MCLEAN, Va., Aug. 8, 2018 /PRNewswire/ -- Cyren (NASDAQ:
CYRN) today announced its second quarter 2018 financial results for
the period ending June 30, 2018.
During the second quarter, Cyren reported its highest ever
quarterly revenues of $9.2 million –
an increase of 20% over the first quarter 2018, and 18% over the
second quarter 2017.
The growth was driven primarily by a large contract expansion
with Microsoft, and double digit growth in the enterprise
business. As previously announced, Microsoft has partnered
with Cyren to integrate its anti-phishing technology into Office
365 in order to protect millions of enterprise users in real-time
from the latest phishing attacks. Bookings from enterprise
accounts, excluding Microsoft, were up 277% over the second quarter
of 2017, while enterprise revenue recognition during the second
quarter grew by 43% year-over-year.
"We are extremely pleased with our financial results during the
second quarter," said Lior
Samuelson, CEO and Chairman of the Board at Cyren. "It's
rewarding to see that our hard work and product innovation
translated to record revenue growth during the quarter. We
look forward to a strong second half of 2018."
Second Quarter 2018 Financial Highlights:
- Revenues for the second quarter of 2018 were $9.2 million, compared to $7.8 million during the second quarter of 2017,
and $7.6 million last quarter.
This translates to an increase of 18% year-over-year and 20%
quarter-over-quarter.
- GAAP net loss for the second quarter of 2018 was $4.3 million, compared to a net loss of
$2.5 million in the second quarter of
2017, and $5.3 million last
quarter.
- GAAP loss per basic and diluted share for the second quarter of
2018 was $0.08, compared to a loss of
$0.06 per basic and diluted share for
the second quarter of 2017, and $0.10
last quarter.
- Non-GAAP net loss for the second quarter of 2018 was
$3.7 million, compared to a Non-GAAP
net loss of $2.3 million for the
second quarter of 2017, and $4.9
million last quarter.
- Non-GAAP loss per basic and diluted share was $0.07 for the second quarter of 2018, compared to
a Non-GAAP loss of $0.06 per share in
second quarter of 2017, and $0.09
last quarter.
- Operating cash flow during the second quarter of 2018 was
$0.9 million, compared to operating
cash usage of $1.8 million during the
second quarter of 2017.
- Net cash flow for the second quarter of 2018 was negative
$1.3 million, compared to negative
$2.0 million during the second
quarter of 2017.
- Cash balance as of June 30, 2018
was $16.6 million, compared to
$11.6 million as of June 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 April, the company announced a major contract expansion with
Microsoft to integrate Cyren anti-phishing services directly into
Office 365 and Exchange Online platforms. This was a material
contract expansion, which is valued at over $20 million to Cyren over three years.
- Since the beginning of the second quarter, Cyren has added
approximately 60 new enterprise customers onto its CCS email and
web security platform. This includes a large multi-national
software company where Cyren was selected to protect tens of
thousands of email users on over 170 enterprise domains.
- At the beginning of Q2, Cyren announced several major product
enhancements to its award winning CCS platform. The latest release
includes Cyren's innovative cryptocurrency mining detection
capability, advanced email security imposter detection, and cloud
access security shadow IT visibility and control.
Financial Results Conference Call:
The company will host a conference call at 10 a.m. Eastern Time (5
p.m. Israel Time) on Wednesday,
August 8, 2018 to discuss second quarter results.
U.S. Dial-in
Number:
|
1-866-548-4713
|
Israel Dial-in
Number:
|
1-80-921-2883
|
International
Dial-in Number:
|
1-323-794-2093
|
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=130666.
For those unable to participate in the live conference call, a
replay will be available until August 22,
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 2356705.
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
|
|
Six months
ended
|
June
30
|
|
June
30
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Revenues
|
$
9,190
|
|
$
7,757
|
|
$
16,826
|
|
$
15,716
|
Cost of
revenues
|
3,632
|
|
2,799
|
|
7,014
|
|
5,831
|
Gross
profit
|
5,558
|
|
4,958
|
|
9,812
|
|
9,885
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
3,664
|
|
2,353
|
|
7,019
|
|
4,643
|
Sales and
marketing
|
4,202
|
|
3,751
|
|
8,454
|
|
7,324
|
General and
administrative
|
1,947
|
|
1,679
|
|
3,985
|
|
3,242
|
Total operating
expenses
|
9,813
|
|
7,783
|
|
19,458
|
|
15,209
|
Operating
loss
|
(4,255)
|
|
(2,825)
|
|
(9,646)
|
|
(5,324)
|
Other
income
|
(15)
|
|
450
|
|
(17)
|
|
451
|
Financial expense,
net
|
(102)
|
|
(130)
|
|
(98)
|
|
(205)
|
Loss before
taxes
|
(4,372)
|
|
(2,505)
|
|
(9,761)
|
|
(5,078)
|
Tax benefit
(expense)
|
48
|
|
42
|
|
94
|
|
97
|
|
Net
loss
|
$
(4,324)
|
|
$
(2,463)
|
|
$
(9,667)
|
|
$
(4,981)
|
|
Loss per share -
basic
|
$
(0.08)
|
|
$
(0.06)
|
|
$
(0.18)
|
|
$
(0.06)
|
Loss per share -
diluted
|
$
(0.08)
|
|
$
(0.06)
|
|
$
(0.18)
|
|
$
(0.06)
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
53,446
|
|
39,179
|
|
53,414
|
|
39,135
|
Diluted
|
53,446
|
|
39,179
|
|
53,414
|
|
39,135
|
CYREN
LTD.
|
RECONCILIATION OF
SELECTED GAAP MEASURES TO NON-GAAP MEASURES
|
(in thousands
of U.S.dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30
|
|
June
30
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
GAAP operating
loss
|
$
(4,255)
|
|
$
(2,825)
|
|
$
(9,646)
|
|
$
(5,324)
|
Stock-based
compensation (1)
|
350
|
|
280
|
|
673
|
|
561
|
Amortization of
intangible assets (2)
|
1,088
|
|
1,040
|
|
2,097
|
|
1,959
|
Capitalization of
technology (6)
|
(767)
|
|
(1,126)
|
|
(1,644)
|
|
(1,721)
|
Non-GAAP operating
loss
|
$
(3,584)
|
|
$
(2,631)
|
|
$
(8,520)
|
|
$
(4,525)
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
$
(4,324)
|
|
$
(2,463)
|
|
$
(9,667)
|
|
$
(4,981)
|
Stock-based
compensation (1)
|
350
|
|
280
|
|
673
|
|
561
|
Amortization of
intangible assets (2)
|
1,088
|
|
1,040
|
|
2,097
|
|
1,959
|
Adjustment to
earn-out liabilities (3)
|
25
|
|
33
|
|
52
|
|
64
|
Amortization of
deferred tax assets (4)
|
(62)
|
|
(60)
|
|
(126)
|
|
(121)
|
Gain from sale of
investment in affiliate (5)
|
-
|
|
-
|
|
-
|
|
(450)
|
Capitalization of
technology (6)
|
(767)
|
|
(1,126)
|
|
(1,644)
|
|
(1,739)
|
Accretion of discount
on convertible note (7)
|
-
|
|
-
|
|
-
|
|
171
|
Change in fair value
of embedded conversion feature on convertible note (8)
|
-
|
|
-
|
|
-
|
|
(267)
|
Non-GAAP net
loss
|
$
(3,690)
|
|
$
(2,296)
|
|
$
(8,615)
|
|
$
(4,803)
|
|
|
|
|
|
|
|
|
GAAP loss per share
(diluted)
|
$
(0.08)
|
|
$
(0.06)
|
|
$
(0.18)
|
|
$
(0.13)
|
Stock-based
compensation (1)
|
0.00
|
|
0.00
|
|
0.01
|
|
0.01
|
Amortization of
intangible assets (2)
|
0.02
|
|
0.03
|
|
0.04
|
|
0.06
|
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)
|
(0.01)
|
|
(0.03)
|
|
(0.03)
|
|
(0.05)
|
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
|
|
0.00
|
|
0.00
|
|
0.00
|
Non-GAAP loss per
share (diluted)
|
$
(0.07)
|
|
$
(0.06)
|
|
$
(0.16)
|
|
$
(0.12)
|
|
|
|
|
|
|
|
|
Numbers of shares
used in computing non-GAAP loss per share (diluted)
|
53,446
|
|
39,179
|
|
53,414
|
|
39,179
|
|
|
|
|
|
|
|
|
(1) Stock-based
compensation
|
|
|
|
|
|
|
|
Cost of
revenues
|
$
45
|
|
$
29
|
|
$
76
|
|
$
59
|
Research and
development
|
101
|
|
85
|
|
192
|
|
167
|
Sales and
marketing
|
96
|
|
58
|
|
197
|
|
113
|
General and
administrative
|
108
|
|
109
|
|
208
|
|
222
|
|
$
350
|
|
$
281
|
|
$
673
|
|
$
561
|
(2) Amortization
of intangible assets
|
|
|
|
|
|
|
|
Cost of
revenues
|
$
933
|
|
$
751
|
|
$
1,785
|
|
$
1,625
|
Sales and
marketing
|
155
|
|
168
|
|
312
|
|
334
|
|
$
1,088
|
|
$
919
|
|
$
2,097
|
|
$
1,959
|
(3) Adjustment to
earn-out liabilities and related expenses
|
|
|
|
|
|
|
|
Financial expenses,
net
|
$
25
|
|
$
33
|
|
$
52
|
|
$
64
|
|
|
|
|
|
|
|
|
(4) Amortization
of deferred tax assets
|
|
|
|
|
|
|
|
Tax benefit
(expense)
|
$
(62)
|
|
$
(61)
|
|
$
(126)
|
|
$
(121)
|
|
|
|
|
|
|
|
|
(5) Gain from sale
of investment in affiliate
|
|
|
|
|
|
|
|
Other
Income
|
$
-
|
|
$
(450)
|
|
$
-
|
|
$
(450)
|
|
|
|
|
|
|
|
|
(6) Capitalization
of technology
|
|
|
|
|
|
|
|
Research and
development
|
$
(767)
|
|
$
(595)
|
|
$
(1,644)
|
|
$
(1,721)
|
Financial expenses,
net
|
-
|
|
(18)
|
|
-
|
|
(18)
|
|
$
(767)
|
|
$
(613)
|
|
$
(1,644)
|
|
$
(1,739)
|
|
|
|
|
|
|
|
|
(7) Accretion of
discount on convertible note
|
|
|
|
|
|
|
|
Financial expenses,
net
|
$
-
|
|
$
171
|
|
$
-
|
|
$
171
|
|
|
|
|
|
|
|
|
(8) Change in fair
value of embedded conversion feature on convertible
note
|
|
|
|
|
|
|
|
Financial expenses,
net
|
$
-
|
|
$
(267)
|
|
$
-
|
|
$
(267)
|
CYREN
LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
June
30
|
|
December
31
|
|
2018
|
|
2017
|
|
Unaudited
|
|
Audited
|
|
|
|
|
Assets
|
|
|
|
Current Assets:
|
|
|
|
Cash and cash
equivalents
|
$
16,627
|
|
$
23,981
|
Trade receivables,
net
|
2,659
|
|
2,890
|
Deferred
commissions
|
1,054
|
|
-
|
Prepaid expenses and
other receivables
|
2,015
|
|
1,339
|
Total current
assets
|
22,355
|
|
28,210
|
|
|
|
|
Long-term deferred
commissions
|
284
|
|
-
|
Lease
deposits
|
853
|
|
379
|
Severance pay
fund
|
497
|
|
714
|
Property and
equipment, net
|
3,626
|
|
2,787
|
Intangible assets,
net
|
10,478
|
|
11,018
|
Goodwill
|
20,758
|
|
21,128
|
Total long-term
assets
|
36,496
|
|
36,026
|
Total
assets
|
$
58,851
|
|
$
64,236
|
|
(4,751.48)
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
Current Liabilities:
|
|
|
|
Trade
payables
|
$
976
|
|
$
1,017
|
Employees and payroll
accruals
|
3,500
|
|
3,239
|
Accrued expenses and
other liabilities
|
1,249
|
|
1,012
|
Earn-out
consideration
|
2,933
|
|
3,588
|
Deferred
revenues
|
7,948
|
|
5,032
|
Total current
liabilities
|
16,606
|
|
13,888
|
|
|
|
|
Deferred
revenues
|
539
|
|
524
|
Deferred tax
liability
|
1,234
|
|
1,355
|
Accrued severance
pay
|
572
|
|
930
|
Other
liabilities
|
501
|
|
438
|
Total long-term
liabilities
|
2,846
|
|
3,247
|
|
|
|
|
Shareholders'
equity
|
39,399
|
|
47,101
|
Total liabilities and
shareholders' equity
|
$
58,851
|
|
$
64,236
|
CYREN
LTD.
|
CONDENSED
CONSOLIDATED CASH FLOW DATA
|
(in thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30
|
|
June
30
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Net loss
|
$
(4,324)
|
|
$
(2,463)
|
|
$
(9,667)
|
|
$
(4,981)
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Loss on disposal of
property and equipment
|
14
|
|
1
|
|
14
|
|
1
|
Depreciation
|
541
|
|
280
|
|
996
|
|
555
|
Stock-based
compensation
|
350
|
|
281
|
|
673
|
|
561
|
Amortization of
intangible assets
|
1,088
|
|
919
|
|
2,097
|
|
1,959
|
Amortization of
deferred commissions
|
489
|
|
-
|
|
807
|
|
-
|
Accretion of discount
on convertible note
|
-
|
|
171
|
|
-
|
|
171
|
Change in fair value
of embedded conversion feature on convertible note
|
-
|
|
(267)
|
|
-
|
|
(267)
|
Other income related
to investment in affiliate
|
-
|
|
(450)
|
|
-
|
|
(450)
|
Other expenses
related to the earn-out consideration
|
25
|
|
33
|
|
52
|
|
64
|
Deferred
taxes
|
(48)
|
|
(42)
|
|
(95)
|
|
(95)
|
|
|
|
|
|
|
|
|
Changes in assets and
liabilities:
|
|
|
-
|
|
|
|
-
|
Trade
receivables
|
(272)
|
|
(414)
|
|
315
|
|
(389)
|
Prepaid expenses and
other receivables
|
(39)
|
|
(453)
|
|
(698)
|
|
(849)
|
Deferred
commissions
|
(510)
|
|
-
|
|
(838)
|
|
-
|
Change in long-term
lease deposits
|
(252)
|
|
(5)
|
|
(475)
|
|
(27)
|
Trade
payables
|
(30)
|
|
(81)
|
|
(69)
|
|
9
|
Employees and payroll
accruals, accrued expenses and other liabilities
|
583
|
|
703
|
|
331
|
|
485
|
Deferred
revenues
|
3,439
|
|
(57)
|
|
2,930
|
|
(546)
|
Accrued severance
pay, net
|
(149)
|
|
23
|
|
(141)
|
|
53
|
Other long-term
liabilities
|
9
|
|
-
|
|
70
|
|
-
|
Net cash provided
by (used in) operating activities
|
914
|
|
(1,821)
|
|
(3,698)
|
|
(3,746)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
investment in affiiate
|
-
|
|
450
|
|
-
|
|
450
|
Capitalization of
technology, net of grants received
|
(798)
|
|
(613)
|
|
(1,460)
|
|
(1,739)
|
Purchase of property
and equipment
|
(1,011)
|
|
(119)
|
|
(1,833)
|
|
(473)
|
Net cash used in
investing activities
|
(1,809)
|
|
(282)
|
|
(3,293)
|
|
(1,762)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
convertible note
|
-
|
|
-
|
|
-
|
|
6,300
|
Payment of earnout
liability
|
(604)
|
|
-
|
|
(604)
|
|
-
|
Proceeds from options
exercised
|
273
|
|
61
|
|
292
|
|
67
|
Net cash provided
by (used in) financing activities
|
(331)
|
|
61
|
|
(312)
|
|
6,367
|
Effect of exchange
rate changes on cash
|
(87)
|
|
72
|
|
(51)
|
|
88
|
Increase
(decrease) in cash and cash equivalents
|
(1,313)
|
|
(1,970)
|
|
(7,354)
|
|
947
|
Cash and cash
equivalents at the beginning of the period
|
17,940
|
|
13,538
|
|
23,981
|
|
10,621
|
Cash and cash
equivalents at the end of the period
|
$
16,627
|
|
$
11,568
|
|
$
16,627
|
|
$
11,568
|
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SOURCE Cyren