Conference Call To Be Held Today at 4:30 pm Eastern Time
PALO ALTO, Calif. – Sysorex (NASDAQ: SYRX), a developer of high performance analytics software and solutions, today reported financial results for the second quarter ended June 30, 2016.
Second Quarter 2016 Financial Highlights:
- 2016 Q2 revenue of $13.3 million
- 2016 Q2 gross margin of 26%
- 2016 Q2 GAAP net loss of $0.17 per share
- 2016 Q2 GAAP net loss of $4.2 million
- 2016 Q2 Proforma Non-GAAP net loss1 of $0.11 per share
- 2016 Q2 Non-GAAP Adjusted EBITDA1 loss of $2.2 million
“While we experienced a softening in our Storage and Computing Segment, which impacted our earnings for the quarter, we remain optimistic about future growth in this segment as we expand into the government vertical to offset the industry trending contraction in commercial verticals. We are encouraged by the expansion in our Mobile, IoT & Big Data Products and Professional Services segments and believe that our growth potential in both our Sysorex and LightMiner offerings are significant. Our offerings are receiving substantial interest from a growing cadre of large, industry leading clients across Retail, Security and Government sectors and we anticipate announcing a number of additional significant customer developments in the coming quarters,” stated Mr. Nadir Ali, CEO of Sysorex. “We are also very pleased to have recently closed on a $5 million convertible-debt and preferred stock financing with Hillair Capital which positions us for further growth by providing the capital we require to expand our sales and marketing and development efforts. This financing is based on a $1.50 conversion price which we believe demonstrates Hillair Capital’s shared confidence in our future.”
Second Quarter 2016 Financial Results
Revenue: Total revenues for the three months ended June 30, 2016 were $13.3 million compared to $17.7 million for the comparable period in the prior year. The decrease in revenues of $4.4 million is primarily attributable to the Storage and Computing segment contraction in the quarter ended June 30, 2016. For the three months ended June 30, 2016, Mobile, IoT & Big Data Products revenue was $491,000 compared to $233,000 for the prior year period. Storage and Computing revenue was $8.7 million for the three months ended June 30, 2016, and $13.4 million for the prior year period. SaaS Revenues was $792,000 during the three months ended June 30, 2016 and $987,000 during the prior year period. Professional Services Revenue was $3.4 million during the three months ended June 30, 2016 and $3.1 million during the prior year period.
Gross Profit: Total gross profit for the quarter ended June 30, 2016 was $3.4 million, compared to $5.7 million for the comparable period in the prior year. Gross margin for the three months ended June 30, 2016 was 26% compared to 32% during the three months ended June 30, 2015. The decrease in gross margin was primarily attributable to lower gross margin for the Storage and Computing segment.
Net Loss: GAAP net loss attributable to the stockholders for quarter ended June 30, 2016 was $4.2 million compared to $1.7 million for the prior year period. This increase in net loss of $2.5 million was primarily attributable to lower revenue during the quarter and therefore lower gross profit to offset the operating expenses.
Non-GAAP net loss1: For the quarter ended June, 30 2016, pro-forma non-GAAP net loss was $2.8 million, compared to a non-GAAP net loss of $225,000 for the prior year period. For the quarter ended June 30, 2016, non-GAAP net loss per share was $0.11, compared to a non-GAAP net loss per share of $0.01 for the prior year period. Non-GAAP net loss per share is defined as net loss per basic and diluted share adjusted for non-cash items including stock based compensation, amortization of intangibles and one time charges including change in the fair value of shares to be issued and acquisition costs.
Non-GAAP adjusted EBITDA1: Total adjusted EBITDA for the quarter ended June 30, 2016 was a loss of $2.2 million compared to a gain of $34,000 for the prior year period. Non-GAAP adjusted EBITDA is defined as net income (loss) before interest, provision for (benefit from) income taxes, and depreciation and amortization plus adjustments for other income or expense items, non-recurring items and non-cash stock-based compensation.
1 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”
Second Quarter 2016 and Recent Business Highlights
- Sysorex Closes On $5 Million Convertible-Debt and Preferred Stock Financing With $1.50 Conversion Price
- Sysorex Launches Shoom e-publication Platform
- Leading Beverage Manufacturer Selects Sysorex For Next Generation Data Center Upgrade
- Sysorex Announces $4 Million Daruna Contract For Installation Of An Asset Tracking And Employee Management Platform For A New Planned Worker Community Of 28,000 Beds North Of Doha In The State Of Qatar
- Sysorex Debut AirPatrol For Retail Properties At Global Shopping Center Convention
All results summarized in this press release (including the financial statement tables) should be considered preliminary, are qualified in their entirety by the financial statement tables included in this press release and are subject to change. Please refer to Sysorex’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, which will be filed with the Securities and Exchange Commission on or about August 15, 2016.
Conference Call Information
Management will host a conference call on Thursday, August 11, 2016, at 4:30 pm Eastern Time to review financial results and corporate highlights. Following management’s formal remarks, there will be a question and answer session.
To listen to the conference call, interested parties within the U.S. should call 1-844-824-3831. International callers should call +1-412-317-5141. All callers should ask for the Sysorex Global conference call. The conference call will also be available through a live webcast, which can be accessed at http://client.irwebkit.com/Sysorex.
A replay of the call will be available approximately one hour after the end of the call through September 11, 2016. The replay can be accessed via Sysorex’s website or by dialing 1-877-344-7529 (U.S.) or +1-412-317-0088 (international). The replay conference playback code is 10091122.
Sysorex develops the systems and solutions that power the data-driven enterprise. With an innovative approach to big data, analytics and the Internet of Things (IoT), we blend virtual data from software and networks with the huge volume of physical data generated by mobile devices and Internet-connected things to open new worlds of insight. Our unique solutions are helping organizations worldwide improve decision making, increase productivity, and fuel the discoveries of tomorrow. Headquartered in Palo Alto, California, we have regional offices in North America, South America, Europe and the Middle East. Visit Sysorex.com, follow us @SysorexGlobal and Link up on LinkedIn.
Safe Harbor Statement
All statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of the control of Sysorex and its subsidiaries, which could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the fluctuation of global economic conditions, the performance of management and employees, the company’s ability to obtain financing, competition, general economic conditions and other factors that are detailed in the company’s periodic and current reports available for review at www.sec.gov. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements.
A. Sage Osterfeld, +1 (760) 707-0459
Sysorex Investor Relations:
Scott Arnold, +1 (516) 222-2560