Mellanox Achieves Record Quarterly Revenues; Updates 2018 Outlook
Quarterly Revenue Record of $251 Million, Up 6 Percent Sequentially and 33 Percent Year-Over-Year
Ethernet Revenues Up 70 Percent Year-Over-Year, InfiniBand Up 6 Percent Year-Over-Year
Significant Improvement in Operating Leverage
April 17, 2018 07:30 AM Eastern Daylight Time
SUNNYVALE, Calif. & YOKNEAM, Israel--( BUSINESS WIRE)--Mellanox® Technologies, Ltd. (NASDAQ:MLNX) today announced financial results for its first quarter 2018 ended March 31, 2018.
“Our record first quarter financial performance is the result of the successful execution of our growth strategy and a testament to years of carefully planned R&D investments in 25 gigabit per second and above Ethernet technology, which is fast becoming the industry standard in markets around the world,” said Eyal Waldman, President and CEO of Mellanox Technologies. “First quarter Ethernet revenues, increased 12 percent sequentially, due to expanding global customer adoption of our 25 gigabit per second and above solutions. Our market leading Ethernet adapters, experienced broad based growth across global hyperscale, OEM, storage, financial services and artificial intelligence customers. Deployments of our LinkX Ethernet cables and transceivers accelerated across global hyperscale customers who recognize the benefits of performance, low-power, and configurability. InfiniBand revenues were up sequentially in the first quarter, outperforming seasonal trends, driven by strong demand from our high-performance computing and artificial intelligence customers using our EDR solutions. Our improved profitability during the first quarter demonstrates the successful execution of our commitment to deliver top-line revenue growth and increased operating leverage.”
First Quarter 2018 -Highlights
Revenues of $251.0 million increased 33.0 percent, compared to $188.7 million in the first quarter of 2017.GAAP gross margins of 64.5 percent in the first quarter, compared to 65.8 percent in the first quarter of 2017.Non-GAAP gross margins of 69.0 percent in the first quarter, compared to 71.7 percent in the first quarter of 2017.GAAP operating income was $12.0 million, compared to operating loss of $12.6 million in the first quarter of 2017.Non-GAAP operating income was $52.1 million, or 20.8 percent of revenue, compared to $15.7 million, or 8.3 percent of revenue in the first quarter of 2017.GAAP benefit from taxes on income in the first quarter was $26.4 million and included a reversal of valuation allowance on deferred tax assets of $26.7 million.GAAP net income was $37.8 million, compared to net loss of $12.2 million in the first quarter of 2017.Non-GAAP net income was $51.4 million, compared to $14.7 million in the first quarter of 2017.GAAP net income per diluted share was $0.71 in the first quarter, compared to net loss per diluted share of $0.25 in the first quarter of 2017.Non-GAAP net income per diluted share was $0.98 in the first quarter, compared to $0.29 in the first quarter of 2017.$55.4 million in cash was provided by operating activities, compared to $35.0 million in the first quarter of 2017.Cash and investments totaled $286.3 million at March 31, 2018, compared to $273.8 million at December 31, 2017.Mr. Waldman continued, “We have increased our full year 2018 outlook based on the strength of our first quarter, and improved visibility we have into market trends as we enter the second quarter. We remain committed to delivering top-line revenue growth and driving down costs to enhance operational efficiencies and achieve our increased non-GAAP operating margin target for fiscal 2018. Our updated financial outlook is further evidence of the strength of our strategy, innovation and investment priorities. With the ramp of our BlueField System-on-Chip and 200 gigabit per second HDR InfiniBand in 2018, we expect to build on our positive momentum and deliver even greater shareholder value.”
Second Quarter 2018 Outlook
We currently project:
Quarterly revenues of $255 million to $265 millionNon-GAAP gross margins of 68.5 percent to 69.5 percentNon-GAAP operating expenses of $119 million to $121 millionShare-based compensation expense of $15.5 million to $16.0 millionNon-GAAP diluted share count of 52.8 million to 53.3 million
Full Year 2018 Outlook
We currently project:
Revenues of $1,030 million to $1,050 millionNon-GAAP gross margins of 68.0 percent to 69.0 percentNon-GAAP operating margin of 21.0 percent to 22.0 percent
p.s.
Second Quarter 2018 Outlook
We currently project:
Quarterly revenues of $255 million to $265 million
(Q2 estimate ~ $248M)
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