Voltaire: Fiscal 1Q10 Financial Results

Voltaire Ltd. announced financial results for the three month period ended March 31, 2010.

Main First Quarter 2010 Highlights

• Revenue more than doubles over the first quarter of last year, reaching $15.6 million;
• Operating loss on a GAAP basis, narrowed to $1.4 million; operating loss on a non-GAAP basis of $0.7 million;
• Net loss on a GAAP basis, narrowed to $1.7 million from $6.1 million in the first quarter of 2009; net loss on a non-GAAP basis, of $0.9 million;
• Cash, cash equivalents and marketable securities as of March 31, 2010 totaled $44.7 million; and
• Increases 2010 annual revenue guidance range to $67-70 million, an increase of 33-39% year over year.

First Quarter Results

• Revenues for the first quarter of 2010 totaled $15.6 million, an increase of 102% compared with $7.7 million reported in the first quarter of 2009.
• Gross profit for the first quarter of 2010 totaled $8.2 million, an increase of 87% compared to $4.4 million in the first quarter of 2009. Gross margin for the first quarter of 2010 totaled 52.5%, compared to 56.7% gross margin for the first quarter of 2009.
• Operating loss for the first quarter of 2010 totaled $1.4 million, a substantial improvement compared to the $5.9 million operating loss in the first quarter of 2009. On a non-GAAP basis, the Company reported operating loss of $0.7 million compared with an operating loss of $5.4 million in the first quarter of 2009.
• Net loss for the first quarter of 2010 totaled $1.7 million, or $0.08 loss per share. This represents a solid improvement from a net loss of $6.1 million, or $0.29 loss per share, in the first quarter of 2009.
• Net loss, on a non-GAAP basis, for the first quarter of 2010 totaled $0.9 million, or $0.04 loss per share, compared to a net loss, on a non-GAAP basis, of $5.5 million, or $0.26 loss per share, in the first quarter of 2009.
• Cash, cash equivalents and marketable securities as of March 31, 2010, totaled $44.7 million with no debt, compared to $47.5 million as of December 31, 2009.

Mr. Ronnie Kenneth, Chairman and CEO of Voltaire commented: “We are pleased with our results. The results make me believe that we are on track to achieving all our goals for the year; in particular, that of reaching profitability toward the end of this year.”

Mr. Kenneth added: “The first quarter in 2010 was one in which Voltaire continued to build for the future. We launched a number of new products – representing the ongoing fruits of our R&D investments, as well as being a testament to our strong ability to innovate. This is especially true on the software front, with our launch of the Voltaire Messaging Accelerator for Ethernet, enabling exceptionally low latency on Ethernet fabrics. We truly have an end-to-end portfolio of switching products, as well as the first-in-kind application acceleration and management software that strongly differentiates Voltaire.”

“Looking ahead, I still stand by my belief that 2010 represents an inflection point for Voltaire. The principles underlying high performance computing including scale-out, low latency and application acceleration is becoming the foundation for the next generation, virtualized data centers and the rapidly growing cloud-computing opportunity. Our ability to provide both InfiniBand and Ethernet fabrics, enable us to take advantage of an upcoming broader range of opportunities. We aim to capitalize on this potential and I am excited with regard to our prospects for the months and years ahead,” concluded Mr. Kenneth.

Outlook
Management raised its revenue guidance for the full year of 2010.

• Revenues for the full year of 2010 are expected in the range of $67 – 70 million, reflecting year over year revenue growth of 33 – 39%, with the second half of the year, as is usual, being seasonally stronger than the first half. Full year 2010 revenue expectations were formerly in the range of $66 – 69 million.
• Management continues to expect full year gross margin to be in the range of 51-53%, similar to 2009, and continues to expect non-GAAP operating expenses between $38 – 39.5 million for 2010. The increase in operating expenses in 2010 compared with that of 2009, is to enable the Company to capitalize on the current and emerging market opportunities, as well as support the forecasted growth of both the InfiniBand and Ethernet-based product lines.
• Management believes that the Company remains on track for non-GAAP operating profit by Q4 2010.