Mellanox: Fiscal 2Q15 Financial Results

Mellanox Technologies, Ltd. announced financial results for its second quarter, ended June 30, 2015.

“We are excited to achieve record quarterly revenues and anticipate continued revenue growth and record annual revenues for the full fiscal year 2015. Our IB solutions continue to take market share on the TOP500 list, and we now connect 51.4% of the systems,” said Eyal Waldman, president and CEO. “The growth of data requires customers to adopt faster technologies in their data centers, and they are eagerly waiting to move to the next generation of high speed interconnects. Faster interconnects are needed in multiple data-intensive markets and applications such as database, big data, financials, machine learning, Web 2.0, cloud, high-performance computing, health care, insurance, transportation, homeland security, media and entertainment and many more. Mellanox is the first company to provide such end-to-end solutions to the market. We expect 25 GbE to be the new 10, 50 to be the new 40, and 100 GbE to do the heavy-lifting for data intensive markets.”

Second Quarter 2015 Highlights

• Revenue of $163.1 million increased 11.2%, compared to $146.7 million in the first quarter of 2015.
• GAAP gross margin was 71.1%, compared to 72% in the first quarter of 2015.
• Non-GAAP gross margins were 72.7%, compared to 73.4% in the first quarter of 2015.
• GAAP operating income was $19.4 million, compared to $15.2 million, in the first quarter of 2015.
• Non-GAAP operating income was $36.2 million, or 22.2% of revenue, compared to $30.2 million, or 20.6% of revenue in the first quarter of 2015.
• GAAP net income was $19.2 million, compared to $10.5 million in the first quarter of 2015.
• Non-GAAP net income was $36.1 million, compared to $28.6 million in the first quarter of 2015.
• GAAP net income per diluted share of $0.40 increased 81.8%, compared to $0.22 in the first quarter of 2015.
• Non-GAAP net income per diluted share of $0.75 increased 25%, compared to $0.60 in the first quarter of 2015.
  $41.3 million in cash was provided by operating activities, compared to $45.8 million in the first quarter of 2015.
• Cash and investments totaled $467.2 million at June 30, 2015, compared to $432.7 million at March 31, 2015.

Third Quarter 2015 Guidance

• Quarterly revenues of $165 million to $170 million.
• Non-GAAP gross margins of 71.5% to 72.5%.
• An increase in non-GAAP operating expenses of 4% to 6%.
• Share-based compensation expense from $12.7 million to $13.2 million.
• Non-GAAP diluted share count from 47.9 million to 48.4 million shares.