Cyren Announces Third Quarter 2018 Financial Results
MCLEAN, Va., Nov. 14, 2018 /PRNewswire/ -- Cyren (NASDAQ: CYRN) today announced its third quarter 2018 financial results for the period ending September 30, 2018.
During the third quarter, Cyren reported quarterly revenues of $9.6 million - an increase of 26% over the third quarter of 2017. During the quarter, enterprise bookings were up 189% over the third quarter of 2017, and year-to-date, enterprise bookings are up 223% over the same period during the prior year.
"We are delighted with our financial results and continued success during the third quarter," said Lior Samuelson, CEO and Chairman of the Board at Cyren. "This is the second straight quarter of record quarterly revenues, driven primarily by the growth in demand for our anti-phishing technology and enterprise email security on our Cyren Cloud Security platform."
Third Quarter 2018 Financial Highlights:
-- Revenues for the third quarter of 2018 were $9.6 million, compared to
$7.6 million during the third quarter of 2017, and $9.2 million last
quarter. This translates to an increase of 26% year-over-year, and 4%
quarterly sequential revenue growth.
-- GAAP net loss for the third quarter of 2018 was $4.4 million, compared
to a net loss of $3.4 million in the third quarter of 2017, and $4.2
million last quarter.
-- GAAP loss per basic and diluted share for the third quarter of 2018 was
$0.08, compared to a loss of $0.09 per basic and diluted share for the
third quarter of 2017, and $0.08 last quarter.
-- Non-GAAP net loss for the third quarter of 2018 was $3.3 million,
compared to a Non-GAAP net loss of $3.3 million for the third quarter of
2017, and $3.5 million last quarter.
-- Non-GAAP loss per basic and diluted share was $0.06 for the third
quarter of 2018, compared to a Non-GAAP loss of $0.09 per share in third
quarter of 2017, and $0.07 last quarter.
-- Operating cash usage during the third quarter of 2018 was $2.6 million,
compared to operating cash usage of $0.5 million during the third
quarter of 2017.
-- Net cash flow for the third quarter of 2018 was negative $3.1 million,
compared to negative $1.7 million during the third quarter of 2017.
-- Total cash, cash equivalents and restricted cash as of September 30,
2018 was $14.1 million, compared to $10.2 million as of September 30,
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 Business Highlights:
-- In August Cyren signed its largest enterprise deal to date - a
multi-year, multi-million dollar contract to provide managed email
security to a multi-national industrial conglomerate with over 80,000
employees. Cyren's CCS platform was chosen in a competitive bake-off RFP
process over other leading email security vendors.
-- In September, Cyren launched its GoCloud Partner Program, which is the
company's new global channel program that provides resellers, managed
service providers, and distributors with the opportunity to predictably
grow recurring revenue streams through 100% cloud security products. The
company also announced the program's first major distributor, Arrow
Electronics, will partner to enable resellers to sell Cyren cloud
security products throughout the US and Canada.
-- During the third quarter, Cyren added over 60 new enterprise customers
onto its CCS email and web security platform. Average new order size and
annual contract value for new customers grew over 190% compared to the
third quarter of 2017.
-- Since the beginning of the third quarter, Cyren renewed and expanded
four of its top ten Threat Intelligence Services contracts for
extensions ranging up to three years. These companies have been
customers of Cyren for an average of 12 years, and together represent
annual contract value of over $6.6 million.
In September Cyren filed a shelf registration statement on Form F-3. Cyren intends to continue to make investments to support its business growth and will likely require additional funds to respond to business challenges, including the need to develop new features to enhance our services and products and improve our operating infrastructure. Accordingly, Cyren may need to engage in equity or debt financings to secure additional funds. The registration statement is intended to give Cyren additional flexibility to access the capital markets on a timely and cost effective basis and enables the company to raise up to $50 million in equity or debt over the next three years.
Financial Results Conference Call:
The company will host a conference call at 10 a.m. Eastern Time (5 p.m. Israel Time) on Wednesday, November 14, 2018 to discuss third quarter results.
U.S. Dial-in Number: 1-888-394-8218
Israel Dial-in Number: 1-80-921-2883
International Dial-in Number: 1-323-701-0225
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=132021.
For those unable to participate in the live conference call, a replay will be available until November 28, 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 8958782. An archived version of the webcast will also be available on the investor relations section of the company's website at http://ir.cyren.com/events.
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
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, and deferred taxes 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 Nine months ended
September 30 September 30
---
2018 2017 2018 2017
---
Unaudited
Unaudited
Unaudited
Unaudited
Revenues $9,562 $7,561 $26,388 $23,277
Cost of revenues 3,670 2,891 10,684 8,722
---
Gross profit 5,892 4,670 15,704 14,555
---
Operating expenses:
Research and
development, net 4,336 2,286 11,355 6,929
Sales and marketing 3,931 4,071 12,133 11,395
General and
administrative 2,166 1,731 6,151 4,973
---
Total operating
expenses 10,433 8,088 29,639 23,297
Operating loss (4,541) (3,418) (13,935) (8,742)
Other income
(expense), net (17) 451
Financial income
(expense), net 7 (58) (91) (263)
---
Loss before taxes (4,534) (3,476) (14,043) (8,554)
Tax benefit 107 51 201 148
---
Net loss $(4,427) $(3,425) $(13,842) $(8,406)
Loss per share -
basic $(0.08) $(0.09) $(0.26) $(0.21)
Loss per share -
diluted $(0.08) $(0.09) $(0.26) $(0.21)
Weighted average number of shares outstanding:
Basic 53,679 39,229 53,503 39,205
===
Diluted 53,679 39,229 53,503 39,205
===
CYREN LTD.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands of U.S.dollars, except per share amounts)
Three months ended Nine months ended
September 30 September 30
---
2018 2017 2018 2017
---
Unaudited
Unaudited
Unaudited
Unaudited
GAAP operating loss $(4,541) $(3,418) $(13,935) $(8,742)
Stock-based compensation (1) 358 248 1,031 809
Amortization of intangible
assets (2) 1,060 932 3,157 2,891
Capitalization of technology
(6) (242) (995) (1,886) (2,716)
---
Non-GAAP operating loss $(3,365) $(3,233) $(11,633) $(7,758)
GAAP net loss $(4,427) $(3,425) $(13,842) $(8,406)
Stock-based compensation (1) 358 248 1,031 809
Amortization of intangible
assets (2) 1,060 932 3,157 2,891
Adjustment to earn-out
liabilities (3) 23 27 75 91
Amortization of deferred tax
assets (4) (62) (65) (188) (186)
Gain from sale of investment
in affiliate (5) (450)
Capitalization of technology
(6) (242) (1,026) (1,886) (2,765)
Accretion of discount on
convertible note (7) 159 330
Change in fair value of
embedded conversion feature
on convertible note (8) (198) (465)
Non-GAAP net loss $(3,290) $(3,348) $(11,653) $(8,151)
GAAP loss per share (diluted) $(0.08) $(0.09) $(0.26) $(0.21)
Stock-based compensation (1) 0.00 0.01 0.02 0.02
Amortization of intangible
assets (2) 0.02 0.03 0.06 0.09
Adjustment to earn-out
liabilities (3) 0.00 0.00 0.00 0.00
Amortization of deferred tax
assets (4) (0.00) 0.00 (0.00) 0.00
Gain from sale of investment
in affiliate (5) 0.00 0.00 0.00 (0.01)
Capitalization of technology
(6) (0.00) (0.03) (0.04) (0.08)
Accretion of discount on
convertible note (7) 0.00 0.00 0.00 0.00
Change in fair value of
embedded conversion feature
on convertible note (8) 0.00 (0.01) 0.00 (0.01)
---
Non-GAAP loss per share
(diluted) $(0.06) $(0.09) $(0.22) $(0.20)
Numbers of shares used in
computing non-GAAP loss per
share (diluted) 53,679 39,229 53,503 39,205
===
(1) Stock-based compensation
---
Cost of revenues $48 $17 $124 $76
Research and development 105 61 297 228
Sales and marketing 96 67 293 180
General and administrative 109 103 317 325
---
$358 $248 $1,031 $809
(2) Amortization of intangible assets
---
Cost of revenues $907 $759 $2,692 $2,384
Sales and marketing 153 173 465 507
---
$1,060 $932 $3,157 $2,891
(3) Adjustment to earn-out liabilities and related
expenses
---
Financial expenses, net $23 $27 $75 $91
(4) Amortization of deferred tax assets
---
Tax benefit (expense) $(62) $(65) $(188) $(186)
(5) Gain from sale of investment in affiliate
---
Other Income
$ -
$ -
$ - $(450)
(6) Capitalization of technology
---
Research and development $(242) $(995) $(1,886) $(2,716)
Financial expenses, net (31) (49)
$(242) $(1,026) $(1,886) $(2,765)
(7) Accretion of discount on convertible note
---
Financial expenses, net
$ - $159
$ - $330
(8) Change in fair value of embedded conversion feature on
convertible note
---
Financial expenses, net
$ - $(198)
$ - $(465)
CYREN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
September 30
December 31
---
2018 2017
Unaudited
Audited
Assets
Current Assets:
Cash and cash equivalents $13,527 $23,981
Trade receivables, net 3,304 2,890
Deferred commissions 854 -
Prepaid expenses and other receivables 1,708 1,339
Total current assets 19,393 28,210
Long-term deferred commissions 1,748 -
Lease deposits 847 379
Severance pay fund 501 714
Property and equipment, net 4,353 2,787
Intangible assets, net 9,649 11,018
Goodwill 20,718 21,128
Total long-term assets 37,816 36,026
Total assets $57,209 $64,236
===
Liabilities and Shareholders' Equity
Current Liabilities:
Trade payables $1,362 $1,017
Employees and payroll accruals 3,823 3,239
Accrued expenses and other liabilities 1,123 1,012
Earn-out consideration 2,947 3,588
Deferred revenues 8,033 5,032
Total current liabilities 17,288 13,888
Deferred revenues 563 524
Deferred tax liability 1,174 1,355
Accrued severance pay 597 930
Other liabilities 501 438
Total long-term liabilities 2,835 3,247
Shareholders' equity 37,086 47,101
Total liabilities and shareholders' equity $57,209 $64,236
===
CYREN LTD.
CONDENSED CONSOLIDATED CASH FLOW DATA
(in thousands of U.S. dollars)
Three months ended Nine months ended
September 30 September 30
---
2018 2017 2018 2017
---
Cash flows from
operating activities:
Unaudited
Unaudited
Unaudited
Unaudited
Net loss $(4,427) $(3,425) $(13,842) $(8,406)
Adjustments to reconcile loss to net cash used in
operating activities:
---
Loss on disposal of
property and
equipment 14 1
Depreciation 438 311 1,434 866
Stock-based
compensation 358 248 1,031 809
Amortization of
intangible assets 1,060 932 3,157 2,891
Amortization of
deferred commissions 445 1,005 -
Accretion of discount
on convertible note 159 330
Change in fair value
of embedded
conversion feature on
convertible note (198) (465)
Other income related
to investment in
affiliate (450)
Other expenses related
to the earn-out
consideration 23 27 75 91
Deferred taxes (57) (51) (152) (146)
Changes in assets and liabilities:
---
Trade receivables (607) 757 (292) 368
Prepaid expenses and
other receivables 306 203 (392) (646)
Deferred commissions (954) (1,797) -
Change in long-term
lease deposits 5 (89) (110) (94)
Trade payables 375 72 306 81
Employees and payroll
accruals, accrued
expenses and other
liabilities 346 (272) 677 (64)
Deferred revenues 110 790 3,040 244
Accrued severance pay,
net 21 13 (120) 66
Other long-term
liabilities 1 71 -
Net cash used in
operating activities (2,557) (523) (5,895) (4,524)
Cash flows from investing activities:
Proceeds from sale of
investment in
affiliate 450
Capitalization of
technology, net of
grants received (384) (782) (1,844) (2,244)
Purchase of property
and equipment (1,156) (345) (2,989) (818)
Net cash used in
investing activities (1,540) (1,127) (4,833) (2,612)
Cash flows from financing activities:
Proceeds from
convertible note 6,300
Payment of earnout
liability (604) -
Proceeds from options
exercised 984 8 1,276 75
Net cash provided by
financing activities 984 8 672 6,375
Effect of exchange
rate changes on cash,
cash equivalents and
restricted cash 12 (11) (39) 77
Decrease in cash, cash
equivalents and
restricted cash (3,101) (1,653) (10,095) (684)
Cash, cash equivalents
and restricted cash
at the beginning of
the period 17,234 11,815 24,228 10,846
---
Cash, cash equivalents
and restricted cash
at the end of the
period $14,133 $10,162 $14,133 $10,162
Reconciliation of cash, cash equivalents and
restricted cash as shown in the consolidated
statements of cash flow:
Cash and cash
equivalents $13,527 $9,919 $13,527 $9,919
Restricted cash
included in long-
term restricted lease
deposits 606 243 606 243
---
Total cash, cash
equivalents and
restricted cash $14,133 $10,162 $14,133 $10,162
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