8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 23, 2009

BROCADE COMMUNICATIONS SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-25601	77-0409517
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

1745 Technology Drive

San Jose, CA 95110

(Address, including zip code, of principal executive offices)

(408) 333-8000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On November 23, 2009, Brocade Communications Systems, Inc. (the “Company”) issued a press release regarding financial results for the fourth quarter and fiscal year ended October 31, 2009. The Company also posted on its website (brcd.com) slides and prepared remarks regarding such financial results and forward-looking statements relating to the Company’s estimated fiscal 2010 financial results and market opportunities. Copies of the press release, slides and accompanying prepared remarks by the Company are attached as Exhibits 99.1, 99.2 and 99.3, respectively, and the information in Exhibits 99.1, 99.2 and 99.3 is incorporated herein by reference.

The information in Item 2.02 and Item 9.01 in this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description of Document
99.1	Press release, dated November 23, 2009, announcing financial results of Brocade Communications Systems, Inc. for the fourth quarter and fiscal year ended October 31, 2009.
99.2	Slides of Brocade Communications Systems, Inc., dated November 23, 2009, regarding financial results of the fourth quarter and fiscal year ended October 31, 2009 and estimated fiscal 2010 financial results and market opportunities.
99.3	Accompanying prepared remarks of Brocade Communications Systems, Inc., dated November 23, 2009, regarding financial results of the fourth quarter and fiscal year ended October 31, 2009 and estimated fiscal 2010 financial results and market opportunities.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BROCADE COMMUNICATIONS SYSTEMS, INC.
Dated: November 23, 2009	By:	/s/    Richard Deranleau
		Richard Deranleau
		Chief Financial Officer and Vice President, Finance

EX-99.1

EXHIBIT 99.1

BROCADE CONTACTS
Public Relations John Noh Tel: 408-333-5108 jnoh@brocade.com	Investor Relations Peter Ausnit Tel: 408-333-4000 pausnit@brocade.com

Brocade Delivers Record Fiscal Q4 and 2009 Results with 33% Year-

over-Year Annual Revenue Growth

Quarterly Revenues Outpace Sequential Growth of Large Networking Peers

and Increase 31 Percent Year-Over-Year

SAN JOSE, Calif., Nov. 23, 2009 — Brocade^® (NASDAQ GS: BRCD) today reported financial results for its fourth fiscal quarter and full fiscal year ended October 31, 2009. Brocade’s quarterly revenues increased 31 percent year-over-year to $521.8 million and annual revenues increased 33 percent year-over-year to over $1.95 billion.

“Fiscal 2009 was a transformational year as Brocade became one of only two end-to-end networking solutions providers in the industry,” said Michael Klayko, CEO of Brocade. “Brocade also delivered exceptionally strong year-over-year revenue growth, and increased its account penetration in the Ethernet networking market while growing share in the storage networking market.”

Klayko continued, “In addition, Q4 saw tremendous momentum as we exceeded the Street’s consensus non-GAAP EPS estimates for the seventeenth consecutive quarter, delivered the fastest sequential revenue growth of any large networking vendor and generated strong cash flows. Looking at 2010, we expect to continue our momentum as we execute our strategy of delivering the highest levels of performance, quality, innovation and choice to the IT market.”

Brocade management has posted prepared comments and slides on its Fiscal Q4 and 2009 results and Fiscal 2010 outlook at www.BRCD.com in addition to this press release. Brocade will host a live webcast conference call to answer questions from investors and analysts at 5:00 a.m. Pacific time on November 24. Questions may be also submitted in advance to ir@brocade.com.

Other Q4 product, customer, and partner announcements are available at http://newsroom.brocade.com/.

Financial Highlights and Additional Financial Information

• Fiscal year 2009 revenue was $1,952.9 million, increasing 33% over fiscal year 2008.

• Q4 revenue was $521.8 million, increasing 31% year-over-year and 6% sequentially.

• Q4 total Storage Area Networking (SAN) port shipments were approximately 1.0 million.

• Q4 SAN Average Selling Price (ASP) declines were in the low single digits.

• Q4 effective GAAP tax rate was (24.9)%; non-GAAP effective tax-rate was 25.3%.

• Q4 Adjusted EBITDA was $130.6 million, increasing from $119.3 million in Q3.

• Q4 non-GAAP operating margin was 22.7%, increasing from 20.3% in Q3.

	Q4 2009			Q3 2009			Q4 2008
Revenue	$	521.8 M		$	493.3 M		$	398.5 M
GAAP net income (loss)	$	33.6 M		$	(21.0) M		$	35.6 M
Non-GAAP net income	$	73.4 M		$	55.4 M		$	75.8 M
GAAP EPS – diluted	$	0.07		$	(0.05	)	$	0.09
Non-GAAP EPS – diluted	$	0.15		$	0.12		$	0.20
Non-GAAP gross margin		59.5	%		58.2	%		64.1	%
Non-GAAP operating margin		22.7	%		20.3	%		26.2	%
Adjusted EBITDA (4)	$	130.6 M		$	119.3 M		$	142.1 M
Cash provided by operations	$	155.3 M		$	16.6 M		$	168.6 M

Brocade

1745 Technology Dr., San Jose, CA 95110

T. 408.333.8000 F. 408.333.8101

www.brocade.com

Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A detailed reconciliation between GAAP and non-GAAP information is contained in the tables included herein.

As a % of total revenues	Q4 2009 (3)	Q3 2009	Q4 2008
OEM revenues	65%	63%	88%
Channel/Direct revenues	35%	37%	12%
10% or greater customer revenues	46%	46%	65%
Domestic revenues (1)	63%	64%	64%
International revenues (1)	37%	36%	36%
Data Storage Revenue	58%	58%	84%
Ethernet Products Revenue	25%	24%	0%
Stackable % of Ethernet Revenues (2)	30%	26%	28%
Chassis % of Ethernet Revenues (2)	70%	74%	72%
Enterprise % of Ethernet Revenues (2)	86%	83%	73%
Service Providers % of Ethernet Revenues (2)	14%	17%	27%
Global Services Revenue	17%	18%	16%
	Q4 2009	Q3 2009	Q4 2008
Cash, cash equivalents and investments	$338.9 M	$249.9 M	$820.1 M
Deferred revenues	$235.4 M	$230.1 M	$141.2 M
Capital expenditures – non-campus related	$  16.7 M	$  20.0 M	$  13.9 M
Capital expenditures – campus related	$  27.8 M	$  24.8 M	$    4.7 M
Total debt, net of discount	$1,085 M	$1,139 M	$1,225 M
Days sales outstanding	52 days	56 days	36 days
Employees at end of period	4,070	3,866	2,834

1) Based on Brocade estimates of adjustment for partners taking delivery of internationally bound shipments in the United States, end-user demand was 53% domestic and 47% international.

2) On an “As If” combined Brocade basis with respect to Q4 2008.

3) Q4 2009 is the third full quarter of combined operations post acquisition of Foundry.

4) EBITDA adjusted for non cash expenses and legal fees and recoveries related to indemnification obligations.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. In evaluating Brocade’s performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under GAAP.

Management believes that non-GAAP net income and other non-GAAP financial measures used in this press release allow management to gain a better understanding of Brocade’s comparative operating performance from period to period and to its competitors’ operating results. Management also believes these non-GAAP financial measures help indicate Brocade’s baseline performance before gains, losses or charges that are considered by management to be outside ongoing operating results. Accordingly, management uses these non-GAAP financial measures for planning and forecasting of future periods and in making decisions regarding operations performance and the allocation of resources. Management believes these non-GAAP financial measures, when read in conjunction with Brocade’s GAAP financials, provide useful information to investors by offering:

• the ability to make more meaningful period-to-period comparisons of Brocade’s ongoing operating results;

• the ability to better identify trends in Brocade’s underlying business and perform related trend analysis;

• a better understanding of how management plans and measures Brocade’s underlying business; and

• an easier way to compare Brocade’s most recent results of operations against investor and analyst financial models.

Page 2 of 9

Management excludes certain gains or losses and benefits or costs in determining non-GAAP net income that are the result of infrequent events or arise outside the ordinary course of our continuing operations. Management believes that it is appropriate to evaluate Brocade’s operating performance by excluding those items that are not indicative of ongoing operating results or limit comparability. Such items include: (i) legal fees and recoveries associated with indemnification obligations to former directors and officers and other related costs, net, (ii) provision for class action lawsuit, (iii) acquisition and integration costs (in connection with the Foundry acquisition), (iv) in-process research and development charges (in connection with the Foundry acquisition), (v) loss on sale of investments, and (vi) loss on impairment of portfolio investments.

Management also excludes the following non-cash charges in determining non-GAAP net income: (i) stock-based compensation expense, (ii) amortization of purchased intangible assets, (iii) costs/benefits associated with restructuring costs and facilities lease losses, and (iv) goodwill and acquisition-related intangible assets impairment. Because of varying available valuation methodologies, subjective assumptions and the variety of award types, management believes that the exclusion of stock-based compensation allows for more accurate comparisons of our operating results to our peer companies. Management believes that the expense associated with the amortization of acquisition-related intangible assets is appropriate to be excluded because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for Brocade’s newly acquired and long-held businesses. Management also believes that the expense associated with the goodwill and acquisition-related intangible assets impairment is appropriate to be excluded because we do not believe that this charge is indicative of future operating results and we believe that investors benefit from an understanding of our operating results without giving effect to it.

Finally, management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income.

Limitations. These non-GAAP financial measures have limitations, however, because they do not include all items of income and expense that impact the Company. Management compensates for these limitations by also considering Brocade’s GAAP results. The non-GAAP financial measures that Brocade uses are not prepared in accordance with, and should not be considered an alternative to measurements required by GAAP, such as operating income, net income (loss) and net income (loss) per share, and should not be considered measurements of Brocade’s liquidity. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, these non-GAAP financial measures may not be comparable to similar measurements reported by other companies.

Cautionary Statement

This press release contains statements that are forward-looking in nature, including statements regarding Brocade’s market positioning and opportunities, including potential benefits of new or expanded partner relationships, and the integration of the Foundry acquisition. These statements are based on current expectations on the date of this press release and involve a number of risks and uncertainties which may cause actual results to differ significantly from such estimates. The risks include, but are not limited to, the effect of changes in IT spending levels, market competition and changes in the industry, Brocade’s ability to successfully introduce new products and services on a timely basis, and Brocade’s ability to manage its business effectively in a rapidly evolving market. Certain of these and other risks are set forth in more detail in “Item 1A. Risk Factors” in Brocade’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2009. Brocade does not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise.

About Brocade

Brocade^® (NASDAQ GS: BRCD) develops extraordinary networking solutions that enable today’s complex, data-intensive businesses to optimize information connectivity and maximize the business value of their data. For more information, visit www.brocade.com.

# # #

Brocade, the B-wing symbol, BigIron, DCX, Fabric OS, FastIron, IronPoint, IronShield, IronView, IronWare, JetCore, NetIron, SecureIron, ServerIron, StorageX and TurboIron are registered trademarks, and DCFM, Extraordinary Networks and SAN Health are trademarks of Brocade Communications Systems, Inc., in the United States and/or in other countries. All other brands, products or service names are or may be trademarks or service marks of, and are used to identify, products or services of their respective owners.

© 2009 Brocade Communications Systems, Inc. All Rights Reserved.

Page 3 of 9

BROCADE COMMUNICATIONS SYSTEMS, INC.

GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended						Twelve Months Ended
	October 31, 2009			October 25, 2008			October 31, 2009			October 25, 2008
Net revenues
Product	$	432,394		$	335,403		$	1,615,511		$	1,230,737
Services		89,361			63,095			337,415			236,200
Total net revenues		521,755			398,498			1,952,926			1,466,937
Cost of revenues
Product		203,442			114,374			739,354			459,850
Services		47,466			38,987			180,072			146,715
Total cost of revenues		250,908			153,361			919,426			606,565
Gross margin		270,847			245,137			1,033,500			860,372
Operating expenses:
Research and development		95,346			70,867			354,809			255,571
Sales and marketing		103,451			71,112			385,155			274,311
General and administrative		22,209			14,912			84,962			58,172
Legal fees and recoveries associated with indemnification obligations and other related costs, net		(14,612	)		26,274			23,941			48,673
Provision for class action lawsuit		—			—			—			160,000
Amortization of intangible assets		17,052			7,820			68,718			31,484
Acquisition and integration costs		333			682			5,127			682
Restructuring costs and facilities lease loss, net		—			3,208			2,329			2,731
In-process research and development		—			—			26,900			—
Goodwill and acquisition-related intangible assets impairment		—			—			53,306			—
Total operating expenses		223,779			194,875			1,005,247			831,624
Income from operations		47,068			50,262			28,253			28,748
Interest and other income/(expense), net		530			(796	)		(2,382	)		26,867
Interest expense		(20,681	)		(5,684	)		(91,281	)		(10,068	)
(Gain)/loss on sale of investments, net		(27	)		111			(602	)		(6,874	)
Loss on impairment of portfolio investments		—			(8,751	)		—			(8,751	)
Income/(loss) before provision/(benefit) for income taxes		26,890			35,142			(66,012	)		29,922
Income tax provision/(benefit)		(6,707	)		(439	)		10,573			(137,148	)
Net income/(loss)	$	33,597		$	35,581		$	(76,585	)	$	167,070
Net income/(loss) per share – Basic	$	0.08		$	0.10		$	(0.19	)	$	0.45
Net income/(loss) per share – Diluted	$	0.07		$	0.09		$	(0.19	)	$	0.43
Shares used in per share calculation – Basic		425,530			371,845			398,948			375,303
Shares used in per share calculation – Diluted		492,174			389,477			398,948			394,703

Page 4 of 9

BROCADE COMMUNICATIONS SYSTEMS, INC.

GAAP CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands) (unaudited)

	October 31, 2009			October 25, 2008
Assets
Current assets:
Cash and cash equivalents	$	334,193		$	453,884
Short-term investments		4,678			152,741
Restricted cash		12,502			—
Total cash, cash equivalents, short-term investments and restricted cash		351,373			606,625
Accounts receivable, net		297,819			158,935
Inventories		72,152			21,362
Deferred tax assets		84,629			104,705
Prepaid expenses and other current assets		79,302			49,931
Total current assets		885,275			941,558
Long-term marketable equity securities		—			177,380
Long-term investments		—			36,120
Restricted cash		—			1,075,079
Property and equipment, net		442,408			313,379
Goodwill		1,648,217			268,977
Intangible assets, net		470,872			220,567
Non-current deferred tax assets		185,713			227,795
Other assets		28,218			37,793
Total assets	$	3,660,703		$	3,298,648
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	181,249		$	167,660
Accrued employee compensation		160,832			107,994
Deferred revenue		174,870			103,372
Current liabilities associated with facilities lease losses		10,769			13,422
Liability associated with class action lawsuit		—			160,000
Revolving credit facility		14,050			—
Current portion of long-term debt		38,822			43,606
Convertible subordinated debt		171,822			—
Purchase commitments		17,011			17,332
Other accrued liabilities		88,252			88,472
Total current liabilities		857,677			701,858
Long-term debt, net of current portion		860,114			1,011,399
Non-current convertible subordinated debt		—			169,660
Non-current liabilities associated with facilities lease losses		10,150			15,007
Non-current deferred revenue		60,575			37,869
Non-current income tax liability		92,276			67,497
Other non-current liabilities		15,114			13,118
Stockholders’ equity
Common stock		1,872,482			1,393,299
Accumulated other comprehensive loss		(5,920	)		(85,877	)
Accumulated deficit		(101,765	)		(25,182	)
Total stockholders’ equity		1,764,797			1,282,240
Total liabilities and stockholders’ equity	$	3,660,703		$	3,298,648

Page 5 of 9

BROCADE COMMUNICATIONS SYSTEMS, INC.

GAAP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended October 31, 2009 and October 25, 2008

(in thousands)

(unaudited)

	Three Months Ended
	October 31, 2009			October 25, 2008
Cash flows from operating activities:
Net income	$	33,597		$	35,581
Adjustments to reconcile net income to net cash provided by operating activities:
Excess tax benefit from employee stock plans		(192	)		(13,641	)
Depreciation and amortization		51,486			30,533
Loss on disposal of property and equipment		110			1,853
Amortization of debt issuance costs		4,182			319
Net losses on investments and marketable equity securities		27			8,839
Provision for doubtful accounts receivable and sales allowances		3,148			1,700
Non-cash compensation expense		35,714			7,515
Capitalization of interest cost		(2,737	)		(970	)
Non-cash facilities lease loss benefit		—			(105	)
Changes in assets and liabilities:
Restricted cash		(12,502	)		—
Accounts receivable		821			13,386
Inventories		(18,560	)		(6,993	)
Prepaid expenses and other assets		(2,716	)		44,232
Deferred tax assets		2,440			(48,296	)
Accounts payable		30,815			39,353
Accrued employee compensation		27,425			33,768
Deferred revenue		5,376			(7,486	)
Other accrued liabilities		(118	)		31,308
Liabilities associated with facilities lease losses		(3,004	)		(2,325	)
Net cash provided by operating activities		155,312			168,571
Cash flows from investing activities:
Purchases of property and equipment		(44,491	)		(18,603	)
Purchases of short-term investments		(22	)		(2,053	)
Purchases of marketable equity securities		—			(248,431	)
Proceeds from maturities and sale of short-term investments		1,056			107,547
Purchases of non-marketable minority equity investments		—			(1,436	)
(Increase) decrease in restricted cash		—			(1,075,079	)
Cash paid in connection with pending acquisition of Foundry Networks, Inc.		—			(1,000	)
Net cash used in investing activities		(43,457	)		(1,239,055	)
Cash flows from financing activities:
Payment of principal related to the term loan		(57,881	)		—
Common stock repurchases		—			—
Excess tax benefit from employee stock plans		192			13,641
Proceeds from issuance of common stock, net		35,375			615
Proceeds from term loan		—			1,054,425
Net cash provided by (used in) financing activities		(22,314	)		1,068,681
Effect of exchange rate fluctuations on cash and cash equivalents		473			(3,712	)
Net increase (decrease) in cash and cash equivalents		90,014			(5,515	)
Cash and cash equivalents, beginning of period		244,179			459,399
Cash and cash equivalents, end of period	$	334,193		$	453,884

Page 6 of 9

BROCADE COMMUNICATIONS SYSTEMS, INC.

GAAP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Twelve Months Ended October 31, 2009 and October 25, 2008

(in thousands)

(unaudited)

	Twelve Months Ended
	October 31, 2009			October 25, 2008
Cash flows from operating activities:
Net income (loss)	$	(76,585	)	$	167,070
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Release of valuation allowance		—			(185,176	)
Excess tax benefit from employee stock plans		794			(16,146	)
Depreciation and amortization		196,573			120,178
Loss on disposal of property and equipment		1,478			3,181
Amortization of debt issuance costs		16,038			319
Net losses on investments and marketable equity securities		597			15,327
Provision for doubtful accounts receivable and sales allowances		12,681			6,614
Non-cash compensation expense		137,219			39,036
Capitalization of interest cost		(9,093	)		(970	)
In-process research and development		26,900			—
Non-cash facilities lease loss benefit		(339	)		(582	)
Asset impairment charge		53,306			—
Changes in assets and liabilities:
Restricted cash		(12,502	)		—
Accounts receivable		(74,965	)		17,143
Inventories		25,338			(3,345	)
Prepaid expenses and other assets		4,213			25,200
Deferred tax assets		3,091			(58,104	)
Accounts payable		(11,052	)		40,550
Accrued employee compensation		(28,685	)		30,242
Deferred revenue		26,454			10,185
Other accrued liabilities		(5,543	)		77,311
Liabilities associated with facilities lease losses		(10,394	)		(9,538	)
Liability associated with class action lawsuit		(160,000	)		160,000
Net cash provided by operating activities		115,524			438,495
Cash flows from investing activities:
Purchases of property and equipment		(162,770	)		(144,071	)
Purchases of short-term investments		(138	)		(169,016	)
Purchases of marketable equity securities		—			(248,431	)
Proceeds from sale of marketable equity securities and equity investments		—			9,926
Proceeds from maturities and sale of short-term investments		155,986			448,385
Purchases of non-marketable minority equity investments		—			(1,436	)
Purchases of long-term investments		—			(37,731	)
Proceeds from maturities and sale of long-term investments		30,173			22,483
(Increase) decrease in restricted cash		1,075,079			(1,075,079	)
Cash paid in connection with pending acquisition of Foundry Networks, Inc.		—			(1,000	)
Net cash paid in connection with acquisitions		(1,297,482	)		(43,554	)
Net cash used in investing activities		(199,152	)		(1,239,524	)
Cash flows from financing activities:
Payment of senior underwriting fees related to the term loan		(30,525	)		—
Payment of principal related to the term loan		(166,022	)		—
Common stock repurchases		—			(168,293	)
Excess tax benefit from employee stock plans		(794	)		16,146
Proceeds from issuance of common stock, net		145,655			42,418
Proceeds from term loan		—			1,054,425
Proceeds from revolving credit facility		14,050			—
Net cash provided by (used in) financing activities		(37,636	)		944,696
Effect of exchange rate fluctuations on cash and cash equivalents		1,573			(5,538	)
Net increase (decrease) in cash and cash equivalents		(119,691	)		138,129
Cash and cash equivalents, beginning of period		453,884			315,755
Cash and cash equivalents, end of period	$	334,193		$	453,884

Page 7 of 9

BROCADE COMMUNICATIONS SYSTEMS, INC.

RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended
	October 31, 2009			October 25, 2008
Net income on a GAAP basis	$	33,597		$	35,581
Adjustments:
Stock-based compensation expense included in cost of revenues		7,062			1,616
Amortization of intangible assets expense included in cost of revenues		17,898			8,780
Provision for certain pre-acquisition litigation		14,335			—
Legal fees associated with certain pre-acquisition litigation		546			20
Total gross margin adjustments		39,841			10,416
Legal fees and recoveries associated with indemnification obligations and other related costs, net		(14,612	)		26,274
Stock-based compensation expense included in research and development		10,251			2,385
Stock-based compensation expense included in sales and marketing		12,934			2,325
Stock-based compensation expense included in general and administrative		5,468			1,189
Amortization of intangible assets expense included in operating expenses		17,052			7,820
Acquisition and integration costs		333			682
Restructuring costs and facilities lease loss benefit, net		—			3,208
Total operating expense adjustments		31,426			43,883
Total operating income adjustments		71,267			54,299
Loss on impairment of portfolio investments		—			8,751
Acquisition-related financing charges		—			4,736
Income tax effect of adjustments		(31,502	)		(27,602	)
Non-GAAP net income	$	73,362		$	75,765
Non-GAAP net income per share – basic	$	0.17		$	0.20
Non-GAAP net income per share – diluted	$	0.15		$	0.20
Shares used in non-GAAP per share calculation – basic		425,530			371,845
Shares used in non-GAAP per share calculation – diluted		492,174			389,477

See explanation of non-GAAP information included herein.

Page 8 of 9

BROCADE COMMUNICATIONS SYSTEMS, INC.

RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME (LOSS)

(in thousands, except per share amounts)

(unaudited)

	Twelve Months Ended
	October 31, 2009			October 25, 2008
Net income (loss) on a GAAP basis	$	(76,585	)	$	167,070
Adjustments:
Stock-based compensation expense included in cost of revenues		25,654			9,117
Amortization of intangible assets expense included in cost of revenues		65,803			37,400
Provision for certain pre-acquisition litigation		14,335			—
Legal fees associated with certain pre-acquisition litigation		546			2,339
Total gross margin adjustments		106,338			48,856
Legal fees and recoveries associated with indemnification obligations and other related costs, net		23,941			48,673
Provision for class action lawsuit		—			160,000
Stock-based compensation expense included in research and development		40,365			10,324
Stock-based compensation expense included in sales and marketing		48,820			10,652
Stock-based compensation expense included in general and administrative		22,380			8,944
Amortization of intangible assets expense included in operating expenses		68,718			31,484
Acquisition and integration costs		5,127			682
Restructuring costs and facilities lease losses (benefits), net		2,329			2,731
In-process research and development		26,900			—
Goodwill and acquisition-related intangible assets impairment		53,306			—
Total operating expense adjustments		291,886			273,490
Total operating income adjustments		398,224			322,346
Loss on sale of investments, net		—			6,004
Loss on impairment of portfolio investments		—			8,751
Acquisition-related financing charges		4,366			4,736
Income tax effect of adjustments		(86,586	)		(248,001	)
Non-GAAP net income	$	239,419		$	260,906
Non-GAAP net income per share – basic	$	0.60		$	0.70
Non-GAAP net income per share – diluted	$	0.53		$	0.67
Shares used in non-GAAP per share calculation – basic		398,948			375,303
Shares used in non-GAAP per share calculation – diluted		454,293			394,703

See explanation of non-GAAP information included herein.

Page 9 of 9

EX-99.2

Q4 FY 2009

EARNINGS

Prepared Comments

and Q&A Discussion

Materials

SLIDES ONLY

EXHIBIT 99.2

BROCADE

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

2

PREPARED

COMMENTS

MIKE KLAYKO

CEO

Released November 23rd

4:00PM Pacific Time

RICHARD DERANLEAU

CFO

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

3

CAUTIONARY STATEMENTS

AND DISCLOSURES

This

presentation

includes

forward-looking

statements,

including

statements

regarding

Brocade’s business outlook and financial projections for fiscal year 2010 and beyond.

These forward-looking statements are only predictions and involve risks and uncertainties

such

that

actual

results

may

vary

significantly.

These

and

other

risks

are

set

forth

in

more

detail in our Form 10-K for the fiscal year ended October 25, 2008 and Form 10-Q for the

quarter ended August 1, 2009. These forward-looking statements reflect beliefs,

assumptions, estimates and predictions as of today, and Brocade expressly assumes no

obligation to update any such forward-looking statements.

In addition, this presentation includes various third party estimates regarding the total

available market and other measures, which do not necessarily reflect the view of the

Company. Further, Brocade does not guarantee the accuracy or reliability of any such

information or forecast.

This presentation includes non-GAAP financial measures. The most directly comparable

GAAP information and a reconciliation between the non-GAAP and GAAP figures are

provided

in

our

Q4

09

press

release,

which

has

been

furnished

to

the

SEC

on

Form

8-K,

and

in this slide presentation.

MIKE KLAYKO

CEO

Q4 AND

FISCAL 2009

Q4 FY 2009 Earnings,  November 23, 2009

4

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Q4 FY 2009 Earnings,  November 23, 2009

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2009 Brocade Communications Systems, Inc.—Company Proprietary Information

5

QUARTERLY

RESULTS

* Q4 is third full quarter of combined operations post-Foundry acquisition.

5.8%

SEQ.

GROWTH

REVENUE

Q4 FY 2009 Earnings,  November 23, 2009

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2009 Brocade Communications Systems, Inc.—Company Proprietary Information

6

ANNUAL

RESULTS

33%

GROWTH

REVENUE

FY 2009: A GAME

CHANGING YEAR

Transformation

Innovation

Execution

Q4 FY 2009 Earnings,  November 23, 2009

7

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

WHO IS

BROCADE?

Q4 FY 2009 Earnings,  November 23, 2009

8

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

A NETWORKING

COMPANY

Q4 FY 2009 Earnings,  November 23, 2009

9

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

ENTER NEW

MARKETS

ETHERNET

Q4 FY 2009 Earnings,  November 23, 2009

10

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

OPERATE AS

ONE COMPANY

Q4 FY 2009 Earnings,  November 23, 2009

11

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

INTEGRATE

ACQUIRE

FOUNDRY

Sales

R&D

Roadmaps

Supply

Chains

INTERNET USERS

2.25 BILLION

EVERY YEAR

DATA DOUBLES

DEVICES BY 2015

15 BILLION

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

12

ROBUST NETWORKING

GROWTH DRIVERS

NETWORK

UPGRADE

COMING

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

13

MULTI-TIERED

ARCHITECTURES

Don’t Scale

Prone to Failure

Obsolete

NEW PERFORMANCE

REQUIREMENTS

65% of CIOs

Plan Major Rebuilds

$3.3T ANNUAL

IT SPEND

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

14

Source: Gartner

Q4 FY 2009 Earnings,  November 23, 2009

15

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

INFLECTION

POINT

Q4 FY 2009 Earnings,  November 23, 2009

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2009 Brocade Communications Systems, Inc.—Company Proprietary Information

16

STORAGE

NETWORKING

Source: Dell’Oro

18.6%

CAGR 09–12

SAN TAM

Source: Brocade estimates

STORAGE

NETWORKING

LONGSTANDING

LEADERSHIP

Q4 FY 2009 Earnings,  November 23, 2009

17

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

MARKET SHARE

ETHERNET

NETWORKING

Source: Infonetics, Dell’Oro

11.7%

CAGR 09–12

Q4 FY 2009 Earnings,  November 23, 2009

18

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

ADDRESSABLE IP TAM

NEW ETHERNET

NETWORKING

CUSTOMERS

500

EXPANDING

OUR FOOTPRINT

Q4 FY 2009 Earnings,  November 23, 2009

19

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Doubled Ethernet

Accounts Among Top

100 Brocade Storage

Networking Accounts

20

PARTNERS

PARTNERS

ADDED 111 NEW PARTNERS

ADDED 111 NEW PARTNERS

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

21

NEW ROUTES TO MARKET

DIRECT VAR

DISTRIBUTORS

OEM PARTNERS

CUSTOMER

DIRECT

GLOBAL SYSTEMS

INTEGRATORS

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

22

PRODUCT DIFFERENTIATION

AND STRATEGY

DELIVERED

62 SOLUTIONS

ETHERNET

STORAGE

SERVICES

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

23

NEW MARKET SEGMENTS

SERVICE

PROVIDERS

CAMPUS

LAN

DATA

CENTER

EDUCATION

MEDIA/

ENTERTAINMENT

HIGH-

PERFORMANCE

COMPUTING

HEALTHCARE

PUBLIC

SECTOR

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

24

VERTICAL MARKET STRATEGY

Q4 AND FISCAL

2009 SUMMARY

Q4 FY 2009 Earnings,  November 23, 2009

25

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

LOOKING

FORWARD

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

26

RELIABILITY

CONVERGENCE

OPEN SYSTEMS

PERFORMANCE

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

27

INNOVATION AND

PRODUCT DEVELOPMENT

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

28

CLOSED VS. OPEN SYSTEMS

VS

KEY 2010

METRICS

•

Ethernet Account and

Revenue Growth

•

Storage Share

•

Partnership Growth

•

Focused Products:

–

Data Center

–

Campus LAN

–

Service Provider

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

29

RICHARD DERANLEAU

CFO

Q4 FISCAL 2009

FINANCIALS

Q4 FY 2009 Earnings,  November 23, 2009

30

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Q4 FINANCIAL HIGHLIGHTS

Q4 FY 2009 Earnings,  November 23, 2009

31

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Revenues in-line with guidance

•

Strength in North America driven by Federal LAN and Director

•

Strength in Asia Pacific/Japan

•

SAN: sequentially up, led by Directors, Switch and Embedded

•

LAN: sequentially up, led by Federal, partially offset by Service Providers

•

Global Services: flat sequentially

Margins within long-term model

•

Improving gross margins on mix and Ethernet product cost reductions

•

Met or exceeded committed acquisition synergies

•

Effectively controlling spending

Strengthening balance sheet

•

Strong cash flows

•

Adjusted EBITDA and operating cash flow enable rapid debt repayment

•

Improving DSO

KEY FINANCIAL METRICS

Q4 2009

Q3 2009

Q2 2009

Revenue

$521.8M

$493.3M

$506.3M

Non-GAAP Gross Margin*

59.5%

58.2%

56.2%

Non-GAAP EPS*-Diluted

$0.15

$0.12

$0.11

GAAP EPS-Diluted

$0.07

($0.05)

($0.16)

Adjusted EBITDA

$130.6M

$119.3M

$119.9M

Cash from Operations

$155.3M

$16.6M

$107.3M

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

32

*Non-GAAP, please see reconciliation in appendix.

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

33

REVENUE: STORAGE,

ETHERNET, AND SERVICES*

*Q4 reflects third full quarter of combined operations post-Foundry acquisition.

Q4 FY 2009 Earnings,  November 23, 2009

©

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34

REVENUE: 10% CUSTOMERS,

OTHER OEM, CHANNEL/DIRECT

*Q4 09 is third full quarter of combined operations post-Foundry acquisition.

DOMESTIC AND INTERNATIONAL

REPORTED REVENUE VS. DEMAND

Q4 FY 2009 Earnings,  November 23, 2009

35

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

REPORTED REVENUE

ON A SHIP-TO BASIS

DEMAND BY ESTIMATED

END USER LOCATION

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

36

GROSS MARGIN* AND PROFIT*

* Non-GAAP, please see reconciliation

* Non-GAAP, please see reconciliation in appendix

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

37

OPERATING MARGINS*

OPERATING

EXPENSES*

Q4 09: 36.9%

Q3 09: 37.8%

Q2 09: 37.4%

½

Qtr.

Foundry

Full Qtr.

Foundry

Long term model operating margin range: 20–23%

* Non-GAAP, please see reconciliation in appendix

SELECTED BALANCE SHEET METRICS

Q4 FY 2009 Earnings,  November 23, 2009

38

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Q4 09 FINANCIAL MESSAGES

Merger integration

•

Revenue synergies on plan

•

Cost synergies ahead of plan

Executing well, despite economic conditions

•

Improved operating margins, now in line with model

•

Improved DSO, strong working capital management

•

Strong cash flows provide flexibility

Committed to our long-term financial model

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

39

FY 2010 PLANNING

ASSUMPTIONS

IT market conditions:

•

Recovering IT Spending in 1H 2010

•

Improving to normal IT Spending in 2H 2010

•

Benign storage pricing environment

Growth drivers:

•

Benefits of Ethernet distribution partnerships ramping through 2010

•

Benefits from product innovation ramping in 2H 2010

Market share:

•

Gain share in IP Ethernet networking

•

Maintain share in storage networking

–

Planning to build share in server products (CNA/Embedded/HBA)

Seasonality:

•

Up sequentially 4–5% in Q1, flat to up in Q2 and Q3, a strong Q4

Q4 FY 2009 Earnings,  November 23, 2009

40

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

FY 2010 FINANCIAL OUTLOOK

Reiterating

September

22

nd

Outlook

Revenue

$2.25B–$2.45B

Non-GAAP Gross Margin

59–60%

Non-GAAP Op. Expenses

In Model

Non-GAAP Op. Margin

In Model

Non-GAAP Tax Rate

30%

Shares

510M–520M

Non-GAAP EPS

$0.56–$0.61

Q4 FY 2009 Earnings,  November 23, 2009

41

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

42

OPERATING AND FREE

CASH FLOW OUTLOOK

* Includes $46M Q1 09 cash from operations, adjusted for $160M class action payment

and normalization of $50M Accounts Payable related to Foundry acquisition.

$162M

$235M

$600M

$750M

$163M

$225M

$90M

$100M

$325M

$460M

$690M

$850M

FY 09

FY 10

FY 11

FY 12

Free Cash Flow

Capital Spending

*

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

43

ADJUSTED EBITDA, CASH,

AND LIQUIDITY OUTLOOK

Q4 FY 2009 Earnings,  November 23, 2009

REDUCING OUR DEBT…

WELL WITHIN OUR DEBT COVENANT…

INCREASING CASH BALANCE…

* Excludes restricted cash of $12.5M

STRONG ADJ. EBITDA PERFORMANCE…

$140–152M

$560–610M

ANTICIPATED REPAYMENT

McDATA CONVERT

Q4 09 Ending Cash and Equivalents*

$339M

Q1 10  Cash from Operations

$51M

Q1 10  Capital Expenditures

($59M)

Q1 10  Stock Option Exercises and Other

$20M

Q1 10 Ending Cash and Equivalents

$351M

Q2 10 Repayment of McDATA Convertible Debt

($173M)

Q2 10 Cash from Operations

$141M

Q2 10 Capital Expenditures

($74M)

Q2 10 Stock Option Exercises and Other

$13M

Q2 10 Ending Cash and Equivalents

$258M

* Excludes restricted cash of $12.5M

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

44

Q4 FY 2009 Earnings,  November 23, 2009

Q4 FY 2009 Earnings,  November 23, 2009

45

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

FY 2009:

SUMMARY

Transformation

Innovation

Execution

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

46

LIVE Q&A CALL

MIKE

KLAYKO

CEO

November 24th 5:00AM Pacific Time

RICHARD

DERANLEAU

CFO

MARC

RANDALL

SVP Products

& Offerings

IAN

WHITING

SVP WW

Sales

& Marketing

DAVE

STEVENS

CTO

APPENDIX AND

RECONCILIATIONS

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

48

LONG TERM FINANCIAL MODEL

Reiterating Model Presented on September 22, 2009

Data

Storage

IP

Ethernet

Global

Services

Brocade

TOTAL

Gross Margin*

60–63%

55–60%

45–50%

59–61%

Operating Expense*

37–39%

38–40%

20–25%

38–39%

Operating Margin*

21–26%

15–22%

20–30%

20–23%

* Non-GAAP numbers, see GAAP vs. Non-GAAP reconciliation in appendix

SEQUENTIAL INCOME

STATEMENT* COMPARISON

20.3%

22.7%

3.2%

3.2%

18.0%

17.3%

16.7%

16.3%

41.8%

40.5%

Q3 09

Q4 09

Cost of revenue

Research and development

Sales and marketing

General and administrative

Income from operations

Q4 FY 2009 Earnings,  November 23, 2009

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

49

* Non-GAAP, please see reconciliation in appendix

CAPITAL EXPENDITURES

Cumulative Campus CAPEX: $183M,

approximately 2/3 complete

Q4 FY 2009 Earnings,  November 23, 2009

50

©

2009 Brocade Communications Systems, Inc.—Company Proprietary Information

Q4 FY 2009 Earnings,  November 23, 2009

©

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51

RELATIVE ACQUISITION

INTEGRATION MARGINS*

*

Non-GAAP,

see

reconciliation

in

appendix,

McDATA

closed

in

Q2

07

and

Foundry

closed

in

Q1

09

50%

52%

54%

56%

58%

60%

62%

64%

66%

GROSS MARGIN

Brocade during McData acquisition

Brocade during Foundry acquisition

OPERATING MARGIN

15%

17%

19%

21%

23%

25%

27%

Brocade

during

McData

acquisition

Brocade during Foundry acquisition

SR. SECURED LEVERAGE RATIO

Q4 FY 2009 Earnings,  November 23, 2009

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2009 Brocade Communications Systems, Inc.—Company Proprietary Information

52

Consolidated Senior Secured Leverage Ratio

Q1 FY09

Q2 FY09

Q3 FY09

Q4 FY09

$ Thousand

Actual

Actual

Actual

Actual

Consolidated Net Income

($26,031)

($63,118)

($21,034)

$34,243

plus

(i) Consolidated Interest Charges

$21,357

$26,398

$22,845

$20,681

(ii) Provision for Federal, state, local and foreign income taxes payable

$22,028

$20,021

$0

(iii) Depreciation and amortization expense

$39,754

$54,377

$50,956

$51,486

(iv) Fees, costs and expenses incurred on or prior to the Acquisition Closing Date in connection with the

Acquisition and the financing thereof

$0

$0

(v) Any cash restructuring charges and integration costs in connection with the Acquisition, in an aggregate

amount not to exceed $75,000,000

$5,319

$4,720

$1,450

$333

(vi) non-cash restructuring charges incurred in connection with the Transaction, all as approved by Arrangers

$18,400

$19,972

$5,840

$2,097

(vii) other non-recurring expenses reducing such Consolidated Net Income which do not represent a cash item in

such period or any future period (in each case of or by the Borrower and its Subsidiaries for such Measurement

Period)

$26,900

$53,304

$0

$0

(viii) any non-cash charges for stock compensation expense in compliance with FAS 123R and amortization of

the

fair

value

of

unvested

options

under

the

Acquired

Business’

employee

stock

option

plan

assumed

by

the

Borrower

$18,080

$40,111

$43,313

$35,714

(ix)

legal fees and expenses relating to the Borrower’s indemnification obligations for the benefit of its former

officers and directors in connection with its historical stock option litigation

$13,740

$11,778

($561)

$0

minus

(i)

Federal, state, local and foreign income tax credits

$0

($24,769)

$0

($6,707)

(ii)

all non-cash items increasing Consolidated Net Income (in each case of or by the Borrower and its

Subsidiaries for such Measurement Period)

($2,877)

($2,899)

($3,511)

($7,216)

Consolidated EBITDA

$136,670

$119,874

$119,319

$130,631

4 Quarter Trailing Consolidated EBITDA

$537,081

$531,304

$518,002

$506,494

Consolidated Senior Secured Debt

$1,114,050

$1,039,050

$1,005,909

$948,028

Consolidated Senior Secured Leverage Ratio

2.07

1.96

1.94

1.87

Q4 FY 2009 Earnings,  November 23, 2009

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53

FOUNDRY PURCHASE

PRICE ADJUSTMENT

Anticipated Impact to Inventory and Revenue

Q4 FY 2009 Earnings,  November 23, 2009

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2009 Brocade Communications Systems, Inc.—Company Proprietary Information

54

QUARTERLY NET INCOME (LOSS)

GAAP/NON-GAAP RECONCILIATION

(IN THOUSANDS)

Q4 09

Q3 09

Q4 08

Net income (loss) on a GAAP basis

$33,597

-$21,033

$35,581

Adjustments:

Legal

fees

and

recoveries

associated

with

indemnification

obligations and other related expenses, net

-$14,612

-$561

$26,274

Stock-based compensation expense

$35,715

$43,313

$7,515

Amortization of intangible assets

$34,950

$35,002

$16,600

Acquisition and integration costs

$333

$1,450

$682

Loss on impairment of portfolio investments

–

–

$8,751

Legal

fees

associated

with

certain

pre-acquisition

litigation

$546

–

$20

Restructuring costs and facilities lease loss benefit, net

–

–

$3,208

Provision for certain pre-acquisition litigation

$14,335

–

–

Acquisition-related financing charges

–

–

$4,736

Income tax effect of adjustments

-$31,502

-$2,795

-$27,602

Non-GAAP net income

73,362

$55,376

$75,765

THANK YOU

EX-99.3

EXHIBIT 99.3

BROCADE

BROCADE Q4 FY 2009 EARNINGS

Prepared Comments

November 23, 2009

Peter Ausnit

Senior Director, Investor Relations

Phone: 408-333-4000

pausnit@brocade.com

John Patun

Senior Manager, Investor Relations

Phone: 408-333-6218

jpatun@brocade.com

BROCADE Q4 FY 2009 EARNINGS NOVEMBER 23, 2009

Slide 1: New Format for Earnings-Related Materials

Prepared comments provided by Peter Ausnit, Sr. Director, Investor Relations

Thank you for your interest in Brocade’s earnings announcement. Beginning this quarter, we are moving to a new format of releasing prepared remarks in advance of the conference call. The goal is two-fold: to provide analysts and investors with access to supplemental earnings-related materials in conjunction with the press release and to allocate more time to answering questions during the live webcast. As such, Brocade released a press release detailing fiscal fourth-quarter and full 2009 financial results at approximately 4:00 p.m. Pacific time on November 23rd via Business Wire and First Call. The release was also made available on Brocade’s Investor Relations website at www.BRCD.com along with prepared comments and slides. A live question and answer conference call will be web cast beginning at 5:00 a.m. Pacific time on November 24th and will be archived on Brocade’s IR website for approximately 12 months. Participants are invited to submit questions via email at ir@brocade.com up to one hour prior to the start of the web cast, and to ask live questions during the conference call.

Slide 2: Prepared Comments

Today’s prepared comments include remarks by Mike Klayko, Brocade’s CEO, regarding business strategy and an overview of our operations, and by Richard Deranleau, Brocade’s CFO, who will provide a financial review.

Slide 3: Safe Harbor

The information in Brocade’s prepared comments includes forward-looking statements, including without limitation, statements about Brocade’s financial results, plans and business outlook. These forward-looking statements are only predictions and involve risks and uncertainties such that actual results may vary significantly. These and other risks are set forth in more detail on Brocade’s Form 10-K for the fiscal year ended October 25, 2008 and 10-Q for the quarter ended August 1, 2009. These forward-looking statements reflect beliefs, assumptions, estimates and predictions as of today, and Brocade expressly assumes no obligation to update any such forward-looking statements.

Certain financial information is presented on a non-GAAP basis. The most directly comparable GAAP information and a reconciliation between the non-GAAP and GAAP figures are provided in the accompanying press release, which has been furnished to the SEC on Form 8-K and posted on Brocade’s website.

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Slide 4: Q4 and Fiscal 2009

Prepared comments provided by Mike Klayko, CEO

Slide 5: Fiscal Q4 09 results

Brocade had an outstanding fourth quarter, capping what has been a truly transformational year.

We achieved record Q4 revenues of $521.8M, growing 31% year-over-year and 5.8% sequentially, the fastest Q4 sequential growth of any networking company with annualized revenues exceeding $2B.

Brocade exceeded the Street’s EPS consensus for the 17th consecutive quarter thanks to revenue growth, expanding gross margins and effective cost controls.

Q4 also produced strong Adjusted EBITDA of $130.6M and a near-record $155.3M of cash flow from operations.

I am extremely pleased with Brocade’s financial results which benefited directly from the relentless growth in data and network traffic, which continues to remain robust regardless of economic cycles. Brocade has experienced a sustained revenue growth ramp, which we expect to continue. Our confidence lies in our ability to (1) run our playbook, (2) continue to expand our routes-to-market, (3) provide the most innovative products customers need, (4) work closely with our partners and develop new partnerships, (5) and finally, to maniacally focus on the execution of every aspect of our operations.

Slide 6: FY2009: Record Results and Milestones

Revenues in FY2009 increased 33% to $1.953 billion, a Company record made even more poignant because it was achieved during the most turbulent global market conditions in many decades.

Not long ago Brocade aspired to become a $1 billion company by increasing our share and leadership position in the storage networking market. We achieved those goals and then set our sights on becoming a $2 billion company, a significant milestone that we have also

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achieved. In 2009, Brocade outlined scenarios showing a path to revenues exceeding four billion dollars by leveraging our entry into the much larger Ethernet networking market, all while operating within our long term financial model. Looking out further, Brocade sees a clear trajectory to $10 billion and beyond. We believe that the company is well-positioned to capitalize on these aggressive goals – we simply need to continue to execute as we have done in the past.

Slide 7: Brocade: An Industry Game-changer

2009 was a game-changing year for Brocade and for the networking industry. In order to produce this successful transformation, we focused on two critical areas: (1) making sure we understood what problems our customers were trying to solve and then developing innovative technology faster, with higher quality at the lowest acquisition costs to address those needs, then (2) ensuring execution in all areas to successfully deliver these products to our customers. Simply put, we focused on out-innovating and out-executing all of our competitors.

Slide 8: Brocade?

So who is Brocade today?

Slide 9: A Networking Company

We are no longer just a Storage Networking or SAN company. Brocade is a networking company! We are one of only two end-to-end networking solutions providers in the industry. We have done extensive surveys among global IT decision-makers – both customers and non-customers. Over 90% state that having a complete networking solution that includes both Storage and Ethernet technologies is an absolute must-have. That means we can sit at the big table with the one other incumbent vendor that offers both. But let me tell you what differentiates Brocade and why we are so excited about the opportunities in this space.

Brocade is a networking company that plans to remain focused on networking and networking innovation. We are a networking company that partners with the world’s leading server vendors and global systems integrators to meet the evolving needs of CIOs around the world.

Brocade is a networking company that offers the highest-performing, fastest, most reliable, most energy- and space-efficient networking products and services through the world’s largest and most effective partner ecosystem.

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Brocade is a networking company that enables open, best-of-breed solutions that give customers freedom to choose their infrastructure, implementation schedules, and their budgets.

Brocade is a networking company that champions standards and delivers products first-to-market that improve performance while saving customers at least 30% or more compared to competitive networking offerings.

In the most recent quarter Brocade was the fastest growing large networking company in the world, and our goal is to make Brocade the best networking company on the planet. In 2009 Brocade made tremendous progress towards that goal.

The next question might be “How?”

Slide 10: Brocade’s Entry into Ethernet Networking Market

Not by accident. Looking back, Chapter 1 in Brocade’s playbook called for entry into new markets.

As the storage networking leader, Brocade enjoyed a privileged view of the world’s largest enterprise data centers: directly touching approximately  ³/4 of the Global 1000 companies. Customers told Brocade about their evolving networking needs and their views of, and fatigue with, incumbent Ethernet networking vendors.

Brocade also saw that the last major Ethernet network upgrade occurred before Y2K, ten years ago, during Web 1.0.

With these insights and data points, Brocade then conducted an exhaustive review of the relative strengths of each Ethernet vendor, assessing what each could contribute to Brocade’s vision of the network, the future role of virtualization, and convergence offerings and differentiation. Brocade’s acquisition criteria were based on intellectual property, product road map, differentiation and performance, customer references, corporate fit, sales coverage, and enterprise readiness.

Slide 11: Brocade’s Acquisition of Foundry Networks

Brocade’s choice was Foundry Networks. Foundry met all of our criteria and offered a broad portfolio of proven data center quality products and performance that met the needs of the world’s most demanding enterprises and the most innovative service providers.

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The acquisition closed last December and during the first half of fiscal 2009 we focused on the integration of our business operations, aligning sales, research and development priorities, product road maps, and supply chain rationalization. With no overlap in products and engineering resources, and minimal overlap in sales coverage, the integration was very efficient and highly leverageable. From an operational perspective, we were able to integrate more quickly and realize greater cost synergies than previously estimated. With both companies being headquartered about 10 miles apart in Silicon Valley, the fit between our cultures is strong, which has led to high employee retention and satisfaction.

Brocade now operates as one company with one face to the customer. We have never been in a better position to meet the needs of the most demanding networking customers and partners around the world.

Slide 12: Market Drivers that Fuel the Networking Industry

As an end-to-end networking company, Brocade serves markets driven by robust, long-term secular growth trends such as the explosive proliferation and increased complexity of addressable devices; the need to store and access data, which is doubling every year, and a rapidly growing population of Internet users, who demand high speed access.

As much as network traffic has grown, we expect future growth to dwarf today’s demands.

In 2010 there will be 175 exabytes of data traffic generated. To put that into perspective, there has only been 150 exabytes of data crossing the Internet since it was created in 1969. So in 2010, the world will generate more network traffic in one year than it has in the past 40. One key growth driver of traffic is video with Internet users watching some 25 billion videos per month, a figure that has doubled from earlier this same year.

Slide 13: Network Upgrade Coming

End user expectations are rising, and CIOs know that network congestion doesn’t clear up on its own. Users want access to their applications and data on the network regardless of location or the device used. Wholesale migration of compute from desktops to the cloud taxes current networks well beyond the capacity they were originally designed to meet and scale to. Retaining end users while meeting their demands will be impossible without a significant networking investment. Commonplace applications and tools such as YouTube, iPhone, LinkedIn, and Facebook are becoming necessities – all of which contribute to the urgency of the upgrade.

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Brocade regularly polls CIOs. In our latest survey, 65% say that they plan major rebuilds within the next three years. The architectures in place do not scale: multiple layers are complex to maintain and prone to failure. As traffic grows, performance degrades, and nothing, apart from a major upgrade, will solve the problem.

Brocade knows the pain points, and knows the constraints IT customers face moving forward. They want to radically simplify their networks, to run one wire throughout their systems, and to raise utilization through virtualization while preserving the data, applications, and functionality they have come to rely on.

Slide 14: $3.3T Global IT Spend in 2010

While IT spending has been constrained in 2009 we are seeing some positive trends that bode well for our industry.

Gartner recently called for Global IT spending to increase to $3.3 trillion in 2010, citing needs to address the aging infrastructure I just described.

As an example, in October, Gartner pointed out that the useful lives of installed servers have been extended a year or more past scheduled retirement. For servers, a year is a long time. Gartner stated that unless replacement cycles accelerate, this aging base and the associated infrastructure raises operational risks to enterprises around the world. Illustrating this, just last week IT systems breakdowns disrupted hundreds of flights across the country for the second time in less than two years.

Brocade believes that the world’s network infrastructure is older than the world’s server infrastructure and that risks from network failure to the enterprise are even higher.

Slide 15: Inflection Point

The market drivers of exploding growth in data, traffic and devices – combined with aging infrastructure and the anticipation of higher IT spending – all create an incredible inflection point for Brocade.

What is even more exciting than being in the industry’s “perfect storm” is that the CIOs of the world’s largest companies are asking for Brocade by name. That’s because they understand

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that our innovative networking solutions can seamlessly integrate with their chosen applications and the heterogeneous systems they’ve built, and plan to continue acquiring, as their businesses evolve. End-to-end networking solutions that solve their infrastructure issues, provide the performance and interoperability they require, protect their IT investments and reduces their overall spend – that’s the value proposition of Brocade.

Slide 16: IT Spending in Storage Networking

Storage networking has remained among the most resilient IT spending segments during the downturn of the last year, down less than 10% in 2009 against other IT spending segments that are down twice as much or more. As we look forward, industry analysts continue to expect storage networking spending to grow faster than overall IT Spend.

Some components of the storage networking market spend are shifting with additional growth expected to come from converged networking products, such as Fibre Channel over Ethernet, known as FCoE, and Converged Enhanced Ethernet, known as CEE. Brocade is uniquely positioned to take advantage of this shift because these converged solutions will continue to leverage Fibre Channel protocols and technologies, an obvious area of strength for us. Therefore, the assets that differentiate Brocade’s networking solutions today remain even more relevant and critical in all networking environments including convergence, especially as customers seek to integrate and maintain existing applications and storage environments.

Slide 17: Brocade’s Market Share in Storage Networking

Brocade’s leadership position in the SAN market continues to strengthen: In Q4 Brocade’s Storage Networking share increased to approximately 71%, extending trends established following the McDATA acquisition, when Brocade’s share was approximately 67%. Brocade’s share has increased by approximately 500 basis points since then.

Slide 18: IT Spending, Market Share in Ethernet Networking

Turning to Ethernet Networking, where Brocade seeks to gain share, expectations call for the Ethernet segments that Brocade addresses to grow at an 11.7% compounded annual growth rate through 2012.

Brocade’s strategy to gain share is based on the strength of Brocade’s (1) product differentiation and strategy, (2) partner ecosystem, and (3) enterprise account relationships and installed base.

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During Q4 and FY 2009 Brocade enhanced all three…

Slide 19: Metrics Related to Ethernet Share Gain Strategy

Starting with enterprise account relationships…

We are well positioned to drive Ethernet sales thanks to storage networking penetration of over 80% of the Global 500 and over two-thirds of the Fortune 1000. This storage networking leadership is an ideal platform to drive Ethernet networking sales due to our reputation for quality, openness, and customer focus. And I am pleased to report that during 2009, Brocade focused on new account development and more than doubled Ethernet penetration among our top 100 Storage Networking customers.

Slide 20: New Partnerships

Turning to partnerships: Brocade’s ecosystem continues to expand. We added 111 new partners in fiscal 2009.

Partners turn to us for several reasons: their customers are calling for choice and want open systems. Brocade provides best-in-class channel support and a focused channel strategy that allows these partners to differentiate and earn a return that enables them to continue to grow. Brocade’s channel reach is growing via hundreds of thousands of partner sales people and thousands of OEM channel partners.

Slide 21: Brocade’s Go-to-Market Model Attracts Partners

Partners are also attracted to Brocade’s go-to-market model, which has grown from a one-dimensional OEM model into a partner-focused, multi-channel strategy that fully distributes our product worldwide. Brocade’s diversified channel model includes OEM Partners, Direct Distributors, Direct Value Added Resellers, Global Systems Integrators, and a direct sales force.

Brocade’s direct sales force is an asset for all channels since they are focused on providing the best solution to the end user customers regardless of the channel the customers use to make IT purchases.

Brocade’s partner relationships continue to scale. As most appreciate, channel development takes time. Many have seen that the dynamics in the networking industry have realigned

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longstanding channel relationships in Brocade’s favor, but perhaps fewer realize that the impact of those realignments are only just beginning to be felt.

Slide 22: Product Differentiation and Strategy

Finally our strategy to gain share depends on Brocade’s continuing history of innovation and networking leadership, which remains the foundation of our value proposition. As such, Brocade has invested in product development throughout its history and continues to out-innovate our networking peers.

In the last year Brocade introduced 62 new products and solutions, addressing unmet needs in our targeted market segments and industry verticals. For us, the number of products and solutions is not as important as what they are able to achieve. Our innovation strategy protects IT investments and reduces the overall IT spend. Our innovation solves the problems CIOs face today and offers an evolutionary plan to address the problems of the future. Our innovation is why our customers and partners turn to us as the thought leader in networking and the supplier of choice for future networking technologies.

Slide 23: Brocade’s Expansion in the Networking Segments

We continue to expand the networking segments we serve. We have deliberately chosen three distinct segments because they play to our core strengths and they represent high-growth and healthy profit margins. This enables us to continue to fund new product development. As a result we have built a focused product and solutions portfolio that capitalizes on the needs of these segments and expect to gain market share.

In the Enterprise Data Center market segment as we entered 2009, we sold storage networking products into data centers around the world. During the year we expanded our reach into the Ethernet side of the data center as well as the LAN Campus and Service Provider segments.

Our efforts in the Data Center market segment are focused on delivering the highest performance, most reliable, cost effective and risk-mitigating networking solutions. We also enabled our partners’ platforms to differentiate and simplify the provisioning and management of a new generation of virtual and cloud solutions.

Brocade’s mission in the Service Provider market segment is to enable customers to transition from high-cost SONET to Ethernet transport at significant savings while enabling multiple

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service platforms and transport protocols. In particular, Service Providers have been hit the hardest in terms of the IT spend required to keep up with the relentless growth in Internet traffic while managing an inequitable revenue stream caused by consumer pricing pressures. So, Brocade’s suite of high-performance, low-cost Ethernet solutions targeted at this market resonate well with this customer base.

In the Campus LAN market segment, Ethernet is everywhere and Ethernet speeds are going up. Our focus is on delivering smarter networks that are simpler and significantly less costly to operate. Why are we excited about this space? Because the TAM for Campus Ethernet is actually larger than it is for Data Center and we have a complete portfolio of products that are optimized for the Campus LAN data center. Our high-speed core technology aggregates everything from the closets, and we integrate wireless and wired offerings to supply end-to-end coverage across the campus in whatever way the customer wants to deploy it. And Brocade goes to market with partners that have the expertise and the support these customers require.

All three market segments—Data Center, Service Provider and Campus LAN—are large, growing, and have significant unmet needs.

Slide 24: Vertical Market Strategy

In parallel with our segment strategy, we are also optimizing products for targeted industry verticals where we have had a strong presence and now have even more opportunities to differentiate our partners’ solutions and address additional networking needs.

For example, in Healthcare, where Brocade has storage account relationships with each of the top ten Healthcare IT customers, there is a need to support real-time medical applications such as electronic medical records, high-definition imaging, and online prescription systems. Brocade also supports solutions that enable secure communication with the patient, within the hospital and throughout the hospital’s network of affiliates. According to a recent Forbes article discussing Healthcare IT, the statistics show a compelling opportunity for growth in this sector. Of the 633,000 doctors in the U.S., only 17% have electronic medical records while the 5,708 U.S. hospitals are lagging even further behind with 9%. However, the U.S. government has allocated $36 billion of the 2009 stimulus package for doctors to install these applications.

In Media & Entertainment, where Brocade has been selected and installed in 9 of the top 10 businesses, there is increasing content variety, delivery methods, and viewing devices. More and more, content is being downloaded or streamed over the Internet, and consumed on

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mobile devices with viewers personalizing and customizing content. Brocade supports solutions that enable secure, bandwidth-intensive content on demand applications that run without lag or choppiness. Our solutions support applications that manage bandwidth utilization, reliability, quality of service, traffic management, security and network visibility.

In Education, Brocade’s customers want virtual classrooms and web-based distance learning. We support solutions that enable secure network access for online assignment, course material, libraries, research, student collaboration, and social networking tools.

In the Public Sector, which accounts for over 15% of global IT Spend, there is demand for server consolidation, infrastructure optimization, virtualization, and improved security. Brocade has strong Federal relationships and a portfolio tailored to the needs of public sector customers.

These are just a few examples of the vertical solutions that differentiate us in our primary business segments.

Slide 25: Summary of Fiscal Q4 and 2009

Again, we are very pleased with our financial performance and execution during fiscal 2009. The momentum of Q4, which saw the fastest sequential revenue growth of any of our large networking peers, strong cash flow generation and EPS ahead of estimates all tell us that we are on the right track with the right playbook, product portfolio and go-to-market model.

FY09 was a transformational year for Brocade as we became one of only two end-to-end networking solutions providers in the world, maintained our market leadership in Storage Networking and made tremendous progress in new Ethernet Networking account penetration. The market drivers of unprecedented and continued growth in data, traffic and devices, the planned infrastructure upgrade and the predicted growth in global IT spending—combined with the industry dynamics of our game-changing entry into the Ethernet market, choices made by customers and partners to consider alternative networking solutions and competitive moves have all put Brocade in a stronger position than ever.

Looking forward, some see obstacles. Brocade sees the openings and is seizing the opportunities.

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Slide 26: Looking Forward

So, turning to 2010 and beyond…

Slide 27: Innovation and Product Development

In the coming year Brocade plans to continue to leverage its technology and innovation leadership to deliver market-leading products providing best-in-class performance in terms of price, efficiency, density, operational simplicity, and reliability. We will continue to enable convergence and virtualization via open systems.

Investing in open systems is both a deliberate philosophy and a strategic choice for Brocade and for customers. We believe that over time open systems win in large markets that attract numerous entrants who then drive innovation, which enables lower costs, and fill in the gaps of closed, proprietary systems.

This is an important distinction. As I have already said, Brocade is one of only two end-to-end networking providers. Of these two players, however, we are the only company who is committed to an open platform for innovation based on industry standards, joint development and testing with partners and a best-of-breed infrastructure. Why has Brocade made this decision while the incumbent provider has opted for a proprietary, closed system? There are several reasons:

Slide 28: Open Versus Closed Systems

First, open systems acknowledge the reality that most infrastructures are and will continue to be heterogeneous. The Enterprise Strategy Group recently affirmed widespread buyer preference for open systems, saying, “95% of the market will continue to buy virtualization offerings from the likes of the major ‘piece part’ suppliers – Dell, HP, IBM, etc.”

Vertically integrated systems may sound appealing on paper, but ultimately, they prove to be an inefficient and costly way to implement IT infrastructure.

Second, open systems enable choice, flexibility and cost-savings. An open architecture offers higher performance and quality, greater efficiency and is simpler to operate. It also provides an easier path for customers to evolve.

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Third, while open systems require long-term commitment to cooperative development, testing and interoperability, they also leverage the intellectual property and horsepower of the leading IT companies in the world. There’s an important competitive advantage to being the only end-to-end networking company that does all of this successfully.

Slide 29: Key 2010 Metrics

For 2010, in addition to Brocade’s financial outlook, we would like investors to measure our progress on four major initiatives:

1. Increasing our IP Ethernet Networking revenues and new account penetration and market share

2. Maintaining our storage networking share

3. Expanding our partnerships

4. Delivering focused products that meet the needs of our key market segments and vertical markets.

Our operational and financial goals are integrated. As we execute to our playbook and plans, we remain optimistic that our customers, partners and investors will understand the unique value proposition that Brocade brings to the networking industry.

Slide 30: Q4 Fiscal 2009 Financials

Prepared comments provided by Richard Deranleau, CFO

Slide 31: Q4 Financial Highlights

As Mike said, our strong Q4 capped a great 2009 during which we achieved our operational and financial goals against challenging market conditions.

Q4 revenues increased $28.5M sequentially and were in-line with our guidance, driven by strength in North America, Asia Pacific and Japan.

In addition, we saw strength in a seasonally strong Federal segment. Our product portfolio performed well across the board, on both the Storage and Ethernet sides.

Non-GAAP Gross Margins and non-GAAP Operating Margins improved, and both are now within Brocade’s Long Term Financial Model, which we improved at our Analyst Day on September 22^nd.

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Brocade strengthened its balance sheet thanks to near record Free Cash Flow and Adjusted EBITDA, which enabled continued execution of our term debt reduction plan. During the year Brocade reduced our Term Debt by $166M, or approximately 15%. Our financial covenants remain well below thresholds.

Slide 32: Key Financial Metrics

On our Key Financial Metrics slide, you can see the continued improvements in non-GAAP gross margins, non-GAAP EPS, and GAAP EPS.

Slide 33: Revenue: Storage, Ethernet, and Services

Turning to revenues by business unit … Our mix remained broadly consistent with Q3.

Within storage we saw strength across all product lines. During the full year Storage, including storage-related services, was flat year-over-year.

Our server product group, consisting of CNA’s, Embedded Switches, HBA’s, and Mezzanine Cards, grew strongly and generated over $37.5M in the quarter, up 19% sequentially from $31.5M in Q3.

Our Ethernet business grew 8% sequentially. Our services business grew 42% year-over-year.

Slide 34: Revenue: 10% Customers, Other OEM, and Channel/Direct

Turning to distribution – our mix remained consistent with Q3.

Slide 35: Domestic Versus International

Turning to geography… On a ship-to basis, the US represented 63% of reported revenues, down from 64% in Q3 09 and 64% in Q4 08.

However, on an estimated end-user basis adjusting for those partners who take delivery of internationally bound products in the US, the US strengthened to 53% of total revenues on a strong Federal quarter, up from 52% in Q3 09, and 41% in Q4 08.

EMEA was in line with expectations, showing slight sequential improvement.

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Slide 36: Non-GAAP Gross Margin and Profit

Gross margin, on a non-GAAP basis, increased to 59.5%, up sequentially from 58.2% in Q3 and consistent with our long-term target model. This improvement was driven by reductions in product costs associated with our supply chain integration. Service margins were 50.7%, down from 52.2% in Q3, on a higher mix of professional services revenue.

From a pricing perspective, on a like-for-like basis, we saw slight pricing pressure in our Storage Networking business, with sequential ASP declines in the low single digits. We did not experience any significant ASP declines in our Ethernet business.

Slide 37: Non-GAAP Operating Margins

Mindful of the current economic environment, we continue to work to control operating expenses, which were 36.9% of revenues versus 37.8% in Q3 on a non-GAAP basis. Operating expenses were better than our long-term target model of 38% to 39% of revenues. Brocade continues to invest in its business and added 204 new employees during the quarter, principally in R&D, Global Services, and Sales.

Non-GAAP operating margins improved sequentially thanks to top line growth and lower cost of revenues. In total, in Q4 09 non-GAAP operating margins were 22.7%, a 240 basis point increase versus the prior quarter’s non-GAAP operating margin of 20.3%.

Our Q4 non-GAAP tax rate was 25.3%, down from 29.2% in Q3.

These factors, combined with improving gross margins, contributed to an $18M sequential improvement in non-GAAP net income, which was $73.4M, increasing 32% sequentially, and equates to non-GAAP diluted EPS of 15 cents.

On a GAAP diluted basis, EPS moved from a $0.05 loss last quarter to a $0.07 profit, reflecting both increased adjusted EBITDA and significantly lower non-cash charges such as stock based compensation.

Slide 38: Selected Balance Sheet Metrics

Turning to the balance sheet…

ROIC increased to 16.4%, following year-long trends. ROE also improved to 4.2%.

Days Sales Outstanding were 52 days, down from 56 days in Q3, reflecting strong receivables collections.

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Inventories turned 14 times, down from 17 times in Q3, driven by inventory movements as we continue to transform our supply chain.

Slide 39: Q4 09 Financial Messages

In Q4 our margins trended towards the high end of our target model, just 3 full quarters after the close of the Foundry acquisition thanks to revenue synergies per plan and cost synergies ahead of plan.

The Company continues to drive strong cash flow and is repaying debt ahead of schedule. Lastly, we are executing very well despite challenging economic conditions and are committed to our long term financial model.

Slide 40: FY 2010 Planning Assumptions

Now, as we look forward, here are some things to consider in developing your financial models:

Our planning assumption is that IT spending will continue to recover during the first half of 2010 and approach normalcy in the second half of 2010.

In addition to a recovering IT market, Brocade expects to generate growth faster than market based on ramping distribution of our Ethernet products throughout the year, and from the launch of innovative new products, which are expected to impact the second half of 2010.

Consequently, Brocade expects to gain share in Ethernet networking and to maintain storage market share.

As a reminder, gaining a point of Ethernet share equates to $300M of incremental revenue. As such, our full year outlook calls for Ethernet market share gains ranging from less than 0.5% to less than 1.2%.

Brocade expects directors and embedded switches to grow faster than fixed port switches in the overall SAN market, and also expects to be a leading supplier of HBAs and CNAs.

We expect quarterly ASP declines on the storage networking side to remain in the low to mid single digits. Declines on the Ethernet side are expected to be in the mid single digits.

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Turning to seasonal expectations: we expect Q1 2010 sequential growth of 4% to 5%, slightly below normal seasonal trends, which are typically up 6% to 8% sequentially. As we stated at Analyst Day, we expect Q2 and Q3 to be flat to up sequentially, followed by a strong Q4.

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Slide 41: FY 2010 Financial Outlook

Given these considerations, we are reiterating our FY 2010 outlook provided at our Analyst Day on September 22nd. To remind you, we expect:

• FY 2010 revenues to be in a range from $2.25 to $2.45 billion;

• Non-GAAP gross margins for the full year to range from 59-60%;

• Operating expenses and operating margins to be in Model;

• Annual non-GAAP tax rate to be approximately 30%;

• Annual diluted shares outstanding to be in a range of 510M to 520M shares;

• Non-GAAP EPS to be in a range from 56 cents to 61 cents.

Slide 42: Operating and Free Cash Flow Outlook

Operating cash flow totaled $325M in FY 2009, adjusted for the $160M payment of a class action lawsuit and normalized for accounts payable related to the Foundry Acquisition. Capital expenses were high this year due to planned campus investments, which are expected to be completed in Q3 of FY 2010. Capital expenses are then expected to normalize. We expect FY 2010 operating cash flow is to exceed $460M, and to increase in the following years, as we indicated at our September 22^nd Analyst Day.

Slide 43: EBITDA, Cash and Liquidity

Our strong Q4 Adjusted EBITDA was again a healthy $131M, up over $11M from Q3. FY 10 Adjusted EBITDA is expected to range from $560M to $610M.

Cash and equivalents have been increasing thanks to strong continuing cash flows. At the end of the fiscal year, as of October 31, 2009, cash and equivalents were $339M, up $89M from the prior quarter. During FY 10, Brocade expects cash and equivalents to approach $0.5B.

Total gross secured debt, before the debt discount of $35M was $948M, reflecting payments in the quarter of $58M, which was $45M in excess of the $13M required payment. Brocade plans to steadily reduce secured debt throughout the year.

Brocade remains well below its debt covenant. Our Q4 Senior Secured Leverage Ratio was 1.87, well below the required 2.3 level. We expect the ratio to range from 1.80 to 1.85 in Q1, and to continue to decline throughout the year, and to always remain well below the required 2.0 level for 2010 set in the agreement.

BROCADE Q4 FY 2009 EARNINGS NOVEMBER 23, 2009

Slide 44: Repaying the McDATA Convert

In February 2010, the McDATA Convertible Debt of $173M matures. As shown, we plan to repay the debt through a combination of cash on hand, cash flow, and working capital. Post redemption, we expect to have cash balances on hand above $250M.

Slide 45: CEO Closing

Prepared Comments by Mike Klayko, CEO

Brocade’s Q4 performance led our large networking peers and capped a great 2009. In 2010, building on that momentum, Brocade moves forward as 1 of only 2 end-to-end networking companies in the world, and is uniquely positioned thanks to our innovative, open, best-in-class products, our partners, and our execution record.

Brocade’s markets are growing due to sustained, rapid data and traffic growth and rising network performance requirements. To meet that demand Brocade foresees the wholesale re-architecture and build-out of the world's networks, on both the storage and Ethernet sides.

Brocade has the right strategy, products and partners to address our core markets. With our success in the rapid integration of the Ethernet business, our expanded routes to market for all of our business segments, and our continued delivery of industry-leading product and technology innovation, we believe Brocade is extremely well-positioned to continue its market leadership in storage and gain market share in the Ethernet space.

Slide 46: Live Q&A Call

Prepared comments provided by Peter Ausnit, Sr. Director, Investor Relations

That concludes Brocade’s prepared comments. At 5:00 am Pacific Time on November 24th Brocade will host a live call to answer questions on the phone and submitted by email to ir@brocade.com. All are welcome to submit questions, which Brocade Investor Relations will read to management. Brocade intends to address more questions using this format, which is also intended to elicit questions from a larger group of analysts and investors.

Thank you for your interest in Brocade.

Slide 47: Appendix and Reconciliations

Slide 48: Long Term Financial Model

BROCADE Q4 FY 2009 EARNINGS NOVEMBER 23, 2009

Slide 49: Sequential Income Statement Comparison

Slide 50: Capital Expenditures

Slide 51: Relative Acquisition Integration Margins

Slide 52: Senior Secured Leverage Ratio

Slide 53: Foundry Purchase Price Adjustments

Slide 54: GAAP/Non-GAAP Reconciliation

Slide 55: Thank You