SEATTLE, Wash., Aug. 3 — Global supercomputer leader Cray Inc. (NASDAQ: CRAY) has announced financial results for the second quarter ended June 30, 2016.

Revenue for the second quarter of 2016 was $100.2 million, which compares with $186.2 million in the second quarter of 2015. Net loss for the second quarter of 2016 was $13.1 million, or $0.33 per diluted share, compared to net income of $5.8 million, or $0.14 per diluted share in the second quarter of 2015. Non-GAAP net loss was $11.4 million, or $0.29 per diluted share for the second quarter of 2016, compared to non-GAAP net income of $12.4 million, or $0.30 per diluted share for the same period of 2015.

Overall gross profit margin on a GAAP and non-GAAP basis for the second quarter of 2016 was 36%, compared to 27% for the second quarter of 2015.

Operating expenses for the second quarter of 2016 were $51.8 million, compared to $40.0 million for the second quarter of 2015. Non-GAAP operating expenses for the second quarter of 2016 were $49.0 million, compared to $37.3 million for the second quarter of 2015. GAAP and non-GAAP operating expenses for the second quarter of 2016 included approximately $2.3 million associated with the Company’s exercising of an early lease termination option.

As of June 30, 2016, cash, investments and restricted cash totaled $224 million. Working capital decreased at the end of the second quarter of 2016 to $381 million compared to $418 million at the end of the first quarter.

Peter Ungaro, president and CEO of Cray, said, “While we had a number of exciting product launches in the second quarter, the drop in our revenue expectations for the second half of the year due to recent developments is extremely disappointing. However, I do not believe that our leadership position in the market has changed. We remain confident in our strategy, competitive position and our ability to drive growth into the future.”

Outlook

For 2016, while a wide range of results remains possible, the Company now expects revenue to be in the range of $650 million. The change in the Company’s revenue outlook was driven by the level and timing of new orders and the delays of key third-party components, the risks of which were outlined last quarter, as well as a very recent electrical smoke event caused by a failed manufacturing facility power component that will delay the Company’s ability to deliver on some customer contracts in 2016, including an impact on anticipated third quarter revenue. Revenue for the third quarter is anticipated to be in the range of $80 million. GAAP and Non-GAAP gross margin for the year is expected to be in the range of 34%. Non-GAAP operating expenses for the year are anticipated to be about $200 million. For 2016, GAAP operating expenses are anticipated to be about $12 million higher than non-GAAP operating expenses, and GAAP gross profit is expected to about $1 million lower than non-GAAP gross profit. Based on this outlook, the Company expects to be profitable on a GAAP and non-GAAP basis for 2016.

Given the Company’s updated outlook for 2016, the effective GAAP and non-GAAP tax rates for the year are now expected to be about 6% and 30%, respectively, but are subject to significant variability.

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

Recent Highlights

• In July, Cray and Deloitte Advisory Cyber Risk Services introduced the first commercially available high-speed, supercomputing threat analytics service, Cyber Reconnaissance and Analytics. The subscription-based offering, which is powered by the Cray Urika-GX and is currently in production, is designed to help organizations effectively discover, understand and take action to defend against cyber adversaries.
• In May, Cray launched the Urika-GX system, the first agile analytics platform that fuses supercomputing technologies with an open, enterprise-ready software framework for big data analytics. The Broad Institute of MIT and Harvard, one of the world’s leading life sciences research centers, is currently using the Urika-GX system for analyzing high-throughput genome sequencing data.
• In June, Cray announced that the US Department of Energy’s Argonne Leadership Computing Facility at Argonne National Laboratory selected a Urika-GX system to perform research in the areas of life science, material science, and machine learning, as well as to support the 2016 ALCF Data Science Program.
• In June, Cray announced that the Academic Center for Computing and Media Studies at Kyoto University in Japan awarded the Company with a contract for a Cray XC40 supercomputer, featuring the Cray DataWarp technology, as well as a Cray CS400 cluster supercomputer. The 5.4 petaflop XC40 system will also include the new Intel Xeon Phi processors, formerly codenamed “Knights Landing”.
• The Centre for Modelling & Simulation (CFMS) in Bristol, UK recently purchased a CS400 cluster supercomputer. The Centre is supported by a consortium of commercial manufacturing companies, including Airbus, BAE Systems, Rolls Royce, MBDA, and Williams F1.

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.

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Source: Cray