Company Update (NASDAQ:CAVM): Cavium Inc Announces Financial Results for Q2 2015

Cavium Inc (NASDAQ:CAVM), a leading provider of semiconductor products that enable secure and intelligent processing for enterprise, data center, wired and wireless networking, today announced financial results for the second quarter ended June 30, 2015.

Net revenue in the second quarter of 2015 was $105.0 million, a 3.1% sequential increase from the$101.8 million reported in the first quarter of 2015 and a 15.8% year-over-year increase from the $90.7 million reported in the second quarter of 2014.

Generally Accepted Accounting Principles (GAAP) Results

Net loss in the second quarter of 2015 was $6.4 million, or $(0.11) per diluted share, compared to $13.9 million, or $(0.25) per diluted share in the first quarter of 2015. Gross margins were 64.1% in the second quarter of 2015 compared to 64.8% in the first quarter of 2015. Total cash and cash equivalents were$122.0 million at June 30, 2015.

Non-GAAP Results

Cavium believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Cavium’sfinancial condition and results of operations. These measures should only be used to evaluate Cavium’sresults of operations in conjunction with the corresponding GAAP measures. The reconciliation between GAAP and non-GAAP financial results is provided in the financial statements portion of this release.

In the second quarter of 2015, Non-GAAP net income was $24.2 million, or $0.41 per diluted share. Non-GAAP gross margin was 66.8% and Non-GAAP operating margin (non-GAAP income from operations as a percentage of revenue) was 23.0%.

Recent News Highlights

  • July 22, 2015 – Cavium Unveiled the 100 Gbps NITROX® V Security Processor Family
  • July 13, 2015 – Cavium and Leading Partners Showcased Advanced ThunderX™ ARM-based Server Platforms and Software for High Performance Computing at ISC 2015
  • July 13, 2015 – Cavium Announced Beta Support for PathScale EKOPath Compiler and Optimized Math Libraries on ThunderX™ Processor Family
  • July 13, 2015 – Cavium Unveiled Flash Support for the Cavium ThunderX™ Processor Family
  • July 13, 2015 – Cavium Added Support for Mellanox InfiniBand Adapters for ThunderX™ Processor Family
  • July 13, 2015 – Mont-Blanc HPC software stack tested on E4’s HPC platform based on ARM64 Cavium ThunderX processor
  • June 16, 2015 – Cavium Crowned Winner of SDN Idol 2015 at Open Networking Summit 2015
  • June 16, 2015 – Cavium Unleashed the Power of SDN through OpenFlow at ONS 2015
  • June 10, 2015 Cavium Announced New Low Power 16-core OCTEON® III SoC Processors for Next Generation Enterprise, Data Center and Service Provider Infrastructure
  • June 10, 2015 – 64-bit MIPS architecture provides low-power, high-throughput processing forCavium’s new OCTEON® III processors
  • June 10, 2015 – Green Hills Software Announced INTEGRITY® RTOS Multicore Support for OCTEON® III Family of SoC from Cavium
  • June 6, 2015 – Qulsar’s Processors Managed Timing Engine Enhances Timing Synchronization in Cavium Small Cell Basestation Designs
  • June 1, 2015 – Cavium and Leading Partners Showcased Best-in-Class Product Solutions across Cloud, Data Center and Enterprise at Computex 2015
  • June 1, 2015 – Cavium Announced Collaboration with Pegatron on Server Platforms based onCavium’s ThunderX™ Workload Optimized Processor Family
  • June 1, 2015 – Leading Network Solution Providers and ODMs Partner with Cavium to Bring to Market Multiple Hardware Ethernet Switch Platforms
  • June 1, 2015 – Cavium OCTEON® III Expands Footprint to Industrial, Military and Aerospace Applications by Offering Standard Computer-On-Module Form Factors
  • May 18, 2015 – Cavium Partners with Canonical to Demonstrate Optimized Cloud Infrastructure with OpenStack at Scale on ThunderX™
  • May 14, 2015 – QLogic and Cavium Collaborates to Deliver Accelerated Performance for Enterprise and Cloud Storage Applications. (Original Source)

Shares of Cavium closed today at $64.06, down $0.21 or 0.33%. CAVM has a 1-year high of $77.42 and a 1-year low of $38.73. The stock’s 50-day moving average is $68.68 and its 200-day moving average is $67.51.

On the ratings front, Cavium has been the subject of a number of recent research reports. In a report issued on July 27, Oppenheimer analyst Rick Schafer maintained a Buy rating on CAVM, with a price target of $72, which implies an upside of 12.5% from current levels. Separately, on June 16, CLSA’s Srini Pajjuri initiated coverage with a Buy rating on the stock and has a price target of $85.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Rick Schafer and Srini Pajjuri have a total average return of 22.2% and -3.4% respectively. Schafer has a success rate of 74.3% and is ranked #28 out of 3718 analysts, while Pajjuri has a success rate of 38.1% and is ranked #3079.

The street is mostly Bullish on CAVM stock. Out of 6 analysts who cover the stock, 5 suggest a Buy rating and one recommends to Hold the stock. The 12-month average price target assigned to the stock is $75.20, which implies an upside of 17.5% from current levels.

Cavium Inc designs, develops and markets semiconductor processors that enable intelligent processing for wired and wireless networking, communications, storage, cloud, wireless, security, video and connected home and office applications.

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