Mellanox: Fiscal 2Q12 Financial Results

(in US$ million)	2Q11	2Q12	6 mo. 11	6 mo. 12
Revenues	63.3	133.5	118.4	222.2
*Growth*		111%		*88%*
Net income (loss)	2.1	32.1	0.5	44.5

Mellanox Technologies, Ltd. announced record financial results in its second quarter 2012, ended June 30, 2012.

Second Quarter 2012 Highlights

Revenues were a record $133.5 million
GAAP gross margins were 68.8%
Non-GAAP gross margins were 70.5%
GAAP operating income was a record $32.0 million
Non-GAAP operating income was a record $42.7 million
GAAP net income was a record $32.1 million
Non-GAAP net income was a record $42.9 million
GAAP net income per diluted share was a record $0.74
Non-GAAP net income per diluted share was a record $0.99
A record $59.2 million in cash was provided by operating activities
$327.8 million in total cash and investments at June 30, 2012, an increase of $60.2 million from March 31, 2012

Financial Results

In accordance with GAAP, the company reported record revenue of $133.5 million for the second quarter of 2012, up 50.4% from $88.7 million in the first quarter of 2012, and up 110.7% from $63.3 million in the second quarter of 2011.
GAAP gross margins in the second quarter of 2012 were 68.8%, compared with 67.4% in the first quarter of 2012, and 64.9% in the second quarter of 2011.
Non-GAAP gross margins in the second quarter of 2012 were 70.5%, compared with 70.0% in the first quarter of 2012, and 68.9% in the second quarter of 2011.
GAAP net income in the second quarter of 2012 was a record $32.1 million, or $0.74 per diluted share, compared with net income of $12.4 million, or $0.29 per diluted share in the first quarter of 2012, and $2.1 million, or $0.06 per diluted share in the second quarter of 2011.
Non-GAAP net income in the second quarter of 2012 was a record $42.9 million, or $0.99 per diluted share, compared with $22.0 million, or $0.51 per diluted share in the first quarter of 2012, and $10.3 million, or $0.27 per diluted share in the second quarter of 2011. The second quarter 2012 non-GAAP net income excludes $8.4 million of share-based compensation expenses compared to $7.2 million in the first quarter of 2012, and compared to $5.4 million in the second quarter of 2011. The second quarter 2012 non-GAAP net income also excludes amortization of acquired intangible assets of $2.3 million associated with the acquisition of Voltaire, Ltd. on February 7, 2011 compared to $2.4 million of such amortization expenses in the first quarter of 2012, and compared to $2.8 million in the second quarter of 2011.
Total cash and investments were $327.8 million at June 30, 2012. The company generated a record $59.2 million in cash from operating activities during the quarter.

"Mellanox surpassed the $100 million quarterly revenue milestone, generating over $133 million of revenue," said Eyal Waldman, chairman, president and CEO of Mellanox. "We benefited from growth in the HPC, Web 2.0, storage, database, cloud, big data and financial services markets. We believe this growth demonstrates the broader market acceptance of both our FDR 56Gb/s IB and 10 and 40GbE solutions. More customers realize that ‘fast interconnect’’ provides them with a higher return-on-investment and lower total cost of ownership."

Recent Press Release Highlights

July 10 – Announces Partnership with Quanta QCT
June 19 – and Bon Trade Benchmark over 598 Million Messages a Second over RDMA on Windows Server 2008 R2
June 18 – FDR 56Gb/s IB to Accelerate World-Class Supercomputer at TACC
June 18 – 40GbE Interconnect Solutions Optimize HPC Application Performance for Ethernet-Based Server and Storage Clusters
June 18 – Announces Connect-IB, World’s Leading Scalable Server and Storage Interconnect Adapter
June 18 – IB Leads TOP500 as Most Used Interconnect
June 12 – FDR 56Gb/s IB Achieves Record Performance in Virtualization Running Windows Server 2012 Hyper-V
June 11 – FDR 56Gb/s IB Silicon Selected by Intel For New Server Platforms
May 21 – Announces Ethernet and IB End-to-End Interconnect Solutions Optimized for New HP ProLiant Generation 8 Servers
May 14 – Enhances Cloud Efficiency and Scalability with Release of IB Driver for VMware vSphere 5

To read the earnings call transcript