Global supercomputer leader Cray Inc. (Nasdaq: CRAY) today announced financial results for the third quarter ended September 30, 2015.
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 third quarter of 2015 was $191.4 million, which compares with $159.4 million in the third quarter of 2014. Net income for the third quarter of 2015 was $10.9 million, or $0.27 per diluted share, compared to net income of $7.4 million, or $0.18 per diluted share in the third quarter of 2014. Non-GAAP net income was $19.5 million, or $0.48 per diluted share for the third quarter of 2015, compared to non-GAAP net income of $10.0 million, or $0.25 per diluted share for the same period last year.
Overall gross profit margin for the third quarter of 2015 was 34%, compared to 30% for the third quarter of 2014. Total non-GAAP gross profit margin for the third quarter of 2015 was 35%, compared to 31% for the third quarter of 2014.
Operating expenses for the third quarter of 2015 were $47.9 million, compared to $43.1 million for the third quarter of 2014. Non-GAAP operating expenses for the third quarter of 2015 were $45.1 million, compared to $39.8 million for the third quarter of 2014.
Cash, investments and restricted cash was $207 million as of September 30, 2015, compared to $103 million as of June 30, 2015. Working capital increased at the end of the third quarter of 2015 to $371 million compared with $355 million at the end of the second quarter.
“We had an excellent quarter as we outperformed our revenue target and delivered strong operating results,” said Peter Ungaro, president and CEO of Cray. “Our momentum in the market continues to build as we were awarded several new contracts around the world. We are also releasing our preliminary 2016 outlook today, with continued expectations for strong growth and increasing profitability. I’m very pleased with our performance this year and where we are at as we head into the final stretch of 2015, as well as with our opportunity to drive continued success into the future.”
A wide range of results remains possible for 2015. A significant portion of our expected fourth quarter revenue is dependent on a few large, complex systems which are currently anticipated to be accepted late in the quarter. Assuming successful acceptance of these systems, we expect revenue to be approximately $715 million for the year. For 2015, non-GAAP gross margin is expected to be in the 30-33% range and total non-GAAP operating expenses are anticipated to be in the range of $180 million. Based on this outlook, we expect our GAAP and non-GAAP operating profit margin to improve significantly for 2015 as compared to 2014.
While it is very early in our 2016 planning process, we currently expect revenue for the year to be in the $825 million range. Revenue is expected to be heavily weighted to the fourth quarter of the year. Non-GAAP gross margin for 2016 is expected to improve and to be in the low-to-mid 30% range. Non-GAAP operating expenses for 2016, when compared to 2015, are anticipated to grow 13-15%. Based on this outlook, we expect to improve our GAAP and non-GAAP operating profit margin for 2016 as compared to 2015.
Our 2015 and 2016 effective non-GAAP tax rate is expected to be about 10%.
Actual results for any future period are subject to large fluctuations and a wide range of results remains possible given the nature of our business.
In October, a new performance benchmark was achieved using the Cray CS-Storm cluster supercomputer andStone Ridge Technology’s ECHELON reservoir simulation software. By leveraging Cray’s unique architecture scaling across multiple GPUs in the Cray CS-Storm, ECHELON is one of the most productive reservoir simulators currently on the market.
In October, Cray announced the creation of the Cray Europe, Middle East and Africa (EMEA) Research Lab based out of Cray’s EMEA headquarters in Bristol, England. The Cray EMEA Research Lab will foster the development of deep technical collaborations with key customers and partners, and will serve as the focal point for the Company’s technical engagements with the European HPC ecosystem.
In September, Cray was awarded a contract to provide a Cray XC40 supercomputer to the Yukawa Institute for Theoretical Physics (YITP) at Kyoto University in Japan. The two-cabinet Cray XC40 system is expected to be delivered in 2015 and will provide the YITP user community with a supercomputer that occupies one-fourth of the physical footprint of the Institute’s previous system and a 4x improvement in overall compute performance.
During the third quarter, a growing list of the world’s leading meteorological centers continued to run their complex, data-intensive climate and weather models on Cray supercomputers. The Swiss National Supercomputing Centre installed a Cray CS-Storm cluster supercomputer to power its operational numerical weather forecasts. In Denmark, the Danish Meteorological Institute (DMI) selected a Cray XC supercomputer and a Cray Sonexion 2000 storage system.
Conference Call Information
Cray will host a conference call today, Thursday, October 29, 2015 at 1:30 p.m. PDT (4:30 p.m. EDT) to discuss its third quarter financial results. To access the call, please dial into the conference at least 10 minutes prior to the beginning of the call at (866) 362-9806. International callers should dial (765) 889-6838 and use the conference ID #66699015. To listen to the audio webcast, go to the Investors section of the Cray website at www.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 #6669905. The conference call replay will be available for 72 hours, beginning at 4:45 p.m. PDT on Thursday, October 29, 2015.
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.