SGI reports Q1 results, posts loss

Will UV help or hinder?

Yesterday SGI announced financial results for the first fiscal quarter of 2010 (you’ll recall that they’ve shifted their fiscal year). Revenue was up over 100% from last quarter, and as I noted in coverage of those results, is more in line with what one might expect from a union of mostly non-overlapping product lines. The dramatic rise in income is welcomed, but it wasn’t enough to prevent the loss of about $18M in the quarter

SGI logoQ1 GAAP revenue was $100.1 million, compared to $58.4 million in the prior quarter and $65.1 million in the comparable year ago quarter. Non-GAAP revenue was $122.7 million, compared to $60.5 million in the prior quarter. The company did not report non-GAAP revenue in the comparable year ago quarter. On a sequential basis, GAAP revenue grew by 71% and non-GAAP revenue grew by 103%.

Gross margin was also up to 22.3% from 8.7% in the prior quarter.

“SGI delivered a solid quarter in terms of revenue, gross margin and operations. We increased revenue by 103% and expanded gross margin up to a record 28.4%, both on a non-GAAP basis,” stated Mark J. Barrenechea, president and CEO of SGI. “Operationally, our integration is ahead of schedule in most key areas. We also introduced new products that could expand our addressable market by over $1.7 billion while investing for long-term growth.”

That growth in new products is going to be a significant challenge for the company. They’ve got to tap some of that potential and prove they can produce, service, and sell a product line that is very diverse, and very complex. Sources inside the company have continually complained in recent months that they have no idea when new products are going to be announced, and often get the news first from press releases.

A major announcement coming soon

On the HPC side of their business the company has started hinting at a major announcement to come during SC09. While the company isn’t publicly talking about what the news might be, it is reasonable to expect it will be related to Ultraviolet, the x86-based version of their big ccNUMA shared memory product line. UV is anticipated to offer customers hardware-supported shared memory at large scale with a much lower price premium than the previous generation of Itanium-based shared memory systems.

SGI has been developing this system for years under the leadership of CTO Eng Lim Goh, and the question now is whether they have taken so long to get out  of the gate with a working system that the market has moved past the technology. If it hasn’t, SGI stands to regain some of its preeminence as an innovator in HPC and put some shine back on the star.

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  2. [...] (not in the release; you’ll have to go to the SEC filing for that number). This is on top of a loss of $18M in Q1. Q2 GAAP revenue was $94.1 million, compared to $100.1 million in the prior quarter and $38.8 [...]

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