Israeli big data connectivity company Mellanox Technologies Ltd. (Nasdaq:MLNX), which was acquired by Nvidia for $6.9 billion last month, published its results for the first quarter of 2019 after the end of trading yesterday on Nasdaq. The company outperformed the analysts' forecasts.
Mellanox posted $305 million in revenue in the quarter, $5 million more than the market expected and 22% more than in the first quarter of 2018. The company's GAAP net profit was $48.6 million, 28.5% more than in the corresponding quarter last year.
Mellanox's non-GAAP gross profit margin, excluding various accounting items, including capital remuneration for employees and write-downs on intangible assets, was 68%, down from 69% in the first quarter of 2018, but its operating profit leaped 66% to $86.3 million. Mellanox's first net profit was $86.5 million, 68% more than in the corresponding quarter last year. Profit per share reached $1.59, compared with the $1.45 profit per share expected by the analysts.
Mellanox generated $88.4 million from current activity in the first quarter. The company's balance sheet also shows that it recognized $16.9 million from the sale of its stake in a private company in which it had invested. Mellanox had $553 million in cash and investments at the end of the first quarter.
Mellanox develops and markets high-speed data communications equipment using the Ethernet and InfiniBand technologies. The company's market cap is $6.5 billion, while its share price stands at $119, compared with $125 in the Nvidia deal last month (the deal is slated for completion by the end of the year). The difference between these two prices reflects investors' caution about completion of the deal, which depends on approval by Mellanox's shareholders and regulatory approval in various places around the world.
"All of our production lines grew continually"
"Mellanox delivered record revenue in Q1, achieving 5% sequential growth and 22% year-over-year growth. All of our product lines grew sequentially, showing the benefits of our diversified data center strategy," said Mellanox president and CEO Eyal Waldman. Waldman stands to receive $250 million for his 3.4% stake in the company, plus remuneration relating to the transfer of control in the company.
"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.," Waldman stated.
Waldman added that the company was also encouraging adoption of BlueField System-on-a-Chip and SmartNIC technology. "With further innovations to come, Mellanox is well-positioned to continue its growth trajectory," he said.
Published by Globes, Israel business news - en.globes.co.il - on April 17, 2019
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