PETALUMA -- Telecommunications equipment and software maker Cyan, Inc. (NYSE: CYNI) on Monday reported second-quarter sales dropped 23 percent and net loss expanded by 61 percent from a year before, as revenues continue to suffer from a major pullback in orders from the top customer, but investors boosted the stock Monday as results beat analyst expectations and recent news from that leading customer that orders could pick up by year-end.
Revenue for the quarter, ended June 30, was $24.4 million, down from $31.7 million a year before but exceeding prior guidance of $21 million to $23 million. Quarterly net loss was $14.7 million, or 31 cents a share, compared with $9.1 million, or 33 cents, a year before.
"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, chairman and chief executive officer. We are pleased with our execution this quarter and with the momentum we see in the market."
Cyan's softward-defined network, or SDN, system is targeted to telecom carriers.
The company's largest customer up to this year, Little Rock, Ark.-based Windstream Holdings, cut purchases from Cyan by 88 percent, and by the end of the first quarter made up only 10 percent of Cyan sales. On July 29, Windstream said it plans to spinoff certain telecom network assets as a private real estate investment trust early next year and invest more in its network.
Mr. Floyd had told investment analysts that Windstream sales for metropolitan markets could pick up in the second half of this year after Windstream finishes long-distance network upgrades. Sales to that telco had rebounded to 28 percent of Cyan revenues, or $6.7 million, by the end of the second quarter, Mr. Floyd told investment analysts on a conference call Monday.
While Cyan anticipates U.S. telcos to pick up capital spending early next year with a new round of federal government in the Connect America program, sales on the continent generally have been "soft," he told analysts.
Yet international sales picked up 15 percent from the beginning of this year, largely because of carriers in South Korea and Japan, he said.
Cyan's stock price got a boost on July 29 from the Windstream announcement but settled back down to $3.65 a share Friday. The closing price, before second-quarter results were released, was $3.75 Monday, up 2.74 percent. Immediate after-hours trading pushed the price up another dime a share to $3.85.