Mellanox: Fiscal 3Q15 Financial Results

 Mellanox Technologies, Ltd. announced financial results for its third quarter, ended September 30, 2015.

“We are excited to achieve consecutive record quarterly revenues. Assuming the midpoint of our fourth quarter 2015 guidance, our annual revenues are expected to grow 41% year-over year, and gross margins to be above 72.5%. We also expect annual operating income to improve substantially from the prior year, to approximately 21% of revenue, which is a significant step towards our long-term target profitability,” said Eyal Waldman, president and CEO.
“Today, Mellanox is a diversified company, serving more products, markets, and customers. We are seeing revenues from our 10, 25, 40, 50 and 100GbE solutions and traction with large data center customers for these products. We are happy to see our EDR 100Gb IB revenues growing at a faster pace than FDR did, to approximately 12% of IB revenues. The EZchip acquisition will bring us strategic customers and advanced technologies that will fuel further growth and diversification.“

Third Quarter 2015 Highlights

• Revenues of $171.4 million increased 5.0%, compared to $163.1 million in the second quarter of 2015.
• GAAP gross margins of 71.3% in the third quarter compared to 71.1% in the second quarter of 2015.
• Non-GAAP gross margins of 72.9% in the third quarter compared to 72.7% in the second quarter of 2015.
• GAAP operating income was $20.6 million, compared to $19.4 million, in the second quarter of 2015.
• Non-GAAP operating income was $37.0 million, or 21.6% of revenue, compared to $36.2 million, or 22.2% of revenue in the second quarter of 2015.
• GAAP net income was $20.0 million, compared to $19.2 million in the second quarter of 2015.
• Non-GAAP net income was $36.3 million, compared to $36.1 million in the second quarter of 2015.
• GAAP net income per diluted share of $0.42 increased 5.0%, compared to $0.40 in the second quarter of 2015.
• Non-GAAP net income per diluted share of $0.75 in the third quarter and second quarter of 2015.
  $28.7 million in cash was provided by operating activities, compared to $41.3 million in the second quarter of 2015.
• Cash and investments totaled $485.6 million at September 30, 2015, compared to $467.2 million at June 30, 2015.

Fourth Quarter 2015 Guidance

• Quarterly revenues of $171 million to $176 million.
• Non-GAAP gross margins of 71.5% to 72.5%.
• An increase in non-GAAP operating expenses of 1% to 4%.
• Share-based compensation expense from $13.2 million to $13.7 million.
• Non-GAAP diluted share count from 48.3 million to 48.8 million shares.

Recent Mellanox Press Release Highlights

• Oct. 13, 2015 – Supports the Grand Opening of the QCT Cloud Solution Center in Silicon Valley
• Sept. 30, 2015 – Announces Definitive Agreement to Acquire EZchip
• Sept. 28, 2015 – With Ixia Demonstrate Industry-First Interoperability of 100Gb/s Ethernet Platforms over 2km of Optical Fiber with Silicon Photonics Transceivers
• Sept. 21, 2015 – Healthcare Organizations Select Company’s IB-Based Cloud
• Sept. 2, 2015 – Begins Shipping Spectrum, Industry’s First Open Ethernet 25/50/100Gb Switch, to Cloud, Web 2.0 and Enterprise Data Center Customers
• Aug. 31, 2015 – Ethernet Solutions Enable Cloud-Based Businesses to Achieve Higher Level of Efficiency and Scalability over vSphere 6
• Aug. 31, 2015 – Simplifies cloud Deployments with CloudX Hyper-Converged Platforms for Enterprise and Telecom
• Aug. 25, 2015 – KTH Royal Institute of Technology Selects Company’s End-to-End EDR 100Gb/s IB Solutions
• Aug. 19, 2015 – Open Ethernet Gains Industry Momentum with Large Eco-System Demonstration Including Microsoft, Dell, Metaswitch, and Mellanox
• Aug. 11, 2015 – Optimizes Flash Storage Access, Enabling Faster Time-to-Decision While Lowering Cost