Click here to close now.


SDN Journal Authors: Stefan Dietrich, Elizabeth White, Peter Silva, Pat Romanski, Don MacVittie

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, 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 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 or follow Cyan on Twitter at


Cyan, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)


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)


June 30, 2014 December 31, 2013
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)


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)


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
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 %
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
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
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
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
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 )
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 )
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.

@CloudExpo Stories
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company In the past, he was co-founder of social-trading platform Currensee, which...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true ...
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem"...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound...
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, San...
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user e...
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...