SEATTLE, Feb. 12, 2019 — Global supercomputer leader Cray Inc. (Nasdaq: CRAY) today announced financial results for the year and fourth quarter ended December 31, 2018.
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 2018, Cray reported total revenue of $456 million, which compares with $393 million in 2017. Net loss for 2018 was $72 million, or $1.76 per diluted share, compared to net loss of $134 million, or $3.33 per diluted share in 2017. Non-GAAP net loss, which adjusts for selected unusual and non-cash items, was $58 million, or $1.42 per diluted share for 2018, compared to non-GAAP net loss of $41 million, or $1.01 per diluted share in 2017.
Revenue for the fourth quarter of 2018 was $163 million, compared to $167 million in the fourth quarter of 2017. Net loss for the fourth quarter of 2018 was $13 million, or $0.33 per diluted share, compared to net loss of $98 million, or $2.42 per diluted share in the fourth quarter of 2017. Non-GAAP net loss was $9 million, or $0.22 per diluted share for the fourth quarter of 2018, compared to non-GAAP net income of $9 million, or $0.22 per diluted share in the fourth quarter of 2017.
Please note, 2017 GAAP results were impacted by both the new U.S. tax law and a change to the valuation allowance held against the Company’s U.S. deferred tax assets. The combined negative impact on the Company’s 2017 GAAP net loss was $103 million and was excluded for non-GAAP purposes.
For 2018, overall gross profit margin on a GAAP and non-GAAP basis was 29%, compared to 33% and 34%, respectively, on a GAAP and non-GAAP basis in 2017.
GAAP operating expenses for 2018 were $204 million, compared to $196 million in 2017. Non-GAAP operating expenses for 2018 were $191 million, compared to $177 million in 2017.
As of December 31, 2018, cash, investments, and restricted cash totaled $246 million. Working capital at the end of 2018 was $291 million, compared to $354 million at December 31, 2017.
“Led by strength in our commercial business, we delivered solid growth for the year,” said Peter Ungaro, president and CEO of Cray. “While our target market continues to show signs of a rebound from its recent lows, 2019 is shaping up to be a transition year as we plan to begin shipping our next generation Shasta platform late this year. Shasta will deliver a balance of performance, flexibility and ease of use unlike anything available today, as well as a true exascale-class architecture capable of scaling well into the future. With continued focus and execution, we are well positioned to expand on our market leadership position and deliver strong long-term growth.”
For 2019, while a wide range of results remains possible, Cray expects revenue to grow modestly compared to 2018. Revenue is expected to be about $70 million for the first quarter of 2019. For 2019, GAAP and non-GAAP gross margins are expected to be in the 30% range, and non-GAAP operating expenses are expected to grow compared to 2018. Based on this outlook, the Company expects to recognize a substantial GAAP and non-GAAP net loss for 2019.
Cray’s effective GAAP and non-GAAP tax rates for 2019 are both expected to be in the low single-digit range.
Actual results for any future periods are subject to large fluctuations given the nature of Cray’s business.
- In November, Vanguard Infrastructures announced it selected the Cray XC supercomputing system as the compute and real-time analytics engine for the new Vanguard Stargate Imaging security scanning solution. The Cray XC was selected because of its exceptional ability to process massive amounts of data at high speed.
- In November, Cray announced support for Intel’s upcoming Cascade Lake advanced performance processors in systems starting in 2019. The Intel Xeon Scalable processors will first be available in Cray’s CS500 line of systems and then, in 2020, on Cray’s new exascale-class systems, code named Shasta.
- In November, Cray announced its Urika AI and Analytics software suites, adding tools that enable data scientists to train artificial intelligence models more accurately and in less time. New features in the Cray Urika-CS and Urika-XC AI and Analytics suites include Cray-developed libraries to intelligently optimize machine learning model settings as well as additional AI tools and frameworks commonly used by data scientists.
- In November, GW4, the Met Office, and Cray announced that the Arm-based supercomputer in Europe, named “Isambard,” is now live in the United Kingdom. It is the largest Arm-based system in the world outside of the US and one of the first systems of its kind to be used for scientific research as well as to explore future computer architectures in the exascale era.
About Cray Inc.
Cray Inc. (Nasdaq:CRAY) combines computation and creativity so visionaries can keep asking questions that challenge the limits of possibility. Drawing on more than 45 years of experience, Cray develops the world’s most advanced supercomputers, pushing the boundaries of performance, efficiency and scalability. Cray continues to innovate today at the convergence of data and discovery, offering a comprehensive portfolio of supercomputers, high-performance storage, data analytics and artificial intelligence solutions. Go to www.cray.com for more information.
Source: Cray Inc.