• Delays in HPC deployments due to CPU transition
• Expect deployments to grow through remainder of 2017
• Ethernet revenues up 17% year-over-year
• “Strong growth” in 25, 50, and 100 Gigabit Ethernet
Mellanox Technologies has announced its financial results for its first quarter of 2017. The company stated, “Our first quarter Ethernet revenues grew across all product families sequentially, driven by the adoption of our 25/50/100 gigabit solutions. We expect 2017 to be a growth year for Mellanox.”
The company supplies end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.
Eyal Waldman, president and CEO of Mellanox, commented, “Our first quarter InfiniBand revenues were down year-over-year, impacted by delays in the general availability of next generation x86 CPUs, seasonal trends in high-performance computing, and technology transitions occurring across several end users and OEM customers.
“We believe InfiniBand has maintained share in HPC, and expect revenues will see sequential growth in the coming quarters driven by current backlog and additional pipeline opportunities. Our first quarter Ethernet revenues grew across all product families sequentially, driven by the adoption of our 25/50/100 gigabit solutions. We expect 2017 to be a growth year for Mellanox.”
Revenues of $188.7 million decreased 4.1 percent, compared to $196.8 million in the first quarter of 2016. Gross margins of 71.7 percent in the first quarter, compared to 71.4 percent in the first quarter of 2016, while ooperating income was $15.7 million, or 8.3 percent of revenue, compared to $41.3 million, or 21.0 percent of revenue in the first quarter of 2016.
Net income was $14.7 million, compared to $39.3 million in the first quarter of 2016 and net income per diluted share was $0.29 in the first quarter, compared to $0.81 in the first quarter of 2016. $35.0 million in cash was provided by operating activities, compared to $48.6 million in the first quarter of 2016. Cash and investments totaled $325.2 million at March 31, 2017, compared to $328.4 million at December 31, 2016. (All figures are non-GAAP).
Second Quarter outlook
Looking ahead to the next trading period, the company gave the following forecast: We currently project: quarterly revenues of $205 million to $215 million; non-GAAP gross margins of 70.5 percent to 71.5 percent; ann increase in non-GAAP operating expenses of 3 percent to 5 percent; share-based compensation expense of $17.3 million to $17.8 million; and non-GAAP diluted share count of 50.8 million to 51.3 million shares.
Further information and news of recent launches and installations is available at www.mellanox.com