Thu, Nov. 5, 3:12 PM
- Mellanox (MLNX -1.7%) is off moderately after EZchip (EZCH -0.2%), which Mellanox is set to acquire for $811M (provided shareholders approve), posted nearly in-line Q3 results and guided for Q4 revenue of $25M, below a $33.1M consensus. The network processor vendor attributes the outlook to "near-term inventory adjustments across several key customers that are serving the carrier networking space," and insists it isn't reflective of the company's long-term outlook,
- However, with major shareholder Raging Capital continuing to oppose Mellanox's planned acquisition of EZchip, EZchip is using the guidance to argue in favor of the Mellanox deal. "The fully financed, all-cash, $25.50 per share offer from Mellanox provides EZchip shareholders with immediate and certain cash value. This is in contrast to the headwinds a standalone EZchip could face as we continue to witness further industry consolidation and the moves of major customers toward in-house production for NPS-400 functionality."
- EZchip has also issued a new PR making a case for a "Yes" vote. Shareholder advisory firm Glass Lewis opposes the deal, while peers ISS and Entropy are in favor of it.
- Thanks to fears the deal could fall through, EZchip is trading at $24.24, 5% below Mellanox's buyout price.
- EZchip's Q3 results, PR
Wed, Oct. 21, 5:31 PM
- In addition to beating Q3 estimates, Mellanox (NASDAQ:MLNX) is guiding for Q4 revenue of $171M-$176M, favorable at the midpoint to a $171.9M consensus and going over well in light of worries about weak enterprise server demand.
- Boosting Q3 EPS: Gross margin was 72.9%, +20 bps Q/Q and Y/Y, and above guidance of 71.5%-72.5%. Q3 GM guidance is also at 71.5%-72.5%. Operating expenses are expected rise 1%-4% Q/Q. They rose 29% Y/Y in Q3 to $88M.
- CEO Eyal Waldman suggests demand for Mellanox's Ethernet connectivity hardware is strong among major Web/cloud service providers. "We are seeing revenues from our 10, 25, 40, 50 and 100 Gigabit Ethernet solutions and traction with large data center customers for these products. We are happy to see our EDR 100 Gigabit InfiniBand revenues growing at a faster pace than FDR did, to approximately 12 percent of InfiniBand revenues."
- Shares have risen to $44.80 after hours.
- Q3 results, PR
Wed, Oct. 21, 4:07 PM
Tue, Oct. 20, 5:35 PM| Tue, Oct. 20, 5:35 PM | 7 Comments
Thu, Oct. 1, 9:16 AM
- Mellanox (NASDAQ:MLNX) now expects Q3 revenue of $169M-$171M, improved from a prior $165M-$170M and above a $167.8M consensus.
- Gross margin is expected to be "at the mid-point or better" relative to prior guidance; operating expenses are expected to be "toward the high end" of prior guidance. Full Q3 results arrive on Oct. 21.
- Shares have risen to $38.91 premarket. They fell 5% yesterday after the EZchip deal was announced. Summit Research had voiced concerns about the fact guidance wasn't reiterated during the conference call held to discuss the deal.
Wed, Jul. 22, 7:00 PM
- Mellanox (NASDAQ:MLNX) expects Q3 revenue of $165M-$170M, above a $163M consensus. Gross margin is expected to slip to 71.5%-72.5% from Q2's 72.7% (-70 bps Q/Q and +340 bps Y/Y).
- The company says it has begun shipping 100G interconnects, and now connects 51.4% of all systems on the TOP500 supercomputer list.
- MLNX +1.1% AH to $47.50. Shares fell 2.4% in regular trading ahead of the Q2 report.
- Q2 results, PR
Wed, Jul. 22, 4:07 PM
Tue, Jul. 21, 5:35 PM| Tue, Jul. 21, 5:35 PM | 5 Comments
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, 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, 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
Tue, Jan. 13, 10:33 AM
- Emulex (NYSE:ELX) now expects FQ2 revenue of $110M-$111M and EPS of $0.23-$0.24, above prior guidance of $102M-$108M and $0.14-$0.18; consensus is at $105.7M and $0.16.
- CEO Jeff Benck: "Emulex finished calendar year 2014 in a much stronger position led by a resilient Fibre Channel sector and benefiting from solid execution and customers' embrace of our current product cycles." The company sees a "broad slate of OEM qualifications of our 10Gb Ethernet products designed for next generation x86 servers [ramping] in the market over the next year."
- Full FQ2 results arrive on Jan. 29. Improving server demand appears to have provided a lift.
- Archrival QLogic (QLGC +5.7%) and InfiniBand/Ethernet adapter and switch vendor Mellanox (MLNX +3%) are also outperforming, as is Fibre Channel switch leader Brocade (BRCD +3.2%). The Nasdaq is up 1.7%.
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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