Cavium Announces Financial Results for Q3 2017

SAN JOSE, Calif., Nov. 1, 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 third quarter ended September 30, 2017.

Net revenue in the third quarter of 2017 was $252.0 million, a 4.1% sequential increase from the $242.1 million reported in the second quarter of 2017 and 49.9% from the $168.1 million reported in the third quarter of 2016.

Generally Accepted Accounting Principles (GAAP) Results

Net loss for the third quarter of 2017 was $6.2 million, or ($0.09) per diluted share, compared to $11.1 million, or ($0.16) per diluted share in the second quarter of 2017. Gross margins were 54.6% in the third quarter of 2017 compared to 53.5% in the second quarter of 2017. As a percentage of revenue, GAAP income from operations was 0.19% in the third quarter of 2017 compared to GAAP operating loss of 2.5% in the second quarter of 2017. Total cash and cash equivalents were $152.7 million at September 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 third quarter of 2017, Non-GAAP net income was $55.8 million, or $0.76 per diluted share, Non-GAAP gross margin was 66.0% and Non-GAAP income from operations as a percentage of revenue was 24.8%.

Recent News Highlights                                           

  • October 24, 2017 - Cadence and Arm Delivers First SoC Verification Solution for Low-Power, High-Performance Arm-Based Servers
  • October 9, 2017 - China Unicom Awarded "Best 5G Initiative" RANNYs Award in Partnership with Cavium
  • September 11, 2017 - Cavium Showcased M-CORD NFV/5G on ARM with Leaf and Spine SDN Fabric at Mobile World Congress Americas 2017
  • September 11, 2017 - Cavium and Enea Delivers Optimized Software and Hardware Platform for uCPE
  • August 28, 2017 - Cavium Demonstrated NVMe Scale-out Technologies at VMworld US 2017
  • August 10, 2017 - Cavium Announced Support for FC-NVMe Standard
  • August 8, 2017 - Cavium Demonstrated Breakthrough NVMe over Fabrics Performance at Flash Memory Summit 2017

Cavium will broadcast its third quarter of 2017 financial results conference call today, November 1, 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 infrastructure solutions for compute, security, storage, switching, connectivity, and baseband processing. Cavium's highly integrated multi-core SoC products deliver software compatible solutions across low to high performance points enabling secure and intelligent functionality in Enterprise, Data Center and Service Provider Equipment. Cavium processors and solutions are supported by an extensive ecosystem of operating systems, tools, application stacks, 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 about the Company, please visit: http://www.cavium.com.

CAVIUM, INC.

Unaudited GAAP Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)



Three Months Ended


September 30, 2017



June 30, 2017

Net revenue

$

251,987



$

242,093

Cost of revenue


114,455




112,604

Gross profit


137,532




129,489

Operating expenses:







     Research and development


93,860




94,758

     Sales, general and administrative


43,184




40,791

        Total operating expenses


137,044




135,549

Income (loss) from operations


488




(6,060)

Other income (expense), net:







    Interest expense


(6,493)




(6,062)

    Other, net


277




1

Total other expense, net


(6,216)




(6,061)

     Loss before income taxes


(5,728)




(12,121)

     Provision for (benefit from) income taxes


486




(1,049)

Net loss

$

(6,214)



$

(11,072)

Net loss per common share, basic and diluted

$

(0.09)



$

(0.16)

Shares used in computing basic and diluted net loss per common share


68,675




68,199


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