Tue, Nov. 17, 8:25 AM
- Four days after EZchip (NASDAQ:EZCH) announced it's postponing a shareholder vote on Mellanox's (NASDAQ:MLNX) planned $25.50/share ($811M) acquisition of the company and has been offered a 30-day go-shop period and termination fee waiver, the company states it has signed off on the revised agreement.
- Should no superior offer arrive during the go-shop period, EZchip shareholders will vote on the deal at a Jan. 19 meeting (Dec. 18 record date). EZchip sees the deal closing in Q1.
- With shares having closed yesterday at $24.04, EZchip remains 5.7% below Mellanox's offer price.
Thu, Nov. 12, 10:53 AM
- Following pressure from activist Raging Capital to get a better deal, EZchip (EZCH +2.6%) has postponed a shareholder vote on Mellanox's (MLNX +0.9%) planned $25.50/share ($811M) acquisition of the company. The vote was set for today's shareholder meeting.
- In addition, Mellanox has granted EZchip a 30-day go-shop period to solicit alternative bids, and has waived its rights to a deal termination fee.
- Mellanox is affirming its $25.50/share, all-cash, offer. EZchip has risen to $24.55 on today's news.
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
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, Sep. 30, 10:25 AM
- Mellanox (MLNX -7.3%) has sold off after announcing it's buying network processor (NPU) vendor and Israeli tech peer EZchip (EZCH +14.3%) for $811M in cash. Meanwhile, telecom/data center chipmakers Cavium (CAVM +3.5%), AppliedMicro (AMCC +4.1%), and PMC-Sierra (PMCS +7.9%) are rallying amid a 2% Nasdaq gain - each company's product line includes (but is by no means limited to) NPUs.
- Whereas Mellanox is focused on high-speed data center connectivity hardware (e.g. adapter cards, switches, switching and adapter ICs), EZchip still gets the majority of its revenue from NPUs going into edge routers and other telecom hardware. However, the company has been trying to expand its data center footprint, via its new NPS processor line (supports deeper packet analysis) and its Tilera unit (acquired in 2014, set to launch a processor supporting 100 ARM cores).
- Mellanox asserts EZchip's "products and expertise in security, deep packet inspection, video, and storage processing" will help it "deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for advanced data center and [telecom] edge platforms." The purchase price is equal to 5.9x EZchip's 2016 sales consensus; Mellanox trades for just 2.3x 2016E sales.
- Update: Summit Research's Srini Nandury thinks Mellanox's selloff stems from the company's failure to reiterate Q3 guidance during today's conference call, in spite of repeatedly being asked by analysts to do so.
Wed, Sep. 30, 7:51 AM
- The price works out to $25.50 per share in cash for EZchip (NASDAQ:EZCH) versus last night's close of $21.99.
- "We expect our combined technologies, and product portfolios to deliver leading end-to-end intelligent interconnect and processing solutions to data centers and wide area networks," says Mellanox (NASDAQ:MLNX) CEO Eyal Waldman.
- The deal is expected to close in Q1.
- A conference call is set for 8:30 ET.
- Source: Press Release
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, Apr. 21, 7:06 AM
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.
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
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.
Other News & PR