Inphi Corporation Announces First Quarter 2015 Results

Reports 90% Year-over-Year Revenue Growth and 156% Year-over-Year Non-GAAP EPS Growth

SANTA CLARA, Calif., April 28, 2015 – Inphi Corporation (NYSE: IPHI), a leading provider of high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets, today announced the financial results for its first quarter ended March 31, 2015.

Revenue in the first quarter of 2015 was $59.2 million, up 8.0% sequentially from $54.8 million reported in the fourth quarter of 2014. This was up 90% year over year compared with $31.2 million in the first quarter of 2014.

Gross margin under U.S. generally accepted accounting principles (GAAP) in the first quarter of 2015 was 50.6%, compared with 64.5% of revenue in the first quarter of 2014. The decline in gross margin was primarily due to the amortization of inventory fair value step-up related to the acquired Cortina inventories, sold during the first quarter of 2015, and amortization of the acquired intangibles.

GAAP net loss in the first quarter of 2015 was $9.7 million, or ($0.26) per diluted common share, compared with GAAP net loss of $1.0 million, or ($0.03) per diluted common share, in the first quarter of 2014.

Inphi reports revenue, gross margin, operating expenses, net income (loss), and earnings per share in accordance with GAAP and on a non-GAAP basis. A reconciliation of the GAAP to non-GAAP revenue, gross margin, operating expenses, net income, and earnings per share, as well as a description of the items excluded from the non-GAAP calculations, is included in the financial statements portion of this news release.

Gross margin on a non-GAAP basis in the first quarter of 2015 was 66.6%, compared with 65.3% in the first quarter of 2014.
Non-GAAP net income in the first quarter of 2015 was $9.3 million, or $0.23 per diluted common share. This compared with non-GAAP net income of $2.9 million, or $0.09 per diluted common share in the first quarter of 2014.

“I am pleased to report that our Q1 non-GAAP revenue and earnings per share came in at the high end of our guidance,” said Ford Tamer, Inphi President and CEO. “The new technologies that we announced and demonstrated at the Optical Fiber Conference were well received. We are confident this will enable Inphi to participate in an upcoming multi-billion dollar Data Center Interconnect opportunity. In 2015, we will continue to invest for top line growth and we are committed to generating significant EPS and cash flow.”

Business Outlook
The following statements are based on our current expectations for the second quarter of 2015. These statements are forward-looking and actual results may differ materially.

  • • Revenues are expected to be flat to up 2% sequentially for Q2 2015, resulting in a range of $59.6 million to $60.8 million.
  • • Non-GAAP gross margin is expected to be approximately 68.1% – 68.6%.
  • • Stock-based compensation expense is expected to be in the range of $7.0 million to $7.4 million.
  • • GAAP results are expected to be in a range between a net loss of $1.0 million to $1.8 million, or ($0.03) – ($0.05) per diluted share, on approximately 38.4 million basic shares outstanding.
  • • Non-GAAP net income, excluding stock-based compensation expense, is expected to be in the range of $8.9 million to $9.7 million, or $0.22 – $0.24 per diluted share, on 40.86 million estimated fully diluted shares outstanding.

Quarterly Conference Call Today
Inphi will to hold a conference call at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time today with Ford Tamer, president and chief executive officer, and John Edmunds, chief financial officer, to discuss first quarter of 2015 results.

The call can be accessed by dialing 844-459-2451; international callers should dial 765-507-2591, participant conference ID: 26016661. Please dial-in ten minutes prior to the scheduled conference call time. A live and archived webcast of the call will be available on Inphi’s Website at http://investors.inphi.com for up to 30 days after the call.

About Inphi
Inphi Corporation is a leading provider of high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets. Inphi’s end-to-end data transport platform delivers high signal integrity at leading-edge data speeds, addressing performance and bandwidth bottlenecks in networks, from fiber to memory. Inphi’s solutions minimize latency in computing environments and enable the rollout of next-generation communications infrastructure. Inphi’s solutions provide a vital interface between analog signals and digital information in high-performance systems, such as telecommunications transport systems, enterprise networking equipment, enterprise and data center servers, and storage platforms. To learn more about Inphi, visit www.inphi.com.


Cautionary Note Concerning Forward-Looking Statements
Statements in the press release and certain matters to be discussed on the first quarter of 2015 conference call regarding Inphi Corporation, which are not historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as outlook, believe, expect, may, will, provide, could, and should, and the negative of these terms or other similar expressions. These statements include statements relating to: our business outlook and current expectations for the second quarter of 2015, including our revenue, gross margin, operating margin, stock-based compensation expense, operating performance, net income, earnings per share; our ability to participate in an upcoming multi-billion dollar Data Center Interconnect opportunity; expectations of our growth; EPS and cash flow; success of the Cortina integration; expectations of economic trends and macroeconomic conditions; 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 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 the markets that the Company targets; market demand for the Company’s products; reliance on third parties to manufacture, assemble and test products; ability to compete; 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 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, 2014, 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.

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.

Corporate Contact:
Kim Markle
408-217-7329
kmarkle@inphi.com

Investor Contact:
Deborah Stapleton
650-815-1239
deb@stapleton.com