Cyan reports revenue record
In its first earnings announcement as a public company, optical transport systems and software-defined networking (SDN) platform vendor Cyan (NYSE: CYNI) says that revenues for its second quarter ended June 30, 2013, reached $31.7 million, a record. However, the company did not report a profit.
The $31.7 million in 2Q13 represented a 37% bump year-over-year and a 20% sequential improvement from the previous quarter, when it earned $26.3 million. Nevertheless, the improved sales performance did not prevent Cyan from reporting a net loss for the quarter of $9.1 million ($0.33 per share). The loss was significantly worse than that of the year-ago quarter, which was $1.5 million. However, it was a slight improvement from the first quarter of this year, when the company suffered a net loss of $9.4 million. Operating expenses for the company nearly doubled year to year to $20.3 million.
Non-GAAP, the net loss shrank to $6.6 million ($0.24 per share), versus a net loss of $0.8 million in last year’s second quarter and a net loss of $6.3 million for the previous quarter of 2013.
Gross margin for the quarter also set a record of 43.5%, up from 41.6% in the previous quarter and 41.7% for the year-ago quarter.
In a call with analysts August 6, the day Cyan released its 2Q13 results, Chairman and CEO Mark Floyd positioned the company as a leader in network virtualization, particularly through SDN. Floyd said SDN offers “a huge opportunity” for the company. In addition, Floyd said that Cyan also was well-placed in packet-optical transport through its Z-Series of systems.
“For the second quarter, Cyan delivered record revenue and gross margin while continuing to make investments to capitalize on our large and growing addressable market,” Floyd explained in a press release announcing the quarter’s results. “Our Blue Planet software-defined network (SDN) platform is a key differentiator and continued to gain momentum, with over 85 customers implementing this innovative technology since its launch last December. We continued to make significant strides in our international expansion, increasing our presence to 13 countries outside of North America and increasing our international partnership base. During the second quarter, we successfully completed our IPO and ended the quarter with over $92 million in cash and cash equivalents.”
Floyd also told participants on the call that Cyan is “actively engaged with multiple new Tier-1 carriers,” but cautioned against expectations about new sales from these carriers in the near term due to the length of the typical sales cycle. Floyd said he hopes these conversations will bear fruit next year. This customer set includes carriers in the U.S. and elsewhere.
He did reveal that the company has begun shipping product to what he described as “one of the largest Internet franchises in the world.”
Looking forward, Cyan also will emphasize international expansion. “Key drivers for the future include further geographic expansion, penetration into verticals beyond the carrier market, and the broadening of our footprint within existing accounts as well as with new customers,” Floyd said via the release.
The company is confident these efforts will bear fruit. For the current quarter, Cyan guided revenue upward, to between $36 million and $38 million. GAAP net loss is expected to range from $8.6 million to $10.0 million. Non-GAAP that loss should become between $6.7 million and $8.1 million.
Cyan launched its IPO this past May (see "Cyan IPO to launch today").
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