Analysts from Susquehanna covered Mellanox Technologies, Ltd.(NASDAQ: MLNX) with a “Positive” rating. The shares of MLNX delivered over 51.2% in this year to date (as of 12:47PM EST on December 13th, 2017; Source: Google finance)
The group recently partnered with NEC Corporation to support for the newly announced SX-Aurora TSUBASA systems with Mellanox® ConnectX® InfiniBand adapters. The top-of the-line Aurora platform uses 32 ConnectX adapters to support 64 vector engines in a single system. The NEC SX-Aurora TSUBASA systems leverage general-purpose vector-based NEC coprocessors and Mellanox in-network computing interconnect accelerators to achieve the highest application performance and scalability.
The group continues to enhance their client base and recently added Tencent Cloud who has adopted Mellanox interconnect solutions for its high-performance computing (HPC) and artificial intelligence (AI) public cloud offering.
They also got an additional design win with HPE for the M Series Ethernet storage switch. The selection of their spectrum switches by HPE Storage Group is significant and represents the group’s core strength in the emerging Ethernet storage fabric market that is becoming an alternative to Fibertel as storage interconnect.
The group witnessed a better Customer demand on their 25 gigabit per second and above Ethernet adapters accelerated during the third quarter. The group is a market leader with 65% share of the 25, 50, and 100 gigabit per second Ethernet adapter markets during the first half of 2017 even as competitive alternative have entered the market.(Source: Creon Research Data)
For the third quarter of 2017, the group’s Ethernet revenues surged 27% sequentially boosted by expanding customer adoption of their 25-gigabits per second and above product. The third quarter 2017 continued to deliver on our multi-year revenue diversification strategy. Third quarter revenues rose 6.5% to $226 million, on a sequential basis while the Third quarter diluted non-GAAP EPS reached $0.71. The group generated $53 million in operating cash flow and ended the quarter with $346 million in cash and investments.
On the other hand, the InfiniBand revenues fell 7% sequentially hurt by the large Department of Energy CORAL deployment in the second quarter. On a year-over-year basis, the group’s InfiniBand high-performance computing and artificial intelligence revenues increased by double-digit percentages.