ACADEMIA

17 percent quarter-over-quarter and 130 percent year-over-year sales growth; 51 percent quarter-over-quarter net income growth

Mellanox Technologies has announced record financial results in its third quarter 2012, ended September 30, 2012.

Third Quarter 2012 Highlights

• Revenues were $156.5 million
• GAAP gross margins were 69.1 percent
• Non-GAAP gross margins were 70.5 percent
• GAAP operating income was $49.2 millionNon-GAAP operating income was $60.9 million
• GAAP net income was $48.4 million
• Non-GAAP net income was $60.1 million
• GAAP net income per diluted share was $1.09
• Non-GAAP net income per diluted share was $1.37
• $74.4 million in cash was provided by operating activities
• $405.4 million in total cash and investments at September 30, 2012, an increase of $77.6 million from June 30, 2012

Financial Results

In accordance with U.S. generally accepted accounting principles (GAAP), the company reported record revenue of $156.5 million for the third quarter of 2012, up 17.2 percent from $133.5 million in the second quarter of 2012, and up 129.6 percent from $68.2 million in the third quarter of 2011.

GAAP gross margins in the third quarter of 2012 were 69.1 percent, compared with 68.8 percent in the second quarter of 2012, and 64.5 percent in the third quarter of 2011.

Non-GAAP gross margins in the third quarter of 2012 were 70.5 percent, unchanged from the second quarter of 2012, and compared to 68.2 percent in the third quarter of 2011.

GAAP net income in the third quarter of 2012 was a record $48.4 million, or $1.09 per diluted share, compared with net income of $32.1 million, or $0.74 per diluted share in the second quarter of 2012, and $4.8 million, or $0.13 per diluted share in the third quarter of 2011.

Non-GAAP net income in the third quarter of 2012 was a record $60.1 million, or $1.37 per diluted share, compared with $42.9 million, or $0.99 per diluted share in the second quarter of 2012, and $13.0 million, or $0.34 per diluted share in the third quarter of 2011. The third quarter 2012 non-GAAP net income excludes $9.4 million of share-based compensation expenses compared to $8.4 million in the second quarter of 2012, and compared to $5.6 million in the third quarter of 2011. The third 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 consistent with such amortization expenses in the second quarter of 2012, and compared to $2.6 million in the third quarter of 2011.

Total cash and investments were $405.4 million at September 30, 2012. The company generated a record $74.4 million in cash from operating activities during the quarter.

“Our third quarter results demonstrate the company’s continued ability to increase its penetration into existing markets, as well as to expand into new markets for our InfiniBand solutions,” said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. “We also continue to see increased traction for our 10 and 40 Gigabit Ethernet products. We expect additional partners and customers to benefit from the higher return-on-investment that our fast interconnect solutions provide to them.”