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Mellanox Reports Fourth Quarter 2016 Financial Results 

February 2, 2017

SUNNYVALE, Calif., Feb. 2 -- Mellanox Technologies, Ltd. (NASDAQ: MLNX) has announced financial results for its fourth quarter ended December 31, 2016.

"During the fourth quarter we saw continued sequential growth in our InfiniBand business, driven by robust customer adoption of our 100 Gigabit EDR solutions into artificial intelligence, machine learning, high-performance computing, storage, database and more. Our quarterly, and full-year 2016 results, highlight InfiniBand's continued leadership in high-performance interconnects," said Eyal Waldman, president and CEO of Mellanox Technologies. "Customer adoption of our 25, 50, and 100 gigabit Ethernet solutions continued to grow in the fourth quarter. Adoption of Spectrum Ethernet switches by customers worldwide generated positive momentum exiting 2016. Our fourth quarter and full-year 2016 results demonstrate Mellanox's diversification, and leadership in both Ethernet and InfiniBand. We anticipate growth in 2017 from all Mellanox product lines."

Fourth Quarter and Fiscal 2016 Highlights

  • Revenues were $221.7 million in the fourth quarter, and $857.5 million in fiscal year 2016.
  • GAAP gross margins were 66.8 percent in the fourth quarter, and 64.8 percent in fiscal year 2016.
  • Non-GAAP gross margins were 71.9 percent in the fourth quarter, and 71.6 percent in fiscal year 2016.
  • GAAP operating income was $13.4 million, or 6.0 percent of revenue, in the fourth quarter, and operating income was $30.6 million, or 3.6 percent of revenue, in fiscal year 2016.
  • Non-GAAP operating income was $44.4 million, or 20.0 percent of revenue, in the fourth quarter, and $180.4 million, or 21.0 percent of revenue, in fiscal year 2016.
  • GAAP net income was $9.0 million in the fourth quarter, and $18.5 million in fiscal year 2016.
  • Non-GAAP net income was $41.3 million in the fourth quarter, and $169.5 million in fiscal year 2016.
  • GAAP net income per diluted share was $0.18 in the fourth quarter, and $0.37 in fiscal year 2016.
  • Non-GAAP net income per diluted share was $0.82 in the fourth quarter, and $3.43 in fiscal year 2016.
  • $54.0 million in cash was provided by operating activities during the fourth quarter.
  • $196.1 million in cash was provided by operating activities during fiscal year 2016.
  • Cash and investments totaled $328.4 million at December 31, 2016.

First Quarter 2017 Outlook

We currently project:

  • Quarterly revenues of $200 million to $210 million
  • Non-GAAP gross margins of 71 percent to 72 percent
  • An increase in non-GAAP operating expenses of 3 percent to 5 percent
  • Share-based compensation expense of $15.8 million to $16.3 million
  • Non-GAAP diluted share count of 50.3 million to 50.8 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. Mellanoxoffers 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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