Welcome!

FinTech Journal Authors: Yeshim Deniz, Elizabeth White, Pat Romanski, Zakia Bouachraoui, Carmen Gonzalez

News Feed Item

Cyan Reports Second Quarter 2014 Financial Results

Cyan (NYSE: CYNI), a leading provider of SDN, NFV, and packet-optical solutions for network operators, today announced financial results for its second quarter ended June 30, 2014.

Revenue for the second quarter of 2014 exceeded prior guidance of $21 million to $23 million and reached $24.4 million. This compares to $19.0 million for the first quarter of 2014 and $31.7 million in the second quarter of 2013. GAAP net loss for the second quarter was $14.7 million, or $0.31 per share, compared to a net loss of $17.8 million, or $0.38 per share, in the first quarter of 2014 and $9.1 million, or $0.33 per share, in the same period last year.

On a non-GAAP basis, Cyan's net loss for the second quarter was $11.9 million, or $0.25 per share. This compares to a non-GAAP net loss of $15.3 million, or $0.33 per share, in the first quarter of 2014 and a non-GAAP net loss of $6.6 million, or $0.24 per share, in the same period last year. Both GAAP and non-GAAP net loss per share figures for the second quarter of 2014 are based on 46.9 million basic weighted average shares outstanding. Please refer to the attached financial statements for additional non-GAAP information and a reconciliation of GAAP to non-GAAP results as well as information regarding weighted average shares outstanding in each period.

“In the second quarter we remained focused on our key initiatives, announced several new customer and partner collaborations and launched Planet Orchestrate, a significant new addition to our Blue Planet SDN and NFV platform,” said Mark Floyd, Cyan’s chairman and chief executive officer. “We are pleased with our execution this quarter and with the momentum we see in the market.

“Service providers continue to advance their initiatives to transform their networks with SDN and NFV technologies. With the Blue Planet Platform, we believe Cyan is well positioned in the market and has a unique, first mover advantage in helping customers orchestrate both network and virtualized resources across multi-domain, multi-vendor networks," continued Floyd.

Second Quarter Highlights

  • Launched Planet Orchestrate – The industry’s first orchestration application that integrates Cloud Services, NFV, and WAN in multi-vendor and multi-domain networks. Unlike other siloed solutions on the market, Planet Orchestrate, an application for Cyan’s Blue Planet SDN Platform, combines the power of WAN service creation and automation with the orchestration of virtual resources – creating a software-defined engine for revenue generation in carrier networks.
  • Certes, the leader in multi-layer encryption solutions for high performance networks, and Fortinet, a global leader in high-performance network security, joined Blue Orbit, an ecosystem of partners focused on delivering real-world, multi-vendor SDN and network functions virtualization (NFV) applications.
  • With Blue Orbit partners Certes, Fortinet and RAD, Cyan demonstrated how Blue Planet can orchestrate multi-vendor distributed NFV in an official ETSI proof of concept (PoC) sponsored by Tier 1 service provider -- CenturyLink.
  • Collaborated with Telefónica and Red Hat to develop a deterministic NFV architecture to support the intelligent placement of virtualized network functions (VNFs). Cyan is delivering the NFV orchestrator that will make use of OpenStack enhancements developed by Red Hat in close collaboration with Telefónica.

Conference Call

Cyan will host a conference call for analysts and investors to discuss its second quarter 2014 results as well as guidance for its third quarter of 2014 today at 2:00 p.m. Pacific time/5:00 p.m. Eastern time. To access the live call, please dial 1-888-364-3108 (US or Canada) or 1-719-325-2435 (international) and use the password: Cyan. A telephonic replay of the call will be available from approximately two hours after the call until 5:00 pm Eastern time on August 25, 2014, and can be accessed by dialing 1-888-203-1112 or 1-719-457-0820 and entering passcode 3977393#. A live audio webcast of the conference call also will be available from the Investors section of the company's website, www.cyaninc.com. Following the webcast, an archived version will be available on the website for 90 days.

Use of Non-GAAP Financial Information

To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share. We use this information in managing our business and believe the non-GAAP data are helpful in understanding our past financial performance and future results. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "GAAP to Non-GAAP Reconciliation." Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. As noted in the accompanying reconciliation, non-GAAP results exclude the effects of stock-based compensation. We use stock-based compensation to attract and retain employees and executives with the goals of aligning their interests with those of our stockholders and long-term employee retention. We exclude stock-based compensation expense from our non-GAAP metrics because it varies for reasons that are generally unrelated to operational decisions and performance in any particular period. In addition, non-GAAP results exclude the effects of preferred stock warrants that were converted in connection with our initial public offering. Upon completion of our initial public offering, our preferred stock warrants were converted to common stock and common stock warrants, and we no longer incur expenses associated with the preferred stock warrants. We have excluded these expenses from our non-GAAP metrics given that they fluctuated based on our valuation as a private company prior to going public and were discontinued upon completion of our IPO.

Forward-Looking Statements

This press release contains forward-looking statements, including but not limited to statements relating to industry momentum for SDN and NFV solutions and Cyan’s positioning to take advantage of the industry momentum. Forward-looking statements made are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and involve a number of risks and uncertainties. Actual results and timing of events could differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: the rate of market adoption of SDN and NFV solutions in general and the adoption rate of our products, particularly our Blue Planet platform; our ability to capitalize on our technological leadership in SDN and NFV; and other risks and uncertainties related to our business. Further information on these risks and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-Q that will be filed for the quarter ended June 30, 2014 and our Form 10-K that we filed for the year ended December 31, 2013. These documents are available on the SEC Filings section of the Investor section of our website at investor.cyaninc.com. All forward-looking statements in this press release are based on information available to us as of the date hereof. We undertake no obligation to revise or update these forward-looking statements in light of new information or future events, other than as required by law. Results reported herein should not be considered as an indication of future performance.

About Cyan

Cyan (NYSE: CYNI) enables network transformation. The company's software-defined network (SDN) solutions deliver orchestration, visualization, and scale to networks that, until now, have been static and hardware driven. Serving carriers, enterprises, governments, and data center operators globally, Cyan's open platforms provide multi-vendor control and visibility to network operators, making service delivery more efficient and profitable. Cyan solutions include Blue Planet SDN software, Z-Series packet-optical transport platforms. For more information, please visit www.cyaninc.com or follow Cyan on Twitter at http://twitter.com/CyanNews.

     

Cyan, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,
2014     2013   2014     2013  
Revenue $ 24,392 $ 31,686 $ 43,430 $ 58,005
Cost of revenue 14,268   17,936   25,883   33,338  
Gross profit 10,124 13,750 17,547 24,667
Operating expenses:
Research and development 9,620 8,158 19,092 15,397
Sales and marketing 11,331 10,821 22,360 18,838
General and administrative 3,711   3,095   8,274   5,958  
Total operating expenses 24,662 22,074 49,726 40,193
Loss from operations (14,538 ) (8,324 ) (32,179 ) (15,526 )
Interest expense (42 ) (136 ) (89 ) (262 )
Other income (expense), net (49 ) (607 ) (111 ) (2,608 )
Total other expense, net (91 ) (743 ) (200 ) (2,870 )
Loss before provision for income taxes (14,629 ) (9,067 ) (32,379 ) (18,396 )
Provision for income taxes 43   21   93   42  
Net loss $ (14,672 ) $ (9,088 ) $ (32,472 ) $ (18,438 )
Basic and diluted net loss per share $ (0.31 ) $ (0.33 ) $ (0.69 ) $ (1.22 )
Weighted-average number of shares used in computing basic and diluted net loss per share 46,882   27,425   46,760   15,077  
   

Cyan, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
June 30, 2014 December 31, 2013
Assets
Current assets:
Cash and cash equivalents $ 13,211 $ 32,509
Marketable securities 25,553 31,639
Accounts receivable 13,131 14,558
Short-term lease receivable 201
Inventories 13,057 20,746
Deferred costs 3,768 8,286
Prepaid expenses and other 3,297   1,378  
Total current assets 72,017 109,317
Long-term lease receivable 403
Property and equipment, net 11,299 11,155
Other assets 643   645  
Total assets $ 83,959   $ 121,520  
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable $ 5,068 $ 8,474
Accrued liabilities 5,606 3,786
Accrued compensation 4,212 4,895
Term loan, current portion 1,635 1,604
Deferred revenue 10,781 17,516
Deferred rent 117 115
Other liabilities 290   734  
Total current liabilities 27,709 37,124
Term loan, non-current portion 2,571 3,396
Deferred revenue 1,348 1,577
Deferred rent 431   486  
Total liabilities 32,059 42,583
 
Stockholders’ equity (deficit):
Preferred stock
Common stock 5 5
Additional paid in-capital 211,665 206,300
Accumulated other comprehensive income (loss) (16 ) (86 )
Accumulated deficit (159,754 ) (127,282 )
Total stockholders’ equity (deficit) 51,900   78,937  
Total liabilities and stockholders’ equity (deficit) $ 83,959   $ 121,520  
 

Cyan, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
Six Months Ended June 30,
2014     2013  
Operating activities
Net loss $ (32,472 ) $ (18,438 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,793 1,226
Stock-based compensation 5,282 2,902
Change in fair value for warrants 2,602
Changes in operating assets and liabilities:
Accounts receivable 1,427 (4,162 )
Lease receivable 604
Inventories 7,447 1,014
Deferred costs 4,518 (2,822 )
Prepaid expenses and other assets (1,917 ) (34 )
Accounts payable (2,478 ) 3,921
Accrued and other liabilities 1,424 1,347
Accrued compensation (683 ) 670
Deferred revenue (6,964 ) 5,757
Deferred rent (53 ) 48  
Net cash used in operating activities (22,072 ) (5,969 )
Investing activities
Purchases of property and equipment (2,623 ) (3,072 )
Purchase of available for sale securities (12,803 )
Maturity of available for sale securities 17,900
Sale of available for sale securities 1,000    
Net cash provided by (used in) investing activities 3,474 (3,072 )
Financing activities
Proceeds from initial public offering (IPO), net of issuance costs 88,164
Proceeds from stock-based compensation programs 398 1,105
Repayments of borrowings under notes payable (7,563 )
Taxes paid related to net-share settlements of restricted stock units (325 )
Repayments of borrowings under term loan (794 )
Payments on capital leases (39 )  
Net cash provided by (used in) financing activities (760 ) 81,706  
Effect of exchange rate changes on cash and cash equivalents 60   35  
Net increase (decrease) in cash and cash equivalents (19,298 ) 72,700
Cash and cash equivalents at beginning of period 32,509   20,221  
Cash and cash equivalents at end of period $ 13,211   $ 92,921  
 

Cyan, Inc.

GAAP to Non-GAAP Reconciliation

(In thousands, except per share amounts)

(Unaudited)

 
Three Months Ended
June 30, 2014   March 31, 2014   June 30, 2013
Reconciliation of Gross Profit:
US GAAP as reported $ 10,124 $ 7,423 $ 13,750
Adjustments:
Stock-Based Compensation   113     60     31  
Non-GAAP Gross Profit $ 10,237   $ 7,483   $ 13,781  
 
Reconciliation of Gross margin:
US GAAP as reported 41.5 % 39.0 % 43.4 %
Adjustments:
Stock-Based Compensation   0.5 %   0.3 %   0.1 %
Non-GAAP Gross margin   42.0 %   39.3 %   43.5 %
 
Reconciliation of Research and Development expenses:
US GAAP as reported $ 9,620 $ 9,472 $ 8,158
Adjustments:
Stock-Based Compensation   1,021     915     511  
Non-GAAP Research and Development expense $ 8,599   $ 8,557   $ 7,647  
 
Reconciliation of Sales and Marketing expenses:
US GAAP as reported $ 11,331 $ 11,029 $ 10,821
Adjustments:
Stock-Based Compensation   957     798     560  
Non-GAAP Sales and Marketing expense $ 10,374   $ 10,231   $ 10,261  
 
Reconciliation of General and Administrative expenses:
US GAAP as reported $ 3,711 $ 4,563 $ 3,095
Adjustments:
Stock-Based Compensation   676     742     738  
Non-GAAP General and Administrative expense $ 3,035   $ 3,821   $ 2,357  
 
Reconciliation of Operating expenses:
US GAAP as reported $ 24,662 $ 25,064 $ 22,074
Adjustments:
Stock-Based Compensation   2,654     2,455     1,809  
Non-GAAP Operating expenses $ 22,008   $ 22,609   $ 20,265  
 
Reconciliation of Net income (Loss):
US GAAP as reported ($14,672 ) ($17,800 ) ($9,088 )
Adjustments:
Stock-Based Compensation 2,767 2,515 1,840
Preferred Stock Warrant Expense   -     -     604  
Non-GAAP Net Income (Loss)   ($11,905 )   ($15,285 )   ($6,644 )
 
Reconciliation of Net income (loss) per share, basic and diluted:
US GAAP as reported ($0.31 ) ($0.38 ) ($0.33 )
Adjustments:
Stock-Based Compensation 0.06 0.05 0.07
Preferred Stock Warrant Expense   -     -     0.02  
Non-GAAP Net Income (Loss) per share, basic and diluted   ($0.25 )   ($0.33 )   ($0.24 )

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

IoT & Smart Cities Stories
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
Whenever a new technology hits the high points of hype, everyone starts talking about it like it will solve all their business problems. Blockchain is one of those technologies. According to Gartner's latest report on the hype cycle of emerging technologies, blockchain has just passed the peak of their hype cycle curve. If you read the news articles about it, one would think it has taken over the technology world. No disruptive technology is without its challenges and potential impediments t...
If a machine can invent, does this mean the end of the patent system as we know it? The patent system, both in the US and Europe, allows companies to protect their inventions and helps foster innovation. However, Artificial Intelligence (AI) could be set to disrupt the patent system as we know it. This talk will examine how AI may change the patent landscape in the years to come. Furthermore, ways in which companies can best protect their AI related inventions will be examined from both a US and...
Bill Schmarzo, Tech Chair of "Big Data | Analytics" of upcoming CloudEXPO | DXWorldEXPO New York (November 12-13, 2018, New York City) today announced the outline and schedule of the track. "The track has been designed in experience/degree order," said Schmarzo. "So, that folks who attend the entire track can leave the conference with some of the skills necessary to get their work done when they get back to their offices. It actually ties back to some work that I'm doing at the University of San...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...