Inphi Reports Fourth Quarter and Full Year 2015 Results 

SANTA CLARA, Calif., Feb. 5 -- Inphi Corporation (NYSE: IPHI), a leading provider of high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets, today announced financial results for its fourth quarter and full year ended Dec. 31, 2015.

Revenue in the fourth quarter of 2015 was a record $64.4 million, up 3.2% sequentially from $62.4 million reported in the third quarter of 2015 and up 18% year-over-year, compared with $54.8 million on a GAAP basis in the fourth quarter of 2014.

Gross margin under U.S. generally accepted accounting principles (GAAP) in the fourth quarter of 2015 was 65.7% of revenue, compared with 37.7% in the fourth quarter of 2014. The increase in gross margin was primarily due to the amortization of inventory fair value step-up related to the acquired Cortina inventories sold during the fourth quarter of 2014.

GAAP net loss for the fourth quarter of 2015 was $2.6 million, or ($0.07) per diluted common share, compared with GAAP net loss of $17.4 million, or ($0.47) per diluted common share, in the fourth quarter of 2014.

GAAP free cash flow in the fourth quarter of 2015, defined as net cash provided by operating activities minus purchases of property and equipment, was a record source of $18.5 million as compared to a use of $8.8 million for the fourth quarter of 2014.

Inphi reports revenue, gross margin, operating expenses, net income (loss), and earnings per share in accordance with GAAP and on a non-GAAP basis. A reconciliation of the GAAP to non-GAAP revenue, gross margin, operating expenses, net income, and earnings per share, as well as a description of the items excluded from the non-GAAP calculations, is included in the financial statements portion of this news release.

Gross margin on a non-GAAP basis in the fourth quarter of 2015 increased to 71.4%, compared with 67.6% in the fourth quarter of 2014.

Non-GAAP income from operations in the fourth quarter of 2015 was $14.1 million, or 21.8% of revenue, compared with $11.5 million, or 19.6% of revenue, in the fourth quarter of 2014.

Non-GAAP net income in the fourth quarter of 2015 was a record $13.4 million, or $0.32 per diluted common share. This compares with non-GAAP net income of $11.7 million, or $0.30 per diluted common share in the fourth quarter of 2014.

"In Q4 we achieved a record revenue and record non-GAAP operating margin, the highest levels we have achieved since I joined the company," said Ford Tamer President and CEO of Inphi. "Our view remains consistent, that the explosion of big data and the need for its rapid transmission is, and continues to be an enormous opportunity for Inphi. We believe we are strategically well positioned to leverage this opportunity both today and in the years ahead."

Full Year 2015 Results

Revenue for the year ended Dec. 31, 2015 was $246.6 million, compared with $156.1 million in the year ended Dec. 31, 2014. GAAP net loss in the year ended Dec. 31, 2015 was $13.4 million, or ($0.35) per diluted common share, on approximately 38.6 million diluted weighted average common shares outstanding. This compares with GAAP net loss of $22.6 million, or ($0.69) per diluted common share, on approximately 32.7 million diluted weighted average common shares outstanding in the year ended Dec. 31, 2014. GAAP free cash flow for the year ended Dec. 31, 2015 was a record source of $51.8 million as compared to use of $12.8 million for the year ended Dec. 31, 2014.

Non-GAAP income from operations for the year ended Dec. 31, 2015 was $50.0 million, or 20.3% of revenue, compared with $24.2 million, or 15.1% of revenue, for the year ended Dec. 31, 2014.

Non-GAAP net income for the year ended Dec. 31, 2015 was $42.9 million, or $1.03 per diluted weighted average common share outstanding, on approximately 41.5 million diluted weighted average common shares outstanding. This compares with non-GAAP net income of $21.4 million for the year ended Dec. 31, 2014, or $0.62 per diluted weighted average common share outstanding.

Business Outlook

The following statements are based on the company's current expectations for the first quarter of 2016. These statements are forward-looking and actual results may differ materially.

• Revenues are expected to be up 1.4% to 4.5% sequentially in Q1 2016, or in a range of $65.3 million to $67.3 million.
• Non-GAAP gross margin is expected to be approximately 68.2% to 69.2%.
• Stock-based compensation expense is expected to be in the range of $7.6 million to $7.8 million.
• GAAP results are expected to be a net loss in a range between $4.5 million to $5.4 million, or ($0.11) - ($0.14) per diluted share, on 39.7 million estimated basic shares outstanding.
• Non-GAAP net income, excluding stock-based compensation expense and expenses related to the Cortina acquisition, is expected to be in the range of $10.8 million to $11.7 million, or $0.25 - $0.27 per diluted share, on 42.6 million estimated fully diluted shares outstanding.

About Inphi

Inphi Corporation is a leading provider of high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets. Inphi's end-to-end data transport platform delivers high signal integrity at leading-edge data speeds, addressing performance and bandwidth bottlenecks in networks, from fiber to memory. Inphi's solutions minimize latency in computing environments and enable the rollout of next-generation communications infrastructure. Inphi's solutions provide a vital interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, enterprise and data center servers, and storage platforms. To learn more about Inphi, visit www.inphi.com.

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Source: Inphi