CYRN - Earnings call transcript Q3 2018

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Operator

Good day. And welcome to the Cyren Limited Third Quarter 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Eric Spindel, Cyren's General Counsel and Corporate Secretary. Please go ahead, sir.

Eric Spindel

you. Thank our discuss to XXXX third call results. financial conference welcome Cyren's to quarter And being and Web broadcast on is call This live Relations of the can section the Cyren site. Investor accessed be

note, With our to does let me conference filings, and to in a forward-looking XXF, considered revise materially a are outlined this management over Any and to would on differ statements Before call not outlook should any of management call Chief Also GAAP of the we based section Chairman Factors I Cyren's Mr. actual provided benefit is safe the statements on performance. section XX, that begin, any future. GAAP remind that and issued may current course to statements forward-looking in release report about on call, tables the statements. Investor like be to our the in during forward-looking forward-looking Lior to me available Company's our for make light the investors call, These risks Form the instead subject directly on measures of now expectations. Risk hand of when number harbor, during uncertainties on Financial discuss Myshrall, included Relations XXXX. Chief are risks you and as April today, cause present SEC will and are of the also of of we the Mr. Officer course These undertake talking including the results these be from annual that Samuelson, conference as please obligation expectations of risk to should today are site. any filed Reconciliations Please most factors. the earnings press the we and financial in the financial are measures of, may Lior. Officer. comparable this Mike addition non-GAAP considered in measures These that, in measures. today Executive With are and Cyren's to, Web not

Lior Samuelson

everyone over QX Thank morning call progress Revenues Cyren. XX% three you, Eric, joining the months, thank good today. record good million us an another the past We made Cyren. We excellent very quarter up for in and for and which on $X.X was reported revenue, were year-over-year. for was and you

security multimillion Overall win During was show quarter. well-known and the Cyren conglomerate, Cloud accounts enterprise Web other was our security significant to process signed quarter, we in comprehensive chosen its multinational RFP cloud platform employees security serve going future and .The good over as XX,XXX multiyear Cyren of provide into feel to CSS to-date largest XX new platform, sign springboard solutions. added on which will third the where awarded enterprise customers of a this customer sandboxing to aim enterprise after quarter. to We to Cyren email the other contract contract its a Security dollar Cyren to email

new to customers the revenue contract compared year-ago, a period grew orders quarter, year-over-year. same customers were the through first few year-to-date quarter bookings Year-to-date from XXX% over third up XXX% prior third The enterprise and recognition up and average enterprise XX% to XXXX. over the is

of cloud Arrow Electronics, security certify to enable provides partnership announced August, new working order channel is products revenue enterprise them with suite security sell province's their major cloud in During is first we a America. sale Cyren's resellers channel with full and the GoCloud. Cyren's to stream. network of with resellers, distributor distributors, product Cyren Arrow service to global to program which North Cyren in a generate recurring opportunity launch to and called third a program In providers the monthly managed quarter, and train The security closely SasS XXX% services.

that and our began relationship go-to-market already America. with our from in this North orders serve great extend receive have customer the first We to Arrow partnership for to a will channel think Cyren as

to has pain become phishing prospects hear from to industry is customers and alike increasingly and and continue prevent. point detect We that number becoming difficult the

real where in block As packages XXX. Cyren's we Cyren in is and phishing securities disclosed attacks year, help in billions Due transactions our Microsoft into by second to every the has we position attacks to earlier threat advanced online this been Office of view Exchange phishing Office technology protection global integrated their time. XXX combat day, unique to network see protection

our We load to remove guard of gateway user's an that their Cyren remediation. protection. industry as fishing of as email have is a company in capability able level be and for been market We primary after the they in will believe emails and this the position to will detection mailbox phishing and anti-phishing to unique to leader be technology We who mailbox. refine using further are working proactively remediate delivered

contract and will which XX four service major have of to XXXX early extensions but relationships a over business, next represent In customers with years the customers. of largest our Threat that Since solutions. is our driver These daily well stickiness Cyren Cyren's Cyren up, renewed Intelligence real transactions standalone it our for of we seeing its years. largest been the look service Threat pipeline become third We Cyren's with will additional our over launch we years, positive sandbox Overall, on feedback Mike. Intelligence of within very quarter, service materialize together $X.X for ranging leverages Cyren during the time billions Threat a could day officially of for database to into XXXX. fourth to of expect three that over zero top XX quarter our we average that, as year. Intelligence companies and I'll of to the call continued Last cloud full turn industry-leading we many deal four threat in base with of the threat. first launch allows quarter, Mike? the XX The the of annual and as our million. view for long-term value tenure talked portfolio. was and quarter, in XX contract are points service over an customers and beginning adopter Threat Intelligence the contracts And reliability up the expanded of signed The growth on forensics early the renew global

Mike Myshrall

good morning everyone XXXX Thank our the call pleased today. to you, quarter on and Lior results. third present I'm to financial

growth. in and $X.X represents refer on to will Web has Once million that million site. translates QX non-operating section reconciliation Relations third GAAP and this was standards, accounting our we items. metrics for Investor release financials our Please or highest a the for during million year-over-year earlier quarter quarter our was For to which that under quarterly full financial of results. today's earnings basis, those including table of release, non-GAAP more compared morning a XXXX to of state certain to Please revenue GAAP please note that details, the XX% issued quarter. adjusted which discuss press the on Cyren is refer again, expenses reported non-GAAP posted I of revenue this last and earnings excludes XXXX ever $X.X U.S. $X.X the to GAAP non-operating the third the and

over employees And to bring in dollar employees multimillion are figure helping the the value contract revenue annual deals over six value. up e-mail our e-mail overall, we XXX% of up in enterprise size our contract quarter base is XX,XXX These XXXX. security security contract Europe annual enterprise quarter, six recently third the and in added where business install During year-over-year. another deal figures. average new U.S. annual added XX% recurring high the customer XX,XXX in a We the another with is with

was which the details technology, a press excludes operating quarter. Third increase is items, related XXX margin our of employees expense, a capitalization to XXXX. from On non-GAAP year a of last in $XX.X basis, an and expenses in last XXXX increased million and and and a QX, $X.X the non-GAAP expenses the quarter last $X.X capitalization finished million with refer line and expenses an which up quarter, share to increase QX results. our to on the quarter quarter share a or share non-GAAP the non-cash per year. in reconciliation $XX.X $X.X or GAAP million R&D million operating third of last net gross non-GAAP was lower results. employees share or XXX with million $X.XX $X.X effective the net quarter. basic from share increase last The GAAP included $X.XX loss the to loss $X.X more a million GAAP year table of a Cyren's from is of last GAAP loss million third per and quarter including Please for the loss due of and compared million $X.X Cyren's and number per during headcount. to compared compare totaled primarily $X.XX We In a XX% non-GAAP quarter derived loss increase to compared in the of in in loss margins we're diluted operating million Non-GAAP diluted $X.X of XXXX totaled and technology the GAAP ago. net increased QX, of million compared GAAP was net $X.XX the to third quarter the $X.XX expenses basic The quarter, in over $X.X per per to net XX% last per in or R&D quarter. XXXX to quarter, third share during ago. or XXXX loss largely $X.X gross for an release million total is during $X.XX operating quarter $X.X million non-GAAP

quarter QX exercises. compared invested million XXXX. During the its end These XXXX. in flow for options developments, third balance employee $X in million million capitalized. of the $X.X cash compares operating had $X.X to and $X.X million of additional quarter cash ago. cash The quarter, operating by approximately the during the the compared million cash from approximately were to we $X.X million CapEx quarter the net third was $X.X technology an quarter, of $XX.X a end offset were which negative in $X.X at usage $X.X the we million the which Also was And of to of in flows Company's flow million, at million proceeds cash year negative

of three cash Company the we we third to ask quarter, calculations In registration the years. shares Throughout restricted the a is another the press operator XXth. filed $XX for $X.X intended million enable cash total to September quarter, the average since a That cash, third our timely act of shelf registration restricted form our equivalents In Cyren over maintained of compares per weighted million shelf had QX outstanding Cyren shares in outstanding, equity as the Q&A. to a cash additional I $XX.X markets the debt in shares addition, cost-effective million the September, of a upto on capital had of concludes FX reflected XX.X $XX.X a third total million to statement million statement last of flexibility next open-up total and raise end on XXXX. At given share for outstanding, XX expired or in XXXX. to release. is now basis, and in in The to prepared and the in remarks. the which line million quarter we which in will

Operator

Bennett Group. [Operator Craig-Hallum Please our take go Instructions] We Chad question from first ahead. from will now Capital

open. is line Your

Chad Bennett

Any provide cloud for potentially? guidance regarding security could you potential XXXX that bookings,

Lior Samuelson

we're forward next quarter looking more the going provide we what guidance But in XXXX. the phishing year. of first the the significantly haven't to service in guidance of release though the we during yet and continue drive enterprise XXXX provided that say QX for that year we the is and we three fourth to traction to is into not that help a expect quarters yet point So and the can QX made bookings should at QX, we're

on number, going on are specific think new release the we a very giving we things service and business. are without enterprise side So of bullish the of the well

Chad Bennett

could you overall there breakdown in securities to of deal terms booking the Is between security get that mix email and web the breakdown? provide

Lior Samuelson

security past of a total of both the both we've that quarter little I email Europe. of email towards deal that was Well, a than And this nice who'll the primarily take what also together mix deal customers just we suite seen users value skewed seeing up larger we're securities opting the the on a dollar which on quarter as who and our email interest the well, say more And significant security had enterprise especially because throughout make side. for offerings. a include of of bit then on think that and by of this are number a driven sandboxing. for historically there's the But larger cloud DNS email quarter. is the been our I email email packages, web security. in email security would would was bookings overall, part web as largest Europe mix services. Historically, And security advanced But overall say of I the component

Operator

is take We from Wallace question your next now our Please ahead, White Mike will go Capital. line from Pine open.

Mike Wallace

a I have couple questions.

do on if my Looking I'm I today. mobile but own at margins gross this and apologize

goods costs now. R&D sold of that you If through cost and amortized others excluded capitalized that by go and the

the If this quarter? gross you what be would margins excluded those,

Mike Myshrall

non-GAAP gross So at quarter on on a margin. a XX% we're basis,

Mike Wallace

it last year? was what And

Mike Myshrall

So previous it XX%. XX% up XX% then QX of 'XX, and also in But QX, was to went quarter on ago it a year QX. was in

So throughout it has trended XXXX. upward

Mike Wallace

And to continue? as it this into be would 'XX, about and you that safe say quarter to trend think

Mike Myshrall

function function it's of it's we obviously recognize. revenue think a that I the things on Yes, two a

so cost same the revenue the continue as think fixed at rate. increase, to we won't support both and operations And that increase in

margin so therefore gross improve. our should And

investing as business, in cloud the are as we operational However, centers the side both components. data the of in our well

to associated data of are our and on slightly stats out you a a goods basis, so building sold higher And centers. quarter-over-quarter operational seeing cost with

Mike Wallace

you I recurring were enterprise mentioned up year-over-year, right? XX% revenues think

Mike Myshrall

year-to-date. Yes,

of So look three XXXX, quarters of you to first three XX%. if quarters up we're compared the the XXXX at first yes,

Mike Wallace

can that us? And what is -- that you with share number

Mike Myshrall

top the $X my it's off it now. north of of but have don't head, I million

Mike Wallace

revenues the of bookings give booking. Can those And are traditional how sense much bookings us contracts? revenue bookings like annual of or recurring really enterprise versus some strong, you were outstanding SaaS

Mike Myshrall

it's we SaaS consider the all So all model. of the recurring bookings revenue, based as

break two booking the The traction them email specifically intelligence we business components, through our was I and business so about the or threat or are And it enterprise CTS recurring. CTS of into web. business. enterprise Both that the SaaS talked

as larger the primarily a script. so the nicely it's very growing during of in we that And the quarter, result deals some mentioned of

Mike Wallace

And do How sign about on about much -- came how the so so those sheet collect cash was when when you much I balance SaaS contracts. And then how of think million think the that, that cash. from that I Cyren contracts? I and $XX.X the

Mike Myshrall

Intelligence the the is prepays So -- actually collection typically when is the it's a little mix the cash bit higher to of derive, because and invoice. Intelligence basically paid advance. as our Historically, related of in deferred also year a and Threat being invoice some revenue business the this quarter, whereas not has customer business. enterprise the the But the time and a upfront to company when as -- in pays Threat business well the balance business, enterprise both our

closed yet. have may might cash that deal in quarter not reflect quarter, the we we the third though third even So in the

Mike Wallace

'XX. grow we into QX think as on about as we business? into look SaaS the side how you Mike, So the building of continue should balance the cash to and

Lior Samuelson

issues the So at mentioned, attention to as $XX.X sheet. the balance related show And or we to least Mike making for we dilutions. while on ways and looking with up sure sheet quarter million paying are our balance always finished to

and looking our making line shareholders we're sure the we that do that? to So shore when balance in have always up sheet we

Mike Wallace

What that cash And last balance you so you a need? one maybe think as do final question. comfortable

Mike Myshrall

provides cash this million operated the cash to $XX.X the I to as comfortable to problem. around had more more with sales a between into the ending XXXX. gives balance visibility now. million it invest we've it the $XX sheet balance we're balances and lot had we're $XX us the on R&D well said, marketing. us a at think $X right million ago and additional But no about, able million in and and cash with balance we're And gives and year it runway add But historically we if sheet, that quarter, Lior Certainly we flexibility that lot

Operator

Instructions] line now [Operator [XX.XX] next We open. is your go take ahead, question our Please [indiscernible]. will

Unidentified Analyst

me Can hear Difficulty] [Technical now? you Operator…

Mike Myshrall

if now the the had The was wait contractually, disclose Yes, sign service press this a question to it? And us been question. think that the disclose history, we in they we the quarter, deal standpoint, but in press at company's do to we've allowed to it did why release that explanation basic did They we largest haven't that we launched of customer receive on is this enterprise a until we haven't the that contract. stage. therefore name their and was to didn't worthy release from so contract allowed third

hoping on the once to will their certain a fully And down they name disclose the and the so that customer we'll road us that we're do allow milestones meet study win. case

Operator

no time, appears call any back or the turn to would remarks. for this conference additional like it closing questions. At to you further I

Lior Samuelson

for thank your quarter And very developments. strong We to call appreciate participation very the And very interest gentlemen, Cyren. on look and Ladies forward in much on keep to the much day. year. Have we'll future you finish strong fourth we a a nice you and our updated you a today.

Operator

today's Thank participation. your you call. for This concludes

now may disconnect. You

Cyren (CYRNQ) 14 Nov 182018 Q3 Earnings call transcript