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Corporate Update Mellanox Technologies

Corporate Update Mellanox Technologies 23
Corporate Update Enabling The Use of Data April 2017 © 2017 Mellanox TechnologiesSafe Harbor Statement These slides and the accompanying oral presentation contain forwardlooking statements and information. The use of words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “project”, “intend”, “future”, “potential” or “continued”, and other similar expressions are intended to identify forwardlooking statements. All of these forwardlooking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain. Forwardlooking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, industry, strategy or actual results to differ materially from the forwardlooking statement. These risks and uncertainties may include those discussed under the heading “Risk Factors” in the Company’s most recent 10K and 10Qs on file with the Securities and Exchange Commission, and other factors which may not be known to us. Any forwardlooking statement speaks only as of its date. We undertake no obligation to publicly update or revise any forwardlooking statement, whether as a result of new information, future events or otherwise, except as required by law. © 2017 Mellanox Technologies 2We Live in a World of Data More Devices More Applications More Data © 2017 Mellanox Technologies 3Exponential Data Growth Everywhere Big Cloud HPC Data Security Internet Enterprise of Things Storage Machine Business Learning Intelligence © 2017 Mellanox Technologies 4Exponential Data Growth Everywhere Higher Data Speeds Faster Data Processing Better Data Security © 2017 Mellanox Technologies 5Exponential Data Growth Everywhere Higher Data Speeds Faster Data Processing Network Processors System on a Chip Better Data Security Cables Switches Adapters Transceivers © 2017 Mellanox Technologies 6Data Growth is Mellanox Growth © 2017 Mellanox Technologies 7Mellanox Leads Across Industries Delivering Highest Data Center Return on Investment 5 of Top 6 Global Banks 9 of Top 10 Hyperscale Companies 9 of the Top 10 Oil and Gas Companies 3 of Top 5 Pharmaceutical Companies 10 of Top 10 Automotive Manufacturers © 2017 Mellanox Technologies 8Enabling Most Efficient Machine Learning Platforms Allowing AI to Perform Critical Real Time Decisions OCP Big Sur Artificial Intelligence Platform Real Time Fraud Detection Machine Learning System with 400Gb/s 18X Speedup For Image Recognition 4X Speedup For Image Recognition Data Analytics Image Recognition World Record For Data Sort, 3X Faster © 2017 Mellanox Technologies 9Business Success Depends on Mellanox Deliver the Highest Data Center Return on Investment Reduction Tier1 Trading Institution 10X Of Latency Tier1 Fortune100 Reduction in Database Web 2.0 Company 97 Recovery Time Military Higher Performance While Reducing Systems System Footprint by 50 4X Yosemite Platform with MultiHost Technology Lowers Total Cost of Ownership Concurrent Streams From a Single Server 100K For the Highest Quality Viewing Experience © 2017 Mellanox Technologies 10The Smart Choice for HPC Platforms Deliver the Highest Data Center Return on Investment Accelerates the 1 Supercomputer Connects 39 of Overall TOP500 Systems (194 Systems) InfiniBand to Connect Future 1 HPC Systems (Coral) InfiniBand InfiniBand Connects 65 of the TOP500 HPC Platforms Leadership 46 of the Total Petascale Systems Ethernet Connects All of 40G Ethernet Systems Leadership The First 100G Ethernet System on The TOP500 List Chosen for 65 EndUser TOP500 HPC Projects in 2016, 3.6X Higher versus OmniPath, 5X Higher versus Cray Aries © 2017 Mellanox Technologies 11Leadership in Storage Platforms Delivering the Highest Data Center Return on Investment SMB Direct © 2017 Mellanox Technologies 12Mellanox Enables Data Centers of the Future Today Security Data Insights RealTime SoftwareDefined Network Intelligence Efficiency Scalability Performance HighestPerformance 100Gb/s 200Gb/s Interconnect Solutions © 2017 Mellanox Technologies 13Comprehensive EndtoEnd Portfolio InfiniBand and Ethernet Software NPU Multicore Metro / WAN Switches/Gateways Adapter Cards ICs Cables/Modules © 2017 Mellanox Technologies 14Leading Supplier of EndtoEnd Interconnect Solutions Switch / Virtual Protocol Virtual Protocol Gateway Interconnect Interconnect Storage 56/100/200G 56/100/200G Server / Front / InfiniBand InfiniBand Compute BackEnd 10/25/40/50/ 10/25/40/50/ 100/200GbE 100/200GbE © 2017 Mellanox Technologies 15Highest Performance 100 and 200Gb/s Interconnect Solutions 200Gb/s, 0.6us Latency 200 Million Messages per Second Adapters (10 / 25 / 40 / 50 / 56 / 100 / 200Gb/s) 40 HDR (200Gb/s) Ports 80 HDR100 (100Gb/s) Ports Switch 16Tb/s Throughput, 15.6 Billion msg/sec 32 100GbE Ports, 64 25/50GbE Ports (10 / 25 / 40 / 50 / 100GbE) Switch Throughput of 6.4Tb/s Transceivers Active Optical and Copper Cables Interconnect (10 / 25 / 40 / 50 / 56 / 100 / 200Gb/s) © 2017 Mellanox Technologies 16Enabling the Future of Machine Learning HPC and Machine Learning Share Same Interconnect Needs IoT SelfDriving Storage Vehicles Database Machine Healthcare Embedded Learning High Appliances Performance Computing Retail Manufacturing Financial Hyperscale © 2017 Mellanox Technologies 17Significant Growth of Ethernet Market at 25Gb/s and Above 1H 2016: Mellanox 86 Market Share for 25, 40, 50, 100G NICs 24 1 100G 2 57 19 43 10G 81 13 Of Total 10G Of Total 40G Market Market 50G 12 3 High Speed High Speed 40G 25G Adapter Forecast Adapter Forecast 7 2016: 1.2B 2020: 1.8B 14 Crehan Research: Q2’16 Server Class Adapter Market Share; Crehan Research: Long Range Forecast – Server class Adapters LOM (Jul 2016); Crehan Research: Long Range Forecast – Data Center Switch (Jul 2016 © 2017 Mellanox Technologies 18BlueField Enables Growing Market Segments Bluefield Combing Mellanox’s BestinClass ConnectX Technology with ARM v8 Multicore Processors Security Data Center Infrastructure Protection Storage Enabling the Path to NVMeoverFabric Storage Platforms Machine Learning The Most Efficient Machine Learning Systems NFV Performance and Flexibility at Lower Cost © 2017 Mellanox Technologies 19Smart Choice For Intelligent Compute and Storage Platforms the MultiCore Future of CPUs Smart Machine Network Learning 25 is the New 10 Ethernet 50G, 100G Adapters are Now Open Ethernet Vendor NOS Open Source NOS Linux Switches for Ethernet Programmable Switches Networks Vertical Integration Cables Silicon Photonics Transceivers Technology Intelligent MultiCore Network Solutions Network Enable Security Processors Everywhere © 2017 Mellanox Technologies 20EndtoEnd Solutions for All Platforms Unleashing the Power of all Compute Architectures Open FPGA X86 GPU ARM POWER Highest Performance Scalability for X86, Power, GPU, ARM FPGAbased Compute and Storage Platforms 10, 20, 25, 40, 50, 100 200Gb/s Speeds © 2017 Mellanox Technologies 21Mellanox Overview Company Headquarters Yokneam, Israel Sunnyvale, California Worldwide Offices 2,900 Employees worldwide Ticker: MLNX © 2017 Mellanox Technologies 22Mellanox Overview Solid financial position 2016 Revenue of 857.5M 2016 nonGAAP GM of 71.6 2016 nonGAAP EBIT Margin of 21.0 2016 nonGAAP EPS of 3.43 Cash Investments of 325.2M as of 1Q’17 Q2’17 Revenue Guidance = 205215M A reconciliation of GAAP to nonGAAP condensed consolidated statements of operations is presented in the financial statements of our most recent earnings release located on the "Investor Relations" page on our website © 2017 Mellanox Technologies 23Mellanox Overview Technology and Product Leadership Leader in EndtoEnd InfiniBand and Ethernet Technologies Introducing New Products to Accelerate Future Growth (Switch Systems/Silicon, Acq. EZchip Technology) Well Positioned to Benefit from Market Transition from 10Gb to 25/50/100Gb © 2017 Mellanox Technologies 24Approaching 1 Billion in Annual Revenues 3Year (20132016) CAGR 30 857.5 658.1 463.6 Historical 390.4 Annual Revenue (M) 2013 2014 2015 2016 YoY 18.8 42.0 30.0 Source: Company financial statements © 2017 Mellanox Technologies 25Historical Quarterly 224.2 221.7 ( in Millions) Revenue Growth 214.8 210.0E 196.8 188.7 176.9 171.4 163.1 146.7 141.1 120.7 105.6 103.6 102.8 99.0 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17E Source: Company financial statements, assuming midpoint of Q2’17 outlook = 205M215M © 2017 Mellanox Technologies 26Investment Highlights Summary Interconnect technology is critical for business performance Increases application productivity and ROI End markets have shown consistent growth Mellanox’s TAM forecasted to reach 15.9B by 2018 Mellanox uniquely positioned to continue market leadership Providing compelling technology benefits to multiple, high growth markets Well positioned as industry transitions to 25Gb+ technology Shipping 25/40/50/100Gb technology today (endtoend solution) Demonstrated revenue growth, strong cash flow and increasing profitability with attractive gross margins Solid revenue growth (30 CAGR) over the last 3 years © 2017 Mellanox Technologies 27Thank You © 2017 Mellanox Technologies