Inphi announces Q4 and full year 2017 financial results

Created February 26, 2018
News and Business

Inphi, a developer of high-speed data interconnects, has just announced financial results for its fourth quarter ended Dec. 31, 2017. Gross margin from continuing operations on a non-GAAP basis in the fourth quarter of 2017 was 70.3%, compared with 73.3% in the fourth quarter of 2016. The decrease was largely due to change in product mix, the company stated.

Operating income from continuing operations in the fourth quarter of 2017 was $17.2 million from continuing operations, compared with $23.4 million from continuing operations in Q4, 2016. The decrease is primarily due to the impact of the company’s net investment in developing new Coherent DSP components as part of the ClariPhy acquisition.

Net income from continuing operations in the fourth quarter of 2017 was $16.2 million, or $0.37 per diluted common share. This compares with non-GAAP net income from continuing operations of $20.8 million, or $0.47 per diluted common share in the fourth quarter of 2016. (All of these figures are non-GAAP)

Slow demand
“As we previously reported over the past few months, we continue to experience customer inventory burn and slow demand in the China long-haul and metro markets,” said President and CEO, Ford Tamer.

“While visibility remains limited, we have recently received positive requests from some of our customers for increased demand starting in Q2. So, we believe that Q1, 2018, will be the bottom and we can resume growth starting in Q2. We also remain confident in the many growth vectors for Inphi revenue in the second half of 2018.

This is based on new design wins for PAM DSPs, with associated linear TiAs and drivers, inside US cloud data centers driven by AI, Infiniband and Ethernet networking applications; M200 coherent DSP ramp in Europe, Asia and US; the ramp of Inphi’s 400G coherent TiAs and drivers; and continued growth of COLORZ in the second half of the year in US and China.”

2017 results
Revenue from continuing operations in the year ended December 31, 2017 was $348.2 million, compared with $266.3 million in the year ended December 31, 2016. GAAP net loss from continuing operations in the year ended December 31, 2017 was $74.9 million, or ($1.78) per diluted share, on approximately 42.2 million basic weighted average common shares outstanding.

This compares with GAAP net income from continuing operations of $26.5 million, or $0.60 per diluted share, on approximately 44.1 million diluted weighted average common shares outstanding in the year ended December 31, 2016.

Non-GAAP net income from continuing operations in the year ended December 31, 2017 was $67.2 million, or $1.52 per diluted weighted average common share outstanding, on approximately 44.3 million diluted weighted average common shares outstanding.

This compares with non-GAAP net income from continuing operations of $66.5 million in the year ended December 31, 2016, or $1.51 per diluted weighted average common share outstanding, on approximately 44.0 million diluted weighted average common shares outstanding.

Outlook
The following statements are based on the company’s current expectations for the first quarter of 2018. These statements are forward-looking and actual results may differ materially.
• Revenue in Q1 2018 is expected to be in a range of $58.0 million to $62.0 million. The midpoint being $60.0 million.
• Non-GAAP gross margin is expected to be approximately 67.4% to 68.4%.
• Stock-based compensation expense is expected to be in the range of $12.5 million to $12.7 million.
• Non-GAAP net loss, 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 $1.6 million to $2.6 million.

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This article was written
by Matthew Peach

Matthew Peach is a freelance technology journalist specialising in photonics and communications. He has previously worked for several business-to-business publishers, editing a range of high-tech magazines and websites.