|(in $ million)||1Q17||1Q18||Growth|
|Net income (loss)||(12.2)||37.8|
Mellanox Technologies, Ltd. announced financial results for its first quarter 2018 ended March 31, 2018.
“Our record first quarter financial performance is the result of the successful execution of our growth strategy and a testament to years of carefully planned R&D investments in 25 gigabit per second and above Ethernet technology, which is fast becoming the industry standard in markets around the world,” said Eyal Waldman, president and CEO. “First quarter Ethernet revenues, increased 12% sequentially, due to expanding global customer adoption of our 25Gb/s and above solutions. Our market leading Ethernet adapters, experienced broad based growth across global hyperscale, OEM, storage, financial services and artificial intelligence customers. Deployments of our LinkX Ethernet cables and transceivers accelerated across global hyperscale customers who recognize the benefits of performance, low-power, and configurability. IB revenues were up sequentially in the first quarter, outperforming seasonal trends, driven by strong demand from our high-performance computing and artificial intelligence customers using our EDR solutions. Our improved profitability during the first quarter demonstrates the successful execution of our commitment to deliver top-line revenue growth and increased operating leverage.”
First Quarter 2018 Highlights
• Revenues of $251.0 million increased 33.0%, compared to $188.7 million in the first quarter of 2017.
• GAAP gross margins of 64.5% in the first quarter, compared to 65.8% in the first quarter of 2017.
• Non-GAAP gross margins of 69.0% in the first quarter, compared to 71.7% in the first quarter of 2017.
• GAAP operating income was $12.0 million, compared to operating loss of $12.6 million in the first quarter of 2017.
• Non-GAAP operating income was $52.1 million, or 20.8% of revenue, compared to $15.7 million, or 8.3% of revenue in the first quarter of 2017.
• GAAP benefit from taxes on income in the first quarter was $26.4 million and included a reversal of valuation allowance on deferred tax assets of $26.7 million.
• GAAP net income was $37.8 million, compared to net loss of $12.2 million in the first quarter of 2017.
• Non-GAAP net income was $51.4 million, compared to $14.7 million in the first quarter of 2017.
• GAAP net income per diluted share was $0.71 in the first quarter, compared to net loss per diluted share of $0.25 in the first quarter of 2017.
• Non-GAAP net income per diluted share was $0.98 in the first quarter, compared to $0.29 in the first quarter of 2017.
• $55.4 million in cash was provided by operating activities, compared to $35.0 million in the first quarter of 2017.
• Cash and investments totaled $286.3 million at March 31, 2018, compared to $273.8 million at December 31, 2017.
Waldman continued: “We have increased our full year 2018 outlook based on the strength of our first quarter, and improved visibility we have into market trends as we enter the second quarter. We remain committed to delivering top-line revenue growth and driving down costs to enhance operational efficiencies and achieve our increased non-GAAP operating margin target for fiscal 2018. Our updated financial outlook is further evidence of the strength of our strategy, innovation and investment priorities. With the ramp of our BlueField System-on-Chip and 200Gb/s HDR IB in 2018, we expect to build on our positive momentum and deliver even greater shareholder value.”
Second Quarter 2018 Outlook
• Quarterly revenues of $255 million to $265 million
• Non-GAAP gross margins of 68.5% to 69.5%
• Non-GAAP operating expenses of $119 million to $121 million
• Share-based compensation expense of $15.5 million to $16.0 million
• Non-GAAP diluted share count of 52.8 million to 53.3 million
Full Year 2018 Outlook
• Revenues of $1,030 million to $1,050 million
• Non-GAAP gross margins of 68.0% to 69.0%
• Non-GAAP operating margin of 21.0% to 22.0%