Mellanox Technologies, Ltd. (NASDAQ: MLNX) has done it again: as in the first quarter of this year, in the second quarter too the company has revised its guidance upwards a month after releasing it, although the rise is more moderate this time round. Mellanox announced today that it expected quarterly revenue of $260- 270 million in the second quarter, up from $255-265 million projected a month ago. The consensus analysts' estimate is for revenue of $260 million.
For the full year 2018, Mellanox currently projects revenue of $1.05-1.07 billion. The previous guidance was for revenue of $1.03-1.05 billion. The updated guidance represents growth of 21.5-23.8% over 2017, in which Mellanox's revenue hardly grew. This year is the first in which Mellanox's revenue will cross the $1 billion mark.
Mellanox also projects a non-GAAP operating margin of 23-24%, which compares with previous guidance of 21-22%, and an actual margin of just 13.7% in 2017. The company's operating margin is the main focus of the criticism of its management levelled by the Starboard fund, a Mellanox shareholder that in recent months has been calling for the company's board of directors to be replaced.
Mellanox's share price is currently up 3.56%.
Yokne'am-based Mellanox produces and sells Ethernet and InfiniBand interconnect solutions and services for servers, storage, and hyper-converged infrastructure.
Mellanox CEO Eyal Waldman said, "We continue to see strength across all our product lines, including InfiniBand and Ethernet, and we are well-positioned for further growth as the adoption of 25 gigabit per second and above Ethernet adapters continues in 2018 and beyond. The team remains disciplined in its investments and committed to optimizing efficiencies and reducing expenses, without slowing down revenue growth. The board and management team are confident that the successful execution of our strategy will continue to deliver enhanced value for all shareholders."
Mellanox has a market cap of $4.4 billion, a more than five-year peak. Next week, a Mellanox shareholders meeting will take place at which the shareholders will be asked to vote on a change in the mechanism for electing directors. In July, a more fateful meeting will take place that will determine the composition of the board of directors will be determined. Representatives of both the company and of Starboard will stand for election.
Published by Globes [online], Israel business news - www.globes-online.com - on May 17, 2018
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