SANTA CLARA, Calif., Jan. 29, 2019 (GLOBE NEWSWIRE) -- Inphi Corporation (NYSE: IPHI), a leader in high-speed data movement interconnects, today announced financial results for its fourth quarter and fiscal year ended Dec. 31, 2018.
Revenue in the fourth quarter of 2018 was $86.5 million on a U.S. generally accepted accounting principles (GAAP) basis, slightly up year-over-year, compared with $85.7 million in the fourth quarter of 2017 and up substantially from the third quarter of 2018, resulting in a 10.9% sequential quarterly revenue growth. The year over year increase was due to higher demand for data center products, including PAM.
Gross margin under GAAP in the fourth quarter of 2018 was 57.2%, compared with 62.0% in the fourth quarter of 2017. The decrease was due to amortization of in-process research and development related to the ClariPhy acquisition that was reclassified to developed technology and product mix.
GAAP loss from operations in the fourth quarter of 2018 was $8.2 million, or (9.5%) of revenue, compared to GAAP loss from operations in the fourth quarter of 2017 of $5.3 million or (6.2%) of revenue. The increase was due to decline in gross margin as discussed above.
GAAP net loss for the fourth quarter of 2018 was $21.6 million, or ($0.49) per diluted common share, compared with GAAP net income of $0.1 million in the fourth quarter of 2017.
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 press release.
Gross margin on a non-GAAP basis in the fourth quarter of 2018 was 69.3%, compared with 70.3% in the fourth quarter of 2017. The slight decrease was largely due to change in product mix.
Non-GAAP income from operations in the fourth quarter of 2018 was $20.5 million, or 23.7% of revenue, compared with $17.2 million, or 20.1% of revenue in the fourth quarter of 2017.
Non-GAAP net income in the fourth quarter of 2018 was $20.5 million, or $0.45 per diluted common share. This compares with non-GAAP net income of $16.2 million, or $0.37 per diluted common share in the fourth quarter of 2017.
“Like others in the industry, we have been anticipating a seasonally down Q1 ‘19 to be followed by strong growth in the latter half of the 2019 calendar year,” said Ford Tamer, Inphi’s President and CEO. “Our business grew 11% sequentially in Q4, making it the third quarter in a row of double-digit revenue growth. Our solid performance was driven by the production ramp of PAM technology for 200G and 400G optical communication, which is just beginning with US cloud customers. Furthermore, the 23.7% non-GAAP income from operations in Q4 2018, and the resulting 3 cents non-GAAP EPS beat, serve to validate our business model.”
Year Ended 2018 Results
Revenue in the year ended December 31, 2018 was $294.5 million, compared with $348.2 million in the year ended December 31, 2017. GAAP net loss in the year ended December 31, 2018 was $95.8 million, or ($2.19) per diluted share, on approximately 43.7 million diluted weighted average common shares outstanding. This compares with GAAP net loss of $74.9 million, or ($1.78) per diluted share, on approximately 42.2 million diluted weighted average common shares outstanding in the year ended December 31, 2017.
Non-GAAP net income in the year ended December 31, 2018 was $38.8 million, or $0.86 per diluted weighted average common share outstanding, on approximately 45.0 million diluted weighted average common shares outstanding. This compares with non-GAAP net income of $67.2 million in the year ended December 31, 2017, or $1.52 per diluted weighted average common share outstanding, on approximately 44.3 million diluted weighted average common shares outstanding.
The following statements are based on the Inphi’s current expectations for the first quarter of 2019. These statements are forward-looking and actual results may differ materially. A reconciliation between the GAAP and Non-GAAP outlook is included at the end of this press release.
- Revenue in Q1 2019 is expected to be in the range of $80.0 million to $82.0 million, the midpoint being $81.0 million.
- GAAP gross margin is expected to be in the range of approximately 56.5% to 57.8%.
- Non-GAAP gross margin is expected to be in the range of approximately 69.5% to 70.5%.
- Stock-based compensation expense is expected to be in the range of $16.3 million to $16.7 million.
- GAAP results are expected to be a net loss in the range of $21.8 million to $22.8 million, or ($0.49) – ($0.51) per basic share, based on 44.4 million estimated weighted average basic shares outstanding.
- Non-GAAP net income, excluding stock-based compensation expense, amortization of intangibles related to acquisitions and noncash interest on convertible debt, is expected to be in the range of $12.7 million to $13.2 million, or $0.27-$0.29 per diluted share, based on 46.1 million estimated diluted shares outstanding.
Quarterly Conference Call Today
Inphi plans to hold a conference call today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time with Ford Tamer, its president and chief executive officer, and John Edmunds, its chief financial officer, to discuss the fourth quarter 2018 results.
The call can be accessed by dialing 765-507-2591, participant passcode: 3045399. 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 https://www.inphi.com/investors/ for up to 30 days after the call.
Inphi Corporation is a leader in high-speed data movement. We move big data - fast, throughout the globe, between data centers, and inside data centers. Inphi's expertise in signal integrity results in reliable data delivery, at high speeds, over a variety of distances. As data volumes ramp exponentially due to video streaming, social media, cloud-based services, and wireless infrastructure, the need for speed has never been greater. That's where we come in. Customers rely on Inphi's solutions to develop and build out the Service Provider and Cloud infrastructures, and data centers of tomorrow. To learn more about Inphi, visit www.inphi.com.
Cautionary Note Concerning Forward-Looking Statements
Statements in this press release and certain matters that may be discussed on the fourth quarter of 2018 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, anticipate, may, will, provide, continue, could, and should, and the negative of these terms or other similar expressions. These statements include statements relating to Inphi’s business outlook and current expectations for 2019, including with respect to the first quarter of 2019, revenue, gross margin, stock-based compensation expense, operating performance, net income or loss, and earnings per share; the Company’s expectations regarding growth opportunities and business model. 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 but not limited to: factors affecting Inphi’s results of operations, Inphi’s ability to manage its growth, Inphi’s ability to sustain or increase profitability, demand for Inphi’s solutions, the effect of declines in average selling prices for Inphi’s products, Inphi’s ability to compete, Inphi’s ability to rapidly develop new technology and introduce new products, Inphi’s ability to safeguard its intellectual property, Inphi’s ability to qualify for tax holidays and incentives, trends in the semiconductor industry and fluctuations in general economic conditions. In addition, actual results could differ materially due to changes in tax rates or tax benefits available, changes in government regulation, 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’s recent SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2017, which are available on the SEC’s website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Inphi 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.