Cyren Announces First Quarter 2021 Financial Results

Rhea-AI Summary

Cyren (NASDAQ:CYRN) reported Q1 2021 revenues of $8.8 million, down from $9.6 million in Q1 2020. The GAAP net loss widened to $4.2 million from $2.8 million year-over-year, attributed to lower revenues and higher R&D costs. Despite the decrease in revenue, management emphasized that the results align with expectations and attributed churn to legacy products. Cyren aims to establish a strong foothold in the anti-phishing market, particularly with its Cyren Inbox Security solution. As of March 31, 2021, cash reserves stood at $16.5 million, up from $9.3 million.

Positive

• Cash balance increased to $16.5 million from $9.3 million year-over-year.
• Net cash flow for Q1 2021 was a positive $7.1 million, up from $3.5 million in Q1 2020.

Negative

• Quarterly revenue declined to $8.8 million, a drop of 8.3% year-over-year.
• GAAP net loss increased to $4.2 million compared to $2.8 million in Q1 2020.

Cyren Continues to Gain Traction in the Anti-Phishing Market with Cyren Inbox Security

MCLEAN, VA / ACCESSWIRE / May 17, 2021 / Cyren (NASDAQ:CYRN) today announced its first quarter 2021 financial results for the period ending March 31, 2021.

During the first quarter, Cyren reported quarterly revenues of $8.8 million, compared to $9.6 million during the first quarter of 2020. GAAP net loss for the quarter was $4.2 million, compared to the $2.8 million net loss reported during the first quarter of 2020, due to lower revenues and higher R&D expenses compared to the prior year.

"Cyren continues to advance on our best growth opportunity - helping enterprise customers using Microsoft 365 mitigate phishing attacks", said Brett Jackson, CEO of Cyren. "While Q1 revenues were down year-over-year, they were inline with our plan and expectations and the variance is largely due to churn associated with our legacy products. We continue to make progress executing our plan to build a high-growth revenue stream with Cyren Inbox Security and develop a market-leading position in the anti-phishing space with the opportunity to significantly impact Cyren's revenues in the future."

First Quarter 2021 Financial Highlights:

• Revenues for the first quarter of 2021 were $8.8 million, compared to $9.6 million during the first quarter of 2020.

• GAAP net loss for the first quarter of 2021 was $4.2 million, compared to a net loss of $2.8 million in the first quarter of 2020.
• GAAP net loss per basic and diluted share for the first quarter of 2021 was $0.06, compared to a loss of $0.05 per basic and diluted share for the first quarter of 2020.

• Non-GAAP net loss for the first quarter of 2021 was $3.2 million, compared to a Non-GAAP net loss of $2.8 million for the first quarter of 2020, representing an increase of 14%.
• Non-GAAP loss per basic and diluted share was $0.05 for the first quarter of 2021 and the first quarter of 2020.
• Cash used in operating activities during the first quarter of 2021 was $5.3 million, compared to operating cash usage of $4.4 million during the first quarter of 2020, largely driven by an increase in net loss and a decline in deferred revenue driven by the receipt of a multi-year, multi-million dollar prepayment from one of its largest customers in the first quarter of 2019.

• Net cash flow for the first quarter of 2021 was a positive $7.1 million, compared to a positive $3.5 million during the first quarter of 2020. Net cash flow in the quarter includes $12.6 million in financing activities (net of issuance costs) as the result of the registered direct stock issuance that closed in February.

• The cash balance as of March 31, 2021, was $16.5 million, compared to $9.3 million as of December 31, 2020.

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:

• On February 25th, Cyren announced it joined the Palo Alto Networks Cortex XSOAR Marketplace, the industry's most comprehensive security orchestration marketplace, providing customers more convenient access to Cyren's threat intelligence product offerings.
• On February 16th, Cyren announced the closing of a $13.8 million registered direct offering of 12,000,000 of its ordinary shares at a purchase price of $1.15. Cyren intends to use the net proceeds from this offering for working capital and general corporate purposes.
• On February 9th, Cyren announced that Swiss-based Sika Group selected and deployed Cyren Inbox Security to 25,000 users across its global operations to provide visibility of phishing attacks across the enterprise and provide automated detection, response and remediation of incidents.
• On January 19th, Cyren announced the availability of Cyren Inbox Security for Microsoft 365 through the Microsoft Azure Marketplace, providing an easy and convenient location for customers to review and evaluate the product.

Financial Results Conference Call:

The company will host a conference call at 4:30 p.m. a.m. Eastern Time (11:30 p.m. Israel Time) on Monday, May 17, 2021 to discuss first 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/cyren05172021/en.

For those unable to participate in the live conference call, a replay will be available until May 31, 2021. 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 13719133. 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 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
Kenneth Tarpey, CFO
Cyren
+1.703.760.3435
kenneth.tarpey@cyren.com

CYREN LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of U.S. dollars, except per share amounts)
		Three months ended
		March 31
		2021				2020
		Unaudited				Unaudited
Revenues		$	8,757			$	9,649
Cost of revenues			3,795				3,598
Gross profit			4,962				6,051
Operating expenses:
Research and development, net			4,250				3,344
Sales and marketing			2,638				3,036
General and administrative			2,160				2,214
Total operating expenses			9,048				8,594
Operating loss			(4,086	)			(2,543	)
Other income (expense), net			(18	)			6
Financial expenses, net			(214	)			(231	)
Loss before taxes			(4,318	)			(2,768	)
Tax benefit (provision)			121				17
Net loss		$	(4,197	)		$	(2,751	)
Net loss per share - basic and diluted		$	(0.06	)		$	(0.05	)
Weighted average number of shares outstanding:
Basic and Diluted			68,469				59,684

CYREN LTD.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands of U.S. dollars, except per share amounts)
		Three months ended
		March 31
		2021				2020
		Unaudited				Unaudited
GAAP gross profit		$	4,962			$	6,051
GAAP gross margin			57%				63%
Plus:
Stock-based compensation expense			21				44
Amortization of intangible assets			667				431
Non-GAAP gross profit			5,650				6,526
Non-GAAP gross margin			65%				68%
GAAP operating loss			(4,086	)			(2,543	)
Plus:
Stock-based compensation expense			458				645
Amortization of intangible assets			742				560
Expense (Capitalization) of technology			(151	)			(1,213	)
Non-GAAP operating loss			(3,037	)			(2,551	)
GAAP net loss			(4,197	)			(2,751	)
Plus:
Stock-based compensation expense			458				645
Amortization of intangible assets			742				560
Amortization of deferred tax assets			(54	)			(48	)
Expense (Capitalization) of technology			(163	)			(1,244	)
Non-GAAP net loss			(3,214	)		$	(2,838	)
Numerator for non-GAAP EPS calculation			(3,214	)		$	(2,838	)
Non-GAAP net loss per share		$	(0.05	)		$	(0.05	)
GAAP weighted-average shares used to
compute net loss per share			68,469				59,684

CYREN LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars)
		March 31				December 31
		2021				2020
		Unaudited
Assets
Current Assets:
Cash and cash equivalents		$	16,455			$	9,296
Trade receivables, net			721				960
Deferred commissions			953				980
Prepaid expenses and other receivables			820				779
Total current assets			18,949				12,015
Long-term deferred commissions			1,036				1,125
Long-term lease deposits and prepaids			861				937
Operating lease right-of-use assets			10,275				10,900
Severance pay fund			767				745
Property and equipment, net			3,360				3,948
Intangible assets, net			7,153				7,797
Goodwill			20,860				21,476
Total long-term assets			44,312				46,928
Total assets		$	63,261			$	58,943
Liabilities and Shareholders' Equity
Current Liabilities:
Trade payables		$	882			$	799
Convertible notes			10,000				10,000
Employees and payroll accruals			3,811				3,813
Accrued expenses and other liabilities			1,236				1,420
Operating lease liabilities			1,863				1,983
Deferred revenues			4,106				6,934
Total current liabilities			21,898				24,949
Deferred revenues			583				644
Convertible Debentures			8,456				9,248
Long-term operating lease liabilities			9,107				9,866
Deferred tax liability, net			513				655
Accrued severance pay			839				838
Other liabilities			521				706
Total long-term liabilities			20,019				21,957
Shareholders' equity			21,344				12,037
Total liabilities and shareholders' equity		$	63,261			$	58,943

CYREN LTD.
CONDENSED CONSOLIDATED CASH FLOW DATA
(in thousands of U.S. dollars)
		Three months ended
		March 31
		2021				2020
Cash flows from operating activities:		Unaudited				Unaudited
Net loss		$	(4,197	)		$	(2,751	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
(Gain) / loss on disposal of property and equipment			18				(13	)
Depreciation			563				618
Stock-based compensation			457				645
Amortization of intangible assets			742				560
Amortization of deferred commissions			325				350
Non-cash operating lease expense			466				389
Interest on convertible notes			142				141
Interest and amortization of debt issuance costs on Convertible Debentures			176				24
Deferred taxes, net			(124	)			(64	)
Changes in assets and liabilities:
Trade receivables			211				(652	)
Prepaid expenses and other receivables			2				(326	)
Deferred commissions			(208	)			(388	)
Change in long-term lease deposits			2				(114	)
Trade payables			62				45
Employees and payroll accruals, accrued expenses and other liabilities			(176	)			(491	)
Deferred revenues			(2,774	)			(2,073	)
Accrued severance pay, net			(21	)			(23	)
Operating lease liabilities			(731	)			(420	)
Other long-term liabilities			(186	)			153
Net cash used in operating activities			(5,251	)			(4,390	)
Cash flows from investing activities:
Proceeds from sale of property and equipment			2				2
Capitalization of technology			(152	)			(1,001	)
Purchase of property and equipment			(18	)			(558	)
Net cash used in investing activities			(168	)			(1,557	)
Cash flows from financing activities:
Proceeds from rights offering, net			-				-
Proceeds from Convertible Debenture, net of debt issuance costs			-				9,442
Proceeds from stock issuance, net of costs			12,588				-
Net cash provided by financing activities			12,588				9,442
Effect of exchange rate changes on cash			(30	)			(6	)
Increase in cash, cash equivalents and restricted cash			7,139				3,489
Cash, cash equivalents and restricted cash at the beginning of the period			9,914				12,127
Cash, cash equivalents and restricted cash at the end of the period		$	17,053			$	15,616
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flow:
Cash and cash equivalents		$	16,455			$	15,061
Restricted cash included in long-term restricted lease deposits			598				555
Total cash, cash equivalents and restricted cash		$	17,053			$	15,616

SOURCE: Cyren Ltd

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https://www.accesswire.com/647820/Cyren-Announces-First-Quarter-2021-Financial-Results

FAQ

What were Cyren's Q1 2021 earnings results?

Cyren reported Q1 2021 revenues of $8.8 million and a GAAP net loss of $4.2 million.

How did Cyren's revenue in Q1 2021 compare to Q1 2020?

Cyren's revenue in Q1 2021 was $8.8 million, down from $9.6 million in Q1 2020.

What is the cash position of Cyren as of March 31, 2021?

As of March 31, 2021, Cyren's cash balance was $16.5 million, significantly up from $9.3 million at the end of 2020.

What are Cyren's plans for the anti-phishing market?

Cyren aims to enhance its position in the anti-phishing market with its Cyren Inbox Security product, targeting enterprise customers using Microsoft 365.