ACADEMIA

• 50 Percent Quarter-over-Quarter and 111 Percent Year-over-Year Revenue Growth
• 158 Percent Quarter-over-Quarter Net Income Growth
• FDR InfiniBand Represents 54 Percent of Revenues

Mellanox Technologies has announced record financial results in its second quarter 2012, ended June 30, 2012.

Second Quarter 2012 Highlights

• Revenues were a record $133.5 million
• GAAP gross margins were 68.8 percent
• Non-GAAP gross margins were 70.5 percent
• GAAP operating income was a record $32.0 million
• Non-GAAP operating income was a record $42.7 million
• GAAP net income was a record $32.1 million
• Non-GAAP net income was a record $42.9 million
• GAAP net income per diluted share was a record $0.74
• Non-GAAP net income per diluted share was a record $0.99
• A record $59.2 million in cash was provided by operating activities
• $327.8 million in total cash and investments at June 30, 2012, an increase of $60.2 million from March 31, 2012

“Mellanox surpassed the $100 million quarterly revenue milestone, generating over $133 million of revenue,” said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. “We benefited from growth in the HPC, Web 2.0, storage, database, cloud, Big Data and financial services markets. We believe this growth demonstrates the broader market acceptance of both our FDR 56Gb/s InfiniBand and 10 and 40 Gigabit Ethernet solutions. More customers realize that ‘fast interconnect’ provides them with a higher return-on-investment and lower total cost of ownership.”

Financial Results

In accordance with U.S. generally accepted accounting principles (GAAP), the company reported record revenue of $133.5 million for the second quarter of 2012, up 50.4 percent from $88.7 million in the first quarter of 2012, and up 110.7 percent from $63.3 million in the second quarter of 2011.

GAAP gross margins in the second quarter of 2012 were 68.8 percent, compared with 67.4 percent in the first quarter of 2012, and 64.9 percent in the second quarter of 2011.

Non-GAAP gross margins in the second quarter of 2012 were 70.5 percent, compared with 70.0 percent in the first quarter of 2012, and 68.9 percent in the second quarter of 2011.

GAAP net income in the second quarter of 2012 was a record $32.1 million, or $0.74 per diluted share, compared with net income of $12.4 million, or $0.29 per diluted share in the first quarter of 2012, and $2.1 million, or $0.06 per diluted share in the second quarter of 2011.

Non-GAAP net income in the second quarter of 2012 was a record $42.9 million, or $0.99 per diluted share, compared with $22.0 million, or $0.51 per diluted share in the first quarter of 2012, and $10.3 million, or $0.27 per diluted share in the second quarter of 2011. The second quarter 2012 non-GAAP net income excludes $8.4 million of share-based compensation expenses compared to $7.2 million in the first quarter of 2012, and compared to $5.4 million in the second quarter of 2011. The second quarter 2012 non-GAAP net income also excludes amortization of acquired intangible assets of $2.3 million associated with the acquisition of Voltaire, Ltd. on February 7, 2011 compared to $2.4 million of such amortization expenses in the first quarter of 2012, and compared to $2.8 million in the second quarter of 2011.

Total cash and investments were $327.8 million at June 30, 2012. The company generated a record $59.2 million in cash from operating activities during the quarter.

Conference Calls

Mellanox will broadcast its second quarter 2012 financial results conference call today at 2 p.m. Pacific Time (5 p.m. Eastern). To listen to the call, dial 877-831-3840 approximately ten minutes prior to the start time.

Mellanox will also conduct a conference call on Thursday, July 19, 2012 at 9 a.m. Israel Time to discuss the company’s second quarter 2012 financial results in Hebrew. To listen to the call, dial +972-3-9180609 approximately 10 minutes prior to the start of the call.

The Mellanox financial results conference call will be available via a live webcast on the investor relations section of the Mellanox website at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fir.mellanox.com&esheet=50346007&lan=en-US&anchor=http%3A%2F%2Fir.mellanox.com&index=1&md5=cd54635feeb35e1269c5a5e62eed47d2. Access the website 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will also be available on the Mellanox website.