On its Wednesday earnings call, Cray announced the largest revenue quarter in the company’s history and the second-highest revenue year. The Seattle-based supercomputer maker recorded $346.6 million in revenue for the fourth quarter of 2016, a 30 percent year-over-year improvement. For the full year, Cray booked $629.8 million in total revenue, a shortfall of $94.9 million compared with 2015, a banner year for the company. Net income for 2016 was $10.6 million compared with $27.5 million in 2015. This marks the seventh consecutive year of profitability for Cray.

As we noted in August, wide year-to-year revenue swings are par for the course in the supercomputing space owing to uneven procurement cycles, but there are some specific challenges that the company has had to contend with this year. During its 2016 second quarter earnings call, Cray downsized the year’s revenue forecast by $175 million, citing damage from an electrical event at a Chippewa Falls factory, processor delays and market slowdown.

The greatest short-term fiscal impact was to the company’s third quarter projection. The quarter’s take was $77.5 million compared to a recorded $191.4 million in revenue for the third quarter of 2015. In August, Cray said that missed earnings for Q3 would move to Q4 or into 2017, and indeed the shift amplified their fourth quarter numbers.

While the July 2016 smoke event that damaged several systems that were undergoing pre-shipment testing impacted the company’s balance sheet short-term, the company was fully insured to recoup the losses. More problematic for Cray is market sluggishness and uncertainty, resulting in continued limited visibility.

“While our market can be lumpy, we are continuing to see very slow conditions in supercomputing, as we discussed on our last earnings call, with fewer opportunities, both in total numbers and dollars. In fact, we believe the high-end of the market which we service, also known as our serviceable addressable market for the high-end, was down by more than 25 percent on a revenue basis in 2016 and down even more on a bookings basis. This clearly had a significant impact on our results for the year, despite continued strong win rates and industry-leading market share,” said CEO Peter Ungaro on the Feb. 8 earnings call.

“Further, the timing of a rebound in our market is uncertain, which has significantly reduced our forward-looking visibility. As a result, we are not able to provide a reasonable range of revenue expectations for the full year of 2017 at this point,” he continued.

Cray had several big installations in 2016 with XC40 systems going to Los Alamos National Laboratory, the National Energy Research Scientific Competing Center in California and Kyoto University in Japan. It also completed the installation of the Pascal-based XC50 system at the Swiss National Supercomputing Centre.

Ungaro said that Cray’s cluster business was shy of projections, but the fourth quarter saw notable installations for a U.S. based aerospace manufacturer, the National Oceanic and Atmospheric Administration, Kyoto University, and a financial services firm. The CEO added that the fourth quarter was a strong one for data analytics and the company’s new Urika-GX platform. It installed two Urika-GX systems at the University of Stuttgart, which will support the aerospace and automotive industries.

Winning new business continues to be a primary goal for Cray. “While we’ve begun to some positive signs in customer activity, it has continued to lag our expectations for the past few quarters, primarily driven by reduced bid activity across the board,” said Ungaro.

The company’s second focus goal is to expand into commercial and big data markets. Cray said that commercial customers have roughly doubled its addressable market, and the company expects the commercial sector to continue to be a significant growth driver going forward. Specifically it sees growth opportunities in energy, manufacturing, financial services, and life sciences.

“We’re taking multiple steps in this area including broadening our product set to be more commercially acceptable, overlying sales and marketing plans to address commercial companies and solutions, and honing our service and support organization to align with commercial company expectations. We’ve done each of these things while also maintaining focus on our traditional, government and academic customers that are at the heart of what we do,” said Cray.

The overall tone struck by Cray as it heads into 2017 is one of cautious optimism.

“We have begun to see some positive signs in the market with new opportunities beginning to open up that were not there a few months ago. However, these opportunities are continuing to evolve slowly, and we haven’t seen this pace accelerate yet. This slowdown in the market is a main driver behind our lack of visibility for the year. We continue to believe that the market is going to rebound, especially at the high end,” said Ungaro.

Cray’s successful fourth quarter has helped to settle the market with several investment firms moving their recommendation from “sell” to “hold” or “buy.” Going into Wednesday’s report, Cray’s shares were at a three and a half year low. By market close on Thursday, the price had jumped 19 percent. But the company still has some work to do to regain investor confidence. The stock has a 12-month low of $16.10 and a 12-month high of $43.79. It is currently trading around $22.