15 Aug 2018 Aalborg East - Asetek reported revenue of $19.5 million in the second quarter of 2018, a 75% increase from the second quarter of 2017. First-half 2018 revenue amounted to $33.4 million, representing growth of 48% compared with the first half of 2017. The change from prior year reflects an increase in desktop revenue driven by shipments in the do-it-yourself (DIY) market.
"The growing popularity of PC gaming and eSports fueled growth in DYI sales for our desktop segment and led to record quarter and first-half revenues. While the long-term outlook is strong for the desktop business, we expect a more modest development in the second half of the year", stated Andre Sloth Eriksen, CEO and founder of Asetek.
"For our data centre business, we continue to execute on our strategy of adding new OEM partnerships while increasing end-user adoption with existing ones. Adoption of new technology takes time, and performance will continue to fluctuate as our emerging data center business is maturing", stated Sloth Eriksen.
EBITDA adjusted for share-based compensation expense was $2.9 million in the second quarter of 2018, compared with EBITDA adjusted of $1.1 million in the second quarter of 2017. First-half 2018 EBITDA adjusted was $3.8 million, compared to $1.8 million for the first-half of 2017.
Desktop revenue was $18.3 million in the second quarter, an increase of 80% from the same period of 2017. First half revenue was $31.5 million, an increase of 49% from 2017. Operating profit from the desktop segment was $5.9 million for the second quarter and $9.9 million for the first half, both reflecting improvement over the respective periods of 2017, due to growth in DIY sales.
During the quarter Asetek announced that ASUS, a premium brand for gaming systems, is expanding its Republic of Gamers (ROG) ecosystem utilizing Asetek solutions. The new ASUS ROG all-in-one coolers, Ryujin and Ryuo, are based on Asetek's latest Generation 6 liquid cooling solution and include custom lighting and other features.
Data centre revenue was $1.2 million in the second quarter, an increase of 25% from the same period of 2017. Revenue in the first half of 2018 totaled $1.9 million, an increase of 35% from the same period of 2017. Operating loss from the data center segment was $2.1 million for the second quarter and $4.3 million for the first half of 2018. This compares with losses of $1.6 million and $3.4 million in 2017, respectively. Continued variability of data center operating results is expected while the company secures new OEM partners and growth of end-user adoption through existing OEM partners.
Through partnerships with data center OEMs, the company is growing its end-user adoption with technology deployed to new HPC installations. In the second quarter, Asetek announced it will provide data centre liquid cooling to a new OEM, Quanta Computer, for an HPC cluster at the National Center for High-Performance Computing in Hsinchu, Taiwan. The new HPC installation will focus on artificial intelligence, and will be the largest supercomputer in Taiwan at the time of commission.
During the quarter Asetek received orders for RackCDU liquid cooling solutions from two established data centre OEMs. Penguin submitted a follow-on order for further build-out of an undisclosed U.S. Department of Energy HPC installation, and Fujitsu will utilize 1,300 Asetek Direct-to-Chip (D2C) coolers for a new HPC system installation in Japan.
On June 15, Asetek raised its full year 2018 desktop revenue expectation to a range of 15% to 25% growth over 2017. Desktop revenue variability by quarter is expected to continue, partly due to when new key hardware components such as GPUs and CPUs are made available to the market. As one such major product launch has experienced delays, Asetek's full-year revenue growth may shift towards the lower-end of the guided range. The outlook for the data center business is unchanged, with revenue expected to be level compared with 2017.