SANTA CLARA, CA — (Marketwired) — 04/28/16 — Inphi Corporation (NYSE: IPHI), a leading provider of high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets, today announced financial results for its first quarter ended March 31, 2016.
Revenue in the first quarter of 2016 was a record $66.5 million on U.S. generally accepted accounting principles (GAAP) basis, up 3.3% sequentially from $64.4 million reported in the fourth quarter of 2015 and up 12% year-over-year, compared with $59.2 million in the first quarter of 2015.
Gross margin under GAAP in the first quarter of 2016 was 63.5%, compared with 50.6% in the first quarter of 2015. The increase in gross margin was primarily due to higher product cost in the first quarter of 2015 as a result of higher inventory fair value step-up related to the acquired Cortina inventories sold during the first quarter of 2015.
GAAP income from operations in the first quarter of 2016 was $2.5 million or 3.8% of revenue, compared to a GAAP loss from operations in the first quarter of 2015 of $5.5 million or (9.3%) of revenue.
GAAP net income for the first quarter of 2016 was $0.2 million, or $0.01 per diluted common share, compared with GAAP net loss of $9.7 million, or ($0.26) per diluted common share, in the first quarter of 2015.
Inphi reports revenue, gross margin, operating expenses, net income (loss), and earnings per share in accordance with GAAP and on a non-GAAP basis. A reconciliation of the GAAP to non-GAAP revenue, gross margin, operating expenses, net income, earnings per share, as well as a description of the items excluded from the non-GAAP calculations, is included in the financial statements portion of this news release.
Gross margin on a non-GAAP basis in the first quarter of 2016 increased to 68.8%, compared with 66.6% in the first quarter of 2015.
Non-GAAP income from operations in the first quarter of 2016 was $13.7 million, or 20.6% of revenue, compared with $11.2 million, or 18.7% of revenue, in the first quarter of 2015.
Non-GAAP net income in the first quarter of 2016 was $11.7 million, or $0.27 per diluted common share. This compares with non-GAAP net income of $9.3 million, or $0.23 per diluted common share in the first quarter of 2015.
“We are delighted to report another strong quarter in Q1 and pleased to be forecasting continued growth in Q2,” said Ford Tamer president and CEO of Inphi Corporation. “We introduced several new products at March–s Optical Fiber Conference this year and we are excited about their potential. We are working hard to get all of these new product offerings into production by the end of the year. Reflecting the market–s growing interest in high speed optical communication, we are confident that we have the right team, delivering the right products to leverage this growing market opportunity in the quarters to come,” he said.
The following statements are based on the Company–s current expectations for the second quarter of 2016. These statements are forward-looking and actual results may differ materially. A reconciliation between the GAAP and Non GAAP outlook is included in the back of the press release.
Revenue is expected to be up 2.8% to 5.8% sequentially in Q2 2016, a range of $68.4 million to $70.4 million.
GAAP based gross margin is expected to be 63.1% – 63.8%
Non-GAAP gross margin is expected to be approximately 68.0% to 68.5%.
Stock-based compensation expense is expected to be in the range of $8.7 million to $8.9 million.
GAAP results are expected to be in a range between a net loss of $0.1 million to net income of $ 0.8 million, or $0.0 – $0.02 per diluted share, on 44.2 million estimated diluted shares outstanding.
Non-GAAP net income, excluding stock-based compensation expense and expenses related to the Cortina acquisition, is expected to be in the range of $11.9 million to $12.8 million, or $0.27 – $0.29 per diluted share, on 44.2 million estimated fully diluted shares outstanding.
Inphi plans to hold a conference call today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time with Ford Tamer, president and chief executive officer, and John Edmunds, chief financial officer, to discuss the first quarter 2016 results.
The call can be accessed by dialing 844-459-2451; international callers should dial 765-507-2591, participant passcode: 89757571. Please dial-in ten minutes prior to the scheduled conference call time. A live and archived webcast of the call will be available on Inphi–s website at for up to 30 days after the call.
Inphi Corporation is a leading provider of high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets. Inphi–s end-to-end data transport platform delivers high signal integrity at leading-edge data speeds, addressing performance and bandwidth bottlenecks in networks, from fiber to memory. Inphi–s solutions minimize latency in computing environments and enable the rollout of next-generation communications infrastructure. Inphi–s solutions provide a vital interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, enterprise and data center servers, and storage platforms. To learn more about Inphi, visit .
Statements in the press release and certain matters to be discussed on the first quarter of 2016 conference call regarding Inphi Corporation, which are not historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as outlook, believe, expect, may, will, provide, could, and should, and the negative of these terms or other similar expressions. These statements include statements relating to: the Company–s business outlook and current expectations for the second quarter of 2016, including with respect to revenue, gross margin, stock-based compensation expense, operating performance, net income or loss, and earnings per share; the Company–s expectations and belief regarding continued growth in the second quarter of 2016, the potential and timing of introduction of new products, market interest in high speed optical communication and the Company–s ability to leverage the right products to leverage this growing market opportunity; features and benefits of the Company–s solutions; and benefits of using non-GAAP financial measures. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those anticipated as a result of various factors, including: the Company–s ability to sustain profitable operations due to its history of losses and accumulated deficit; dependence on a limited number of customers for a substantial portion of revenue and lack of long-term purchase commitments from our customers; product defects; risk related to intellectual property matters, lengthy sales cycle and competitive selection process; lengthy and expensive qualification processes; ability to develop new or enhanced products in a timely manner; development of the markets that the Company targets; market demand for the Company–s products; reliance on third parties to manufacture, assemble and test products; ability to compete; and other risks inherent in fabless semiconductor businesses. In addition, actual results could differ materially due to changes in tax rates or tax benefits available, changes in claims that may or may not be asserted, as well as changes in pending litigation. For a discussion of these and other related risks, please refer to Inphi Corporation–s recent SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2015, which are available on the SEC–s website at . Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Inphi Corporation undertakes no obligation to update forward-looking statements for any reason, except as required by law, even as new information becomes available or other events occur in the future.
Inphi, the Inphi logo and Think fast are registered trademarks of Inphi Corporation. All other trademarks used herein are the property of their respective owners.
The following table presents details of stock-based compensation expense included in each functional line item in the consolidated statements of operations above:
To supplement the financial data presented on a GAAP basis, the Company discloses certain non-GAAP financial measures, which exclude stock-based compensation, legal, transition costs and other expenses, purchase price fair value adjustments related to Cortina acquisition, non-cash interest expense related to convertible debt and deferred tax asset valuation allowance. These non-GAAP financial measures are not in accordance with GAAP. These results should only be used to evaluate the Company–s results of operations in conjunction with the corresponding GAAP measures. The Company believes that its non-GAAP financial information provides useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations because it excludes charges or benefits that management considers to be outside of the Company–s core operating results. The Company believes that the non-GAAP measures of gross margin, income from operations, net income and earnings per share, in combination with the Company–s financial results calculated in accordance with GAAP, provide investors with additional perspective and a more meaningful understanding of the Company–s ongoing operating performance. In addition, the Company–s management uses these non-GAAP measures to review and assess the financial performance of the Company, to determine executive officer incentive compensation and to plan and forecast performance in future periods. The Company–s non-GAAP measurements are not prepared in accordance with GAAP, and are not an alternative to GAAP financial information, and may be calculated differently than non-GAAP financial information disclosed by other companies.
Kim Markle
Inphi
408-217-7329
Deborah Stapleton
650-815-1239
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