Mellanox Achieves Record Quarterly Revenue in First Quarter 2016 

SUNNYVALE, Calif. & YOKNEAM, Israel, April 21 -- Mellanox Technologies, Ltd. (NASDAQ: MLNX) today announced financial results for its first quarter ended March 31, 2016.

"We are pleased to report the fourth consecutive quarter of record revenue. Our profitability grew 37.2 percent year-over-year. During the quarter we closed the acquisition of EZchip Semiconductor Ltd. We see great promise in the combination of EZchip's intelligent processors, and Mellanox's leading interconnect technology. We believe the combined company can deliver compelling value to current and future customers," said Eyal Waldman, president and CEO of Mellanox Technologies. "We recorded strong growth in our Ethernet business, supported by adoption of our 40 Gigabit Ethernet adapters. We are seeing strong interest in the Spectrum product line and expect revenues to accelerate in the coming quarters. Tests demonstrate superior performance, costs, resiliency, and power of Spectrum compared to alternative products. We are pleased to see our InfiniBand business grow year-over-year. We see additional hyperscale entities deployed InfiniBand in their data centers."

First Quarter 2016 Highlights

• Revenues of $196.8 million increased 11.2 percent, compared to $176.9 million in the fourth quarter of 2015.
• GAAP gross margins of 64.2 percent in the first quarter compared to 70.7 percent in the fourth quarter of 2015.
• Non-GAAP gross margins of 71.4 percent in the first quarter compared to 72.2 percent in the fourth quarter of 2015.
• GAAP operating loss was $3.9 million, compared to operating income of $19.9 million in the fourth quarter of 2015.
• Non-GAAP operating income was $41.3 million, or 21.0 percent of revenue, compared to $36.6 million, or 20.7 percent of revenue in the fourth quarter of 2015.
• GAAP net loss was $7.2 million, compared to net income of $43.2 million in the fourth quarter of 2015.
• Non-GAAP net income was $39.3 million, compared to $37.5 million in the fourth quarter of 2015.
• GAAP net loss per diluted share was $0.15 in the first quarter compared to net income per diluted share of $0.90 in the fourth quarter of 2015.
• Non-GAAP net income per diluted share was $0.81 in the first quarter compared to $0.77 in the fourth quarter of 2015.
• $48.6 million in cash was provided by operating activities, compared to $34.7 million in the fourth quarter of 2015.
• Cash and investments totaled $261.8 million at March 31, 2016, compared to $510.5 million at December 31, 2015.

Second Quarter 2016 Guidance

We currently project:

• Quarterly revenues of $210 million to $215 million
• Non-GAAP gross margins of 71 percent to 72 percent
• An increase in non-GAAP operating expenses of 8 percent to 10 percent
• Share-based compensation expense of $13.4 million to $13.9 million
• Non-GAAP diluted share count of 48.8 million to 49.3 million shares

About Mellanox

Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software, cables and silicon that accelerate application runtime and maximize business results for a wide range of markets including high-performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. More information is available at www.mellanox.com.

Source: Mellanox Technologies