Mellanox Technologies (MLNX) Tops Q3 EPS by 13c, Beats on Revenues; Offers 4Q Revenue Outlook

Mellanox Technologies (NASDAQ: MLNX) reported Q3 EPS of $1.33, $0.13 better than the analyst estimate of $1.20. Revenue for the quarter came in at $279.2 million versus the consensus estimate of $275.53 million.

“Mellanox continues to execute and gain momentum in the markets we participate in. We reported another record quarter in Q3, delivering 24% revenue growth and 90% non-GAAP operating income growth year-over-year. This resulted in a non-GAAP operating margin of 26.2%," said Eyal Waldman, President and CEO of Mellanox Technologies. "Our strong results reflect the differentiated and superior product technologies that Mellanox has to offer for data center infrastructure.”

“The innovations built into our high-speed Ethernet adapters, switches and cables are fueling demand for our Ethernet products. Leading hyperscale, cloud, enterprise data center and artificial intelligence customers continue to choose Mellanox to maximize the efficiency and utilization of their compute and storage investments. This has resulted in further market share gains across our high-speed Ethernet products and 59% year-over-year revenue growth in our Ethernet business. During the third quarter we released our HDR 200 Gigabit per second InfiniBand solutions to first customers and announced multiple design wins. HDR InfiniBand will enhance the performance, efficiency and scalability of high-performance computing, artificial intelligence, storage, cloud and other performance-driven applications, and deliver highest return on investment for compute and storage infrastructures,” Mr. Waldman concluded.

Third Quarter 2018 - Highlights

• Revenue of $279.2 million in the third quarter, an increase of 23.7 percent, compared to $225.7 million in the third quarter of 2017.
• GAAP gross margins of 65.8 percent in the third quarter, compared to 65.7 percent in the third quarter of 2017.
• Non-GAAP gross margins of 69.6 percent in the third quarter, compared to 70.7 percent in the third quarter of 2017.
• GAAP operating income of $39.5 million in the third quarter, compared to $6.6 million in the third quarter of 2017.
• Non-GAAP operating income of $73.2 million in the third quarter, or 26.2 percent of revenue, compared to $38.5 million, or 17.1 percent of revenue in the third quarter of 2017.
• GAAP net income of $37.1 million in the third quarter, compared to $3.4 million in the third quarter of 2017.
• Non-GAAP net income of $71.4 million in the third quarter, compared to $36.6 million in the third quarter of 2017.
• GAAP net income per diluted share of $0.68 in the third quarter, compared to $0.07 in the third quarter of 2017.
• Non-GAAP net income per diluted share of $1.33 in the third quarter, compared to $0.71 in the third quarter of 2017.
• $66.4 million in cash provided by operating activities in the third quarter, compared to $53.0 million in the third quarter of 2017.
• Cash and investments totaled $350.2 million at September 30, 2018, compared to $273.8 million at December 31, 2017.

GUIDANCE:

Mellanox Technologies sees Q4 2018 revenue of $280-290 million, versus the consensus of $280.57 million.

For earnings history and earnings-related data on Mellanox Technologies (MLNX) click here.

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