Cypress Reports First Quarter 2019 Results

SAN JOSE, Calif. — (BUSINESS WIRE) — April 25, 2019 — Cypress Semiconductor Corporation (NASDAQ: CY), today announced its first quarter 2019 results with the following highlights:

  • $539.0 million in revenue, in line with guidance
  • GAAP and non-GAAP gross margins were 37.6% and 47.4%, respectively, and represent a 110 bps and 150 bps increase year-over-year
  • GAAP and Non-GAAP diluted EPS were $0.05 and $0.27, respectively, above the high-end of guidance
  • Closed the NAND JV to exit the business and increase focus on high-growth IoT and automotive end markets

"We delivered a solid first quarter with revenue, gross margin, and diluted EPS meeting or exceeding our guidance," said Hassane El-Khoury, Cypress’ president and chief executive officer. "Despite uncertain market conditions, Cypress’ world-class connect and compute solutions continue to gain strong momentum. Overall design activity increased 15%, led by Automotive and IoT, and in particular we saw strength in automotive platform wins for our new Traveo-II MCU during the quarter. With our focus on these high-growth markets, we remain committed to our Cypress 3.0 strategy while continuing to execute to our long-term financial model."

Revenue and earnings for the quarter are shown below with comparable periods:

(In thousands, except per-share data)

       
GAAP NON-GAAP1
Q1 2019   Q4 2018   Q1 2018 Q1 2019   Q4 2018   Q1 2018
Revenue $ 539,004 $ 604,474 $ 582,241 $ 539,004 $ 604,474 $ 582,241
Gross margin 37.6 % 37.3 % 36.5 % 47.4 % 47.8 % 45.9 %
Operating margin 5.9 % 0.5 % 6.1 % 21.1 % 24.5 % 19.5 %
Net income $ 19,714 $ 267,114 $ 9,078 $ 102,104 $ 130,990 $ 100,296
Diluted EPS $ 0.05 $ 0.72 $ 0.02 $ 0.27 $ 0.35 $ 0.27
 
1.   See the "Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures" tables ("Non-GAAP Reconciliation Tables") included below.
 
 

REVENUE SUMMARY

(In thousands, except percentages)

(Unaudited)

 
  Three Months Ended
March 31, 2019     December 30, 2018   April 1, 2018   Sequential Change   Year-over-year Change

Business Unit¹

               
MCD $ 310,389 $ 355,793 $ 336,710 (12.8)% (7.8)%
MPD $ 228,615   $ 248,681   $ 245,531   (8.1)% (6.9)%
Total $ 539,004   $ 604,474   $ 582,241   (10.8)% (7.4)%
 
 
Three Months Ended

End Market

March 31, 2019   December 30, 2018   April 1, 2018
IoT 28.5%   31.5%   31.9%
Automotive

36.7%

35.5% 34.3%
Legacy 34.8% 33.0% 33.8%
Total 100% 100% 100%
     
1.   The Microcontroller and Connectivity Division ("MCD") includes microcontroller, wireless connectivity and USB products and the Memory Products Division ("MPD") includes RAM, Flash and AgigA Tech products.
 

SECOND QUARTER 2019 FINANCIAL OUTLOOK (1)

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