Mellanox Technologies (MLNX) Tops Q1 EPS by 14c, Revenues Beat

Mellanox Technologies (NASDAQ: MLNX) reported Q1 EPS of $1.59, $0.14 better than the analyst estimate of $1.45. Revenue for the quarter came in at $305.2 million versus the consensus estimate of $300.4 million.

First Quarter 2019 - Highlights

• Revenue of $305.2 million in the first quarter, an increase of 21.6 percent, compared to $251.0 million in the first quarter of 2018.
• GAAP gross margins of 64.6 percent in the first quarter, compared to 64.5 percent in the first quarter of 2018.
• Non-GAAP gross margins of 68.0 percent in the first quarter, compared to 69.0 percent in the first quarter of 2018.
• GAAP operating income of $44.7 million in the first quarter, compared to $12.0 million in the first quarter of 2018.
• Non-GAAP operating income of $86.3 million in the first quarter, or 28.3 percent of revenue, compared to $52.1 million, or 20.8 percent of revenue in the first quarter of 2018.
• GAAP net income of $48.6 million in the first quarter, compared to $37.8 million in the first quarter of 2018.
• Non-GAAP net income of $86.5 million in the first quarter, compared to $51.4 million in the first quarter of 2018.
• GAAP net income per diluted share of $0.87 in the first quarter, compared to $0.71 in the first quarter of 2018.
• Non-GAAP net income per diluted share of $1.59 in the first quarter, compared to $0.98 in the first quarter of 2018.
• $88.4 million in cash provided by operating activities in the first quarter, compared to $55.4 million in the first quarter of 2018.
• Cash and investments totaled $552.6 million at March 31, 2019, compared to $438.5 million at December 31, 2018.

“Mellanox delivered record revenue in Q1, achieving 5 percent sequential growth and 22 percent year-over-year growth. All of our product lines grew sequentially, showing the benefits of our diversified data center strategy,” said Eyal Waldman, president and CEO of Mellanox Technologies. “Our R&D execution has resulted in differentiated products, while at the same time we have generated operating margin of 14.6% on a GAAP basis and 28.3% on a non-GAAP basis. Additionally, we increased cash and short-term investments by $114 million during the quarter.”

“Across InfiniBand and Ethernet product lines, our innovations are driving continued market leadership. Our 200 gigabit HDR InfiniBand solutions are enabling the world’s fastest supercomputers and driving our overall InfiniBand growth. During Q1, HDR InfiniBand connected tens-of-thousands of compute and storage end-points across supercomputing, hyperscale, and cloud data centers around the globe to achieve breakthrough performance. Our Ethernet solutions continue to penetrate the market for both adapters and switches. Our market leadership in 25 gigabit per second Ethernet solutions is well established, and our 100 gigabit per second solutions are the fastest growing portion of our Ethernet adapter product line. We are also encouraged by the adoption of our BlueField System-on-a-Chip and SmartNIC technology. With further innovations to come, Mellanox is well-positioned to continue its growth trajectory,” Mr. Waldman concluded.

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

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