Fourth Quarter and Full Year 2013 Highlights:
- Revenues of $70.9 million for 2013 and $20.1 million for the fourth quarter
- Gross margin, on a GAAP basis, was 83.0% for 2013 and 81.7% for the fourth quarter
- Gross margin, on a non-GAAP basis, was 83.4% for 2013 and 82.1% for the fourth quarter
- Net income, on a GAAP basis, was $21.7 million for 2013 and $6.5 million for the fourth quarter
- Net income, on a non-GAAP basis, was $35.6 million for 2013 (50% of revenues) and $10.1 million for the fourth quarter (50% of revenues)
- Operating cash flow of $37.6 million for 2013 and $12.9 million for the fourth quarter
- Net cash at end of 2013 was $202.9 million
Fourth Quarter 2013 Results:
Total revenues in the fourth quarter of 2013 were $20.1 million, an increase of 32% compared to $15.2 million in the fourth quarter of 2012, and an increase of 7% compared to $18.8 million in the third quarter of 2013.
Net income, on a GAAP basis, for the fourth quarter of 2013 was $6.5 million, or $0.22 per share (diluted), compared to net income of $4.8 million, or $0.17 per share (diluted), in the fourth quarter of 2012, and net income of $6.5 million, or $0.22 per share (diluted), in the third quarter of 2013.
Net income, on a non-GAAP basis, for the fourth quarter of 2013 was $10.1 million, or $0.34 per share (diluted), compared to non-GAAP net income of $7.8 million, or $0.26 per share (diluted), in the fourth quarter of 2012, and non-GAAP net income of $10.1 million, or $0.33 per share (diluted), in the third quarter of 2013.
Cash, cash equivalents, marketable securities and deposits as of December 31, 2013, totaled $202.9 million, compared to $190.6 million as of September 30, 2013. Cash generated from operations was $12.9 million, cash used in investing activities was $0.7 million and cash provided by financing activities (resulting from the exercise of options) was $0.1 million.
Full Year 2013 Results:
Total revenues for the year ended December 31, 2013 were $70.9 million, a year-over-year increase of 30% compared to $54.7 million in 2012.
Net income on a GAAP basis for 2013 was $21.7 million, or $0.74 per share (diluted), compared to net income of $15.7 million, or $0.54 per share (diluted), in 2012.
Net income on a non-GAAP basis for 2013 was $35.6 million or $1.18 per share (diluted), compared with non-GAAP net income of $27.1 million, or $0.92 per share (diluted), in 2012.
Cash, cash equivalents, marketable securities and deposits as of December 31, 2013, totaled $202.9 million, compared to $168.0 million as of December 31, 2012. Cash generated from operations was $37.6 million, cash used in investing activities was $3.5 million, cash provided by financing activities (resulting from the exercise of options) was $1.4 million and a decrease of $0.6 million resulted from cash adjustment of marketable securities, net.
Eli Fruchter, CEO of EZchip, commented, "2013 has been a record year for EZchip in revenues, operating and net income. Revenues increased 30% year over year with an outstanding 50% net margin. We believe our 2013 growth likely exceeded the growth in the merchant NPU market and the growth in the edge routing market, and that such growth likely resulted in an increase to our market share in 2013.
"During the year, we completed the transition from NP-2 and NP-3 to NP-4 and we are pleased to confirm that all our NP-4 customers and all NP-4 platforms are now in production. NP-4 entered production at the end of 2011, exceeded the NP-3 run rate at the end of 2012, and generated more than 50% of our revenues in 2013, representing over 100% increase from 2012. We expect NP-4 revenues to continue to increase in 2014, assuming the router spending level the market experienced in 2013 continues and our key customers continue to gain market share.
"In 2013 we sampled the NP-5, our fifth generation NP, that is now being used by our customers to build their NP-5 based platforms. We expect these platforms to enter production in the second half of 2014. We have provided our customers with a new product generation every three years and we are proud to report that we have been able to gain more customers and design wins as we move from each generation to the next. We believe that NP-5 is on track to be yet another successful product.
"In 2013 we also laid the foundation for a transition to the NPS line of network processors, targeting many different market segments such as switches and routers, network monitoring, lawful interception, network appliances, load balancers, DPI, security, network virtualization, NFV and SDN, all with a single chip. We believe that we will be able to win in these market segments and significantly diversify our customer base as a result, thereby reducing our current customer concentration. Tier-1 customers in all these market segments have expressed a strong interest in NPS and we believe that the NPS will start gaining customer wins in the second half of 2014, which implies customer product prototypes in 2015 and the start of production in 2016."
