SEATTLE, May 02, 2017 — Global supercomputer leader Cray Inc. (Nasdaq:CRAY) today announced financial results for its first quarter ended March 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.
Revenue for the first quarter of 2017 was $59.0 million, compared to $105.5 million in the first quarter of 2016. Net loss for the first quarter of 2017 was $19.2 million, or $0.48 per diluted share, compared to a net loss of $5.0 million, or $0.13 per diluted share in the first quarter of 2016. Non-GAAP net loss was $28.4 million, or $0.71 per diluted share for the first quarter of 2017, compared to non-GAAP net loss of $5.3 million, or $0.13 per diluted share for the same period of 2016.
Overall gross profit margin on a GAAP and Non-GAAP basis for the first quarter of 2017 was 40%, compared to 38% for the first quarter of 2016.
Operating expenses for the first quarter of 2017 were $56.1 million, compared to $49.2 million for the first quarter of 2016. Non-GAAP operating expenses for the first quarter of 2017 were $53.3 million, compared to $46.3 million for the first quarter of 2016.
As of March 31, 2017, cash, investments and restricted cash totaled $285 million. Working capital at the end of the first quarter was $350 million, compared to $373 million at the end of 2016.
“As expected, we got off to a slower start to the year,” said Peter Ungaro, president and CEO of Cray. “While activity at the high-end of the supercomputing market continues to be relatively slow and our visibility remains limited, our competitive position remains strong. We were recently awarded several significant new contracts in the worldwide weather and climate segment — a market where our leadership position continues to expand. We also released our 2017 revenue outlook today which, driven by the ongoing market conditions, is significantly lower than where we finished 2016. Despite this, we continue to be confident in our ability to drive long-term growth over time.”
Outlook
For 2017, while a wide range of results remains possible, Cray expects revenue to be in the range of $400-$450 million for the year. Revenue in the second quarter of 2017 is expected to be approximately $60 million. GAAP and non-GAAP gross margins for the year are expected to be in the low- to mid-30% range. Non-GAAP operating expenses for 2017 are expected to be roughly flat with 2016 levels. For 2017, 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 $1 million lower than non-GAAP gross profit.
Actual results for any future periods are subject to large fluctuations given the nature of Cray’s business.
Recent Highlights
- In May, Cray announced that it was selected to deliver a Cray CS400system to the Laboratory Computing Resource Center at Argonne National Laboratory. The new 1.5 petaflops Cray system will serve as the Center’s flagship cluster.
- In April, Cray announced that it signed a solutions provider agreement with Mark III Systems, to develop, market and sell solutions that leverage Cray’s portfolio of supercomputing and big data analytics systems.
- In April, Cray completed its office move from downtown St. Paul to The Offices @ MOA in Bloomington, Minnesota. This office is now fully operational, housing more than 350 Cray employees.
- In January, Cray was selected by the GW4 Alliance and The Met Office in the UK to deliver the hardware and support for a new Tier 2 high performance computing service for UK-based scientists. This unique new service will provide multiple advanced architectures within the same system in order to enable evaluation and comparison across a diverse range of processors.
- In the last several months, Cray was awarded significant new contracts to deliver Cray supercomputers and storage systems to multiple leading weather and climate research centers around the world. None of these awards has been announced specifically as of yet.
Conference Call Information
Cray will host a conference call today, Tuesday, May 2, 2017 at 1:30 p.m. PDT (4:30 p.m. EDT) to discuss its first quarter ended March 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 #56308196. To listen to the audio webcast, go to the Investors section of the Cray website atwww.cray.com/company/investors.
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 #56308196. The conference call replay will be available for 72 hours, beginning at 4:45 p.m. PDT on Tuesday, May 2, 2017.
Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission (“SEC”). A reconciliation of U.S. generally accepted accounting principles, or GAAP, to non-GAAP results is included in the financial tables included in this press release. Management believes that the non-GAAP financial measures that we have set forth provide additional insight for analysts and investors and facilitate an evaluation of Cray’s financial and operational performance that is consistent with the manner in which management evaluates Cray’s financial performance. However, these non-GAAP financial measures have limitations as an analytical tool, as they exclude the financial impact of transactions necessary or advisable for the conduct of Cray’s business, such as the granting of equity compensation awards, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Hence, to compensate for these limitations, management does not review these non-GAAP financial metrics in isolation from its GAAP results, nor should investors. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with, or disclosures required by GAAP. These measures are adjusted as described in the reconciliation of GAAP to non-GAAP numbers at the end of this release, but these adjustments should not be construed as an inference that all of these adjustments or costs are unusual, infrequent or non-recurring. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures determined in accordance with GAAP. Investors are advised to carefully review and consider this non-GAAP information as well as the GAAP financial results that are disclosed in Cray’s SEC filings.
Additionally, we have not quantitatively reconciled the non-GAAP guidance measures disclosed under “Outlook” to their corresponding GAAP measures because we do not provide specific guidance for the various reconciling items such as stock-based compensation, adjustments to the provision for income taxes, amortization of intangibles, costs related to acquisitions, purchase accounting adjustments, and gain on significant asset sales, as certain items that impact these measures have not occurred, are out of our control or cannot be reasonably predicted. Accordingly, reconciliations to the non-GAAP guidance measures are not available without unreasonable effort. Please note that the unavailable reconciling items could significantly impact our financial results.
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 www.cray.com for more information.
Source: Cray