U.S. markets open in 5 hours 36 minutes
  • S&P Futures

    4,541.25
    +4.75 (+0.10%)
     
  • Dow Futures

    35,571.00
    +14.00 (+0.04%)
     
  • Nasdaq Futures

    15,374.00
    +33.00 (+0.22%)
     
  • Russell 2000 Futures

    2,291.10
    +2.30 (+0.10%)
     
  • Crude Oil

    84.37
    +0.61 (+0.73%)
     
  • Gold

    1,798.30
    +2.00 (+0.11%)
     
  • Silver

    24.50
    +0.05 (+0.19%)
     
  • EUR/USD

    1.1666
    +0.0020 (+0.17%)
     
  • 10-Yr Bond

    1.6550
    0.0000 (0.00%)
     
  • Vix

    16.08
    +1.07 (+7.13%)
     
  • GBP/USD

    1.3784
    +0.0025 (+0.18%)
     
  • USD/JPY

    113.6280
    +0.1680 (+0.15%)
     
  • BTC-USD

    62,671.77
    +1,867.21 (+3.07%)
     
  • CMC Crypto 200

    1,453.34
    -49.70 (-3.31%)
     
  • FTSE 100

    7,227.19
    +22.64 (+0.31%)
     
  • Nikkei 225

    28,600.41
    -204.44 (-0.71%)
     

Cyren Reports Third Quarter 2020 Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·13 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Cyren Inbox Security continues to gain momentum supporting company's growth strategy

MCLEAN, VA / ACCESSWIRE / November 16, 2020 / Cyren (NASDAQ:CYRN), a provider of email security and threat intelligence solutions, today announced its third quarter 2020 financial results for the period ending September 30, 2020.

"The third quarter was our first full quarter in the market with our next generation email security product, Cyren Inbox Security, and we are very pleased with product-market fit and customer wins within the quarter," said Brett Jackson, Chief Executive Officer of Cyren. "With most employees working from home, there has been an uptick in compromised email and phishing attempts, and increased demand for innovative solutions to combat these attacks. During the third quarter, we closed a number of new enterprise customers in the US and Europe, ranging from 3,000 to 20,000 users. It is clear to us that the phishing problem is widespread, the addressable market is large and Cyren Inbox Security has the potential to be a significant new enterprise revenue stream for our company."

Third Quarter 2020 Financial Highlights:

  • Revenues for the third quarter of 2020 were $9.1 million, compared to $9.5 million during the third quarter of 2019. Revenue declined year-over-year as a result of the wind-down of retired legacy products, while recognition from new enterprise offerings introduced during Q2 have not yet had a material impact on quarterly results.

  • GAAP net loss for the third quarter of 2020 was $4.9 million, compared to a net loss of $3.5 million in the third quarter of 2019. GAAP net loss includes lower R&D capitalization from prior quarters and a one-time adjustment for previously capitalized technology development totaling $0.7 million.

  • GAAP loss per basic and diluted share for the third quarter of 2020 was $0.08, compared to a loss of $0.06 per basic and diluted share for the third quarter of 2019.

  • Non-GAAP net loss for the third quarter of 2020 was $2.9 million, compared to a Non-GAAP net loss of $3.5 million for the third quarter of 2019.

  • Non-GAAP loss per basic and diluted share was $0.05 for the third quarter, compared to a Non-GAAP loss of $0.06 per share in Q3 2019.

  • Cash and cash equivalents balance as of September 30, 2020, was $12.9 million, compared to $11.6 million as of December 31, 2019.

  • Operating cash usage during the third quarter of 2020 was $3.6 million, compared to operating cash flow of usage $1.7 million during the third quarter of 2019.

  • Net cash flow for the third quarter of 2020 was negative $3.2 million, compared to negative $2.9 million during the third quarter of 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:

  • During the third quarter, Cyren continued to experience strong market reaction to its next generation email security product focused on the phishing problem for enterprise users of Microsoft 365. At the end of the third quarter, Cyren Inbox Security was protecting over 60,000 mailboxes and analyzing over 15 million suspicious emails on a weekly basis.

  • Also in the quarter, Cyren launched its incident response service which provides 24x7 expert support for phishing investigation and remediation. Cyren Incident Response Service is a complementary add-on service to Cyren Inbox Security that relieves the burden on IT and security teams from complicated and time consuming threat investigation and response.

  • Cyren's CIS and email security offerings attracted the attention of industry analysts and were highlighted as innovative cloud-based phishing solutions in Gartner's 2020 Market Guide for Email Security as well as Forrester's 'Now Tech' Report on enterprise email security providers.

Financial Results Conference Call:

The company will host a conference call at 4:30 p.m. Eastern Time on Monday, November 16, 2020 to discuss third 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://www.webcast-eqs.com/cyren20201116/en.

For those unable to participate in the live conference call, a replay will be available until November 30, 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 13713213. An archived version of the call 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
September 30

Nine months ended
September 30

2020

2019

2020

2019

Unaudited

Unaudited

Unaudited

Unaudited

Revenues

$

9,114

$

9,496

$

27,944

$

28,862

Cost of revenues

3,792

3,712

11,168

11,501

Gross profit

5,322

5,784

16,776

17,361

Operating expenses:

Research and development, net

4,769

3,516

12,264

11,990

Sales and marketing

2,942

3,027

9,123

10,473

General and administrative

2,302

2,484

6,992

7,314

Total operating expenses

10,013

9,027

28,379

29,777

Operating loss

(4,691

)

(3,243

)

(11,603

)

(12,416

)

Other income, net

1

(3

)

9

262

Financial expenses, net

(235

)

(321

)

(757

)

(642

)

Loss before taxes

(4,925

)

(3,567

)

(12,351

)

(12,796

)

Tax benefit

33

37

94

117

Net loss

$

(4,892

)

$

(3,530

)

$

(12,257

)

$

(12,679

)

Loss per share - basic and diluted

$

(0.08

)

$

(0.06

)

$

(0.20

)

$

(0.23

)

Weighted average number of shares outstanding:

Basic and Diluted

60,580

54,554

60,103

54,389


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

2020

2019

2020

2019

Unaudited

Unaudited

Unaudited

Unaudited

GAAP gross profit

$

5,322

$

5,784

$

16,776

$

17,361

GAAP gross margin

58

%

61

%

60

%

60

%

Plus:

Stock-based compensation expense

21

36

85

98

Amortization of intangible assets

673

758

1,698

2,364

Non-GAAP gross profit

6,016

6,578

18,559

19,823

Non-GAAP gross margin

66

%

69

%

66

%

69

%

GAAP operating loss

(4,690

)

(3,243

)

(11,603

)

(12,416

)

Plus:

Stock-based compensation expense

724

419

1,876

1,002

Amortization of intangible assets

788

885

2,071

2,736

Expense (Capitalization) of technology

536

(1,118

)

(1,067

)

(2,510

)

Settlement of litigation, net

-

-

-

-

Non-GAAP operating loss

(2,643

)

(3,057

)

(8,723

)

(11,188

)

GAAP net loss

(4,892

)

(3,530

)

(12,257

)

(12,679

)

Plus:

Stock-based compensation expense

724

419

1,876

1,002

Amortization of intangible assets

788

885

2,071

2,736

Adjustment to earn-out liabilities

-

-

-

-

Amortization of deferred tax assets

(48

)

(55

)

(144

)

(170

)

Gain from an earn-out liability settlement

-

-

-

(256

)

Settlement of litigation, net

-

-

-

-

Expense (Capitalization) of technology

531

(1,169

)

(1,126

)

(2,627

)

Non-GAAP net loss

$

(2,896

)

$

(3,450

)

$

(9,580

)

$

(11,994

)

Numerator for non-GAAP EPS calculation

$

(2,896

)

$

(3,450

)

$

(9,580

)

$

(11,994

)

Non-GAAP net loss per share

$

(0.05

)

$

(0.06

)

$

(0.16

)

$

(0.22

)

GAAP weighted-average shares used to

compute net loss per share

60,580

54,554

60,103

54,389


CYREN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

September 30

December 31

2020

2019

Unaudited

Assets

Current Assets:

Cash and cash equivalents

12,894

$

11,551

Trade receivables, net

2,348

2,187

Deferred commissions

1,004

948

Prepaid expenses and other receivables

1,284

819

Total current assets

17,530

15,505

Long-term deferred commissions

1,243

1,580

Long-term lease deposits

863

767

Operating lease right-of-use assets

11,191

8,695

Severance pay fund

646

659

Property and equipment, net

4,410

4,410

Intangible assets, net

8,093

8,966

Goodwill

20,818

20,246

Total long-term assets

47,264

45,323

Total assets

$

64,794

$

60,828

Liabilities and Shareholders' Equity

Current Liabilities:

Trade payables

$

1,103

$

1,184

Employees and payroll accruals

3,676

3,427

Accrued expenses and other liabilities

1,160

1,145

Operating lease liabilities

1,889

1,946

Deferred revenues

9,272

7,208

Total current liabilities

17,100

14,910

Deferred revenues

1,064

1,956

Convertible notes

10,000

10,000

Convertible debentures

9,344

-

Long-term operating lease liabilities

9,678

7,174

Deferred tax liability

646

796

Accrued severance pay

762

811

Other liabilities

653

470

Total long-term liabilities

32,147

21,207

Shareholders' equity

15,547

24,711

Total liabilities and shareholders' equity

$

64,974

$

60,828


CYREN LTD.
CONDENSED CONSOLIDATED CASH FLOW DATA

(in thousands of U.S. dollars)

Three months ended

Nine months ended

September 30

September 30

2020

2019

2020

2019

Cash flows from operating activities:

Unaudited

Unaudited

Unaudited

Unaudited

Loss

$

(4,892

)

$

(3,530

)

(12,257

)

$

(12,679

)

Adjustments to reconcile loss to net cash provided by (used in) operating activities:

Loss on disposal of property and equipment

(1

)

-

12

1

Depreciation

594

484

1,809

1,420

Stock-based compensation

724

419

1,876

1,002

Amortization of intangible assets

788

885

2,071

2,736

Amortization of deferred commissions

378

(297

)

1,181

(909

)

Amortization of operating lease right-of-use assets

586

338

1,508

1,051

Interest on convertible notes

153

142

436

424

Interest and amortization of debt issuance costs on Convertible Debentures

188

-

400

-

Other income related to the earn-out consideration

-

-

-

(257

)

Deferred taxes, net

(53

)

(55

)

(171

)

(182

)

Changes in assets and liabilities:

Trade receivables

36

(509

)

(126

)

196

Prepaid expenses and other receivables

(73

)

168

(456

)

(607

)

Deferred commissions

(236

)

353

(900

)

1,101

Change in long-term lease deposits

(3

)

2

(89

)

25

Trade payables

(175

)

559

(289

)

(264

)

Employees and payroll accruals, accrued expenses and other liabilities

(43

)

39

(90

)

(185

)

Deferred revenues

(955

)

(357

)

1,034

5,997

Accrued severance pay, net

(37

)

5

(36

)

73

Operating lease liabilities

(591

)

(342

)

(1,545

)

(1,075

)

Other long-term liabilities

21

(15

)

184

(126

)

Net cash (used in) operating activities

(3,590

)

(1,711

)

(5,448

)

(2,258

)

Cash flows from investing activities:

Proceeds from sale of property and equipment

2

1

6

1

Capitalization of technology

489

(1,027

)

(1,100

)

(2,462

)

Purchase of property and equipment

(105

)

(309

)

(1,543

)

(1,259

)

Net cash provided by (used in) investing activities

386

(1,335

)

(2,637

)

(3,720

)

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

-

231

-

743

Net cash provided (used) by financing activities

-

231

9,442

(1,937

)

Effect of exchange rate changes on cash

(1

)

(76

)

(14

)

(124

)

Increase (decrease) in cash, cash equivalents and restricted cash

(3,205

)

(2,891

)

1,343

(8,039

)

Cash, cash equivalents and restricted cash at the beginning of the period

16,675

13,008

12,127

18,156

Cash, cash equivalents and restricted cash at the end of the period

$

13,470

$

10,117

$

13,470

$

10,117

Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flow:

Cash and cash equivalents

$

12,894

$

9,546

$

12,894

$

9,546

Restricted cash included in long-term restricted lease deposits

576

571

576

571

Total cash, cash equivalents and restricted cash

$

13,470

$

10,117

$

13,470

$

10,117

SOURCE: Cyren



View source version on accesswire.com:
https://www.accesswire.com/617011/Cyren-Reports-Third-Quarter-2020-Financial-Results