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Financial Overview
Jacob Shulman − Chief Financial Officer
October 25, 2013
Major Takeaways from Earlier Presentations
 Exponential increase in data consumption emphasizes
critical importance of in...
Core Affects from Acquisitions
Voltaire
1Q11

IPtronics
3Q13

Kotura
3Q13

TAM
ASP
Long-term Gross Margins
*

Accretive af...
Historical Annual Revenue Growth

Annual Revenue ($M)

500.8

360.0

Mid-point of 4Q13
Guidance

392.8E

259.3
154.6

107....
2011 – 2013 Revenue Proforma

Annual Revenue ($M)

500.8

300.0310.0
154.6

107.7

YoY
%

116.0

2008

2009

2010

28.1%

...
Historical Quarterly Revenue Growth
156.5

Quarterly Revenue ($M)

133.5
122.1
104.1

105 –
110

98.2
88.7

83.1

72.7
68....
Percentage of Revenue by Product Family

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

Q3’12 Q4’12 Q1’13 Q2’13 Q3’13
IC
...
Percentage of Revenue by Data Rate
100%

90%

80%

70%

60%

Other
Ethernet
50%

FDR
QDR
DDR

40%

SDR
30%

20%

10%

0%
1...
Quarterly Head Count Trend
18%

1,600

16%

1,371

14%

1,400

1,229

1,205

1,200

1,160
1,089
12%

1,000
10%
800
8%
600
...
Quarterly Head Count Trend (excluding Q3’13 acquisitions)
18%

1,600

16%

1,400
1,272

14%

1,229

1,205

1,200

1,160
1,...
Positive Cash Flow from Operations
182.5

Cash Flow from Ops ($M)

63.1
41.2
31.0

32.8
21.3

2008
1Cash

2009

2010

2011...
Long-Term Target Model
1

Percentage-Based Income Statement (Non-GAAP )
Q3
2013

FY
2012

Long term model

Revenue

100%

...
Drive Shareholder Value
 Focus on high growth, profitable opportunities in
the data center

 Continue to drive efficienc...
Thank You
Thank You
© 2013 Mellanox Technologies

- Mellanox Confidential -

14
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Mellanox Financial Overview

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Mellanox Analyst Day - October 25, 2013. Presented by Jacob Sulman, Chief Financial Officer

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Transcript of "Mellanox Financial Overview"

  1. 1. Financial Overview Jacob Shulman − Chief Financial Officer October 25, 2013
  2. 2. Major Takeaways from Earlier Presentations  Exponential increase in data consumption emphasizes critical importance of interconnect  Experience developing 7 generations of interconnects gives us an advantage in reaching 100 Gb/s solutions  Solutions deliver unmatched ROI for multiple markets  Global sales team focused on opportunities within traditional and new markets  Mellanox focuses on building an infrastructure to enable scalable growth © 2013 Mellanox Technologies - Mellanox Confidential - 2
  3. 3. Core Affects from Acquisitions Voltaire 1Q11 IPtronics 3Q13 Kotura 3Q13 TAM ASP Long-term Gross Margins * Accretive after 4 Quarters * IP Portfolio Team Geography Israel Denmark US *Based on Company forecasts © 2013 Mellanox Technologies - Mellanox Confidential - 3
  4. 4. Historical Annual Revenue Growth Annual Revenue ($M) 500.8 360.0 Mid-point of 4Q13 Guidance 392.8E 259.3 154.6 107.7 YoY % 116.0 2008 2009 2010 2011 2012 2013E 28.1% 7.7% 33.3% 67.6% 93.2% (21.6%) Source: Company financial statements CAGR over the past 5 years ~ 30% © 2013 Mellanox Technologies - Mellanox Confidential - 4
  5. 5. 2011 – 2013 Revenue Proforma Annual Revenue ($M) 500.8 300.0310.0 154.6 107.7 YoY % 116.0 2008 2009 2010 28.1% 7.7% 33.3% 2011 Actual revenue © 2013 Mellanox Technologies 400.0410.0 430.0 440.0 E 2012 2013E Proforma revenue (estimated) - Mellanox Confidential - 5
  6. 6. Historical Quarterly Revenue Growth 156.5 Quarterly Revenue ($M) 133.5 122.1 104.1 105 – 110 98.2 88.7 83.1 72.7 68.2 63.3 55.1 40.0 32.7 22.6 35.5 36.2 37.8 40.7 25.3 2009 2010 2011 2012 2013 Source: Company financial statements © 2013 Mellanox Technologies - Mellanox Confidential - 6
  7. 7. Percentage of Revenue by Product Family 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 IC Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Board IC Board © 2013 Mellanox Technologies Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Switch Switch - Mellanox Confidential - Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Cable / Other Cable / Other 7
  8. 8. Percentage of Revenue by Data Rate 100% 90% 80% 70% 60% Other Ethernet 50% FDR QDR DDR 40% SDR 30% 20% 10% 0% 1Q08 2008 © 2013 Mellanox Technologies 1Q09 2009 1Q10 2010 1Q11 - Mellanox Confidential - 2011 1Q12 2012 1Q13 2013 8
  9. 9. Quarterly Head Count Trend 18% 1,600 16% 1,371 14% 1,400 1,229 1,205 1,200 1,160 1,089 12% 1,000 10% 800 8% 600 6% 400 4% 200 2% 0% 0 Q3'12 Q4'12 Q1'13 Total HC © 2013 Mellanox Technologies Q2'13 Q3'13 % q-o-q increase - Mellanox Confidential - 9
  10. 10. Quarterly Head Count Trend (excluding Q3’13 acquisitions) 18% 1,600 16% 1,400 1,272 14% 1,229 1,205 1,200 1,160 1,089 12% 1,000 10% 800 8% 600 6% 400 4% 200 2% 0% 0 Q3'12 Q4'12 Q1'13 Total HC © 2013 Mellanox Technologies Q2'13 Q3'13 % q-o-q increase - Mellanox Confidential - 10
  11. 11. Positive Cash Flow from Operations 182.5 Cash Flow from Ops ($M) 63.1 41.2 31.0 32.8 21.3 2008 1Cash 2009 2010 2011 2012 YTD 2013 and investments include $7.4m in restricted cash Cash and Investments @ September 30, 2013 = $306.4M1 © 2013 Mellanox Technologies - Mellanox Confidential - 11
  12. 12. Long-Term Target Model 1 Percentage-Based Income Statement (Non-GAAP ) Q3 2013 FY 2012 Long term model Revenue 100% 100% 100% Gross Margin 69% 70% 65% - 69% R&D 35% 24% 26% - 30% SG&A 20% 14% 15% - 18% Operating Income 13% 33% 24% - 29% Net Income 13% 31% 23% - 28% a reconciliation of non-GAAP to GAAP financial measures, please reference the Company’s 3Q13 financial results press release Source: Company financial statements 1For Strategy is to drive revenue and earnings growth rates with end-to-end solutions, expand distribution channels and enhance product offerings © 2013 Mellanox Technologies - Mellanox Confidential - 12
  13. 13. Drive Shareholder Value  Focus on high growth, profitable opportunities in the data center  Continue to drive efficiencies across the organization  Make strategic investments in technologies in our core business  Deliver increased operating profits and EPS  Generate healthy levels of cash flow © 2013 Mellanox Technologies - Mellanox Confidential - 13
  14. 14. Thank You Thank You © 2013 Mellanox Technologies - Mellanox Confidential - 14

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