Mellanox Technologies reported record revenue of $305.2 million in the first quarter, an increase of 21.6 percent, compared to $251.0 million in the first quarter of 2018. GAAP gross margins of 64.6 percent in the first quarter, compared to 64.5 percent in the first quarter of 2018.
“Mellanox delivered record revenue in Q1, achieving 5 percent sequential growth and 22 percent year-over-year growth. All of our product lines grew sequentially, showing the benefits of our diversified data center strategy,” said Eyal Waldman, president and CEO of Mellanox Technologies. “Our R&D execution has resulted in differentiated products, while at the same time we have generated operating margin of 14.6% on a GAAP basis and 28.3% on a non-GAAP basis. Additionally, we increased cash and short-term investments by $114 million during the quarter.”
“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. Our Ethernet solutions continue to penetrate the market for both adapters and switches. Our market leadership in 25 gigabit per second Ethernet solutions is well established, and our 100 gigabit per second solutions are the fastest growing portion of our Ethernet adapter product line. We are also encouraged by the adoption of our BlueField System-on-a-Chip and SmartNIC technology. With further innovations to come, Mellanox is well-positioned to continue its growth trajectory,” Mr. Waldman concluded.
Highlights
- Non-GAAP gross margins of 68.0 percent in the first quarter, compared to 69.0 percent in the first quarter of 2018.
- GAAP operating income of $44.7 million in the first quarter, compared to $12.0 million in the first quarter of 2018.
- Non-GAAP operating income of $86.3 million in the first quarter, or 28.3 percent of revenue, compared to $52.1 million, or 20.8 percent of revenue in the first quarter of 2018.
- GAAP net income of $48.6 million in the first quarter, compared to $37.8 million in the first quarter of 2018.
- Non-GAAP net income of $86.5 million in the first quarter, compared to $51.4 million in the first quarter of 2018.
- GAAP net income per diluted share of $0.87 in the first quarter, compared to $0.71 in the first quarter of 2018.
- Non-GAAP net income per diluted share of $1.59 in the first quarter, compared to $0.98 in the first quarter of 2018.
With Mellanox, NVIDIA targets full compute/network/storage stack
NVIDIA agreed to acquire Mellanox in a deal valued at approximately $6.9 billion.
The merger targets data centers in general and the high-performance computing (HPC) market in particular. Together, NVIDIA’s computing platform and Mellanox’s interconnects power over 250 of the world’s TOP500 supercomputers and have as customers every major cloud service provider and computer maker. Mellanox pioneered the InfiniBand interconnect technology, which along with its high-speed Ethernet products is now used in over half of the world’s fastest supercomputers and in many leading hyperscale datacenters.
NVIDIA said the acquired assets enables it to data center-scale workloads across the entire computing, networking and storage stack to achieve higher performance, greater utilization and lower operating cost for customers.
“The emergence of AI and data science, as well as billions of simultaneous computer users, is fueling skyrocketing demand on the world’s datacenters,” said Jensen Huang, founder and CEO of NVIDIA. “Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine.
NVIDIA also promised to continue investing in Israel, where Mellanox is based.
The companies expect to close the deal by the end of 2019.
