version of its file system software that significantly broadens system support for a wide range of nearline workloads and use cases beyond its core data protection markets. Announced a new strategic partnership with Vizioncore, a leading provider of management tools for VMware virtual environments. Through its partnership with Vizioncore, Data Domain has significantly strengthened the value proposition it offers to VMware users for protection of their virtualized environments. During the third quarter, 228 new Data Domain customers were acquired, more than in any single quarter in the company's history. Strong sales of Data Domain's top-of-line DD580 system (first introduced during the second quarter of 2007) underscore the company's penetration of increasingly larger enterprises. Conference Call Information Data Domain will host a conference call for analysts and investors to discuss its third quarter results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The dial-in number for this conference call is 800-638-5439 (617-614-3945 international) and the call identification number is 24057102. A live webcast of the conference call will be accessible from the Investor Relations section of the Company's website at www.datadomain.com. Following the webcast, an archived version will be available on the company's website for 30 days. To hear the replay, parties in the United States and Canada should call 1-888-286-8010 and enter passcode 25044662. International parties can access the replay at 1-617-801-6888 and should enter passcode 25044662. Use of Non-GAAP Financial Information Data Domain has supplemented the financial measures contained in this press release that are provided in accordance with generally accepted accounting principles ("GAAP") with non-GAAP financial measures. Data Domain believes that these non-GAAP financial measures better reflect its core operating results and thus are appropriate to enhance the overall understanding of its past financial performance and its prospects for the future. These adjustments to Data Domain's GAAP results are made with the intent of providing both management and investors a more complete understanding of Data Domain's underlying operational results and trends and performance. Management uses these non-GAAP measures to evaluate Data Domain's financial results, develop budgets and manage expenditures. The method Data Domain uses to produce non-GAAP financial results may differ from the methods used by other companies. Data Domain's reference to these non-GAAP financial results should be considered in addition to results that are prepared under current accounting standards but should not be considered as a substitute for, or superior to, the financial results that are presented as consistent with GAAP. Reconciliation of the non-GAAP financial measures to the nearest GAAP financial measures is included in the financial measures attached hereto. ABOUT DATA DOMAIN Data Domain® is a leading provider of deduplication storage appliances for disk-based backup and network-based disaster recovery. Approximately 1,200 companies worldwide have purchased Data Domain's storage systems to reduce costs and simplify data management. Data Domain delivers the performance, reliability and scalability to address the data protection needs of enterprises of all sizes. Data Domain's products integrate into existing customer infrastructures and are compatible with leading enterprise backup software products. To find out more about Data Domain, visit www.datadomain.com. Data Domain is headquartered at 2421 Mission College Blvd., Santa Clara, CA 95054 and can be contacted by phone at 1-866-933-3873 or by e-mail at sales@datadomain.com. Forward Looking Statements This press release contains forward-looking statements regarding the continuing demand for our industry-leading technology and the rapid expansion of our market, our penetration of increasingly larger enterprises, our support of a wide range of nearline workloads and use cases beyond our core data protection markets, and the strengthened value proposition we offer to VMware users for protection of their virtualized environments. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs or develop new or enhanced products to meet those needs; market acceptance of our products; our ability to scale our distribution channels; our ability to recruit and retain personnel; our ability to compete in our industry; our ability to maintain and expand relationships with technology partners; our ability to protect our intellectual property; shortages or price fluctuations in our supply chain and the performance of our contract manufacturer; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission. More information about these and other risks that may impact our business are set forth in the "Risk Factors" section of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements. Data Domain and the Data Domain logo are trademarks or registered trademarks of Data Domain, Inc. All other trademarks used or mentioned herein belong to their respective owners. A copy of this press release can be found on the Investor Relations page of Data Domain's website at www.datadomain.com Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations GAAP to Non-GAAP Reconciliation GAAP to Non-GAAP Reconciliation Condensed Consolidated Statements of Cash Flows Contact Information Data Domain Michael P. Scarpelli Chief Financial Officer 408.980.4800 ir@datadomain.com

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