Wed, Jul. 15, 5:19 PM
- Intel (up 2.4% AH) beat Q2 estimates and provided better-than-expected Q3 and full-year guidance. The chip giant reported a 14% Y/Y drop in PC/mobile CPU division sales, and a 10% increase in server CPU division sales.
- Various names with PC and/or server exposure are following Intel higher. HP (NYSE:HPQ) +1.2% AH. Micron (NASDAQ:MU) +2.2%. AMD +2%. Nvidia (NASDAQ:NVDA) +1.3%. Mellanox (NASDAQ:MLNX) +1%.
- Micron fell 3.7% in regular trading, after having surged yesterday on a WSJ report about a buyout offer from China's Tsinghua Unigroup. John McCain let it be known today he isn't thrilled with the idea of a Chinese company acquiring "the last major American manufacturer of memory chips."
- AMD is 9 days removed from plunging on account of a Q2 warning. The Intel rival's Q2 report arrives tomorrow.
Thu, Jul. 9, 10:04 AM
- InfiniBand/Ethernet server connectivity hardware and chip developer Mellanox (NASDAQ:MLNX) and Fibre Channel/Ethernet switch vendor Brocade (NASDAQ:BRCD) are selling off after QLogic (down 20.9%) issued a major FQ1 (June quarter) warning.
- QLogic blamed weak enterprise server/storage demand and an OEM inventory buildup caused by "a slower next-generation server transition in enterprise environments." The latter is an apparent reference to Intel's Grantley Xeon server CPU platform, which has acted as a tailwind for Mellanox.
- Mellanox reports on July 22. Given its historical reporting, Brocade should report next month.
Tue, Jun. 16, 5:38 PM
Thu, May 28, 1:34 PM
- In a presentation (.pdf) discussing their planned merger, Avago (AVGO -0.4%) and Broadcom (BRCM -2.6%) state they're aiming for a 40% long-term op. margin, up from the 30% collectively possessed by the companies today. Gross margin is forecast to rise to 60% from a current 57%, and R&D and SG&A spend respectively fall to 16% and 4% of revenue from 20% and 7%.
- Avago and Broadcom, who have $15.1B in revenue between them, are only forecasting a 5% long-term revenue CAGR. However, Avago CEO Hock Tan states the outlook is "probably conservative."
- Avago plans to partly finance the $17B cash portion of the deal via $9B worth of new debt. The post-merger company is expected to have $15.5B in debt and $1.3B in cash; Broadcom shareholders will have a 32% stake. The deal is expected to close in Q1 2016.
- Many potential product synergies exist. Among the possibilities: Wi-Fi/Bluetooth solutions that pair Broadcom's combo chips with Avago RF components; server/storage connectivity product lines featuring a mixture of Broadcom's Ethernet transceivers and switching chips and Avago's adapter cards and optical transceivers - Stifel thinks Mellanox (MLNX -0.3%) could be at risk here - and telecom equipment product lines that combine Broadcom's network processors and switching chips with Avago's optical components.
- Meanwhile, in its FQ2 report (issued in tandem with the merger announcement), Avago has guided for FQ3 revenue of $1.74B (+/- $25M), above a $1.68B consensus. The company reported a 66% Y/Y increase in FQ2 wireless chip revenue (aided by strong Apple/Samsung demand), along with 74% and 64% increases in wired infrastructure and industrial/other revenue (lifted by both organic growth and M&A).
Tue, May 26, 11:30 AM
- Mehdi Asgahri has been named Mellanox's (MLNX -1.1%) VP of silicon photonics, Eyal Babish its VP of hardware, Ronnen Lovinger its VP of operations and corporate quality, Alon Webman its VP of silicon engineering, and Henning Lysdal is VP of active interconnect engineering. Save for Lysdal, who will be reporting to Webman, all of the execs will be reporting to CEO Eyal Waldman.
- Together with the pending departures of COO Shai Cohen and engineering SVP Roni Ashuri (announced in April), the appointments give Waldman more direct oversight of Mellanox's R&D and business operations.
Tue, Apr. 21, 9:36 AM
- In tandem with its Q1 report, Mellanox (MLNX +1.2%) announces COO Shai Cohen and engineering SVP Roni Ashuri (both co-founders) "have indicated their intentions to retire to spend more time with their families." They'll remain with the company into Q4 to ensure an orderly transition.
- Q2 guidance is for revenue of $155M-$160M, soundly above a $149.3M consensus. Strong numbers were expected after Intel reported 19% Y/Y server CPU division growth last week on the back of strong Grantley Xeon CPU sales and demand from cloud/telco clients (Mellanox rallied in response).
- Discussing Q1, Mellanox notes the 40G Ethernet transition at major customers helped drive its top-line growth, and since its overall Ethernet share grew. The company's mainstay InfiniBand offerings say 46% Y/Y growth.
- Perhaps looking to counter fears of Intel competition, CEO Eyal Waldman asserts Mellanox is "the only company shipping full end-to-end 100 Gigabit [Ethernet and InfiniBand] solutions," that its 100G offerings deliver superior performance, and that its 40G Ethernet switches "were found to have zero packet loss and lower latency compared with competitive products."
- Contributing to the EPS beat: Gross margin rose to 73.4% from 72.3% in Q4 and 68.8% a year ago; Q2 GM guidance is at 71%-72%. Operating expenses (non-GAAP) rose 23% Y/Y to $77.4M (compares with 48% rev. growth). Mellanox ended Q1 with $432.7M in cash/investments, and no debt (compares with a $2.2B market cap).
- Q1 results, PR
Tue, Apr. 21, 7:06 AM
Mon, Apr. 20, 5:30 PM
Wed, Apr. 15, 2:32 PM
- InfiniBand and Ethernet adapter/switch/controller vendor Mellanox (MLNX +4.8%) is up strongly after Intel reported 19% Y/Y server CPU division growth. Fibre Channel and Ethernet adapter/switch/controller vendor QLogic (QLGC +2.4%) is also having a good day.
- On its CC (transcript), Intel (NASDAQ:INTC) stated its Grantley Xeon E5 CPUs (launched last September, used in HPC deployments featuring Mellanox hardware) now account for over half of its 2-socket server CPU volume. Not surprisingly, the company also reported seeing strong cloud and telco server CPU demand.
- Mellanox reports on April 21. QLogic hasn't set a calendar Q1 earnings date yet.
Sat, Mar. 7, 3:26 PM
- With Intel's (NASDAQ:INTC) Grantley Xeon CPU launch and Web data center investments offsetting weak high-end server demand, IDC estimates global server revenue rose 1.9% Y/Y in Q4 to $14.5B, and Gartner estimates it rose 2.2% to $14B; those figures compares with Q3 growth estimates of 4.8% and 1.7%, respectively.
- Likewise, IDC estimates global enterprise storage revenue rose 7.2% Y/Y in Q4, aided by Web investments and healthy demand for mid-range systems featuring integrated flash. Q3 growth was pegged at 5.1%.
- IBM had a rough time its both the server and storage markets: IDC believes its storage share fell to 9% (tied for #3) from 12.7% a year earlier, and Gartner estimates its server revenue fell 14% if one excludes Big Blue's x86 server unit, which was just sold to Lenovo. After accounting for the x86 sale, IDC estimates IBM's server share was at 13.7% (#3) vs. 26.8% a year ago.
- HP (NYSE:HPQ) fared a little better: IDC has its server share falling fractionally to 26.8% (still #1 overall), and its storage share falling to 13.8% (#2) from 14.1%. The company's x86 server unit has been gaining ground against IBM's former business, but its high-end server sales remain weak.
- Cisco's (NASDAQ:CSCO) UCS server line (recently refreshed) continues to gain ground: Its share rose to 5.3% (#5) from 4.5%, with full-year revenue pegged at $2.9B. With the help of aggressive pricing and x86 growth, Dell's server share rose to 16.7% (#2) from 15.2%, while its storage share slipped to 9% (tied for #3) from 9.2%. Lenovo (OTCPK:LNVGY) claimed a 7.6% server share (#4) thanks to the IBM deal, kicking Oracle (NYSE:ORCL) out of the top-5 along the way.
- EMC, whose high-end storage sales have been pressured (mid-range/flash demand has been better), saw its storage share drop to 22.2% (still #1) from 23.1%. NetApp (NASDAQ:NTAP), which posted an FQ3 miss and light guidance last month amid tough mid-range competition from EMC and others, saw its share drop to 7.2% (#5) from 8%.
- Not surprisingly, the white-label hardware beloved by Google, Facebook, Amazon, etc. continued to take share. IDC estimates such hardware, referred to as ODM Direct, claimed server and storage shares of 8.2% and 12.8% vs. 6.4% and 9.9% a year ago.
- Sales of x86 servers, the lion's share of which run on Intel CPUs, rose 7.1% to $11.5B. Sales of non-x86 servers fell 14% to $3B, thanks to declining demand for both mainframes and UNIX servers running proprietary RISC CPUs. "Early-stage revenue" was seen for ARM (NASDAQ:ARMH) servers, largely via HP's Moonshot line.
- Other companies with strong server and/or storage exposure: STX, WDC, SMCI, MLNX, AVGO, QLGC, RHT
Thu, Feb. 26, 3:59 PM
- Mellanox (MLNX +3.9%) has gradually rallied following news Avago is buying Fibre Channel/Ethernet adapter and controller vendor Emulex for $609M. Brocade and QLogic are also higher.
- Emulex doesn't compete against Mellanox in the InfiniBand adapter card/switch market, but there is some overlap between the companies in the 10G/40G Ethernet adapter and controller markets. On a broader level, both companies act as connectivity hardware providers for server and storage OEMs.
- Mellanox rallied a month ago after beating Q4 estimates and providing strong Q1 guidance.
Thu, Jan. 29, 9:12 AM
Wed, Jan. 28, 5:35 PM
Wed, Jan. 28, 5:26 PM
- With Intel's Grantley Xeon server CPU launch providing a big tailwind, Mellanox (NASDAQ:MLNX) expects Q1 revenue of $140M-$145M, above a $135.4M consensus.
- CEO Eyal Waldman declares the Q4 beat was fueled by 40G Ethernet adoption by major clients, growing HPC deployments (boosted by share gains), and "additional penetration into Web 2.0, storage and cloud markets." Mellanox's 100G InfiniBand offerings are expected to see initial deployments in Q1, as are its 25/50/100G Ethernet adapters and cables.
- Gross margin rose 300 bps Y/Y in Q4 to 72.3%; it's expected to be at 70%-71% in Q1. Opex rose 14% to $73M.
- Mellanox ended Q4 with $389M in cash/investments, and no debt. Jefferies' downgrade wasn't timed well.
- Q4 results, PR
Wed, Jan. 28, 4:09 PM
Tue, Jan. 27, 5:35 PM| Tue, Jan. 27, 5:35 PM | 4 Comments
Mellanox Technologies Ltd designs, manufactures and sells interconnect products and solutions that facilitate data transmission between servers, storage systems and communications infrastructure equipment and other embedded systems.
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