No Slowdown in Sight for Supercomputer Maker Cray

By Nicole Hemsoth

October 29, 2014

There are bright skies ahead for supercomputer maker, Cray, which has announced its most recent financial results on the heels of news about a record-breaking international contract for yet another large weather and climate modeling center. The company’s CEO, Pete Ungaro, noted that since their last quarterly statement, Cray has managed to close an additional $250 million in new deals.

According to the company’s Q3 reports, which are often lumpy throughout the year given the nature of procurement and funding cycles, there has been sustained growth bolstered by new deals at home and abroad. Revenue for this quarter was $159.4 million, a marked increase over the same quarter last year. Net income for the quarter hovers at $7.4 million with operational expenses at the $43.1 mark—up from $38 million during the previous year’s results.

The company’s fourth quarter results will be hard to predict since there are still a number of systems in various stages of the acceptance cycles. However, if these are all able to pass acceptance testing, that could move an addition $600 million onto the books for 2014.

While we have already reported on the company’s most recent large-scale systems in the United States, most notably the Trinity supercomputer, they are continuing to make inroads abroad. The most recent example represents the largest deal Cray has ever penned outside the U.S. at $128 million. This contract, which is for multiple new systems over a long-term contract agreement, includes a XC40 for the Met Office in the UK. This is yet another large-scale weather modeling system to complement other Cray systems crunching similar problems at ECMWF and several other weather prediction and climate forecasting centers worldwide.

According to Cray, “in their final configurations, which will include Cray XC40 systems as well as next-generation Cray XC systems with current and future Intel Xeon processors, the Cray supercomputers at the Met Office will have 13 times more supercomputing power than its current systems.” This is a new set of wins at the center, which has traditionally deployed IBM supercomputers in their efforts to provide extensive European weather modeling and prediction services.

As Ungaro stated during the earnings call this week, “It’s really been an incredible run of wins for us. In fact, since the beginning of the year, we’ve been awarded more than $800 million in new awards, an increase to well over 2x where we were at this point last year. And like the U.K. Met award, many of these new contracts are multiyear in scope, contributing to our continued confidence in our ability to grow into the future.”

Cray’s trajectory isn’t marked by these few very large contracts. Rather, they’ve made some notable product and customer waves over the course of the last couple of quarters. This includes, most recently, the formal announcement of the XC40 line of supercomputers with DataWarp technology (more on that in the full specs). They have also diversified their line of offerings with the Urika-XA big data analytics system, which targets Hadoop as opposed to graph analytics on their Urika-GA appliances. For supercomputing customers, they have also rolled out the CS400 supercomputer, in addition to improvements in their Sonexion storage line. The Cray CS-Storm, which is powered with NVIDIA GPUs was announced this summer and we imagine we might see a few systems appear on the Top 500 later next month.

Other recent notable contract wins include a $26 million deal with the DoD’s HPC Modernization program, which will be an XC40 set for installation in late 2014. They have also booked a $13 million contract for another XC40 at the KTH Royal Institute of Technology in Sweden.

As Ungaro noted this week, “While we still have work left to do in the fourth quarter, I’m pleased with where we stand and in our ability to deliver strong results again this year, continuing our growth and momentum in the exciting supercomputing and big data markets.”

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