Positive initial market traction with new strategy and enterprise offerings
McLEAN, VA / ACCESSWIRE / August 12, 2020 / Cyren (NASDAQ:CYRN), a provider of email security and threat intelligence solutions, today announced its second quarter 2020 financial results for the period ending June 30, 2020.
"During the second quarter Cyren continued to make good progress implementing our strategy. We achieved our key quarterly operational milestones, including completing the retooling of our U.S. salesforce, delivering two new enterprise products and closing our first customers for these new offerings" said Brett Jackson, Chief Executive Officer of Cyren. "With the key pieces of our foundational work behind us, we believe that we are positioned for bookings to accelerate in the second half as our new product sales execution matures and our first half pipeline building efforts begin to yield results".
Second Quarter 2020 Financial Highlights:
Revenues for the second quarter of 2020 were $9.2 million, compared to $9.7 million during the second quarter of 2019.
GAAP net loss for the second quarter of 2020 was $4.6 million, compared to a net loss of $4.6 million in the second quarter of 2019.
GAAP loss per basic and diluted share for the second quarter of 2020 was $0.08, compared to a loss of $0.08 per basic and diluted share for the second quarter of 2019.
Non-GAAP net loss for the second quarter of 2020 was $3.8 million, compared to a Non-GAAP net loss of $4.1 million for the second quarter of 2019.
Non-GAAP loss per basic and diluted share was $0.06 for the Q2 2020, compared to a Non-GAAP loss of $0.08 per share in Q2 2019.
Operating cash flow during the second quarter of 2020 was positive $2.5 million, compared to operating cash flow of positive $0.8 million during the second quarter of 2019.
Net cash flow for the second quarter of 2020 was positive $1.1 million, compared to negative $31 thousand during the second quarter of 2019.
Cash and cash equivalents balance as of June 30, 2020, was $16.1 million, compared to $11.6 million as of December 31, 2019.
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, Cyren launched a new cloud-based anti-phishing product targeted at enterprise customers using Microsoft 365 (formerly Office 365) email. Cyren Inbox Security (CIS) is fully integrated within Microsoft 365 and provides continuous email monitoring and threat detection with automated response and remediation.
Cyren recently announced positive early traction with Cyren Inbox Security and validating product market fit. In the first quarter of availability, Cyren converted several enterprise accounts and is protecting tens of thousands of Microsoft 365 mailboxes from phishing attacks, business email compromise (BEC) and fraudulent account takeovers.
Also during the second quarter, Cyren launched Threat InDepth, a threat intelligence data product that provides detailed and actionable intelligence to enterprise security teams. Threat InDepth leverages Cyren's GlobalView threat intelligence cloud, which analyzes billions of transactions daily to identify emerging security threats across email, web and files globally. Threat InDepth is the first product offering resulting from Cyren's strategy to expand its core threat intelligence services beyond the OEM market into the larger enterprise market.
In June, Cyren appointed a new Chairman of the Board, James Hamilton, who is an experienced security industry veteran. Mr. Hamilton was first appointed to the Cyren board of directors in 2012, and succeeds Lior Samuelson as Chairman.
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 12, 2020 to discuss second quarter results.
U.S. Dial-in Number: 1-877-407-0312
Israel Dial-in Number: 1-80-940-6247
International Dial-in Number: 1-201-389-0899
The call will be simultaneously webcast live on the investor relations section of Cyren's website at https://ir.cyren.com, or by using the following link: https://webcasts.eqs.com/cyren20200812/en.
For those unable to participate in the live conference call, a replay will be available until August 26, 2020. To access the replay, the U.S. dial in number is 1-877-660-6853 and the non-U.S. dial in number is 1-201-612-7415. Callers will be prompted for replay conference ID number 13707843. An archived version of the webcast will also be available on the investor relations section of the company's website at https://ir.cyren.com/events.
About Cyren:
More than 1.3 billion users around the world rely on Cyren's cloud security solutions to protect them against cyber attacks and data loss every day. Powered by GlobalView, Cyren's global security cloud that identifies emerging threats on a global basis in real-time, Cyren (NASDAQ: CYRN) delivers fast time-to-protection with embedded threat detection services, threat intelligence and enterprise email security products for leading email providers, cybersecurity vendors, service providers and enterprises. 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, adjustments to earn-out obligations, and capitalization of technology. 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 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 publicly filed reports, which are available through www.sec.gov.
Company Contact
Mike Myshrall, CFO
Cyren
+1.703.760.3320
mike.myshrall@cyren.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
2020
2019
2020
2019
Unaudited
Unaudited
Unaudited
Unaudited
Revenues
$
9,181
$
9,711
$
18,830
$
19,366
Cost of revenues
3,778
3,789
7,376
7,789
Gross profit
5,403
5,922
11,454
11,577
Operating expenses:
Research and development, net
4,151
4,297
7,495
8,474
Sales and marketing
3,146
3,590
6,182
7,446
General and administrative
2,476
2,398
4,690
4,830
Total operating expenses
9,773
10,285
18,367
20,750
Operating loss
(4,370
)
(4,363
)
(6,913
)
(9,173
)
Other income, net
2
17
8
265
Financial expenses, net
(290
)
(268
)
(521
)
(321
)
Loss before taxes
(4,658
)
(4,614
)
(7,426
)
(9,229
)
Tax benefit
44
41
61
80
Net loss
$
(4,614)
$
(4,573)
$
(7,365)
$
(9,149)
Loss per share – basic and diluted
$
(0.08
)
$
(0.08
)
$
(0.12
)
$
(0.17
)
Weighted average number of shares outstanding:
Basic and Diluted
60,041
54,424
59,862
54,300
CYREN LTD.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands of U.S. dollars, except per share amounts)
Three months ended
Three months ended
June 30
June 30
2020
2019
2020
2019
Unaudited
Unaudited
Unaudited
Unaudited
GAAP gross profit
$
5,403
$
5,922
$
11,454
$
11,577
GAAP gross margin
59
%
61
%
61
%
60
%
Plus:
Stock-based compensation expense
20
33
64
62
Amortization of intangible assets
593
767
1,024
1,606
Non-GAAP gross profit
6,016
6,722
12,542
13,245
Non-GAAP gross margin
66
%
69
%
67
%
68
%
GAAP operating loss
(4,370
)
(4,363
)
(6,913
)
(9,173
)
Plus:
Stock-based compensation expense
507
314
1,152
583
Amortization of intangible assets
723
885
1,283
1,851
Capitalization of technology
(389
)
(650
)
(1,602
)
(1,392
)
Settlement of litigation, net
–
–
–
–
Non-GAAP operating loss
(3,529
)
(3,814
)
(6,081
)
(8,131
)
GAAP net loss
(4,614
)
(4,573
)
(7,365
)
(9,149
)
Plus:
Stock-based compensation expense
507
314
1,152
583
Amortization of intangible assets
723
885
1,283
1,851
Adjustment to earn-out liabilities
–
–
–
–
Amortization of deferred tax assets
(48
)
(58
)
(96
)
(115
)
Gain from an earn-out liability settlement
–
–
–
(256
)
Settlement of litigation, net
–
–
–
–
Capitalization of technology
(414
)
(688
)
(1,657
)
(1,458
)
Non-GAAP net loss
$
(3,846
)
$
(4,120
)
$
(6,684
)
$
(8,544
)
Numerator for non-GAAP EPS calculation
$
(3,846
)
$
(4,120
)
$
(6,684
)
$
(8,544
)
Non-GAAP net loss per share
$
(0.06
)
$
(0.08
)
$
(0.11
)
$
(0.16
)
GAAP weighted-average shares used to
compute net loss per share
60,041
54,424
59,862
54,300
CYREN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
June 30
December 31
2020
2019
Unaudited
Assets
Current Assets:
Cash and cash equivalents
$
16,103
$
11,551
Trade receivables, net
2,366
2,187
Deferred commissions
1,037
948
Prepaid expenses and other receivables
1,203
819
Total current assets
20,709
15,505
Long-term deferred commissions
1,352
1,580
Long-term lease deposits
850
767
Operating lease right-of-use assets
11,466
8,695
Severance pay fund
582
659
Property and equipment, net
4,675
4,410
Intangible assets, net
9,338
8,966
Goodwill
20,251
20,246
Total long-term assets
48,514
45,323
Total assets
$
69,223
$
60,828
Liabilities and Shareholders' Equity
Current Liabilities:
Trade payables
$
1,106
$
1,184
Employees and payroll accruals
3,714
3,427
Accrued expenses and other liabilities
1,200
1,145
Operating lease liabilities
1,886
1,946
Deferred revenues
9,714
7,208
Total current liabilities
17,620
14,910
Deferred revenues
1,460
1,956
Convertible notes
10,000
10,000
Convertible debentures
9,447
–
Long-term operating lease liabilities
9,966
7,174
Deferred tax liability
677
796
Accrued severance pay
735
811
Other liabilities
633
470
Total long-term liabilities
32,918
21,207
Shareholders' equity
18,685
24,711
Total liabilities and shareholders' equity
$
69,223
$
60,828
CYREN LTD.
CONDENSED CONSOLIDATED CASH FLOW DATA
(in thousands of U.S. dollars)
Three months ended
Six months ended
June 30
June 30
2020
2019
2020
2019
Cash flows from operating activities:
Unaudited
Unaudited
Unaudited
Unaudited
Loss
$
(4,614
)
$
(4,573
)
(7,365
)
$
(9,149
)
Adjustments to reconcile loss to net cash provided by (used in) operating activities:
Loss on disposal of property and equipment
26
–
13
1
Depreciation
597
475
1,215
936
Stock-based compensation
507
314
1,152
583
Amortization of intangible assets
723
885
1,283
1,851
Amortization of deferred commissions
452
(280
)
803
(612
)
Amortization of operating lease right-of-use assets
534
362
922
713
Interest on convertible notes
142
142
283
282
Interest and amortization of debt issuance costs on Convertible Debentures
187
–
211
–
Other income related to the earn-out consideration
–
(1
)
–
(257
)
Deferred taxes, net
(54
)
(58
)
(118
)
(127
)
Changes in assets and liabilities:
Trade receivables
490
27
(162
)
705
Prepaid expenses and other receivables
(57
)
(37
)
(383
)
(775
)
Deferred commissions
(276
)
341
(664
)
748
Change in long-term lease deposits
28
3
(86
)
23
Trade payables
(159
)
(418
)
(114
)
(823
)
Employees and payroll accruals, accrued expenses and other liabilities
444
50
(47
)
(224
)
Deferred revenues
4,062
3,891
1,989
6,354
Accrued severance pay, net
24
27
1
68
Operating lease liabilities
(534
)
(368
)
(954
)
(733
)
Other long-term liabilities
10
–
163
(111
)
Net cash provided by (used in) operating activities
2,532
782
(1,858
)
(547
)
Cash flows from investing activities:
Proceeds from sale of property and equipment
2
–
4
–
Capitalization of technology
(588
)
(808
)
(1,589
)
(1,435
)
Purchase of property and equipment
(880
)
(406
)
(1,438
)
(950
)
Net cash used in investing activities
(1,466
)
(1,214
)
(3,023
)
(2,385
)
Cash flows from financing activities:
Proceeds from convertible debenture, net of debt issuance costs
–
–
9,442
–
Payment of earn-out consideration
–
–
–
(2,680
)
Proceeds from options exercised
–
323
–
512
Net cash provided (used) by financing activities
–
323
9,442
(2,168
)
Effect of exchange rate changes on cash
(7
)
78
(13
)
(48
)
Increase (decrease) in cash, cash equivalents and restricted cash
1,059
(31)
4,548
(5,148)
Cash, cash equivalents and restricted cash at the beginning of the period
15,616
13,039
12,127
18,156
Cash, cash equivalents and restricted cash at the end of the period
$
16,675
$
13,008
$
16,675
$
13,008
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flow:
Cash and cash equivalents
$
16,103
$
12,405
$
16,103
$
12,405
Restricted cash included in long-term restricted lease deposits
572
603
572
603
Total cash, cash equivalents and restricted cash
$
16,675
$
13,008
$
16,675
$
13,008
SOURCE: Cyren Ltd
ReleaseID: 601257
