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™ HyperScale Server Platforms Powered by Cavium ThunderX2™ Processors
- May 29, 2017 - Ingrasys Enables High Performance Computing and Hyperscale Workloads with New Class of Server Platforms Powered by Cavium ThunderX2™ Processors
- May 29, 2017 - GIGABYTE Technology Announced Expansion of their ARM Server Portfolio based on Cavium's ThunderX2™ 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.
| Contact: |
| Cavium, Inc.
Art Chadwick, Vice President of Finance and Administration and Chief Financial Officer, Tel: (408) 943-7104, Email: Email Contact Angel Atondo, Senior Marketing Communications Manager, Tel: (408) 943-7417, Email: Email Contact Web: http://www.cavium.com |