Cyren Announces First Quarter 2018 Financial Results
Cyren Announces First Quarter 2018 Financial Results
Continued Growth in Enterprise Business; Cyren Achieves Largest-Ever Contract Win
MCLEAN, Va., May 22, 2018 /PRNewswire/ -- Cyren (NASDAQ: CYRN) today announced its first quarter 2018 financial results for the period ending March 31, 2018.
During the first quarter, Cyren grew its enterprise bookings at a rate of 260% compared to the first quarter of 2017. The growth was the result of continued traction with channel partners in Europe and the US, and the company added approximately 60 new enterprise customers and resellers during the period.
The success during the quarter culminated in the signing of the company's largest-ever contract, a three-year multi-million dollar agreement with Microsoft announced in April to extend Cyren's anti-phishing solution to millions of Office 365 enterprise users. Due to the timing of the contract, there was no revenue impact during the first quarter, but it is anticipated to have a material impact on revenue throughout the rest of 2018.
"Cyren had an excellent quarter in terms of new customer and partner acquisition," said Lior Samuelson, CEO and Chairman of the Board at Cyren. "We added several new resellers into the Cyren Cloud Security ecosystem, and we're thrilled to have our anti-phishing technology selected by the world's largest and most well known provider of enterprise email solutions."
First Quarter 2018 Financial Highlights:
-- Revenues for the first quarter of 2018 were $7.6 million, compared to
$8.0 million during the first quarter of 2017.
-- GAAP net loss for the first quarter of 2018 was $5.3 million, compared
to a net loss of $2.5 million in the first quarter of 2017.
-- GAAP loss per basic and diluted share for the first quarter of 2018 was
$0.10, compared to a loss of $0.06 per basic and diluted share for the
first quarter of 2017.
-- Non-GAAP net loss for the first quarter of 2018 was $4.9 million,
compared to a Non-GAAP net loss of $2.4 million for the first quarter of
2017.
-- Non-GAAP loss per basic and diluted share was $0.09 for the first
quarter of 2018, compared to a Non-GAAP loss of $0.06 per share in first
quarter of 2017.
-- Operating cash usage during the first quarter was $4.6 million, compared
to operating cash usage of $1.9 million in the first quarter of 2017.
-- Cash usage, excluding financing activities, during the first quarter of
2018 was $6.0 million, compared to cash usage, excluding financing
activities, of $3.4 million during the first quarter of 2017.
-- Cash balance as of March 31, 2018 was $17.9 million, compared to $13.5
million as of March 31, 2017 and $24.0 million as of December 31, 2017.
For information regarding the non-GAAP financial measures discussed in this release, please see "Use of Non-GAAP Financial Measures" and "Reconciliation of Selected GAAP Measures to Non-GAAP Measures."
Recent Highlights:
-- In January, Cyren announced an agreement with CARVIR, a global cyber
security distributor. CARVIR selected Cyren to provide Cyren Cloud
Security (both Web Security and Email Security) to over 500 MSP partners
and tens of thousands of business customers.
-- Cyren recently announced a strategic partnership and revenue contract
with Meta Networks, a technology leader in secure cloud-native
networking to utilize Cyren DNS and Web Security in Meta's
Network-as-a-Service SD-WAN solution in order to protect enterprise
customers around the world.
-- During Q1, Cyren released version 4.3 of its CCS platform, which adds
email imposter protection, cloud access security with application
control, single sign-on authentication with SAML, and cryptocurrency
mining protection. Cyren's cryptocurrency mining protection is unique in
the industry and introduces a new URL filtering category with the
ability to block sites which exploit the user's device resources (CPU
and RAM), for the purpose of cryptocurrency mining.
-- Cyren's board of directors appointed Lauren Zletz from Warburg Pincus as
a member of the Cyren board, as of May 15, 2018, for an initial term
that will expire at Cyren's next annual shareholders meeting, at which
time, her re-election for an additional term will be brought for
shareholders' approval.
Financial Results Conference Call:
The company will host a conference call at 10 a.m. Eastern Time (5 p.m. Israel Time) on Tuesday, May 22, 2018 to discuss first quarter results.
U.S. Dial-in Number: 1-800-289-0438
Israel Dial-in Number: 1-80-921-2883
International Dial-in Number: 1-323-794-2423
The call will be simultaneously webcast live on the investor relations section of Cyren's website at www.cyren.com/ir.html, or by using the following link: http://public.viavid.com/index.php?id=129687.
For those unable to participate in the live conference call, a replay will be available until June 5, 2018. To access the replay, the U.S. dial in number is 1-844-512-2921 and the non-U.S. dial in number is 1-412-317-6671. Callers will be prompted for replay conference ID number 8346828. An archived version of the webcast will also be available on the investor relations section of the company's website.
About Cyren:
More than 1.3 billion users around the world rely on Cyren's 100% cloud internet security solutions to protect them against cyber attacks and data loss every day. Powered by the world's largest security cloud, Cyren (NASDAQ and TASE: CYRN) delivers fast time to protection from cyber threats with award-winning security as a service for web, email, sandboxing, and DNS for enterprises, and embedded threat intelligence solutions for security vendors and service providers. Customers like Google, Microsoft and Check Point are just a few of the businesses that depend on Cyren every day to power their security. Learn more at www.cyren.com.
Blog: http://blog.cyren.com
Facebook: www.facebook.com/CyrenWeb
LinkedIn: www.linkedin.com/company/cyren
Twitter: www.twitter.com/CyrenInc or www.twitter.com/cyren_ir
Use of Non-GAAP Financial Measures:
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: stock-based compensation expenses, amortization of acquired intangible assets, executive termination costs, deferred taxes and deferred revenues related to acquisitions, one-time gain from sale of investment in affiliate, adjustments to earn-out obligations, capitalization of technology, accretion of discount on convertible note and change in fair value of the embedded conversion feature. The purpose of such adjustments is to give an indication of the company's performance exclusive of non-cash charges and other items that are considered by management to be outside of the company's core operating results. The company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.
Company management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate the business and make operating decisions.
These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. The company believes this adjustment is useful to investors as a measure of the ongoing performance of the business. The company believes these non-GAAP financial measures provide consistent and comparable measures to help investors understand the company's current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it important to make these non-GAAP adjustments available to investors.
This press release contains forward-looking statements, including projections about the company's business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as "expect," "plan," "estimate," "anticipate," or "believe" are forward-looking statements. These statements are based on information available at the time of the press release and the company assumes no obligation to update any of them. The statements in this press release are not guarantees of future performance and actual results could differ materially from current expectations as a result of numerous factors, including business conditions and growth or deterioration in the internet security market, technological developments, products offered by competitors, availability of qualified staff, and technological difficulties and resource constraints encountered in developing new products, as well as those risks described in the company's Annual Reports on Form 20-F and reports on Form 6-K, which are available through www.sec.gov.
Company Contact
Mike Myshrall, CFO
Cyren
+1.703.760.3320
mike.myshrall@cyren.com
Media Contact
Matthew Zintel
Zintel Public Relations
+1.281.444.1590
matthew.zintel@zintelpr.com
CYREN LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of U.S. dollars, except per share amounts)
Three months ended
March 31
--------
2018 2017
---- ----
Unaudited Unaudited
Revenues $7,636 $7,959
Cost of revenues 3,382 3,032
----- -----
Gross profit 4,254 4,927
----- -----
Operating expenses:
Research and
development, net 3,355 2,290
Sales and marketing 4,252 3,573
General and
administrative 2,038 1,563
----- -----
Total operating
expenses 9,645 7,426
Operating loss (5,391) (2,499)
Other income (expense) (2) 1
Financial income
(expense), net 4 (75)
--- ---
Loss before taxes (5,389) (2,573)
Tax benefit (expense) 46 55
--- ---
Net loss $(5,343) $(2,518)
======= =======
Loss per share - basic $(0.10) $(0.06)
====== ======
Loss per share -
diluted $(0.10) $(0.06)
====== ======
Weighted average number of shares outstanding:
Basic 53,381 39,179
====== ======
Diluted 53,381 39,179
====== ======
CYREN LTD.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands of U.S.dollars, except per share amounts)
Three months ended
March 31
--------
2018 2017
---- ----
Unaudited Unaudited
GAAP
operating
loss $(5,391) $(2,499)
Stock-based
compensation
(1) 323 280
Amortization
of
intangible
assets (2) 1,009 1,040
Capitalization
of
technology
(5) (877) (1,126)
---- ------
Non-GAAP
operating
loss $(4,936) $(2,305)
======= =======
GAAP net
loss $(5,343) $(2,518)
Stock-based
compensation
(1) 323 280
Amortization
of
intangible
assets (2) 1,009 1,040
Adjustment
to earn-
out
liabilities
and related
expenses
(3) 27 31
Amortization
of deferred
tax assets
(4) (64) (60)
Capitalization
of
technology
(5) (877) (1,126)
---- ------
Non-GAAP
net loss $(4,925) $(2,353)
======= =======
GAAP loss
per share
(diluted) $(0.10) $(0.06)
Stock-based
compensation
(1) 0.01 0.00
Amortization
of
intangible
assets (2) 0.02 0.03
Adjustment
to earn-
out
liabilities
and related
expenses
(3) 0.00 0.00
Amortization
of deferred
tax assets
(4) (0.00) 0.00
Capitalization
of
technology
(5) (0.02) (0.03)
----- -----
Non-GAAP
loss per
share
(diluted) $(0.09) $(0.06)
====== ======
Numbers of
shares used
in
computing
non-GAAP
loss per
share
(diluted) 53,381 39,179
====== ======
(1) Stock-based compensation
----------------------------
Cost of
revenues $31 $30
Research and
development 91 82
Sales and
marketing 101 55
General and
administrative 100 113
--- ---
$323 $280
==== ====
(2) Amortization of intangible assets
-------------------------------------
Cost of
revenues $852 $874
Sales and
marketing 157 166
--- ---
$1,009 $1,040
====== ======
(3) Adjustment to earn-out liabilities
and related expenses
--------------------------------------
Financial
expenses,
net $27 $31
=== ===
(4) Amortization of deferred tax assets
--------------------------------------
Tax benefit
(expense) $(64) $(60)
==== ====
(5) Capitalization of technology
--------------------------------
Research and
development $(877) $(1,126)
===== =======
CYREN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
March 31 December 31
-------- -----------
2018 2017
---- ----
Unaudited Audited
Assets
Current Assets:
Cash and
cash
equivalents $17,940 $23,981
Trade
receivables,
net 2,261 2,890
Deferred
commissions 990 -
Prepaid
expenses
and other
receivables 2,017 1,339
----- -----
Total
current
assets 23,208 28,210
------ ------
Long-term
deferred
commissions 327 -
Lease
deposits 603 379
Severance
pay fund 640 714
Property and
equipment,
net 3,185 2,787
Intangible
assets, net 10,994 11,018
Goodwill 21,521 21,128
Total long-
term assets 37,270 36,026
------ ------
Total assets $60,478 $64,236
======= =======
Liabilities and Shareholders' Equity
Current Liabilities:
Trade
payables $1,000 $1,017
Employees
and payroll
accruals 3,183 3,239
Accrued
expenses
and other
liabilities 1,038 1,012
Earn-out
consideration 3,717 3,588
Deferred
revenues 4,485 5,032
Total
current
liabilities 13,423 13,888
------ ------
Deferred
revenues 562 524
Deferred tax
liability 1,341 1,355
Accrued
severance
pay 864 930
Other
liabilities 507 438
Total long-
term
liabilities 3,274 3,247
----- -----
Shareholders'
equity 43,781 47,101
------ ------
Total
liabilities
and
shareholders'
equity $60,478 $64,236
======= =======
CYREN LTD.
CONDENSED CONSOLIDATED CASH FLOW DATA
(in thousands of U.S. dollars)
Three months ended
March 31
--------
2018 2017
---- ----
Cash flows from
operating
activities: Unaudited Unaudited
Net loss $(5,343) $(2,518)
Adjustments to reconcile net loss to net
cash used in operating activities:
----------------------------------------
Depreciation 455 275
Stock-based
compensation 323 280
Amortization of
intangible
assets 1,009 1,040
Amortization of
deferred
commissions 318 -
Other expenses
related to the
earn-out
consideration 27 31
Deferred taxes (47) (53)
Changes in assets and liabilities:
----------------------------------
Trade
receivables 587 25
Prepaid expenses
and other
receivables (659) (396)
Deferred
commissions (328) -
Change in long-
term lease
deposits (223) (22)
Trade payables (39) 90
Employees and
payroll
accruals,
accrued
expenses and
other
liabilities (252) (218)
Deferred
revenues (509) (489)
Accrued
severance pay,
net 8 30
Other long-term
liabilities 61 -
Net cash used in
operating
activities (4,612) (1,925)
Cash flows from investing activities:
Capitalization
of technology,
net of grants
received (662) (1,126)
Purchase of
property and
equipment (822) (354)
Net cash used in
investing
activities (1,484) (1,480)
Cash flows from financing activities:
Proceeds from
convertible
note - 6,300
Proceeds from
options
exercised 19 6
---
Net cash
provided by
financing
activities 19 6,306
Effect of
exchange rate
changes on cash 36 16
Increase
(decrease) in
cash and cash
equivalents (6,041) 2,917
Cash and cash
equivalents at
the beginning
of the period 23,981 10,621
------ ------
Cash and cash
equivalents at
the end of the
period $17,940 $13,538
======= =======
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SOURCE Cyren
