Clearly they have withdrawn from any productive work and abandoned any effort to become profitable, and will be bankrupt as soon as the numbers turn around and start heading south, which could be happening any moment now.
From the financial statement: “This quarter we grew revenue by 17% year-over-year and 12% sequentially from the previous quarter; both signs of the strategic and financial progress we have made,” said Eric Kelly, chairman and chief executive officer of Sphere3D. “In addition, I am proud of the progress we have made toward the goal of achieving profitability, evident by the improvement in our adjusted EBITDA of 84% year-over-year and 77% sequentially from the previous quarter. These solid financial results are driven by our improved business operations and the growing market recognition of both our virtualization and storage products.”
Third Quarter 2017 Financial Results:
Financial Highlights Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended
(in millions) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net revenue $21.7 $18.5 $62.9 $57.7
Gross profit $6.7 $5.2 $19.0 $16.9
Gross margin (%) 31.1% 28.0% 30.2% 29.3%
Adjusted EBITDA (1) $(0.6) $(4.0) $(4.2) $(11.7)
Net loss $(3.5) $(43.3) $(18.8) $(61.0)
(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.
Net revenue for the third quarter of 2017 was $21.7 million, compared to $18.5 million for the third quarter of 2016, which represented a 17% year-over-year growth in revenue.
Product revenue for the third quarter of 2017 was $19.6 million, compared to $16.5 million for the third quarter of 2016, representing a 19% year-over-year growth.
• Disk systems revenue was $14.1 million, compared to $11.1 million for the third quarter of 2016. Disk systems is defined as RDX, SnapServer family, virtual desktop infrastructure, and Glassware derived products.
• Tape archive product revenue was $5.5 million, compared to $5.4 million for the third quarter of 2016.
Service revenue was $2.1 million, compared to $2.0 million in the third quarter of 2016, representing a 5% year-over year growth.
Gross margin for the third quarter of 2017 was 31.1%, compared to 28.0% for the third quarter of 2016. Non-GAAP gross margin for the third quarter of 2017 was 33.7%, compared to 31.1% for the third quarter of 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 the third quarter of 2017 were $11.2 million, compared to $47.8 million for the third quarter of 2016. Included in the operating expenses for the third quarter of 2016 were $34.4 million in impairment of goodwill and acquired intangible assets.
Share-based compensation expense for the third quarter of 2017 was $2.0 million, compared to $2.7 million for the third quarter of 2016. Depreciation and amortization was $1.5 million in the third quarter of 2017 and 2016.
Net loss for the third quarter of 2017 was $3.5 million, or a net loss of $0.59 per share, compared to a net loss of $43.3 million, or a net loss of $21.10 per share, in the third quarter of 2016.
Adjusted EBITDA for the third quarter of 2017 was a net loss of $0.6 million, or a net loss of $0.11 per share, based on 5.9 million weighted average shares outstanding, compared to adjusted EBITDA net loss of $4.0 million, or net loss of $1.96 per share based on 2.1 million weighted average shares outstanding for the third quarter of 2016. 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.
The preceding financial results for the third quarter of 2017 include contribution from our acquisition in January 2017.
Nine Months Ended September 30, 2017 Financial Results:
Net revenue for the first nine months of 2017 was $62.9 million, compared to $57.7 million for the first nine months of 2016 which represented a 9% year-over-year growth in revenue.
Product revenue for the first nine months of 2017 was $56.2 million, compared to $51.2 million for the first nine months of 2016, representing a 10% year-over-year growth.
• Disk systems revenue was $40.6 million, compared to $35.1 million for the first nine months of 2016. Disk systems is defined as RDX, SnapServer family, virtual desktop infrastructure, and Glassware derived products.
• Tape archive product revenue was $15.6 million compared to $16.1 million for the first nine months of 2016.
Service revenue for the first nine months was $6.7 million, compared to $6.5 million in the first nine months of 2016, representing a 3% year-over-year growth.
Gross margin for the first nine months of 2017 was 30.2%, compared to 29.3% for the first nine months of 2016. Non-GAAP gross margin for the first nine months of 2017 was 32.9%, compared to 32.4% for the first nine months of 2016.
Operating expenses for the first nine months of 2017 were $34.3 million, compared to $75.4 million for the first nine months of 2016. Included in the operating expenses for the first nine months of 2016 were $34.4 million in impairment of goodwill and acquired intangible assets.
Share-based compensation expense for the first nine months of 2017 was $5.6 million, compared to $7.4 million for the first nine months of 2016. Depreciation and amortization was $4.6 million in the first nine months of 2017, compared to $4.7 million in the first nine months of 2016.
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