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Mellanox Achieves Record Quarterly Revenue in Second Quarter 2016 

July 21, 2016

SUNNYVALE, Calif. and YOKNEAM, Israel, July 21 -- Mellanox Technologies, Ltd. (NASDAQ: MLNX) has announced financial results for its second quarter ended June 30, 2016.

"We are pleased to report the fifth consecutive quarter of record revenue. We saw strong growth in our Ethernet business, driven by growth in our 25, 50 and 100 Gigabit Ethernet products," said Eyal Waldman, president and CEO of Mellanox Technologies. "We are pleased with the execution in InfiniBand, and believe strength in HPC markets will lead to further growth of our InfiniBand solutions during the second half of this year. We continue to see strong customer interest in our Spectrum Ethernet switch. The transition from 10 Gigabit Ethernet to 25, 50, and 100 Gigabit Ethernet has begun and represents a multi-year growth opportunity."

Second Quarter 2016 Highlights

  • Revenues of $214.8 million increased 9.1 percent, compared to $196.8 million in the first quarter of 2016.
  • GAAP gross margins of 62.8 percent in the second quarter compared to 64.2 percent in the first quarter of 2016.
  • Non-GAAP gross margins of 71.4 percent, unchanged from the first quarter of 2016.
  • GAAP operating income was $6.6 million, compared to operating loss of $3.9 million in the first quarter of 2016.
  • Non-GAAP operating income was $45.5 million, or 21.2 percent of revenue, compared to non-GAAP operating income of $41.3 million, or 21.0 percent of revenue in the first quarter of 2016.
  • GAAP net income was $4.7 million, compared to net loss of $7.2 million in the first quarter of 2016.
  • Non-GAAP net income was $42.7 million, compared to $39.3 million in the first quarter of 2016.
  • GAAP net income per diluted share was $0.09 in the second quarter compared to net loss per diluted share of $0.15 in the first quarter of 2016.
  • Non-GAAP net income per diluted share was $0.87 in the second quarter compared to $0.81 in the first quarter of 2016.
  • $44.8 million in cash was provided by operating activities, compared to $48.6 million in the first quarter of 2016.
  • Cash and investments totaled $276.5 million at June 30, 2016, compared to $261.8 million at March 31, 2016.

Third Quarter 2016 Guidance

We currently project:

  • Quarterly revenues of $221 million to $227 million
  • Non-GAAP gross margins of 71 percent to 72 percent
  • An increase in non-GAAP operating expenses of 2 percent to 4 percent
  • Share-based compensation expense of $17.9 million to $18.4 million
  • Non-GAAP diluted share count of 49.3 million to 49.8 million shares

About Mellanox

Mellanox Technologies (NASDAQ: MLNX) is a leading supplier of end-to-end Ethernet and InfiniBand intelligent interconnect solutions and services for servers, storage, and hyper-converged infrastructure. Mellanox's intelligent interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance. Mellanox offers a choice of high performance solutions: network and multicore processors, network adapters, switches, cables, software 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, network security, telecom and financial services. More information is available at www.mellanox.com.

Source: Mellanox Technologies

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