Mellanox Reports Third Quarter 2015 Financial Results 

SUNNYVALE, Calif. & YOKNEAM, Israel, Oct. 22 -- Mellanox Technologies, Ltd. (NASDAQ: MLNX) has announced financial results for its third quarter, ended September 30, 2015.

"We are excited to achieve consecutive record quarterly revenues. Assuming the midpoint of our fourth quarter 2015 guidance, our annual revenues are expected to grow 41 percent year-over year, and gross margins to be above 72.5 percent. We also expect annual operating income to improve substantially from the prior year, to approximately 21 percent of revenue, which is a significant step towards our long-term target profitability," said Eyal Waldman, president and CEO of Mellanox Technologies. "Today, Mellanox is a diversified company, serving more products, markets, and customers. We are seeing revenues from our 10, 25, 40, 50 and 100 Gigabit Ethernet solutions and traction with large data center customers for these products. We are happy to see our EDR 100 Gigabit InfiniBand revenues growing at a faster pace than FDR did, to approximately 12 percent of InfiniBand revenues. The EZchip acquisition will bring us strategic customers and advanced technologies that will fuel further growth and diversification."

Third Quarter 2015 Highlights

• Revenues of $171.4 million increased 5.0 percent, compared to $163.1 million in the second quarter of 2015.
• GAAP gross margins of 71.3 percent in the third quarter compared to 71.1 percent in the second quarter of 2015.
• Non-GAAP gross margins of 72.9 percent in the third quarter compared to 72.7 percent in the second quarter of 2015.
• GAAP operating income was $20.6 million, compared to $19.4 million, in the second quarter of 2015.
• Non-GAAP operating income was $37.0 million, or 21.6 percent of revenue, compared to $36.2 million, or 22.2 percent of revenue in the second quarter of 2015.
• GAAP net income was $20.0 million, compared to $19.2 million in the second quarter of 2015.
• Non-GAAP net income was $36.3 million, compared to $36.1 million in the second quarter of 2015.
• GAAP net income per diluted share of $0.42 increased 5.0 percent, compared to $0.40 in the second quarter of 2015.
• Non-GAAP net income per diluted share of $0.75 in the third quarter and second quarter of 2015.
• $28.7 million in cash was provided by operating activities, compared to $41.3 million in the second quarter of 2015.
• Cash and investments totaled $485.6 million at September 30, 2015, compared to $467.2 million at June 30, 2015.

Fourth Quarter 2015 Guidance

We currently project:

• Quarterly revenues of $171 million to $176 million.
• Non-GAAP gross margins of 71.5 percent to 72.5 percent.
• An increase in non-GAAP operating expenses of 1 percent to 4 percent.
• Share-based compensation expense from $13.2 million to $13.7 million.
• Non-GAAP diluted share count from 48.3 million to 48.8 million shares.

Recent Mellanox Press Release Highlights

• Oct. 13, 2015 - Mellanox Supports the Grand Opening of the QCT Cloud Solution Center in Silicon Valley
• Sept. 30, 2015 - Mellanox Technologies, Ltd. Announces Definitive Agreement to Acquire EZchip
• Sept. 28, 2015 - Mellanox and Ixia Demonstrate Industry-First Interoperability of 100Gb/s Ethernet Platforms over 2km of Optical Fiber with Silicon Photonics Transceivers
• Sept. 21, 2015 - Healthcare Organizations Select Mellanox InfiniBand-Based Cloud
• Sept. 2, 2015 - Mellanox Begins Shipping Spectrum, Industry's First Open Ethernet 25/50/100 Gigabit Switch, to Cloud, Web 2.0 and Enterprise Data Center Customers
• Aug. 31, 2015 - Mellanox Ethernet Solutions Enable Cloud-based Businesses to Achieve Higher Level of Efficiency and Scalability over VMware vSphere 6
• Aug. 31, 2015 - Mellanox Simplifies Cloud Deployments with CloudX Hyper-Converged Platforms for Enterprise and Telecom
• Aug. 25, 2015 - KTH Royal Institute of Technology Selects Mellanox End-to-End EDR 100Gb/s InfiniBand Solutions
• Aug. 19, 2015 - Open Ethernet Gains Industry Momentum with Large Eco-System Demonstration Including Microsoft, Dell, Metaswitch, andMellanox
• Aug. 11, 2015 - Mellanox Optimizes Flash Storage Access, Enabling Faster Time-to-Decision While Lowering Cost
• http://www.mellanox.com/ethernet/wine-space.php

About Mellanox

Mellanox Technologies is a leading supplier of 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. Mellanox offers a choice of fast interconnect products: adapters, switches, software, cables and silicon that accelerate application runtime and maximize business results for a wide range of markets including high-performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. More information is available at www.mellanox.com.

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Source: Mellanox Technologies