Company Overview
Sphere 3D Corp. (NASDAQ: ANY) provides virtualization technologies and data management solutions. It enables organizations to deploy a combination of public, private, or hybrid cloud strategies through containerized applications, virtual desktops, virtual storage, and physical hyper-converged platforms. The company sells its products through its distributor and re-seller network to small and medium enterprises, small and medium businesses, and distributed enterprises. Sphere 3D Corp. was incorporated in 2007 and is headquartered in Mississauga, Canada.
Products and Services
The company offers G-Series Appliance and G-Series Cloud applications; virtual desktop management software for managing virtual desktop pools on its V3 hyper-converged appliances for virtualized desktop infrastructures; virtual desktop infrastructure appliances; RDX removable disk solutions, which use public cloud providers comprising Microsoft and Amazon for data protection; and SnapServer network attached storage solution, a platform for primary or nearline storage for integration with Windows, UNIX/Linux, and Macintosh environments.
It also provides SnapScale clustered network attached storage solutions, which are clustered network attached storage (NAS) solutions that enable organizations with rapid or unpredictable data growth to scale capacity and performance; NEO tape-based backup and long-term archive solutions, including tape libraries, autoloaders, and drives, as well as LTFS solutions; and LTO tape drives and media products. The company markets its products under the Glassware 2.0, NEO, RDX, SnapCLOUD, SnapServer, SnapSync, and V3 brand names.
Earlier this month the company announce the release of its new HVE Appliances supporting Non-Volatile Memory express (NVMe) technology. These NVMe enabled appliances will allow for over 3 times the drive read / write performance when compared to SSD only platforms, and are available as either converged and hyper converged appliances or “Datrium Ready” open converged nodes. Per G2M research, the NVMe market is growing fast, with a 95% CAGR rate and a forecast of 60% of enterprise storage appliances adopting the NVMe technology by 2020.
Q1 Financial Review
Financial Highlights Three Months Ended
(in millions) March 31, 2017 March 31, 2016
Net revenue $21.7 $19.6
Gross profit $6.8 $6.0
Gross margin (%) 31.4% 30.4%
Adjusted EBITDA (1) $(1.0) $(3.1)
Net loss $(7.8) $(8.1)
Net revenue for the first quarter of 2017 was $21.7 million, compared to $19.6 million for the first quarter of 2016.
Product revenue for the first quarter of 2017 was $19.4 million, compared to $17.3 million for the first quarter of 2016.
Disk systems revenue was $15.0 million, compared to $12.2 million for the first quarter of 2016. Disk systems is defined as RDX, SnapServer family, virtual desktop infrastructure, and Glassware derived products.
Tape archive product revenue was $4.4 million compared to $5.1 million for the first quarter of 2016.
Service revenue was $2.3 million in the first quarter of 2017 and the first quarter of 2016.
Operating expenses for the first quarter of 2017 were $11.6 million, compared to $13.8 million for the first quarter of 2016.
Share-based compensation expense for the first quarter of 2017 was $2.2 million, compared to $2.6 million for the first quarter of 2016. Depreciation and amortization was $1.5 million in the first quarter of 2017, compared to $1.6 million in the first quarter of 2016.
Adjusted EBITDA for the first quarter of 2017 was a net loss of $966,000, or a net loss of $0.01 per share, based on 77.9 million weighted average shares outstanding, compared to adjusted EBITDA net loss of $3.1 million, or net loss of $0.07 per share based on 45.7 million weighted average shares outstanding for the first quarter of 2016. Adjusted EBITDA is a non-GAAP measure presented as net loss before interest expense, income taxes, acquisition costs, depreciation and amortization, share-based compensation, loss on revaluation of investment, and warrant revaluation gain. For additional information regarding the non-GAAP financial measures discussed in this release, please see “Use of GAAP and Non-GAAP Financial Measures” and “Non-GAAP Reconciliations ” below.
Net loss for the first quarter of 2017 was $7.8 million, or a net loss of $0.10 per share, compared to a net loss of $8.1 million, or a net loss of $0.18 per share, in the first quarter of 2016.
Stock Influences
- Results from new product release;
- The company is still burning cash, and may require additional financing in the future.
Risk Factors
- Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk.
- The Company is subject to risk of non-payment of accounts receivable.
- The share price is under the NASDAQ minimum and there is a risk of share reorganization.
- The Company may not be able to meet its obligations as they fall due.
Stock Performance
ANY shares closed at $.16 on Wednesday, June 21, 2017. Trading volume was at 9.4 million shares, much higher than the daily average of 2.9 million. The current RSI (14 day) is 57.07. ANY shares closed below their 50-day moving average of $.166 and below their 200-day moving average of $.359.
***Get our small cap profiles, special situation and watch alerts in real time. We are now offering our VIP – SMS/text alert service for free, simply text the word “Traders” to the phone number “25827” from your cell phone***
Disclaimer
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Mark Roberts. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
17B Disclosure
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.
