Company Quick10K Filing
Quick10K
Mellanox Technologies
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$107.07 55 $5,865
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-07-25 Officers, Shareholder Vote, Exhibits
8-K 2019-07-24 Earnings, Exhibits
8-K 2019-06-20 Officers, Shareholder Vote, Exhibits
8-K 2019-05-23 Other Events
8-K 2019-04-16 Earnings, Exhibits
8-K 2019-03-10 Enter Agreement, Regulation FD, Exhibits
8-K 2019-01-30 Earnings, Exhibits
8-K 2019-01-03 Officers, Regulation FD, Exhibits
8-K 2018-10-24 Earnings, Exhibits
8-K 2018-07-25 Officers, Shareholder Vote, Exhibits
8-K 2018-07-17 Earnings, Exhibits
8-K 2018-07-09 Officers
8-K 2018-06-19 Enter Agreement, Officers, Other Events, Exhibits
8-K 2018-03-15 Regulation FD, Exhibits
8-K 2018-02-20 Officers, Regulation FD, Exhibits
8-K 2018-01-18 Earnings, Exhibits
INTC Intel 205,002
AVGO Broadcom 112,802
SWKS Skyworks Solutions 12,943
MPWR Monolithic Power Systems 6,397
IDTI Integrated Device Technology 4,322
AMKR Amkor Technology 2,063
MTSI Macom Technology Solutions Holdings 1,242
HIMX Himax Technologies 664
LASR Nlight 492
SOL Renesola 358
MLNX 2019-06-30
Part I. Financial Information
Item 1 - Financial Statements
Note 1-The Company and Summary of Significant Accounting Policies:
Note 2-Revenue
Note 3-Balance Sheet Components:
Note 4-Fair Value Measurements:
Note 5-Investments:
Note 6-Goodwill and Intangible Assets:
Note 7-Derivatives and Hedging Activities:
Note 8-Employee Benefit Plans:
Note 9-Commitments and Contingencies:
Note 10-Share Incentive Plans
Note 11-Accumulated Other Comprehensive Income (Loss):
Note 12-Income Taxes:
Note 13-Interest and Other, Net:
Note 14-Leases:
Note 15-Restructuring Charges:
Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3-Quantitative and Qualitative Disclosures About Market Risk
Item 4-Controls and Procedures
Part II. Other Information
Item 1-Legal Proceedings
Item 1A-Risk Factors
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 - Defaults Upon Senior Securities
Item 4 - Mine Safety Disclosures
Item 5 - Other Information
Item 6 - Exhibits
EX-10.1 ex101amendedandrestate.htm
EX-31.1 ex311rule13a-14a15dx14.htm
EX-31.2 ex312rule13a-14a15dx14.htm
EX-32.1 ex321sec1350certofceoq.htm
EX-32.2 ex322sec1350certofcfoq.htm

Mellanox Technologies Earnings 2019-06-30

MLNX 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
false--12-31Q220190001356104P3M200000000.01750.017520000000020000000053918000547950005391800054795000P9YP7YP8YP4YP4YP1YP9YP7YP8YP4YP4YP1Y 0001356104 2019-01-01 2019-06-30 0001356104 2019-07-26 0001356104 2018-12-31 0001356104 2019-06-30 0001356104 2019-04-01 2019-06-30 0001356104 2018-04-01 2018-06-30 0001356104 2018-01-01 2018-06-30 0001356104 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0001356104 2018-01-01 2018-03-31 0001356104 2019-01-01 2019-03-31 0001356104 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001356104 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001356104 2018-06-30 0001356104 us-gaap:CommonStockMember 2017-12-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001356104 us-gaap:CommonStockMember 2019-06-30 0001356104 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001356104 us-gaap:CommonStockMember 2019-03-31 0001356104 2019-03-31 0001356104 us-gaap:RetainedEarningsMember 2018-12-31 0001356104 2018-03-31 0001356104 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001356104 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001356104 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001356104 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001356104 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0001356104 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001356104 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001356104 us-gaap:CommonStockMember 2018-06-30 0001356104 us-gaap:RetainedEarningsMember 2019-06-30 0001356104 us-gaap:CommonStockMember 2018-12-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001356104 2017-12-31 0001356104 us-gaap:RetainedEarningsMember 2019-03-31 0001356104 us-gaap:RetainedEarningsMember 2018-01-01 0001356104 us-gaap:RetainedEarningsMember 2018-03-31 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0001356104 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001356104 us-gaap:CommonStockMember 2018-03-31 0001356104 us-gaap:RetainedEarningsMember 2018-06-30 0001356104 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001356104 us-gaap:RetainedEarningsMember 2017-12-31 0001356104 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001356104 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001356104 2018-01-01 0001356104 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001356104 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001356104 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001356104 mlnx:NVIDIAMergerMember 2019-03-10 0001356104 mlnx:NVIDIAMergerMember 2019-01-01 2019-06-30 0001356104 mlnx:NVIDIAMergerMember 2019-03-10 2019-03-10 0001356104 us-gaap:EmployeeStockOptionMember 2018-04-01 2018-06-30 0001356104 mlnx:DellMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-04-01 2018-06-30 0001356104 mlnx:HewlettPackardMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-04-01 2018-06-30 0001356104 mlnx:HewlettPackardMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-06-30 0001356104 mlnx:HewlettPackardMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-06-30 0001356104 mlnx:DellMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-06-30 0001356104 mlnx:DellMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-06-30 0001356104 mlnx:HewlettPackardMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-04-01 2019-06-30 0001356104 us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0001356104 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001356104 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0001356104 mlnx:SwitchSystemsMember 2018-01-01 2018-06-30 0001356104 mlnx:CablesAccessoriesAndOtherMember 2019-01-01 2019-06-30 0001356104 mlnx:BoardsMember 2018-01-01 2018-06-30 0001356104 mlnx:SwitchSystemsMember 2019-04-01 2019-06-30 0001356104 mlnx:BoardsMember 2019-04-01 2019-06-30 0001356104 mlnx:SwitchSystemsMember 2019-01-01 2019-06-30 0001356104 mlnx:SwitchSystemsMember 2018-04-01 2018-06-30 0001356104 mlnx:ICAndSemiconductorsMember 2018-04-01 2018-06-30 0001356104 mlnx:BoardsMember 2019-01-01 2019-06-30 0001356104 mlnx:CablesAccessoriesAndOtherMember 2018-01-01 2018-06-30 0001356104 mlnx:CablesAccessoriesAndOtherMember 2019-04-01 2019-06-30 0001356104 mlnx:ICAndSemiconductorsMember 2019-04-01 2019-06-30 0001356104 mlnx:ICAndSemiconductorsMember 2019-01-01 2019-06-30 0001356104 mlnx:CablesAccessoriesAndOtherMember 2018-04-01 2018-06-30 0001356104 mlnx:ICAndSemiconductorsMember 2018-01-01 2018-06-30 0001356104 mlnx:BoardsMember 2018-04-01 2018-06-30 0001356104 2019-07-01 2019-06-30 0001356104 mlnx:HDRMember 2019-01-01 2019-06-30 0001356104 mlnx:EthernetMember 2018-04-01 2018-06-30 0001356104 mlnx:OtherMember 2019-04-01 2019-06-30 0001356104 mlnx:HDRMember 2019-04-01 2019-06-30 0001356104 mlnx:QDRDDRSDRMember 2019-01-01 2019-06-30 0001356104 mlnx:EDRMember 2018-01-01 2018-06-30 0001356104 mlnx:QDRDDRSDRMember 2018-04-01 2018-06-30 0001356104 mlnx:EthernetMember 2019-01-01 2019-06-30 0001356104 mlnx:EDRMember 2018-04-01 2018-06-30 0001356104 mlnx:FDRMember 2018-01-01 2018-06-30 0001356104 mlnx:EthernetMember 2018-01-01 2018-06-30 0001356104 mlnx:HDRMember 2018-01-01 2018-06-30 0001356104 mlnx:FDRMember 2018-04-01 2018-06-30 0001356104 mlnx:InfiniBandMember 2018-01-01 2018-06-30 0001356104 mlnx:FDRMember 2019-01-01 2019-06-30 0001356104 mlnx:InfiniBandMember 2018-04-01 2018-06-30 0001356104 mlnx:EDRMember 2019-04-01 2019-06-30 0001356104 mlnx:EthernetMember 2019-04-01 2019-06-30 0001356104 mlnx:EDRMember 2019-01-01 2019-06-30 0001356104 mlnx:QDRDDRSDRMember 2019-04-01 2019-06-30 0001356104 mlnx:OtherMember 2019-01-01 2019-06-30 0001356104 mlnx:FDRMember 2019-04-01 2019-06-30 0001356104 mlnx:HDRMember 2018-04-01 2018-06-30 0001356104 mlnx:OtherMember 2018-04-01 2018-06-30 0001356104 mlnx:InfiniBandMember 2019-01-01 2019-06-30 0001356104 mlnx:OtherMember 2018-01-01 2018-06-30 0001356104 mlnx:InfiniBandMember 2019-04-01 2019-06-30 0001356104 mlnx:QDRDDRSDRMember 2018-01-01 2018-06-30 0001356104 mlnx:OtherAmericasExcludingUnitedStatesMember 2019-04-01 2019-06-30 0001356104 srt:EuropeMember 2018-04-01 2018-06-30 0001356104 srt:EuropeMember 2019-01-01 2019-06-30 0001356104 country:US 2019-01-01 2019-06-30 0001356104 country:CN 2019-04-01 2019-06-30 0001356104 mlnx:OtherAsiaExcludingChinaMember 2019-01-01 2019-06-30 0001356104 country:CN 2018-04-01 2018-06-30 0001356104 mlnx:OtherAmericasExcludingUnitedStatesMember 2019-01-01 2019-06-30 0001356104 country:CN 2019-01-01 2019-06-30 0001356104 srt:EuropeMember 2018-01-01 2018-06-30 0001356104 mlnx:OtherAsiaExcludingChinaMember 2018-01-01 2018-06-30 0001356104 mlnx:OtherAmericasExcludingUnitedStatesMember 2018-01-01 2018-06-30 0001356104 mlnx:OtherAsiaExcludingChinaMember 2019-04-01 2019-06-30 0001356104 country:CN 2018-01-01 2018-06-30 0001356104 mlnx:OtherAsiaExcludingChinaMember 2018-04-01 2018-06-30 0001356104 srt:EuropeMember 2019-04-01 2019-06-30 0001356104 country:US 2018-01-01 2018-06-30 0001356104 country:US 2018-04-01 2018-06-30 0001356104 mlnx:OtherAmericasExcludingUnitedStatesMember 2018-04-01 2018-06-30 0001356104 country:US 2019-04-01 2019-06-30 0001356104 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2019-06-30 0001356104 us-gaap:ComputerEquipmentMember 2018-12-31 0001356104 us-gaap:FurnitureAndFixturesMember 2019-06-30 0001356104 us-gaap:LeaseholdsAndLeaseholdImprovementsMember 2018-12-31 0001356104 us-gaap:ComputerEquipmentMember 2019-06-30 0001356104 us-gaap:FurnitureAndFixturesMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001356104 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CertificatesOfDepositMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CertificatesOfDepositMember 2018-12-31 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2018-12-31 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CertificatesOfDepositMember 2018-12-31 0001356104 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CertificatesOfDepositMember 2019-06-30 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CertificatesOfDepositMember 2019-06-30 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CertificatesOfDepositMember 2019-06-30 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0001356104 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0001356104 us-gaap:MoneyMarketFundsMember 2019-06-30 0001356104 us-gaap:CertificatesOfDepositMember 2019-06-30 0001356104 us-gaap:CashMember 2019-06-30 0001356104 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:CorporateDebtSecuritiesMember 2019-06-30 0001356104 us-gaap:CashAndCashEquivalentsMember 2019-06-30 0001356104 us-gaap:CashAndCashEquivalentsMember 2018-12-31 0001356104 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:CashMember 2018-12-31 0001356104 us-gaap:CertificatesOfDepositMember 2018-12-31 0001356104 us-gaap:CorporateDebtSecuritiesMember 2018-12-31 0001356104 us-gaap:MoneyMarketFundsMember 2018-12-31 0001356104 us-gaap:TradeNamesMember 2018-12-31 0001356104 us-gaap:LicensingAgreementsMember 2018-12-31 0001356104 us-gaap:CustomerRelationshipsMember 2018-12-31 0001356104 us-gaap:DevelopedTechnologyRightsMember 2018-12-31 0001356104 us-gaap:TradeNamesMember 2018-01-01 2018-12-31 0001356104 us-gaap:CustomerRelationshipsMember 2019-06-30 0001356104 us-gaap:DevelopedTechnologyRightsMember 2019-06-30 0001356104 us-gaap:TradeNamesMember 2019-06-30 0001356104 us-gaap:TradeNamesMember 2019-01-01 2019-06-30 0001356104 us-gaap:LicensingAgreementsMember 2019-06-30 0001356104 srt:MinimumMember us-gaap:LicensingAgreementsMember 2018-01-01 2018-12-31 0001356104 srt:MaximumMember us-gaap:CustomerRelationshipsMember 2019-01-01 2019-06-30 0001356104 srt:MinimumMember us-gaap:LicensingAgreementsMember 2019-01-01 2019-06-30 0001356104 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2018-01-01 2018-12-31 0001356104 srt:MaximumMember us-gaap:CustomerRelationshipsMember 2018-01-01 2018-12-31 0001356104 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-06-30 0001356104 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-06-30 0001356104 srt:MinimumMember us-gaap:CustomerRelationshipsMember 2018-01-01 2018-12-31 0001356104 srt:MinimumMember us-gaap:CustomerRelationshipsMember 2019-01-01 2019-06-30 0001356104 srt:MaximumMember us-gaap:LicensingAgreementsMember 2019-01-01 2019-06-30 0001356104 srt:MaximumMember us-gaap:LicensingAgreementsMember 2018-01-01 2018-12-31 0001356104 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2018-01-01 2018-12-31 0001356104 us-gaap:NondesignatedMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:OperatingExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001356104 us-gaap:NondesignatedMember us-gaap:NonoperatingIncomeExpenseMember us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001356104 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001356104 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2019-06-30 0001356104 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember 2019-06-30 0001356104 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember 2018-12-31 0001356104 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2018-12-31 0001356104 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember 2019-06-30 0001356104 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2019-06-30 0001356104 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember 2018-12-31 0001356104 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2018-12-31 0001356104 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001356104 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001356104 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001356104 us-gaap:NondesignatedMember 2019-06-30 0001356104 us-gaap:NondesignatedMember 2018-12-31 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0001356104 us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-06-30 0001356104 us-gaap:SellingAndMarketingExpenseMember 2019-04-01 2019-06-30 0001356104 us-gaap:CostOfSalesMember 2019-01-01 2019-06-30 0001356104 us-gaap:GeneralAndAdministrativeExpenseMember 2018-04-01 2018-06-30 0001356104 us-gaap:ResearchAndDevelopmentExpenseMember 2018-04-01 2018-06-30 0001356104 us-gaap:ResearchAndDevelopmentExpenseMember 2019-04-01 2019-06-30 0001356104 us-gaap:ResearchAndDevelopmentExpenseMember 2018-01-01 2018-06-30 0001356104 us-gaap:CostOfSalesMember 2018-04-01 2018-06-30 0001356104 us-gaap:GeneralAndAdministrativeExpenseMember 2019-04-01 2019-06-30 0001356104 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-06-30 0001356104 us-gaap:CostOfSalesMember 2018-01-01 2018-06-30 0001356104 us-gaap:GeneralAndAdministrativeExpenseMember 2018-01-01 2018-06-30 0001356104 us-gaap:SellingAndMarketingExpenseMember 2018-04-01 2018-06-30 0001356104 us-gaap:SellingAndMarketingExpenseMember 2018-01-01 2018-06-30 0001356104 us-gaap:SellingAndMarketingExpenseMember 2019-01-01 2019-06-30 0001356104 us-gaap:CostOfSalesMember 2019-04-01 2019-06-30 0001356104 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-06-30 0001356104 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001356104 us-gaap:EmployeeStockOptionMember 2018-12-31 0001356104 us-gaap:EmployeeStockOptionMember 2019-06-30 0001356104 us-gaap:EmployeeStockMember 2019-01-01 2019-06-30 0001356104 us-gaap:EmployeeStockMember 2018-01-01 2018-06-30 0001356104 us-gaap:RestrictedStockUnitsRSUMember 2019-06-30 0001356104 us-gaap:EmployeeStockMember 2019-06-30 0001356104 mlnx:ThirdRestatedPlanMember 2018-07-25 2018-07-25 0001356104 us-gaap:EmployeeStockOptionMember 2019-06-28 0001356104 srt:MinimumMember us-gaap:PerformanceSharesMember 2019-01-01 2019-06-30 0001356104 mlnx:ThirdRestatedPlanMember 2018-07-25 0001356104 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-06-30 0001356104 us-gaap:PerformanceSharesMember 2019-06-30 0001356104 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-06-30 0001356104 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001356104 us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0001356104 srt:MaximumMember us-gaap:PerformanceSharesMember 2019-01-01 2019-06-30 0001356104 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-01-01 2018-06-30 0001356104 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2017-12-31 0001356104 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-01-01 2019-06-30 0001356104 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-01-01 2018-06-30 0001356104 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-06-30 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001356104 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001356104 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-06-30 0001356104 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-12-31 0001356104 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-06-30 0001356104 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0001356104 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-06-30 0001356104 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-06-30 0001356104 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-12-31 0001356104 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-01-01 2018-06-30 0001356104 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-06-30 0001356104 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-01-01 2018-06-30 0001356104 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-01-01 2019-06-30 0001356104 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0001356104 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-06-30 0001356104 mlnx:YokneamMember us-gaap:IsraelTaxAuthorityMember 2017-06-14 2017-06-14 0001356104 us-gaap:IsraelTaxAuthorityMember us-gaap:IsraelTaxAuthorityMember 2019-06-30 0001356104 mlnx:TelAvivMember us-gaap:IsraelTaxAuthorityMember 2017-06-14 2017-06-14 0001356104 us-gaap:IsraelTaxAuthorityMember 2019-01-01 2019-06-30 0001356104 mlnx:TelAvivMember us-gaap:IsraelTaxAuthorityMember 2019-01-01 2019-06-30 0001356104 us-gaap:IsraelTaxAuthorityMember 2019-01-01 2019-06-30 0001356104 2019-01-01 0001356104 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001356104 us-gaap:EmployeeSeveranceMember 2018-01-01 2018-06-30 0001356104 us-gaap:ContractTerminationMember 2018-01-01 2018-06-30 xbrli:pure iso4217:ILS xbrli:shares iso4217:USD xbrli:shares iso4217:USD xbrli:shares mlnx:subsidiary


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended:
June 30, 2019
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to            

Commission File Number 001-33299
MELLANOX TECHNOLOGIES, LTD.
(Exact name of registrant as specified in its charter)
Israel
 
98-0233400
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
Beit Mellanox, Yokneam, Israel 20692
(Address of principal executive offices, including zip code)
+972-4-909-7200
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Ordinary Shares, nominal value NIS 0.0175 per share
MLNX
The Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes     No 
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
 
 
 
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes     No 

The total number of shares outstanding of the registrant's Ordinary Shares, nominal value NIS 0.0175 per share, as of July 26, 2019, was 54,799,274.
 
 
 
 
 



MELLANOX TECHNOLOGIES, LTD.
          PART I
Page No.
          FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2

PART I. FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS




MELLANOX TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
June 30,
 
December 31,
 
2019
 
2018
 
(in thousands, except par value)
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
53,782

 
$
56,766

Short-term investments
556,806

 
381,724

Accounts receivable, net
200,351

 
150,625

Inventories
89,650

 
104,381

Other current assets
20,895

 
16,942

Total current assets
921,484

 
710,438

Property and equipment, net
108,142

 
105,334

Intangible assets, net
159,046

 
179,328

Goodwill
473,916

 
473,916

Other long-term assets
159,520

 
118,182

Total assets
$
1,822,108

 
$
1,587,198

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 
 
 
Accounts payable
$
73,790

 
$
70,336

Accrued and other liabilities
142,246

 
121,878

Deferred revenue
22,998

 
20,558

Total current liabilities
239,034

 
212,772

Deferred revenue, long-term
20,224

 
18,665

Other long-term liabilities
100,093

 
54,113

Total liabilities
359,351

 
285,550

Commitments and Contingencies - (see Note 9)


 


Shareholders’ equity:
 
 
 
Ordinary shares: NIS 0.0175 par value, 200,000 shares authorized, 54,795 and 53,918 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
237

 
233

Additional paid-in capital
1,051,985

 
982,677

Accumulated other comprehensive income (loss)
2,394

 
(1,051
)
Retained earnings
408,141

 
319,789

Total shareholders’ equity
1,462,757

 
1,301,648

Total liabilities and shareholders' equity
$
1,822,108

 
$
1,587,198


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


MELLANOX TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands, except per share data)
Total revenues
$
310,324

 
$
268,462

 
$
615,541

 
$
519,462

Cost of revenues
110,034

 
103,668

 
218,120

 
192,666

Gross profit
200,290

 
164,794

 
397,421

 
326,796

Operating expenses:
 

 
 

 
 
 
 
Research and development
99,329

 
87,152

 
191,534

 
173,578

Sales and marketing
39,302

 
35,673

 
79,399

 
75,167

General and administrative
19,199

 
23,635

 
38,470

 
40,151

Restructuring and impairment charges
275

 
1,774

 
1,178

 
9,361

Total operating expenses
158,105

 
148,234

 
310,581

 
298,257

Income from operations
42,185

 
16,560

 
86,840

 
28,539

Interest and other, net
2,268

 
(338
)
 
10,499

 
(871
)
Income before taxes on income
44,453

 
16,222

 
97,339

 
27,668

Provision for (benefit from) taxes on income
6,024

 
(304
)
 
10,290

 
(26,701
)
Net income
$
38,429

 
$
16,526

 
$
87,049

 
$
54,369

Net income per share — basic
$
0.70

 
$
0.31

 
$
1.60

 
$
1.04

Net income per share — diluted
$
0.68

 
$
0.30

 
$
1.55

 
$
1.00

Shares used in computing net income per share:
 

 
 

 
 
 
 
Basic
54,707

 
52,615

 
54,469

 
52,219

Diluted
56,480

 
54,466

 
56,180

 
54,149


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
   

4


MELLANOX TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands)
Net income
$
38,429

 
$
16,526

 
$
87,049

 
$
54,369

Other comprehensive income (loss), net of tax:
 

 
 

 
 
 
 
Change in unrealized gains (losses) on available-for-sale securities, net of tax
1,186

 
213

 
1,968

 
(80
)
Change in unrealized gains (losses) on derivative contracts, net of tax
189

 
(2,382
)
 
2,780

 
(3,720
)
Other comprehensive income (loss), net of tax
1,375

 
(2,169
)
 
4,748

 
(3,800
)
Total comprehensive income, net of tax
$
39,804

 
$
14,357

 
$
91,797

 
$
50,569

 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


5


MELLANOX TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
 
 
 
 
 
 
 
Accumulated
 
 
 
 
 
 
 
 
 
Additional
 
Other
 
 
 
Total
 
Ordinary Shares
 
Paid-in
 
Comprehensive
 
Retained
 
Shareholders'
 
Shares
 
Amount
 
Capital
 
Income (Loss)
 
Earnings
 
Equity
 
(In thousands, except share data)
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
53,918,208

 
$
233

 
$
982,677

 
$
(1,051
)
 
$
319,789

 
$
1,301,648

 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
48,620

 
48,620

Unrealized gains on available-for-sale securities and derivative contracts, net of taxes
 
 
 
 
 
 
3,373

 
 
 
3,373

Share-based compensation
 
 
 
 
24,242

 
 
 
 
 
24,242

Issuances of shares through employee equity incentive plans
451,535

 
2

 
5,970

 
 
 
 
 
5,972

Issuance of shares through employee share purchase plan
162,573

 
1

 
11,054

 
 
 
 
 
11,055

Balance at March 31, 2019
54,532,316

 
$
236

 
$
1,023,943

 
$
2,322

 
$
368,409

 
$
1,394,910

Net income
 
 
 
 
 
 
 
 
38,429

 
38,429

Unrealized gains on available-for-sale securities and derivative contracts, net of taxes
 
 
 
 
 
 
72

 
1,303

 
1,375

Share-based compensation
 
 
 
 
26,949

 
 
 
 
 
26,949

Issuances of shares through employee equity incentive plans
262,557

 
1

 
1,093

 
 
 
 
 
1,094

Balance at June 30, 2019
54,794,873

 
$
237

 
$
1,051,985

 
$
2,394

 
$
408,141

 
$
1,462,757

 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
51,487,650

 
$
221

 
$
873,979

 
$
1,618

 
$
181,630

 
$
1,057,448

 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
37,843

 
37,843

Unrealized losses on available-for-sale securities and derivative contracts, net of taxes
 
 
 
 
 
 
(1,631
)
 
 
 
(1,631
)
Effect of adopting Topic 606
 
 
 
 
 
 
 
 
4,501

 
4,501

Share-based compensation
 
 
 
 
14,974

 
 
 
 
 
14,974

Issuances of shares through employee equity incentive plans
384,523

 
2

 
2,708

 
 
 
 
 
2,710

Issuance of shares through employee share purchase plan
288,017

 
1

 
11,347

 
 
 
 
 
11,348

Balance at March 31, 2018
52,160,190

 
$
224

 
$
903,008

 
$
(13
)
 
$
223,974

 
$
1,127,193

Net income
 
 
 
 
 
 
 
 
16,526

 
16,526

Unrealized losses on available-for-sale securities and derivative contracts, net of taxes
 
 
 
 
 
 
(2,169
)
 
 
 
(2,169
)
Share-based compensation
 
 
 
 
14,916

 
 
 
 
 
14,916

Issuances of shares through employee equity incentive plans
770,573

 
5

 
5,278

 
 
 
 
 
5,283

Balance at June 30, 2018
52,930,763

 
$
229

 
$
923,202

 
$
(2,182
)
 
$
240,500

 
$
1,161,749



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


6


MELLANOX TECHNOLOGIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
 
(in thousands)
Cash flows from operating activities:
 
 

 
 

Net income
 
$
87,049

 
$
54,369

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Depreciation and amortization
 
47,449

 
52,674

Deferred income taxes
 

 
(28,085
)
Share-based compensation
 
51,191

 
29,890

Gain on short-term investments, net
 
(6,558
)
 
(1,828
)
Gain on investments in privately-held companies
 
(9,569
)
 

Impairment charges
 
2,843

 
1,567

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
(49,726
)
 
(1,451
)
Inventories
 
11,800

 
(30,598
)
Prepaid expenses and other assets
 
4,047

 
718

Accounts payable
 
1,969

 
12,530

Accrued and other liabilities
 
6,509

 
12,334

Net cash provided by operating activities
 
147,004

 
102,120

 
 
 

 
 
Cash flows from investing activities:
 
 
 
 
Purchase of short-term investments
 
(364,777
)
 
(82,486
)
Proceeds from sales and maturities of short-term investments
 
198,221

 
76,289

Proceeds from sales of property and equipment
 

 
3,239

Purchase of property and equipment
 
(15,208
)
 
(20,078
)
Purchase of intangibles and other assets
 
(2,850
)
 
(6,995
)
Proceeds from sale of an investment in a privately-held company
 
16,887

 

Purchase of investments in privately-held companies
 
(4,247
)
 
(6,000
)
Acquisition, net of cash acquired
 

 
(7,129
)
Net cash used in investing activities
 
(171,974
)
 
(43,160
)
 
 
 
 
 
Cash flows from financing activities:
 
 

 
 
Principal payments on term debt
 

 
(74,000
)
Payments on intangible asset financings
 
(4,019
)
 
(3,446
)
Proceeds from share issuances through employee stock plans
 
18,121

 
19,341

Net cash provided by (used in) financing activities
 
14,102

 
(58,105
)
 
 
 
 
 
Net increase (decrease) in cash, cash equivalents, and restricted cash
 
(10,868
)
 
855

Cash, cash equivalents, and restricted cash at beginning of period
 
64,650

 
70,498

Cash, cash equivalents, and restricted cash at end of period
 
$
53,782

 
$
71,353



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


7


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Company
Mellanox Technologies, Ltd., an Israeli corporation (the "Company" or "Mellanox"), was incorporated and commenced operations in March 1999. Mellanox is a supplier of high-performance interconnect products for computing, storage and communications applications.
Pending Merger with NVIDIA Corporation
On March 10, 2019, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with NVIDIA Corporation, a Delaware corporation ("NVIDIA"), NVIDIA International Holdings Inc., a Delaware corporation and wholly owned subsidiary of NVIDIA ("Parent") and Teal Barvaz Ltd., a wholly owned subsidiary of Parent organized under the laws of the State of Israel and wholly owned subsidiary of Parent ("Merger Sub"). NVIDIA has agreed to guarantee the payment and performance obligations of Parent under the Merger Agreement. The Merger Agreement and the Merger (as defined below) have been approved by the boards of directors of the Company, NVIDIA, Parent and Merger Sub.
The Merger Agreement provides that, upon the terms and subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will be merged with and into the Company (the "Merger") in accordance with Sections 314-327 of the Companies Law 5759-1999 of the State of Israel, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent.
At the effective time of the Merger (the "Effective Time"), each ordinary share, par value NIS 0.0175 per share, of the Company (a "Company Share") issued and outstanding immediately prior to the Effective Time, other than any shares owned by the Company, Parent and their respective subsidiaries or any shares held in the Company’s treasury, will be deemed to have been transferred to the Parent in exchange for the right to receive $125.00 in cash, without interest and subject to applicable withholding taxes.
The Merger Agreement contains customary representations, warranties and covenants. The consummation of the Merger is conditioned on the receipt of the approval of the Company’s shareholders, as well as the satisfaction of other customary closing conditions, including domestic and foreign regulatory approvals and performance in all material respects by each party of its obligations under the Merger Agreement. At the Company’s extraordinary general meeting held on June 20, 2019, the Company’s shareholders approved the consummation of the Merger. Closing of the Merger is expected by the end of calendar year 2019.
The Merger Agreement contains certain customary termination rights by either the Company or Parent, including if the Merger is not consummated by December 10, 2019, subject to two three-month extensions in order to obtain required regulatory approvals. If the Merger Agreement is terminated under certain circumstances, including termination by the Company to enter into a superior proposal, a termination by Parent following a change of the Company’s board of directors’ recommendation or a termination by Parent as a result of a willful material breach of the Merger Agreement’s no-solicitation obligations by the Company, the Company will be obligated to pay to Parent a termination fee equal to $225 million in cash. If the Merger Agreement is terminated under certain circumstances involving the failure to obtain certain regulatory approvals, Parent will be obligated to pay the Company a termination fee equal to $350 million in cash.
The Company recorded transaction-related costs of $7.8 million, principally for investment banking and legal fees associated with the pending acquisition, during the six months ended June 30, 2019. These costs are recorded in general and administrative expenses included in the condensed consolidated statement of operations for the six months ended June 30, 2019. Additional transaction-related costs are expected to be incurred through the closing of the Merger.
Principles of presentation
The unaudited condensed consolidated financial statements include the Company's accounts as well as those of its wholly owned subsidiaries after the elimination of all intercompany balances and transactions.
The unaudited condensed consolidated financial statements included in this quarterly report on Form 10-Q have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). The year-end balance sheet data were derived from audited consolidated financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States ("GAAP"). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been

8


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures contained in this quarterly report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, for a quarterly report on Form 10-Q and are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on February 21, 2019. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2019 or thereafter.
Certain prior year amounts have been reclassified for consistency with the current year presentation. On the balance sheet, the severance assets were reclassified to other long-term assets, and the accrued severance was reclassified to other long-term liabilities.
Risks and uncertainties
The Company is subject to all of the risks inherent in a company which operates in the dynamic and competitive semiconductor industry. Significant changes in any of the following areas could have a material adverse impact on the Company's financial position and results of operations: unpredictable volume or timing of customer orders; ordered product mix; the sales outlook and purchasing patterns of the Company's customers based on consumer demands and general economic conditions; loss of one or more of the Company's customers; decreases in the average selling prices of products or increases in the average cost of finished goods; the availability, pricing and timeliness of delivery of components used in the Company's products; reliance on a limited number of subcontractors to manufacture, assemble, package and production test the Company's products; the Company's ability to successfully develop, introduce and sell new or enhanced products in a timely manner; product obsolescence and the Company's ability to manage product transitions; the timing of announcements or introductions of new products by the Company's competitors; and the Company's ability to successfully integrate acquired businesses.
Use of estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of net revenue and expenses in the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, allowances for doubtful accounts, allowances for price adjustments, investment valuation, warranty reserves, inventory reserves, share-based compensation expense, long-term asset valuations, useful lives of property, equipment, and intangibles, accounting for business combinations, goodwill and purchased intangible asset valuation, investments in privately-held companies, accounting and fair value of financial instruments and derivatives, deferred income tax asset valuation, uncertain tax positions, and litigation and other loss contingencies. These estimates and assumptions are based on current facts, historical experience and various other factors that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources. The actual results that the Company experiences may differ materially and adversely from the Company's original estimates. To the extent there are material differences between the estimates and actual results, the Company's future results of operations will be affected.
Significant accounting policies
Other than our accounting policy related to the new lease standard (see Note 14, "Leases"), there have been no changes in the Company’s significant accounting policies that were disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on February 21, 2019.
Restricted cash
The Company maintained certain cash amounts that were restricted as to withdrawal or use over the long-term. The cash was securing bank guarantees primarily issued against long-term tenancy agreements. During the second quarter of 2019, the Company renegotiated the guarantee terms with the banks, and all restricted cash was released as of June 30, 2019. The long-term restricted cash balance of $7.9 million was reported in other long-term assets on the balance sheet as of June 30, 2018, and was included in the ending balance of cash, cash equivalents and restricted cash in the statement of cash flows for the six

9


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


months ended June 30, 2018. The following table provides a reconciliation of the cash and cash equivalents balances reported on the balance sheets and the cash, cash equivalents and restricted cash balances reported in the statements of cash flows:
 
June 30,
 
2019
 
2018
 
(In thousands)
Cash and cash equivalents, as reported on the balance sheets
$
53,782

 
$
63,422

Restricted cash in other long-term assets, as reported on the balance sheets

 
7,931

Cash, cash equivalents, and restricted cash, as reported in the statements of cash flows
$
53,782

 
$
71,353


Concentration of credit risk
The following table summarizes the revenues from customers (including original equipment manufacturers) in excess of 10% of the total revenues:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Hewlett Packard Enterprise ("HPE")
13.5
%
 
13.0
%
 
10.5
%
 
15.0
%
Dell Technologies Inc. ("Dell")
*

 
14.0
%
 
11.3
%
 
12.0
%
____________________
 
 
 
 
 
 
 
* Less than 10%
 
 
 
 
 
 
 

There was no customer with an accounts receivable balance in excess of 10% of total accounts receivable as of June 30, 2019 and December 31, 2018.
Product warranty
The following table provides changes in the product warranty accrual for the six months ended June 30, 2019 and 2018:
 
Six Months Ended June 30,
 
2019
 
2018
 
(in thousands)
Balance, beginning of the period
$
1,376


$
889

New warranties issued during the period
2,397


856

Reversal of warranty reserves
(18
)


Settlements during the period
(1,934
)

(784
)
Balance, end of the period
1,821


961

Less: long-term portion of product warranty liability
(362
)

(173
)
Current portion, end of the period
$
1,459


$
788



10


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


Net income per share
The following table sets forth the computation of basic and diluted net income per share for the three and six months ended June 30, 2019 and 2018:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands, except per share data)
Net income
$
38,429

 
$
16,526

 
$
87,049

 
$
54,369

Basic and diluted shares:
 


 

 
 
 
 
Weighted average ordinary shares outstanding
54,707


52,615

 
54,469

 
52,219

Effect of dilutive shares
1,773


1,851

 
1,711

 
1,930

Shares used to compute diluted net income per share
56,480

 
54,466

 
56,180

 
54,149

Net income per share — basic
$
0.70

 
$
0.31

 
$
1.60

 
$
1.04

Net income per share — diluted
$
0.68

 
$
0.30

 
$
1.55

 
$
1.00


There were no material amounts of potentially dilutive share options and restricted share units ("RSUs") that had an anti-dilutive effect for the computation of diluted net income per share for both the three and six months ended June 30, 2019. The Company excluded 0.2 million potentially dilutive share options and RSUs from the computation of diluted net income per share for both the three and six months ended June 30, 2018, respectively, because including them would have had an anti-dilutive effect.
Adoption of new accounting principles
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory.
The standard became effective for the Company on January 1, 2019. The Company elected the available practical expedients and implemented internal controls to enable the preparation of financial information on adoption. The adoption of the standard had a material impact on the Company's condensed consolidated balance sheets due to the recognition of the right-of-use ("ROU") assets and lease liabilities related to the Company's operating leases. In addition, a material portion of the Company's leases are denominated in currencies other than the U.S. Dollar, mainly in New Israeli Shekels ("NIS"). As a result, the associated lease liabilities were remeasured using the current exchange rate, which resulted in non-operating foreign exchange losses. The standard did not have a material impact on the Company's results of operations or cash flows. See Note 14, "Leases" for details about the impact from adopting the new lease standard and other required disclosures.
Recent accounting pronouncements
In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This ASU clarifies the accounting treatment for implementation costs for cloud computing arrangements (hosting arrangements) that are service contracts. This standard becomes effective for the Company beginning January 1, 2020. The Company is currently assessing the effect that this ASU will have on its condensed consolidated financial statements and related disclosures. 


11


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


NOTE 2—REVENUE
Revenues by geographic region for the three and six months ended June 30, 2019 and 2018 were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands)
United States
$
121,618

 
$
101,396

 
$
231,912

 
$
197,656

China
91,868

 
54,182

 
170,008

 
110,395

Europe
38,343

 
41,454

 
85,589

 
77,450

Other Americas
28,082

 
33,112

 
53,811

 
60,852

Other Asia
30,413

 
38,318

 
74,221

 
73,109

Total revenues
$
310,324

 
$
268,462

 
$
615,541

 
$
519,462

The following tables represent our total revenues for the three and six months ended June 30, 2019 and 2018 by product type and interconnect protocol:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands)
ICs
$
53,046

 
$
28,934

 
$
113,669

 
$
57,521

Boards
120,643

 
136,708

 
229,073

 
254,759

Switch systems
73,808

 
57,074

 
155,866

 
112,721

Cables, accessories and other
62,827

 
45,746

 
116,933

 
94,461

Total revenues
$
310,324

 
$
268,462

 
$
615,541

 
$
519,462

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 
(in thousands)
InfiniBand:
 
 
 
 
 
 
 
HDR
$
28,620

 
$

 
$
51,813

 
$

EDR
66,643

 
59,319

 
$
126,286

 
$
115,265

FDR
28,972

 
35,649

 
69,570

 
77,397

QDR/DDR/SDR
8,646

 
7,143

 
23,350

 
12,587

Total
132,881

 
102,111

 
271,019

 
205,249

Ethernet
169,131

 
157,470

 
330,024

 
294,418

Other
8,312

 
8,881

 
14,498

 
19,795

Total revenues
$
310,324

 
$
268,462

 
$
615,541

 
$
519,462


Contract balances
The Company recognizes contract liabilities, or deferred revenues, when it receives advance payments from customers before performance obligations primarily related to extended warranty and post-contract customer support have been performed. Advance payments are received at the beginning of the service period and the related deferred revenues are reclassified to revenue ratably over the service period. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of reporting period. The Company expects to recognize the long-term portion of deferred revenue over the remaining service period of up to five years.

12


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


The following table presents the significant changes in the deferred revenue balance during the six months ended June 30, 2019:
 
(in thousands)
Balance, beginning of the period
$
39,223

New deferred revenue
21,013

Reclassification to revenues during the year (1)
(17,014
)
Balance, end of the period
43,222

Less: long-term portion of deferred revenue
20,224

Current portion, end of the period
$
22,998


(1) Of the total reclassification from deferred revenue to revenues, $11.7 million was related to the beginning balance, and $5.3 million was related to the new deferred revenue during the period.
Unsatisfied performance obligations, other than extended warranty and post-contract customer support, primarily represent contracts with future delivery dates. As of June 30, 2019, the Company had $57.5 million of unbilled transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied related to contracts with an original duration over one year. The Company expects to invoice and recognize the revenue as it satisfies each performance obligation during a period of three years. The foregoing excludes the value of the remaining unsatisfied performance obligations related to contracts that have original durations of one year or less.
The Company recognizes assets for the material incremental costs of obtaining contracts with customers if it expects the benefit of those costs to be longer than one year. The Company allocates these assets proportionally to the performance obligations in the contracts and amortizes them as the performance obligations are satisfied. During the six months ended June 30, 2019, the Company recognized $11.3 million of assets related to costs to obtain contracts, and amortized $6.7 million of these assets during the same period. The unamortized balance of the assets was $4.6 million as of June 30, 2019.


13


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


NOTE 3—BALANCE SHEET COMPONENTS:
 
 
June 30, 2019
 
December 31, 2018
 
 
(in thousands)
Accounts receivable, net:
 
 

 
 

Accounts receivable, gross
 
$
209,851

 
$
156,525

Less: unearned distribution price adjustments allowance
 
(9,000
)
 
(5,400
)
Less: allowance for doubtful accounts
 
(500
)
 
(500
)
 
 
$
200,351

 
$
150,625

Inventories:
 
 

 
 

Raw materials
 
$
19,331

 
$
19,391

Work-in-process
 
32,580

 
39,425

Finished goods
 
37,739

 
45,565

 
 
$
89,650

 
$
104,381

Property and equipment, net:
 
 

 
 
Computer, equipment, and software
 
$
189,505

 
$
180,125

Furniture and fixtures
 
1,886

 
2,140

Leasehold improvements
 
50,057

 
46,179

 
 
241,448

 
228,444

Less: Accumulated depreciation and amortization
 
(133,306
)
 
(123,110
)
 
 
$
108,142

 
$
105,334

Other long-term assets:
 
 

 
 
Right of use assets
 
$
62,376

 
$

Deferred taxes
 
50,660

 
50,660

Equity investments in privately-held companies
 
35,496

 
40,300

Long-term restricted cash
 

 
7,884

Severance assets
 
5,428

 
17,043

Other
 
5,560

 
2,295

 
 
$
159,520

 
$
118,182

Accrued and other liabilities:
 
 

 
 
Payroll and related expenses
 
$
68,965

 
$
76,788

Accrued expenses
 
31,227

 
28,821

Lease liability, current
 
17,706

 

Intangible asset financings
 
5,379

 
4,488

Other
 
18,969

 
11,781

 
 
$
142,246

 
$
121,878

Other long-term liabilities:
 
 
 
 
Lease liability, long term
 
$
51,490

 
$

Income tax payable
 
36,211

 
25,600

Accrued severance
 
6,778

 
21,645

Deferred rent
 

 
2,532

Other
 
5,614

 
4,336

 
 
$
100,093

 
$
54,113




14


MELLANOX TECHNOLOGIES, LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)


NOTE 4—FAIR VALUE MEASUREMENTS:
Fair value hierarchy:
The Company measures its cash equivalents and marketable securities at fair value. The Company’s cash equivalents are classified within Level 1. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. The Company's investments in debt securities and certificates of deposits are classified within Level 2 as the market inputs to value these instruments consist of market yields, reported trades and broker/dealer quotes. In addition, foreign currency contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Level 3 valuation inputs include the Company's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation. As of June 30, 2019 and December 31, 2018, the Company did not have any assets or liabilities valued based on Level 3 valuations.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:
The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019:
 
Level 1
 
Level 2
 
Total
 
(in thousands)
Money market funds
$
4,048

 
$

 
$
4,048

Certificates of deposit

 
149,108

 
149,108

Government debt securities

 
150,144

 
150,144

Corporate debt securities

 
257,554

 
257,554

 
4,048

 
556,806

 
560,854