Inphi Corporation (NYSE: IPHI), a leader in high-speed data
movement interconnects, today announced preliminary financial
results for the first quarter of 2020, ending March 31, 2020.
Our revenue and operating income are expected to
be higher for the first quarter than the midpoint of our February
4th guidance of $132.4M for revenue. Based on the midpoint of the
guidance given at that time, the associated GAAP Operating Loss was
expected to be ($18.6M) and the Non-GAAP Operating Income was
expected to be $25.2M. This result was due primarily to higher
revenue in Q1 than anticipated coming from our Cloud customers.
Revenue contributed from our January 10th acquisition of eSilicon
was also slightly higher than originally anticipated. In addition,
as of March 31, 2020, we had $238.2M in cash and short term
investments.
“We began calendar 2020 expecting strong new
product-cycle driven growth for our PAM and coherent products in
both the cloud and telecom infrastructure markets. So far, we have
seen that growth,” said Ford Tamer, President and CEO of Inphi
Corporation. “The growth appears to be the result of customer
driven upgrade cycles, as well as other market demands driving the
need for more bandwidth. These include demands which appear to also
have been accelerated by the COVID-19 pandemic.”
The pre-COVID19 growth vectors for inside and
between data centers that we previously identified continue to
apply. These growth vectors include the ramp of new products, as
well as the continuing addition of new customers adopting PAM4 and
coherent solutions for cloud and telecom applications. In addition,
COVID-19 has had a significant impact on the global economy,
including accelerating the secular shift to cloud computing and
concurrently driving a sharp increase in the demand for bandwidth.
We expect our business to continue to be favorably impacted by
these phenomena.
Preliminary Financial Results for the Three
Months Ended March 31, 2020 are as follows:
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Total revenue |
$ |
138,130 |
|
|
$ |
139,430 |
|
|
GAAP operating loss |
$ |
(16,900 |
) |
|
$ |
(18,000 |
) |
|
Non-GAAP operating income |
$ |
33,900 |
|
|
$ |
34,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to Non-GAAP Reconciliation |
|
|
|
|
|
|
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Operating loss |
$ |
(16,900 |
) |
|
$ |
(18,000 |
) |
|
Stock-based compensation |
|
23,800 |
|
|
|
24,400 |
|
(a) |
Acquisition related expenses |
|
9,000 |
|
|
|
9,600 |
|
(b) |
Amortization of intangibles and step up values related to
acquisitions |
|
17,500 |
|
|
|
17,900 |
|
(c) |
Expense on lease not occupied |
|
500 |
|
|
|
570 |
|
(d) |
|
|
|
|
|
|
|
Non-GAAP operating income |
$ |
33,900 |
|
|
$ |
34,470 |
|
|
|
|
|
|
|
|
|
To supplement the financial data presented on a
GAAP basis, we disclose certain non-GAAP financial measures, which
exclude stock-based compensation, legal, transition costs and other
expenses related to acquisitions, purchase price fair value
adjustments related to acquisitions, loss on claim settlements and
lease expense on building not occupied. These non-GAAP financial
measures are not in accordance with GAAP. These results should only
be used to evaluate our results of operations in conjunction with
the corresponding GAAP measures. We believe that our 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 our
core operating results. We believe that the non-GAAP measure of
income from operations, in combination with our financial results
calculated in accordance with GAAP, provides investors with
additional perspective and understanding of our ongoing operating
performance. In addition, our management uses these non-GAAP
measures to review and assess the financial performance of our
company, to help determine executive officer incentive compensation
and to plan and forecast performance in future periods. Our
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. The preliminary financial data
included in this press release has been prepared by, and is the
responsibility of, our management. PricewaterhouseCoopers LLP, has
not audited, reviewed, compiled, or applied agreed-upon procedures
with respect to the preliminary financial data. Accordingly,
PricewaterhouseCoopers LLP does not express an opinion or any other
form of assurance with respect thereto.
(a) |
Reflects the stock-based compensation expense recorded relating to
stock-based awards. We exclude this item when we evaluate the
continuing operational performance of our company as management
believes this GAAP measure is not indicative of our core operating
performance. |
(b) |
Reflects the legal, transition costs and other expenses related to
acquisitions. We exclude this item when we evaluate the continuing
operational performance of our company as management believes this
GAAP measure is not indicative of its core operating
performance. |
(c) |
Reflects the cost of goods sold fair value amortization of
inventory step-up, amortization of intangibles and fair value
depreciation of fixed assets related to acquisitions. The Company
excludes these items when it evaluates the continuing operational
performance of the Company as management believes this GAAP measure
is not indicative of its core operating performance. |
(d) |
Reflects the expense on building lease not yet occupied. The
Company excludes these items when it evaluates the continuing
operational performance of the Company as management believes this
GAAP measure is not indicative of its core operating
performance. |
The Company will provide a more detailed review
of its financial results for Q1 and Business Outlook for Q2 when it
reports its first quarter 2020 results on May 7, 2020. There will
be no conference call associated with this press release.
Inphi’s First Quarter 2020 Earnings
CallInphi will release its first quarter 2020 results for
the quarter ended March 31, 2020 on Thursday, May 7, 2020, after
the close of the market. In conjunction with the release, Inphi
will hold a conference call at 4:30 p.m. Eastern Time/1:30 p.m.
Pacific Time with Ford Tamer, President and Chief Executive
Officer, and John Edmunds, Chief Financial Officer.
To participate via telephone, dial 765-507-2591,
conference ID: 3452654. Please dial in 10 minutes prior to the
scheduled conference call time. A webcast of the conference call
will be available live and archived on Inphi’s website at
https://www.inphi.com/investors/.
This update, including the financial results
expected for the first fiscal quarter of 2020, is preliminary in
nature, based on information available to management as of the date
of this release, including with respect to those impacts of the
COVID-19 outbreak that are currently known to management, and is
subject to further changes upon completion of standard quarter-end
closing procedures and based on the duration and severity of the
COVID-19 outbreak. Inphi’s independent registered public accounting
firm has not completed its review of Inphi’s results for the first
fiscal quarter ended March 31, 2020. Inphi undertakes no obligation
to update the information in this release in the event facts or
circumstances change after the date of this release.
Cautionary Note Concerning
Forward-Looking Statements
These forward-looking statements may be
identified by terms such as outlook, believe, expect, may, will,
provide, continue, 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 2020, including with respect to the first quarter
of 2020 and subsequent periods, revenue, stock-based compensation
expense, operating performance and net income or loss; the
Company’s expectations regarding growth opportunities, success of
our growth strategy, strength of the cloud and telecom
infrastructure markets and increasing demand growth inside data
centers, customer relationships, the Company’s expectations
regarding the benefits of the eSilicon acquisition 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
completion of the Company’s quarter end closing procedures; the
impact of the COVID-19 pandemic on the Company’s business; 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 target
markets; market demand for the Company’s products; reliance on
third parties to manufacture, assemble and test products; ability
to compete; the ability to effectively integrate eSilicon 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 demand, 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 Corporation’s recent
SEC filings, including its Annual Report on Form 10-K for the year
ended December 31, 2019, 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 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.
About Inphi Inphi Corporation
is a leader in high-speed data movement interconnects. 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.
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.
Investor Contact:
Vernon P. Essi, Jr.
408-606-6524
vessi@inphi.com
Corporate Contact:
Kim Markle
408-217-7329
kmarkle@inphi.com
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