CYRN - Earnings call transcript Q4 2021

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Operator

Greetings. Welcome to Cyren’s Fourth Quarter and Full Year 2021 Earnings Call. At this time, all participants will be in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. turn over I’ll General Brian time, Counsel. this the to conference Dunn, At Mr. begin. you Dunn, may

Brian Dunn

live and you, Year Call. being the on Results Full Cyren’s section Relations XXXX Conference be of broadcast the is Investor call website. Thank This to Financial welcome Fourth Cyren can accessed and Quarter and

expectations call, to and provided and measures financial are in release available be press section measures. instead the today in our we tables future. me company’s outlook statements make revise most may from in forward-looking talking benefit number of should non-GAAP These including the of forward-looking please the statements and Before considered when Risk our that be and may of does these considered and expectations. website. the These management not to XXXX. we management Reconciliations Please financial filed conference Factors forward-looking filings, any let obligation and included on investors the uncertainties undertake begin, subject outlined course to measures in report today, XX, we cause on of Relations SEC XX-K, in Cyren’s during any directly during based issued that on of note, risks we should not the actual current comparable harbor Form light our may These are to you safe risks this about addition a call, differ factors. as the are annual earnings remind of on are GAAP this the of conference that materially the risk are discuss is the statements. the GAAP statements to measures section also forward-looking in March of performance. results Also Investor Any present as for

over to now Executive Jackson, call Brett. Ken Officer. Financial today’s I Joining that, will Brett me have we hand Officer; With on Chief and call, the Chief Tarpey,

Brett Jackson

execution strategy Thanks, Brian. stream focus to build our of an establishing everybody Cyren I’d anti-phishing the in with exciting revenue revenue market. continues today’s like call. to to welcome to continued enterprise on growth, new

QX quarters downsell declined our which of XXXX to previously was legacy this and prior constitutes from reported to overall our and While churn related the Cyren’s business, year-over-year, revenues. largely current revenues majority due

continue future We believe revenue that Cyren Cyren driver Inbox be over and key to become of mix our for will part larger solution, growth anti-phishing a our a revenue time. of Security,

I for business materially yet results, to to of number our quarters, high-growth has have with beyond the rate it’s potential maintain to a not material been believe overall to expected future revenues. potential and XXXX While the we be anti-phishing not to and throughout contribute a

this past Cyren approximately potential has As approximately growth are growth our quarter-on-quarter calls, of growth provide a ARR to shareholders Inbox quarters full in year-over-year journey that we have to is mentioned market year multiple was the XX% and XX%. with we pleased of span are report for. looking Security and and XXXX will that first in Cyren the our

demand base our vector. email which suggest XX%, global and believe threat dollar believe and coming effective these business is Traditional of and gross deal across compromise, threats basis. these and in This enough attacks are against customer an gateways have and security channel Many help are a even in complemented and email with have year almost value But top defenses We security specific are customers high, existing solutions security traditional Customers of been an are defenses strategy. was growth, grew doubled threats retention our awareness multiple total who to compelling highly automated the Customer educate attacks reports through not deal of to addition phishing cyber Multiple These training is results implemented research provides struggling awareness In awareness the in business simply industries our indicative business We and Inbox satisfaction or that partners. Inbox a remediation licensed XX% Security anti-phishing companies ATP important by all XXXX phishing security to Microsoft sizes on for was email to focused in Security, data as threats our phishing, that continue of will a solution provides with attack training on and both from top proliferate. ransomware. as studies constant addition compromise and strong industries Security of and of with Cyren and detection component Cyren to like opinion, users be customers on they with the approximately emails. of to fight and evasive. across users email and training compromise security phishing. effectively turned XXXX should solutions. ARR Inbox with dynamic of record our Cyren with very XXXX better faced have geographies multiple customers solution email a XX%. remains implemented to

have We our As previously from Inbox the business is paradigm a customers products. that different received and security products including security email feel traditional than training Cyren’s very believe and solution between security a provides market-leading addressing differentiated, integration reinforcing reported, Security more highly awareness we solution, training. completely awareness no phishing email to have with Cyren who positive against integrated befores approach follows and feedback effective phishing compromise,

and incident email detection, threats, from a Our remove along them automatically threat and just automated approach we as compromised We eliminating customer’s phishing a the email system, identify response. time security on and and don’t on business and effort leverages saves strength investigate and Cyren’s IT This no customers longer core threat and saving with suspicious basis. return provides staff effort and manually regular a valuable must they tangible emails investment. remove time

easy our a for and greater solution need business greater go-to-market we – email solution XXXX. compromise. than customers opportunity is grow business anti-phishing in key compelling have to growth continue in of to to XXXX, our including continuing front to differentiated implement we believe by who phishing plan our get and to a channel. real large our execute clear we market we continued maintain and we As address expansion rate ARR of close The and grow investing The throughout in more is XX% to efforts, maintained customers to our a

the been our to from their to in threats business. and move help customers Cyren than business OEM themselves me from Let email, files years, this providing and has XX detection in more for customers protect threat intelligence solutions web. and

relationships of renewal most confidence vendors, and They leading email The renewals, with a multimillion dollar valuable largest are for number have who and a one solutions cybersecurity our business services the annual in who Cyren the brands dominated for grateful by highlight typically service. results their $XXX,XXX. providers renewals. products. XX in closed be of we’re than our our providers, most greater have decade, over was been customers, a whom continued their with world. for customers, of longstanding values high-value were part to our customer into Cyren, this contract with happens of approximately of Quarterly largest one managed a Our embed We

financials. gross and maintaining focused XX%. OEM report high-quality teams we engineering fourth of are pleased quarter retention quarter and maximizing well and With satisfaction dollar to among improving and review a service a are I will we customer now to us, over our on XXXX who on are turn focused success results strong Tarpey, of behind on QX. customer fourth customers, the call concentrating Our in Ken to will close the our XXXX CFO,

Kenneth Tarpey

you, good Thank afternoon, everyone. Brett, results. quarter our financial year I will fourth full now XXXX and and present

earnings full XXXX for XXXX. our for were reconciliation that quarter revenues excludes XXXX. press in the fourth the to measures. our selected decrease issued stock-based markets for detailed million an costs. the year Investor were assets, to million, was XXXX $XX.X are QX a during closed $XX.X then non-GAAP The non-operating fourth capitalization line million Please year and adjusted including accounting discuss financial of Please amortization revenue revenue today $X.X first after compared mainly these revenue. GAAP driven results financials our impairment is U.S. XXXX by this on more contract items, standards, that which intangible note posted compared today largest were in quarter and our The deferred on revenues non-operating to XXXX XXXX. in XX% XXXX $X.X tangible shortly For on including Relations results GAAP press our please table and to we Full and revenue Form reported non-GAAP in of results, representing refer which largest February compensation, million that Cyren’s disclosed XX% present under full Form of tax non-cash refer with release items. XXXX amortization year QX of QX effective exclude on of $XXX,XXX decrease of was preliminary X-K a XXXX from This number GAAP filed section QX XX. results, was our customer, and for million impact and released XX-Q, was and will contract website. release expenses, full effect metrics assets or The basis, QX reduction I decrease for technology of reduction XXXX. year $X.X customer non-GAAP of assets remains which which customer, was of of of to XXXX the certain a the the

were to XXXX. GAAP of during year quarter quarter values as On year decreased the with XX% end-of-life a year legacy going margins was period renewals XXXX, during to products. non-GAAP were quarter customer fourth the compared to contract fourth compared XX% gross Full due XX% compared lower XXXX. XXXX. with the XXXX gross fourth for cost basis, margins full gross XXXX Additionally, churn, XX% XX% GAAP gross sold for and ago. quarter revenues XXXX, at non-GAAP and the the XX% ago. a in line were to for And non-GAAP were compared the margins margins the goods of of to same to a full the year for several coupled have year roughly XX% customer XX%

the net during $X.XX net to and loss million revenue. XXXX. or diluted function So share basic GAAP the of of per compared gross share Fourth a of margin quarter reduction per lower $X.XX a million GAAP is was and loss fourth $X loss in quarter $X.X

For fourth the during share, $XX.X $X.XX million, $X.XX and a share net basic per million a XXXX. loss per loss XXXX. net a of was of Cyren’s diluted fourth non-GAAP per to of during $X.XX quarter share XXXX million compared quarter $X.X basic to loss $XX non-GAAP basis, in loss $X.X net year, in share and or translated net diluted an $X.XX full On and This was the increase versus GAAP from XXXX XXXX. of million loss per the

million was non-GAAP full a fourth On the expense. million change million as for quarter quarter the million, loss to XXXX, XXXX XXXX. non-GAAP $X basis, total $XX.X quarter For operating compared totaled $XX.X fourth for $X.XX million by going $X.XX the million in mainly year, fourth per increase compared share in the This or compared XXXX. quarter per to share, totaled $XX.X in R&D was driven expenses as Cyren’s net for expenses million $X.X or XXXX. a QX $X.X $X operating of to GAAP the

decided During the $X.X million books fourth of development during to of quarter projects. quarter increase we terminated older million, a fourth result products. projects expense for release was includes did $XXX,XXX to fourth XXXX in during expense for certain the was one-time those XXXX on The XXXX. R&D R&D the R&D expense the adjustment approximately recent reason write-off also the of quarter, R&D quarter not compared from the GAAP GAAP GAAP $X.X that technology non-recurring in

R&D prior XXXX, in quarter launched in fourth fully the XXXX amount certain of a During are expense new lower quarters, since we now capitalize products than market.

R&D and related and the R&D increased which for expense costs salary headcount as On QX marketing expense XXXX in which $X.X XXXX XXXX compared quarters. was for expenses a million capitalization to QX $X.X so $X.X million quarter compared excludes compared Non-GAAP On capitalization fourth increase. the at headcount, non-GAAP effect than in from R&D XXXX. for basis, QX lower for XXXX. fourth resulted XXXX basis, Employee R&D during lower million million, part-time to to of higher to and GAAP $X.X capitalization, quarter during were QX of million XXXX. was headcount expenses. end The the result, reduces R&D $X.X was G&A decreases, fourth year full-time R&D these the and a will a with XXXX, sales costs. the XXXX. was consistent in million as XXX was quarter as during XXXX quarter Hence Also, GAAP As $X.X XXXX. prior in expenses employees, from $X.X non-GAAP million quarter a fourth sales during to of $X.X the $X expense at compared expenses XXX G&A of fourth the of the of end QX decreased ago. to expense million, quarter employees marketing XXXX, million of of the down period

repayment had to driven $XX.X This million flow trade at receivable to split. million, the by XXXX. of flow in on comply previously XXXX. negative NASDAQ on began $X.X a quarter, of customer notes, XX, Overall operating receipts, balance due days, offset procedures. To net common the February no we our we $X.X a was after our net XX, the with XXXX. X, a consecutive regained compared compliance basis closing cash the increase ordinary price during NASDAQ per which stock The the negative quarter for a cash one-for-twenty subject flow the in symbol, quarter million as negative XXXX during delisting are matured trading ordinary convertible largely During share February This approved was to And capitalized February fourth under by longer $X.X payment of trading Listing operating X, large cash of increase $X share closed an of loss, split-adjusted by fourth requirements, well above announced vote. shares cash of December improved Requirements million, minimum XXXX. CYRN.. received $XX XXXX, we we was million existing XXXX, the on was shares primarily business December $X.X for million October was shareholder bid XX a and action reverse On with XXXX, minimum bid of

received placement corporate February purposes. the of the we to on which million Thank investors. will executed several XX, proceeds, for questions. gross reported, a capital XXXX, approximately issued you. to general previously working institutional shares As operator We for will warrants private ordinary lines and and ask I and used open now be $XX

Operator

Thank we now management you. be turn conducting time, [Operator [Operator At a questions. Thank Instructions] have session. floor not We’ll for to I’ll the question-and-answer Instructions] remarks. do you. any this further

Brett Jackson

Thank today interest We on and joining for to in all in on remarks. future. keeping further forward progress you. No us the you Thank updated call our Cyren. your look you the

Operator

This will today’s conclude conference.

You participation. may for lines time. your at this disconnect you Thank your

Cyren (CYRNQ) 24 Mar 222021 Q4 Earnings call transcript