[January 27, 2016]

Silicom Reports All-Time Record Revenues for the 4Th Quarter & Full Year 2015

Silicom Ltd. (NASDAQ:SILC) (TASE:SILC), a leading provider of high-performance networking and data infrastructure solutions, today reported its financial results for the fourth quarter and full year ended December 31, 2015.

Financial Results

Fourth Quarter 2015: Revenues for the fourth quarter rose by 20% to a record $27.4 million from $22.8 million in the fourth quarter of 2014. The rise in revenues reflected growth with most of our customers and product lines.

On a GAAP basis, net income for the quarter totalled $4.4 million, or $0.60 per diluted share ($0.61 per basic share), compared with $4.7 million, or $0.65 per diluted share ($0.66 per basic share), in the fourth quarter of 2014. On a non-GAAP basis (as described and reconciled below), operating income for the quarter reached a record $6.9 million, up 11% from $6.2 million in Q4 2014. Net income for the quarter totalled $6.3 million, or $0.86 per diluted share ($0.87 per basic share), a 17% increase compared with $5.4 million, or $0.74 per diluted share ($0.75 per basic share), in the fourth quarter of 2014.

Full Year 2015: Revenues for 2015 totalled a record $82.7 million, up 9% compared with $75.6 million in 2014.

On a GAAP basis, net income for the year totalled $16.5 million, or $2.24 per diluted share ($2.27 per basic share), compared with $14.6 million, or $2.00 per diluted share ($2.03 per basic share), for 2014. On a non-GAAP basis (as described and reconciled below), operating income for 2015 reached a record $19.2 million, compared with $18.7 million in 2014. Net income for the year totalled $17.3 million, or $2.35 per diluted share ($2.38 per basic share), a 6% increase compared with $16.3 million, or $2.22 per diluted share ($2.26 per basic share), in 2014.

Comments of Management

Mr. Shaike Orbach, Silicom's President and CEO, commented, "We are very pleased to report our best-ever quarter so far, with a record $27.5 million in revenues boosting our full-year revenues and operating profit to new levels as well. Our rising sales demonstrate our continued success in our traditional networking appliance markets as well as in our 'hot' new target markets, including those driven by the Cloud Computing, SDN, NFV, IoT, Virtualization and other trends. They also demonstrate our success in bringing our customers much-needed products, whether through our 'internal' development or through acquisitions. With many of these trends in their infancy, and with closer relationships than ever with our strategic customers and suppliers, we believe we are positioned for further growth in the year ahead."

Mr. Orbach continued, "During the quarter, we were pleased to complete the accretive acquisition of ADI Engineering, an expert in Intel-based platforms that operates in the Cloud/SDN/NFV and CPE markets. In addition, we were gratified to receive two new Coleto Creek design wins from cyber security leaders, demonstrating the growing momentum of our 'on-top-of-Intel" hardware and software solutions and the strong growth potential of our large customer base.

"In short, the future looks promising for Silicom. We are performing well in a broad cross-section of market sectors, with our sales driven by growing market trends and needs. The acquisitions that we have made are boosting our technology edge, helping us extend our penetration of the cloud while expanding our addressable markets. In parallel, our ever-deepening relationships with key clients gives us unique insight into their true needs, positioning us as enabling partners for their growth. We believe this is a formula for continued success and growth."

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Conference Call Details
Silicom's Management will host an interactive conference today, January 27th, at 9am Eastern Time (6am Pacific Time, 4pm Israel Time) to review and discuss the results.

To participate, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, try the international dial-in number.

US: 1 888 668 9141
UK: 0 800-917-5108
ISRAEL: 03 918 0609
INTERNATIONAL: +972 3 918 0609
At: 9:00am Eastern Time, 6:00am Pacific Time, 3:00pm Israel Time

For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call under the investor relations section of Silicom's website.

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Non-GAAP Financial Measures

This release, including the financial tables below, presents other financial information that may be considered "non-GAAP financial measures" under Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission as they apply to our company. These non-GAAP financial measures exclude compensation expenses in respect of options and RSUs granted to directors, officers and employees, acquisition-related expenses, adjustment of inventory step up related to acquisition, amortization of acquired intangible assets, changes in the fair value of contingent consideration from a business combination, as well as taxes on amortization of acquired intangible assets. Non-GAAP financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables also present the GAAP financial measures, which are most comparable to the non-GAAP financial measures as well as reconciliation between the non-GAAP financial measures and the most comparable GAAP financial measures. The non-GAAP financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or per share data prepared in accordance with GAAP.

About Silicom

Silicom Ltd. is an industry-leading provider of high-performance networking and data infrastructure solutions. Designed primarily to increase data center efficiency, Silicom's solutions dramatically improve the performance and availability of networking appliances and other server-based systems.

Silicom's products are used by a large and growing base of OEM customers, many of whom are market leaders, as performance-boosting solutions for their offerings in the Cyber Security, Network Monitoring and Analytics, Traffic Management, Application Delivery, WAN Optimization, High Frequency Trading and other mission-critical segments within the fast-growing data center, enterprise networking, virtualization, cloud computing and big data markets. Silicom's product portfolio includes multi-port 1/10/40/100 Gigabit Ethernet server adapters, Intelligent Bypass solutions, Encryption accelerators, Ultra Low Latency solutions, Time Stamping and other innovative Smart adapters. These products are available for incorporation directly into our OEM customers' systems, or provided as part of Silicom's patented SETAC (Server To Appliance Converter), a unique approach to the provision of high quality standard platforms with modular front connectivity.

For more information, please visit: www.silicom.co.il

Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission. The Company disclaims any duty to update such statements.

-- FINANCIAL TABLES FOLLOW -

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