SUNNYVALE, Calif. and YOKNEAM, Israel, Oct. 30, 2019 — Mellanox Technologies, Ltd., a leading supplier of high-performance, end-to-end interconnect solutions for data center servers and storage systems, today announced preliminary financial results for its third quarter ended September 30, 2019.
“Mellanox delivered record revenue and cash flow from operations in the third quarter, with growth across all our major product lines. Sales of our Ethernet adapter solutions grew 28% quarter-over-quarter, and continue to lead the market for data rates of 25 gigabit per second and above. We started shipping ConnectX-6 Dx, the world’s first 200 gigabit per second Ethernet adapter with built in crypto acceleration, which will allow security to be deployed throughout enterprise and cloud data centers. We are also seeing healthy adoption of our Ethernet switches across a broad range of data center applications, including hyperscale, cloud, storage, and financial markets, resulting in 25% growth over the prior quarter,” said Eyal Waldman, president and CEO of Mellanox Technologies. “Our InfiniBand solutions grew as well, driven by the ramp of our 200 gigabit per second HDR solutions in the high performance computing, artificial intelligence, cloud, and storage market segments. As one key example, Microsoft is now offering InfiniBand HDR connected nodes in the Azure cloud for high performance computing workloads,” continued Waldman. “We are pleased with the strong traction of our adapters and switches in the data center, as well as our solid financial results for the third quarter.”
Third Quarter 2019 – Highlights
- Revenue of $335.3 million in the third quarter, an increase of 20.1 percent, compared to $279.2 million in the third quarter of 2018.
- GAAP gross margins of 64.9 percent in the third quarter, compared to 65.8 percent in the third quarter of 2018.
- Non-GAAP gross margins of 68.1 percent in the third quarter, compared to 69.6 percent in the third quarter of 2018.
- GAAP operating income of $48.9 million in the third quarter, compared to $39.5 million in the third quarter of 2018.
- Non-GAAP operating income of $95.1 million in the third quarter, or 28.4 percent of revenue, compared to $73.2 million, or 26.2 percent of revenue in the third quarter of 2018.
- GAAP net income of $44.2 million in the third quarter, compared to $37.1 million in the third quarter of 2018.
- Non-GAAP net income of $93.9 million in the third quarter, compared to $71.4 million in the third quarter of 2018.
- GAAP net income per diluted share of $0.78 in the third quarter, compared to $0.68 in the third quarter of 2018.
- Non-GAAP net income per diluted share of $1.69 in the third quarter, compared to $1.33 in the third quarter of 2018.
- $130.0 million in cash provided by operating activities in the third quarter, compared to $66.4 million in the third quarter of 2018.
- Cash, cash equivalents and short-term investments totaled $742.5 million at September 30, 2019, compared to $610.6 million at June 30, 2019.
Commentary Regarding Mellanox Acquisition by NVIDIA
As announced on March 11, 2019, NVIDIA Corporation intends to acquire all the issued and outstanding common shares of Mellanox for $125 per share in cash. Due to the pending acquisition, Mellanox will not hold an earnings conference call and has suspended the practice of providing forward-looking guidance.
Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage, and hyper-converged infrastructure. Mellanox’s intelligent interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications, unlocking system performance and improving security. Mellanox offers a choice of high-performance solutions: network and multicore processors, network adapters, switches, cables, software and silicon, that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, cloud, storage, cybersecurity, telecom and financial services. More information is available at: www.mellanox.com.