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™ 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


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