Takeover target Mellanox posts impressive 2018 results

Mellanox Technologies Photo: Reuters

After reports that Intel has bid $5.5 billion to buy it, the Israeli big data connectivity company beat the analysts on 2018 and gave bullish guidance for 2019.

Israeli big data connectivity chip developer Mellanox Technologies Ltd. (Nasdaq:MLNX) has reported impressive financial results for the fourth quarter of 2018 and full-year 2018, beating the analysts' predictions, and bullish guidance for 2019. During trading on Nasdaq yesterday, Mellanox's share price rose 7.2% following reports that Intel had made a $5.5 billion bid to buy the company.

Mellanox reported revenue of $1.09 billion in 2018, up 26% from 2017. GAAP net profit was $134.3 million ($2.46 per share) in 2018, compared with a net loss of $19.4 million ($0.39 per share) in 2017. Non-GAAP net profit in 2018 was $266.5 million ($5.01 per share), up from $116.6 million ($2.28 per share) in 2017.

Fourth quarter revenue was $290 million up 22.1% from $237.6 million in the corresponding quarter of 2017. GAAP net proft was $42.8 million ($0.78 per share) in the fourth quarter, compared with a net loss of $2.6 million ($0.05 per share) in the fourth quarter of 2017. Non-GAAP net profit in the fourth quarter of 2018 was $77.1 million ($1.42 per share), up from $42.9 million ($0.82 per share) in the corresponding quarter of 2017.

Mellanox has provided a bullish guidance for the first quarter of 2019. The company sees revenue of $295-305 million and Non-GAAP operating profit of $123-125 million - in other words an operating profit ratio of 40%-42%.

In his comments on the results, founder and CEO Eyal Waldman did not relate to the takeover reports. He said, We continue to invest in research and development to maintain our leadership across all product lines to fuel our growth in 2019 and beyond."

"Mellanox had an outstanding 2018, delivering 26% annual revenue growth and achieving $1.09 billion in revenue for the first time in our history. We leveraged top line growth and strong expense discipline to accelerate profitability. We expect to carry this momentum into 2019 and deliver another year of healthy, double-digit revenue growth to drive operating margins even higher."

"We achieved record quarterly revenue in our Ethernet switch business, capitalizing on design wins for our high-performance, feature-rich solutions, which support continued growth in 2019."

He added that the Infiniband business grew 8% in 2018.

Mellanox has a market cap of $4.7 billion.

Published by Globes, Israel business news - en.globes.co.il - on January 31, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Mellanox Technologies Photo: Reuters
Mellanox Technologies Photo: Reuters
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