Cray Reports Huge Q2'19 Sales Hit As HPE Preps Its Acquisition

Cray's revenue fell sharply over last year as product sales plummeted as the company prepares to be assimilated into HPE in a $1.3-billion deal unveiled in May.


Cray, the supercomputer manufacturer that is in the process of being acquired by Hewlett Packard Enterprise, on Friday reported that its revenue for its second fiscal quarter took a huge year-over-year fall.

HPE in May unveiled a plan to acquire Cray in a $1.3-billion deal to help drive HPE's supercomputing, high performance computing, and artificial intelligence business.

HPE said it will combine Cray's technologies with its own to create future HPC-as-a-service offering as well as AI and machine-learning analytics through the HPE GreenLake consumption-based platform.

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[Related: HPE Acquiring Cray For $1.3 Billion To Drive Supercomputing And AI]

Seattle-based Cray on Friday reported revenue for its second fiscal quarter 2019, which ended June 30, of $69 million, down over 42 percent compared to the $120 million the company reported for its second fiscal quarter 2018.

That included a huge drop in product revenue, which for the second fiscal quarter 2019 was $30 million, down almost 64 percent from the $83 million it reported last year. Services revenue for the quarter, however, rose over 5 percent over last year to reach $39 million.

Cray also reported a net loss for the second fiscal quarter of $43 million, or $1.03 per share, a steep rise from the net loss of $11 million, or 27 cents per share, it reported last year.

Cray at the end of the quarter had working capital of $223 million, down $40 million from the end of its first fiscal quarter.

Cray did not hold a conference call with analysts to discuss the results due to the pending acquisition by HPE.

Cray did not respond to a CRN request for further information.

However, in a statement emailed to CRN, an HPE spokesperson said, “We are confident in this acquisition and excited for Cray to join HPE. The market for high performance computing is strong because of the increasingly massive amounts of data being generated, and our combined world-class teams and technology will help customers analyze that data to solve some of society’s most pressing challenges.”