CLOUD

SGI has announced financial results for its fiscal second quarter ended Dec. 27, 2013. Total revenue for the fiscal second quarter was $116 million, which compares with $148 million in the previous quarter and $171 million in the second fiscal quarter of 2013. GAAP net loss for the second quarter was $14 million, or $(0.40) per share, which compares with a GAAP net loss of $7 million, or $(0.20) per share, in the prior quarter, and GAAP net income of $1 million, or $0.03 per share, in the second quarter of fiscal 2013. Non-GAAP net loss for the quarter was $7 million, or $(0.20) per share, which compares with non-GAAP net income of $1 million, or $0.04 per share, in the prior quarter and non-GAAP net income of $3 million, or $0.10 per share, in the year-ago period.

• Core revenue, which includes supercomputing, storage, and services, but excludes revenue related to legacy cloud infrastructure and "low-margin deals" in prior periods, was $107 million, which compares with $132 million in the prior quarter and $133 million in the same quarter a year ago.
• As expected, core revenue in the company's Federal business, which includes U.S. government customers, system integrators, and higher education institutions, was impacted by the October 2013 government shutdown and its after-effects. Federal core revenue was $44 million, down from $76 million in the prior quarter and $65 million in the same quarter one year ago.
• Outside of the Federal business (commercial and non-U.S. public sector), core revenue was $62 million, up 13% from $55 million in the prior quarter and down 8% from $68 million in the same quarter a year ago.
• Revenue related to the legacy cloud, which is generally commodity servers for provisioning cloud infrastructure, was $9 million, which compares with $16 million in the prior quarter and $38 million in the fiscal second quarter of 2013. The company is continuing to exit commoditized legacy account relationships.

"Final results for the quarter were consistent with the preliminary results announced earlier this month, and reflect the impact of the October government shutdown as well as the continued freezing of certain Federal intelligence-related programs," said Jorge Titinger, president and CEO of SGI. "We are extremely proud to provide high-performance compute and storage solutions for a variety of mission-critical Federal government programs, including technology platforms that help to ensure the security of the United States and our allies. We will continue to work closely with current and prospective Federal customers and ecosystem partners to support the government's near-term and long-term IT-related missions and we are confident that our overall Federal business will soon resume its growth trajectory, whether as a result of the reprogramming of currently frozen projects or new programs on behalf of civilian and defense-related customers. In addition, we are now beginning to drive sustainable growth in core revenue outside of Federal. With recent wins for our coherent shared memory UV system in Japan, a big ICE X win in Europe, and a growing list of key software and go-to-market partners, we believe we are well positioned to exploit the growing HPC and Big Data opportunities in the U.S. commercial market and overseas."