Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

Note 14— Segment Information

The Company has the following reportable segments: Supercomputing (formerly HPC Systems), Storage and Data Management, Maintenance and Support, and Engineering Services and Other. The Company’s reportable segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, who is the Chief Operating Decision Maker, in determining how to allocate the Company’s resources and evaluate performance. The segments are determined based on several factors, including the Company’s internal operating structure, the manner in which the Company’s operations are managed, client base, similar economic characteristics and the availability of separate financial information.

Supercomputing

Supercomputing includes a suite of highly advanced, tightly integrated and cluster supercomputer systems which are used by large research and engineering centers in universities, government laboratories, and commercial institutions. Supercomputing also includes the ongoing maintenance of these systems as well as system analysts.

Storage and Data Management

Storage and Data Management offers Cray Data Warp, Sonexion as well as other third-party storage products and their ongoing maintenance as well as system analysts.

Maintenance and Support

Maintenance and Support provides ongoing maintenance of Cray supercomputers, big data storage and analytics systems, as well as system analysts.

Engineering Services and Other

Included within Engineering Services and Other are the Company’s analytics business and Custom Engineering.

The following table presents revenues and gross margins for the Company’s operating segments for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
Supercomputing	$	60,730		$	156,519		$	216,125		$	370,053
Storage and Data Management	12,330			22,068			50,755			63,736
Maintenance and Support	26,292			23,106			79,862			68,833
Engineering Services and Other	4,391			12,826			16,355			23,429
Elimination of inter-segment revenue	(26,292		)	(23,106		)	(79,862		)	(68,833		)
Total revenue	$	77,451		$	191,413		$	283,235		$	457,218
Gross Profit:
Supercomputing	$	18,322		$	51,590		$	74,893		$	109,639
Storage and Data Management	3,917			8,908			18,091			21,186
Maintenance and Support	8,447			9,174			30,530			30,706
Engineering Services and Other	1,362			5,384			6,740			8,678
Elimination of inter-segment gross profit	(8,447		)	(9,174		)	(30,530		)	(30,706		)
Total gross profit	$	23,601		$	65,882		$	99,724		$	139,503

Revenue and cost of revenue is the only discrete financial information the Company prepares for its segments. Other financial results or assets are not separated by segment.

The Company’s geographic operations outside the United States include sales and service offices in Europe and the Middle East, South America, Asia Pacific and Canada. The following data represents the Company’s revenue for the United States and all other countries, which is determined based upon a customer’s geographic location (in thousands):

	United States				Other Countries				Total
	2016		2015		2016		2015		2016		2015
Three months ended September 30,
Product revenue	$	45,412	$	104,729	$	2,273	$	52,963	$	47,685	$	157,692
Service revenue	19,335		25,955		10,431		7,766		29,766		33,721
Total revenue	$	64,747	$	130,684	$	12,704	$	60,729	$	77,451	$	191,413

	United States				Other Countries				Total
	2016		2015		2016		2015		2016		2015
Nine months ended September 30,
Product revenue	$	101,347	$	232,821	$	86,677	$	135,549	$	188,024	$	368,370
Service revenue	64,080		65,456		31,131		23,392		95,211		88,848
Total revenue	$	165,427	$	298,277	$	117,808	$	158,941	$	283,235	$	457,218

Sales to the U.S. Government totaled approximately $51.4 million and $140.4 million for the three and nine months ended September 30, 2016, respectively, compared to approximately $68.4 million and $196.7 million for the three and nine months ended September 30, 2015, respectively. For the nine months ended September 30, 2016, one non-U.S. Government customer accounted for 12% of total revenue, while revenue in the United Kingdom and Australia accounted for 31% of total revenue. For the nine months endedSeptember 30, 2015, one non-U.S. Government customer located in Saudi Arabia accounted for 12% of total revenue.