Mellanox: Fiscal 4Q16 Financial Results

Mellanox Technologies, Ltd. announced financial results for its fourth quarter ended December 31, 2016.

“During the fourth quarter we saw continued sequential growth in our IB business, driven by robust customer adoption of our 100Gb EDR solutions into artificial intelligence, machine learning, high-performance computing, storage, database and more. Our quarterly, and full-year 2016 results, highlight IB’s continued leadership in high-performance interconnects,” said Eyal Waldman, president and CEO. “Customer adoption of our 25, 50, and 100 GbE solutions continued to grow in the fourth quarter. Adoption of Spectrum Ethernet switches by customers worldwide generated positive momentum exiting 2016. Our fourth quarter and full-year 2016 results demonstrate Mellanox’s diversification, and leadership in both Ethernet and IB. We anticipate growth in 2017 from all Mellanox product lines.“

Fourth Quarter and Fiscal 2016 Highlights
    •    Revenues were $221.7 million in the fourth quarter, and $857.5 million in fiscal year 2016.
    •    GAAP gross margins were 66.8% in the fourth quarter, and 64.8% in fiscal year 2016.
    •    Non-GAAP gross margins were 71.9% in the fourth quarter, and 71.6% in fiscal year 2016.
    •    GAAP operating income was $13.4 million, or 6.0% of revenue, in the fourth quarter, and operating income was $30.6 million, or 3.6% of revenue, in fiscal year 2016.
    •    Non-GAAP operating income was $44.4 million, or 20.0% of revenue, in the fourth quarter, and $180.4 million, or 21.0% of revenue, in fiscal year 2016.
    •    GAAP net income was $9.0 million in the fourth quarter, and $18.5 million in fiscal year 2016.
    •    Non-GAAP net income was $41.3 million in the fourth quarter, and $169.5 million in fiscal year 2016.
    •    GAAP net income per diluted share was $0.18 in the fourth quarter, and $0.37 in fiscal year 2016.
    •    Non-GAAP net income per diluted share was $0.82 in the fourth quarter, and $3.43 in fiscal year 2016.
    •    $54.0 million in cash was provided by operating activities during the fourth quarter.
    •    $196.1 million in cash was provided by operating activities during fiscal year 2016.
    •    Cash and investments totaled $328.4 million at December 31, 2016.

First Quarter 2017 Outlook
    •    Quarterly revenues of $200 million to $210 million
    •    Non-GAAP gross margins of 71% to 72%
    •    An increase in non-GAAP operating expenses of 3% to 5%
    •    Share-based compensation expense of $15.8 million to $16.3 million
    •    Non-GAAP diluted share count of 50.3 million to 50.8 million shares