Cavium Announces Financial Results for Q2 2017
SAN JOSE, Calif., Aug. 2, 2017 /PRNewswire/ -- Cavium, Inc. (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for enterprise, data center, cloud, wired and wireless networking, today announced financial results for the second quarter ended June 30, 2017.
Net revenue in the second quarter of 2017 was $242.1 million, a 5.5% sequential increase from the $229.6 million reported in the first quarter of 2017 and 125.9% from the $107.2 million reported in the second quarter of 2016.
Generally Accepted Accounting Principles (GAAP) Results
Net loss for the second quarter of 2017 was $11.1 million, or ($0.16) per diluted share, compared to $50.5 million, or ($0.75) per diluted share in the first quarter of 2017. Gross margins were 53.5% in the second quarter of 2017 compared to 40.1% in the first quarter of 2017. GAAP operating loss (GAAP loss from operations as a percentage of revenue) was 2.5% in the second quarter of 2017 compared to 17.0% in the first quarter of 2017. Total cash and cash equivalents were $127.1 million at June 30, 2017.
Non-GAAP Results
Cavium believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Cavium's financial condition and results of operations. Cavium believes that these non-GAAP financial measures provide additional insight into Cavium's ongoing performance and core operational activities and has chosen to provide these measures for more consistent and meaningful comparison between periods. These measures should only be used to evaluate Cavium's results of operations in conjunction with the corresponding GAAP measures. The reconciliation between GAAP and non-GAAP financial results is provided in the financial statements portion of this release.
In the second quarter of 2017, Non-GAAP net income was $48.9 million, or $0.67 per diluted share, Non-GAAP gross margin was 65.9% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 23.3%.
Recent News Highlights
-- July 25, 2017 - Cavium Expands XPliant® Product Portfolio with 10GbE
and 25GbE Optimized Programmable Switch Devices
-- July 18, 2017 - Cavium 25/50Gbps Ethernet Adapter Technology Powers
Hewlett Packard Enterprise Synergy
-- July 11, 2017 - Cavium FastLinQ® Ethernet Enables Universal RDMA for
Dell EMC 14th Generation PowerEdge Servers
-- June 28, 2017 - Cavium and China Unicom Announced Trials of M-CORD
NFV/5G Platforms in China
-- June 27, 2017 - Cavium Unveiled Industry's Most Advanced 10/25/40/50Gbps
Ethernet NIC Family
-- June 19, 2017 - Cavium and Leading Partners Showcased ThunderX®-based
Server Platforms & Software for High Performance Computing at ISC 2017
-- June 19, 2017 - Cavium Expands the ThunderX2 Server Ecosystem for Cloud
and HPC Applications
-- May 29, 2017 - Cavium and Partners Demonstrated a Range of Efficient,
Secure and Scalable Datacenter and Networking Infrastructure Solutions
at COMPUTEX 2017
-- May 29, 2017 - Cavium FastLinQ® Ethernet Adopted by Major ODMs for
Next-Generation Cloud and Telco Datacenters
-- May 29, 2017 - Inventec Launched New Baymax(TM) HyperScale Server
Platforms Powered by Cavium ThunderX2(TM) Processors
-- May 29, 2017 - Ingrasys Enables High Performance Computing and
Hyperscale Workloads with New Class of Server Platforms Powered by
Cavium ThunderX2(TM) Processors
-- May 29, 2017 - GIGABYTE Technology Announced Expansion of their ARM
Server Portfolio based on Cavium's ThunderX2(TM) Workload Optimized
Processor Family
-- May 9, 2017 - Cavium QLogic Accelerates NVMe over Fabrics Adoption
-- May 8, 2017 - Cavium Demonstrated Newest Enterprise Connectivity and
Datacenter Solutions at Dell EMC World 2017
-- May 8, 2017 - Cavium Showcased Innovative Solutions for Private and
Public Cloud Infrastructure and Scale Out Applications at OpenStack 2017
-- May 3, 2017 - Cavium Named Winner of Omega Award for Trailblazing
Innovation by ACG Research for 2016
-- May 3, 2017 - Cavium Demonstrated Next-generation NFV, SDN, 5G and Telco
Cloud Infrastructure Solutions at NFV World Congress 2017
-- May 2, 2017 - China Mobile, ARM, Cavium and Enea Signed Agreement for
Cooperation in China Mobile Open NFV Testlab
-- May 2, 2017 - Cavium Demonstrated Leading Datacenter, HPC and
Next-generation Cloud Infrastructure Solutions at Red Hat Summit 2017
-- April 27, 2017 - Online Launched ARMv8-Based Scaleway Public Cloud
Service Powered by Cavium's ThunderX® Workload Optimized Processors
Cavium will broadcast its second quarter of 2017 financial results conference call today, August 2, 2017, at 2 p.m. Pacific time (5 p.m. Eastern time). The conference call will be available via a live web cast on the investor relations section of the Cavium website at http://www.cavium.com. Please access the website at least a few minutes prior to the start of the call in order to download and install any necessary audio software. An archived web cast replay of the call will be available on the web site for a limited period of time.
About Cavium
Cavium offers a broad portfolio of integrated, software compatible processors ranging in performance from 1Gbps to 100Gbp that enable secure, intelligent functionality in Enterprise, Data Center, Broadband, Mobile and Service Provider Equipment, highly programmable switches which scale to 3.2Tbps and Ethernet and Fibre Channel adapters up to 100Gbps. Cavium processors are supported by ecosystem partners that provide operating systems, tools and application support, hardware reference designs and other products. Cavium is headquartered in San Jose, CA with design centers in California, Massachusetts, India, Israel, China and Taiwan. For more information, please visit: http://www.cavium.com.
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
------------------
June 30, 2017 March 31, 2017
------------- --------------
Net
revenue $242,093 $229,577
Cost of
revenue 112,604 137,454
------- -------
Gross
profit 129,489 92,123
------- ------
Operating
expenses:
Research
and
development 94,758 90,713
Sales,
general
and
administrative 40,791 40,397
------ ------
Total
operating
expenses 135,549 131,110
------- -------
Loss from
operations (6,060) (38,987)
------ -------
Other
income
(expense),
net:
Interest
expense (6,062) (10,124)
Other, net 1 (133)
--- ----
Total
other
expense,
net (6,061) (10,257)
------ -------
Loss
before
income
taxes (12,121) (49,244)
(Benefit
from)
provision
for
income
taxes (1,049) 1,279
------ -----
Net
loss $(11,072) $(50,523)
======== ========
Net
loss
per
common
share,
basic
and
diluted $(0.16) $(0.75)
Shares
used in
computing
basic and
diluted
net loss
per
common
share 68,199 67,640
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
Three Months Ended
------------------
June 30, 2017 March 31, 2017
------------- --------------
Reconciliation of GAAP gross profit
and margin to non-GAAP:
Net revenue $242,093 $229,577
GAAP gross profit 129,489 92,123
GAAP gross margin 53.5% 40.1%
Stock-based compensation and
related payroll taxes 718 694
Inventory charges 1,661 25,803
Realignment charges - 5,104
Amortization of acquisition related
assets 27,706 27,053
------ ------
Non-GAAP gross profit $159,574 $150,777
======== ========
Non-GAAP gross margin 65.9% 65.7%
==== ====
Reconciliation of GAAP operating
expenses to non-GAAP:
GAAP research and
development expenses $94,758 $90,713
Stock-based compensation and
related payroll taxes (18,298) (16,214)
Realignment charges - (422)
Amortization of acquisition related
assets (731) (743)
Acquisition and integration related
costs (811) (1,346)
---- ------
Non-GAAP research and development
expenses 74,918 71,988
------ ------
GAAP sales, general and
administrative expenses 40,791 40,397
Stock-based compensation and
related payroll taxes (9,363) (8,769)
Realignment charges - (552)
Amortization of acquisition related
assets (1,277) (1,246)
Acquisition and integration related
costs (1,984) (1,618)
------ ------
Non-GAAP sales, general and
administrative expenses 28,167 28,212
------ ------
Total Non-GAAP operating
expenses $103,085 $100,200
======== ========
Reconciliation of GAAP non-
operating expenses to non-GAAP:
GAAP other expense, net $(6,061) $(10,257)
Acquisition related debt refinancing
costs - 2,680
--- -----
Non-GAAP other expense,
net $(6,061) $(7,577)
======= =======
Reconciliation of GAAP Income tax to
non-GAAP:
GAAP (benefit from)
provision for income tax $(1,049) $1,279
Acquisition related tax adjustments 2,605 -
----- ---
Non-GAAP provision for
income tax $1,556 $1,279
====== ======
CAVIUM, INC.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data and percentages)
Three Months Ended
------------------
June 30, 2017 March 31, 2017
------------- --------------
Reconciliation of GAAP loss from
operations to non-GAAP income from
operations:
GAAP loss from operations $(6,060) $(38,987)
Stock-based compensation and related
payroll taxes 28,379 25,677
Inventory charges 1,661 25,803
Realignment charges - 6,078
Amortization of acquisition related
assets 29,714 29,042
Acquisition and integration related
costs 2,795 2,964
----- -----
Non-GAAP income from
operations $56,489 $50,577
======= =======
Non-GAAP income from operations as a
percentage of revenue 23.3% 22.0%
==== ====
Reconciliation of GAAP net loss to non-
GAAP net income:
GAAP net loss $(11,072) $(50,523)
Non-GAAP adjustments:
Stock-based compensation and related
payroll taxes 28,379 25,677
Inventory charges 1,661 25,803
Realignment charges - 6,078
Amortization of acquisition related
assets 29,714 29,042
Acquisition and integration related
costs 2,795 2,964
Acquisition related debt refinancing
costs - 2,680
Acquisition related tax adjustments (2,605) -
------ ---
Total of non-GAAP adjustments 59,944 92,244
------ ------
Non-GAAP net income $48,872 $41,721
======= =======
GAAP net loss per share,
diluted $(0.16) $(0.75)
====== ======
Non-GAAP adjustments detailed above 0.83 1.33
Non-GAAP net income per
share, diluted $0.67 $0.58
===== =====
GAAP weighted average shares, diluted 68,199 67,640
Non-GAAP share adjustment 5,019 4,688
----- -----
Non-GAAP weighted average shares,
diluted 73,218 72,328
CAVIUM, INC.
Unaudited GAAP Condensed Consolidated Balance Sheets
(in thousands)
As of
-----
June 30, 2017 March 31, 2017
------------- --------------
Assets
Current assets
Cash and cash equivalents $127,061 $132,409
Accounts receivable, net 173,754 136,510
Inventories 94,116 100,467
Prepaid expenses and other current assets 21,669 22,461
------ ------
Total current assets 416,600 391,847
Property and equipment, net 157,542 152,690
Intangible assets, net 714,636 740,004
Goodwill 241,067 241,067
Other assets 5,286 5,559
----- -----
Total assets $1,535,131 $1,531,167
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $72,494 $68,772
Accrued expenses and other current
liabilities 49,825 54,704
Deferred revenue 8,990 8,213
Current portion of long-term debt 3,256 3,249
Capital lease and technology license
obligations 19,195 21,402
------ ------
Total current liabilities 153,760 156,340
Long-term debt 594,590 593,880
Capital lease and technology license
obligations, net of current 20,563 24,929
Deferred tax liability 16,972 19,314
Other non-current liabilities 18,722 17,735
------ ------
Total liabilities 804,607 812,198
------- -------
Stockholders' equity
Common stock 68 68
Additional paid-in capital 1,128,752 1,106,649
Accumulated deficit (399,088) (388,016)
Accumulated other comprehensive income
(loss) 792 268
--- ---
Total stockholders' equity 730,524 718,969
------- -------
Total liabilities and
stockholders' equity $1,535,131 $1,531,167
========== ==========
View original content with multimedia:http://www.prnewswire.com/news-releases/cavium-announces-financial-results-for-q2-2017-300498522.html
SOURCE Cavium, Inc.
