Inphi Corp. (IPHI) Reports In-Line Q1 EPS, Miss on Revenues; Offers 2Q EPS Outlook Above Consensus

Inphi Corp. (NYSE: IPHI) reported Q1 EPS of ($0.05), in-line with the analyst estimate of ($0.05). Revenue for the quarter came in at $60.1 million versus the consensus estimate of $61.23 million.

Non-GAAP Results

• Gross margin on a non-GAAP basis in the first quarter of 2018 was 66.4%, compared with 71.3% in the first quarter of 2017. The decrease was due to change in product mix.
• Non-GAAP operating loss in the first quarter of 2018 was $2.1 million, compared with operating income of $21.6 million in the first quarter of 2017. The decrease is primarily due to lower revenue.
• Non-GAAP net loss in the first quarter of 2018 was $2.0 million, or ($0.05) per diluted common share. This compares with non-GAAP net income of $19.5 million, or $0.44 per diluted common share in the first quarter of 2017.

“As our guidance for Q2 shows, we believe ​Q1 ​represented the bottom of a down cycle driven by inventory buildups in China long-haul and metro markets. We met our Q1 guidance on revenue and EPS, and guided for 15 percent sequential revenue growth in Q2, while guiding up for Q2 EPS,” said Ford Tamer, President and CEO of Inphi. “Our product innovation continues. We unveiled our newest 400G PAM DSP at the recent Optical Fiber Conference (OFC), along with our 56Gbaud linear TiA and driver. We look forward to a growing presence in the data center, resulting in a continued diversification of our business, which we expect to help drive our growth in the second half of 2018 and beyond.”

Business Outlook

The following statements are based on the company’s current expectations for the second quarter of 2018. These statements are forward-looking and actual results may differ materially. A reconciliation between the GAAP and Non-GAAP outlook is included at the end of this press release.

• Revenue in Q2 2018 is expected to be in a range of $67.3 million to $71.3 million. The midpoint being $69.3 million.
• GAAP gross margin is expected to be approximately 56.5% to 58.1%.
• Non-GAAP gross margin is expected to be approximately 67.8% to 68.8%.
• Stock-based compensation expense is expected to be in the range of $16.5 million to $17.1 million.
• GAAP results are expected to be a net loss in a range between $23.7 million to $24.3 million, or ($0.54) – ($0.56) per basic share, based on 43.763 million estimated weighted average basic shares outstanding.
• Non-GAAP net income, excluding stock-based compensation expense, amortization of intangibles and inventory step up fair value related to acquisitions and noncash interest on convertible debt, is expected to be in the range of $5.3 million to $6.1 million, or $0.12 - $0.14 per weighted average diluted share, based on 44.992 million estimated weighted average diluted shares outstanding.

GUIDANCE:

Inphi Corp. sees Q2 2018 EPS of $0.12-$0.14, versus the consensus of $0.10. Inphi Corp. sees Q2 2018 revenue of $67.3-71.3 million, versus the consensus of $70.47 million.

For earnings history and earnings-related data on Inphi Corp. (IPHI) click here.

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