SUNNYVALE, Calif. & YOKNEAM, Israel, April 17, 2018 — 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 million
- Non-GAAP gross margins of 68.5 percent to 69.5 percent
- Non-GAAP operating expenses of $119 million to $121 million
- Share-based compensation expense of $15.5 million to $16.0 million
- Non-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 million
- Non-GAAP gross margins of 68.0 percent to 69.0 percent
- Non-GAAP operating margin of 21.0 percent to 22.0 percent
Recent Mellanox Press Release Highlights
|•||April 9, 2018||Chinese Leading Weather Research Institute Selected Mellanox InfiniBand, Replacing OmniPath in an Existing Data Center|
|•||April 9, 2018||Mellanox ConnectX-5 Adapters and Rivermax Software Media Acceleration Enable Breakthrough Performance for Grass Valley Video Streaming Platform|
|•||April 2, 2018||World’s First 2 Petaflop Deep Learning System, NVIDIA DGX-2, Features Mellanox InfiniBand and Ethernet Solutions|
|•||March 20, 2018||Mellanox Simplifies Hybrid Cloud Connectivity between Enterprises and Microsoft Azure|
|•||March 19, 2018||Mellanox’s Advanced Ethernet Solutions Selected to Connect the Tel-Aviv Stock Exchange Network Infrastructure|
|•||March 7, 2018||Mellanox Surpasses One Million 100Gb/s Ports with LinkX™ Optical Transceivers and Cables|
|•||March 6, 2018||Mellanox Introduces Next Generation Ethernet Network Operating System – Mellanox Onyx™|
Mellanox will hold its first quarter 2018 financial results conference call today, at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time), to discuss the company’s financial results. To listen to the call, dial 1-877-876-9177, or for investors outside the U.S., +1-785-424-1667, approximately 10 minutes prior to the start time.
The Mellanox financial results conference call will be available via live webcast on the investor relations section of the Mellanox website at: http://ir.mellanox.com. Access the webcast 15 minutes prior to the start of the call to download and install any necessary audio software. A replay of the webcast will also be available on the Mellanox website.
Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage.Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software, cables and silicon that accelerate application runtime and maximize business results for a wide range of markets including high-performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. More information is available at: www.mellanox.com.