Mellanox Achieves Record Quarterly and Annual Revenues; Forecasts Strong 2018
Thu January 18, 2018 4:05 PM|Business Wire|About: MLNX
Q4: 01-13-18 Earnings Summary
8-K
News
Quarterly Revenue Record of $238 Million, Up 5 Percent Sequentially and 7 Percent Year Over Year
2017 Ethernet Revenues Up 26 Percent and 25/50/100 Gigabit Revenues Up 156 Percent Year-Over-Year
Revenue Growth and Cost Rationalization Builds Foundation for Expanding Operating Leverage
SUNNYVALE, Calif. & YOKNEAM, Israel--(BUSINESS WIRE)-- Mellanox ( MLNX)® Technologies, Ltd. (NASDAQ: MLNX) today announced financial results for its fourth quarter and full year 2017 ended December 31, 2017.
“We are pleased to achieve record quarterly and full year revenues,” said Eyal Waldman, President and CEO of Mellanox Technologies. “2017 represented a year of investment and product transitions for Mellanox. Fourth quarter Ethernet revenues increased 11 percent sequentially, due to expanding customer adoption of our 25 gigabit per second and above Ethernet products across all geographies. We are encouraged by the acceleration of our 25 gigabit per second and above Ethernet switch business, which grew 41 percent sequentially, with broad based growth across OEM, hyperscale, tier-2, cloud, financial services and channel customers. During the fourth quarter, InfiniBand revenues grew 2 percent sequentially, driven by growth from our high-performance computing and artificial intelligence customers. For the full fiscal 2017, our revenues from the high performance computing market grew 13 percent year over year. Our 2017 results demonstrate the successful execution of our multi-year revenue diversification strategy, and our leadership position in 25 gigabit per second and above Ethernet adapters.”
Fourth Quarter 2017 - Highlights
Revenues were $237.6 million in the fourth quarter, and $863.9 million in fiscal year 2017.
GAAP gross margins were 64.1 percent in the fourth quarter, and 65.2 percent in fiscal year 2017.
Non-GAAP gross margins were 68.8 percent in the fourth quarter, and 70.4 percent in fiscal year 2017.
GAAP operating loss was $(6.7) million, or (2.8) percent of revenue, in the fourth quarter, and was $(17.1) million, or (2.0) percent of revenue, in fiscal year 2017.
Non-GAAP operating income was $38.0 million, or 16.0 percent of revenue, in the fourth quarter, and $118.7 million, or 13.7 percent of revenue, in fiscal year 2017.
GAAP net loss was $(2.6) million in the fourth quarter, and was $(19.4) million in fiscal year 2017.
Non-GAAP net income was $42.9 million in the fourth quarter, and $116.6 million in fiscal year 2017.
GAAP net loss per diluted share was $(0.05) in the fourth quarter, and $(0.39) in fiscal year 2017.
Non-GAAP net income per diluted share was $0.82 in the fourth quarter, and $2.28 in fiscal year 2017.
$66.9 million in cash was provided by operating activities during the fourth quarter.
$161.3 million in cash was provided by operating activities during fiscal year 2017.
Cash and investments totaled $273.8 million at December 31, 2017.
Mr. Waldman continued, “As we enter 2018, we expect to build on our momentum in Ethernet and InfiniBand. With the recent release of our BlueField system-on-chip, and the future introduction of our 200 gigabit per second InfiniBand and Ethernet products, Mellanox is well positioned to begin reaping the benefits from prior investments. Looking ahead, we anticipate seeing acceleration of revenue growth, while delivering on our commitment to more efficiently manage costs and achieve fiscal 2018 non-GAAP operating margins of 18 to 19 percent. We continue to drive improvements in profitability and identify further efficiencies that can be realized as our prior investments begin to yield positive results and we transition towards new product introductions in 2018 and beyond.”
First Quarter 2018 Outlook
We currently project:
Quarterly revenues of $222 million to $232 million
Non-GAAP gross margins of 68.5 percent to 69.5 percent
Non-GAAP operating expenses of $120 million to $122 million
Share-based compensation expense of $16.3 million to $16.8 million
Non-GAAP diluted share count of 52.4 million to 52.9 million
Full Year 2018 Outlook
We currently project:
Revenues of $970 million to $990 million
Non-GAAP gross margins of 68.0 percent to 69.0 percent
Non-GAAP operating margin of 18.0 percent to 19.0 percent
Non-GAAP operating margin of more than 20.0 percent exiting 2018
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