Sphere 3D Reports Fourth Quarter and Fiscal Year 2017 Financial Results

Sphere 3D (NASDAQ:ANY) has announced its financial results for the fourth quarter and year ended December 31, 2017.

As quoted in the press release:

“With a year over year revenue increase of over $5 million, I am pleased to report we closed 2017 with momentum and have laid the foundation for growth.  Moreover, we demonstrated our continued commitment to improving operational efficiencies through a reduction of nearly $6 million in operating expense for the year which helped reduce our adjusted EBIDTA losses by over 50%,” said Eric Kelly, chairman and chief executive officer of Sphere3D.  “We have executed on our goal to promote both the virtualization business through our HVE brand, and the storage business through our Overland-Tandberg brand.  As market awareness for our products increases, we believe we are well positioned to continue to grow our business.”

Financial Highlights	Three Months Ended			Three Months Ended			Twelve Months Ended			Twelve Months Ended
(in millions)	December 31, 2017			December 31, 2016			December 31, 2017			December 31, 2016
Net revenue	$18.7	$18.7	$81.5	$76.4
Gross profit	$5.7	$5.4	$24.7	$22.3
Gross margin (%)	30.7%	28.9%	30.3%	29.2%
Adjusted EBITDA (1)	$(2.3)	$(2.4)	$(6.6)	$(14.1)
Net loss	$(7.4)	$(7.5)	$(26.2)	$(68.5)

(1)  Non-GAAP financial measure as defined below.  See the “Use of GAAP and Non-GAAP Financial Measures” and “Non-GAAP Reconciliations” sections of this announcement below.

Fiscal Year Financial Results:

• Net revenue for 2017 was $81.5 million, compared to net revenue of $76.4 million for 2016.
• Product revenue for 2017 was $72.8 million, compared to product revenue of $68.1 million for 2016.

• • Disk systems revenue was $52.5 million, compared to $46.8 million for 2016. Disk systems is defined as RDX, SnapServer family, virtual desktop infrastructure, and Glassware derived products.
  • Tape archive revenue was $20.3 million, compared to $21.3 million for 2016.

• Service revenue was $8.7 million, compared to $8.3 million for 2016.
• Gross margin for 2017 was 30.3%, compared to 29.2% for 2016.  Non-GAAP gross margin for the  2017 was 33.1%, compared to 32.3% for 2016. Our methodology for determining non-GAAP gross margin, which excludes the effect of intangible asset amortization from gross profit, is described in the Use of GAAP and Non-GAAP Financial Measures section of this announcement.  See also, Non-GAAP Reconciliations” below.
• Operating expenses for 2017 were $48.6 million, compared to $86.2 million for 2016. Operating expenses included $2.5 million of impairment of acquired intangible assets for 2017, and $34.4 million of impairment of goodwill and acquired intangible assets for 2016.
• Share-based compensation expense for 2017 was $7.8 million, compared to $9.1 million for 2016. Depreciation and amortization was $6.1 million in 2017, compared to $6.2 million in 2016.
• Net loss for 2017 was $26.2 million, or a loss of $5.26 per share, compared to a net loss of $68.5 million, or a loss of $34.42 per share, for 2016.

Click here to read the full press release.