Cray Reports 2017 Full Year and Fourth Quarter Financial Results

February 15, 2018

SEATTLE, Feb. 15, 2018 — Global supercomputer leader Cray Inc. (Nasdaq:CRAY) today announced financial results for the year and fourth quarter ended December 31, 2017.

All figures in this release are based on U.S. GAAP unless otherwise noted.  A reconciliation of GAAP to non-GAAP measures is included in the financial tables in this press release.

For 2017, Cray reported total revenue of $392.5 million, which compares with $629.8 million in 2016. Net loss for 2017 was $133.8 million, or $3.33 per diluted share, compared to net income of $10.6 million, or $0.26 per diluted share in 2016.  Non-GAAP net loss, which adjusts for selected unusual and non-cash items, was $40.5 million, or $1.01 per diluted share for 2017, compared to non-GAAP net income of $19.9 million, or $0.49 per diluted share in 2016.

Revenue for the fourth quarter of 2017 was $166.6 million, compared to $346.6 million in the fourth quarter of 2016.  Net loss for the fourth quarter of 2017 was $97.5 million, or $2.42 per diluted share, compared to net income of $51.8 million, or $1.27 per diluted share in the fourth quarter of 2016.  Non-GAAP net income was $9.2 million, or $0.22 per diluted share for the fourth quarter of 2017, compared to non-GAAP net income of $56.3 million, or $1.38 per diluted share for the same period in 2016.

The Company’s GAAP Net Loss for the fourth quarter and year ended December 31, 2017 was significantly impacted by both the enactment of the Tax Cuts and Jobs Act of 2017 and by its decision to record a valuation allowance against all of its U.S. deferred tax assets.  The combined GAAP impact totaled $103 million.  These items have been excluded for non-GAAP purposes.

For 2017, overall gross profit margin on a GAAP and non-GAAP basis was 33% and 34%, respectively, compared to 35% on a GAAP and non-GAAP basis for 2016.

Operating expenses for 2017 were $196.4 million, compared to $211.1 million in 2016.  Non-GAAP operating expenses for 2017 were $176.5 million, compared to $199.7 million in 2016.  GAAP operating expenses in 2017 included $8.6 million in restructuring charges associated with our recent workforce reduction.

As of December 31, 2017, cash, investments and restricted cash totaled $147 million.  Working capital at the end of the fourth quarter was $354 million, compared to $373 million at December 31, 2016.

“Despite difficult conditions in our core market we finished 2017 strong, highlighted by several large acceptances at multiple sites around the world, including completing the installation of what is now the largest supercomputing complex in India at the Ministry of Earth Sciences,” said Peter Ungaro, president and CEO of Cray.  “As we shift to 2018, we’re seeing signs of a rebound at the high-end of supercomputing as well as considerable growth opportunities in the coming years.  Supercomputing continues to expand in importance to both government and commercial customers, driving growth and competitiveness across many different disciplines and industries.  As the leader at the high-end of the market, we’re poised to play a key role in this growth and I’m excited about where we’re headed.”

For 2018, while a wide range of results remains possible, Cray continues to expect revenue to grow in the range of 10-15% over 2017.  Revenue is expected to be about $50 million for the first quarter of 2018.  For 2018, GAAP and non-GAAP gross margins are expected to be in the low- to mid-30% range.  Non-GAAP operating expenses for 2018 are expected to be in the range of $190 million.  For 2018, non-GAAP adjustments are expected to total about $14 million, driven primarily by share-based compensation.  For the year, GAAP operating expenses are anticipated to be about $12 million higher than non-GAAP operating expenses, and GAAP gross profit is expected to be about $2 million lower than non-GAAP gross profit.

Based on this outlook, Cray’s effective GAAP and non-GAAP tax rates for 2018 are both expected to be in the low-single digit range, on a percentage basis.

Actual results for any future periods are subject to large fluctuations given the nature of Cray’s business.

Recent Highlights

  • In January, Cray announced it had deployed two Cray XC40 supercomputers and two Cray ClusterStor storage systems as part of a $67 million contract with the Ministry of Earth Sciences in India.  The combined systems are the largest supercomputing resource in India and were accepted in late 2017.
  • In December, Cray announced that it has joined the Big Data Center at the Department of Energy’s National Energy Research Scientific Computing Center (NERSC). The collaboration is representative of Cray’s commitment to leverage its supercomputing expertise, technologies, and best practices to advance the adoption of Artificial Intelligence (AI), deep learning, and data-intensive computing.
  • In November, Cray announced that Samsung Electronics Co. Ltd. has purchased a Cray CS-Storm accelerated cluster supercomputer. The Samsung Strategy & Innovation Center procured the system for use in its research into AI and deep learning workloads, including systems for connected cars and autonomous technologies.
  • In November, Cray announced new high performance computing storage solutions including Cray View for ClusterStor – providing customers with dramatically improved job productivity; Cray ClusterStor L300N – a flash-based acceleration solution; and Cray DataWarp for the Cray XC50 supercomputer – exponentially reducing data access time.
  • In November, Cray announced the Company is creating an Arm-based supercomputer with the addition of Cavium ThunderX2 processors to the Cray XC50 supercomputer. Cray customers will have a complete Arm-based supercomputer that features a full software environment, including the Cray Linux Environment, the Cray Programming Environment, and Arm-optimized compilers, libraries, and tools for running today’s supercomputing workloads.
  • In November, Cray announced a comprehensive set of AI products and programs that will empower customers to learn, start, and scale their deep learning initiatives.  These include the new Cray Accel AI lab, new Cray Accel AI offerings, a new Cray Urika-XC analytics software suite, and an AI collaboration agreement with Intel.
  • In December, Cray announced that Catriona Fallon was appointed to Cray’s board of directors.  Fallon is currently the Senior Vice President, Networks Segment at Itron Inc. and was Chief Financial Officer before Itron’s acquisition of Silver Springs Networks in January 2018.

Conference Call Information
Cray will host a conference call today, Thursday, February 15, 2018 at 1:30 p.m. PT (4:30 p.m. ET) to discuss its year and fourth quarter ended December 31, 2017 financial results.  To access the call, please dial into the conference at least 10 minutes prior to the beginning of the call at (855) 894-4205. International callers should dial (765) 889-6838 and use the conference ID #56308204.  To listen to the audio webcast, go to the Investors section of the Cray website at

If you are unable to attend the live conference call, an audio webcast replay will be available in the Investors section of the Cray website for 180 days.  A telephonic replay of the call will also be available by dialing (855) 859-2056, international callers dial (404) 537-3406, and entering the conference ID #56308204.  The conference call replay will be available for 72 hours, beginning at 4:45 p.m. PT on Thursday, February 15, 2018.

About Cray Inc.
Global supercomputing leader Cray Inc. (Nasdaq:CRAY) provides innovative systems and solutions enabling scientists and engineers in industry, academia and government to meet existing and future simulation and analytics challenges.  Leveraging more than 40 years of experience in developing and servicing the world’s most advanced supercomputers, Cray offers a comprehensive portfolio of supercomputers and big data storage and analytics solutions delivering unrivaled performance, efficiency and scalability.  Cray’s Adaptive Supercomputing vision is focused on delivering innovative next-generation products that integrate diverse processing technologies into a unified architecture, allowing customers to meet the market’s continued demand for realized performance. Go to for more information.

Source: Cray Inc.

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