Cree’s revenue rises for second consecutive quarter

April 15, 2024
After a string of declines, sales gained again. Meanwhile, the parent firm focuses increasingly on AI and high-performance computing.

Cree LED is looking more than ever like the outlier in the business strategy of parent firm SGH Corp. But that didn’t stop it from gaining financial ground in the second quarter, as revenue rose by 8% compared to the same period a year ago.

The modest increase to $60.1 million from $55.6 million was notable for being the second consecutive like-for-like quarterly gain, following a string of five such declines.

The growth appears to have come from price increases. 

“With the LED demand environment remaining relatively muted in the near term, we continue to manage our Cree LED operations prudently, and are aligning our expenses with current business conditions,” SGH CEO Mark Adams told analysts on a call to discuss the quarter’s performance. “We are optimistic that demand trends will begin to improve, and currently expect revenues to increase sequentially in the third quarter.”

SGH does not break out profits by divisions, which in addition to Cree include two computing groups.

Durham, N.C.–based Cree makes LEDs for video screens, outdoor illumination, horticultural, architectural, automotive, and other applications.

As solid as the recent turn of fortunes seems to be, it comes as SGH focuses its attention increasingly on the computing side of the business, which in the second quarter contributed 79% of the company’s $284.8 million in revenue. Exactly half of that came from the Intelligent Platform Solutions group, a high-performance computing outfit that Adams is intent on positioning for growth as a provider of artificial intelligence hardware, software, and services. 

Another 29% came from the Memory Solutions group, which, as its name implies, provides computer memory components.

It is those two groups, especially Intelligent Platform Solutions, that more and more are shaping SGH’s identity.

In his opening remarks on the analysts call, Adams described the company as one in the midst of a “transformation into a provider of high-performance, high-availability solutions that enterprise customers need to deploy AI on premise, at edge, and in the cloud.” He made several references throughout the call to the “early innings of AI,” and assured analysts that SGH is positioned “to become a leader in this market by working to solve our customers’ most challenging AI infrastructure needs.” 

Computing issues, especially AI, were also very much on the minds of analysts on the call. In nearly 30 minutes of questions-and-answers, none of them asked about LEDs.

Although Cree is not in the corporate spotlight, Adams expressed confidence in the company.

“As a technology and brand leader with a strong intellectual property portfolio, the Cree LED team continues to lead the charge in LED lighting innovation,” he said in a quick review of Cree’s financial numbers. “Given our strong R&D and IP portfolio combined with our capital light outsource model, I’m confident in Cree LED’s competitiveness and prospects for future success.”

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).


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About the Author

Mark Halper | Contributing Editor, LEDs Magazine, and Business/Energy/Technology Journalist

Mark Halper is a freelance business, technology, and science journalist who covers everything from media moguls to subatomic particles. Halper has written from locations around the world for TIME Magazine, Fortune, Forbes, the New York Times, the Financial Times, the Guardian, CBS, Wired, and many others. A US citizen living in Britain, he cut his journalism teeth cutting and pasting copy for an English-language daily newspaper in Mexico City. Halper has a BA in history from Cornell University.