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Mellanox recovering but wheezing

Good revenue rise, smaller profit

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InfiniBand supplier Mellanox is making profits as the recession eases, but much less than before.

The company, like competitor Voltaire, is embracing 10gigE alongside InfiniBand, and the greater competition in the Ethernet market means it has to work harder to stay afloat.

In its fourth 2009 quarter revenues were $35.5m, a 41 per cent increase on the year-ago quarter's $25m. However, profits of $4.3m were down on the final 2008 quarter's $8m. So revenues up 41 per cent, profits down 46 per cent - it's got its work cut out.

Full year figures were less extreme; revenues were $116m, an increase of 7.7 per cent on 2008's $107.7m. Net income was $12.9m, a 42 per cent fall. Gross margins look good, at 75.6 per cent for the fourth 2009 quarter and 75.3 per cent for the year.

But a lot of things must happen to turn a gross margin level other companies would kill for into such depressing profits figures after good revenue rises. ®

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