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Mellanox Q2FY10 Earnings: Blasting thru the Macro

Yesterday Mellanox announced second quarter revenues of $25.3 million for the period ended June 30, 2009. The company's results shine brilliantly through dreary global economic conditions that are smothering their competitors.  After declining for two consecutive quarters that correspond with the bail-out period; Mellanox revenue bounced back onto the growth track with a strong 12% quarter over quarter increase.

The performance by Mellanox reinforces my belief that results posted by Qlogic one day earlier were not all about "the macro."  Doing business side-by-side in the same macro-economic conditions, increasing Mellanox revenue reflects a growing InfiniBand market while slowing Qlogic revenue reflects a declining Fibre Channel market.

Highlighted on the Mellanox earnings call was the continued penetration of InfiniBand; the contribution of new products and the outlook for next quarter and beyond.

According to Mellanox, revenue from new 40 gigabit per second Quad Data Rate InfiniBand increased from 34% of total revenue in Q1 to 56% of total revenue in Q2. I believe this underscores the performance advantage of InfiniBand and why at least 50% of technical HPC clusters have already deployed the technology.  I expect QDR technology to give InfiniBand vendors a boost for the next year or two against low-latency Ethernet and open doors in high performance business computing environments such as trading.

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