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Mystery Customer Deals Big Order for Cyan

Dan O'Shea
8/12/2014
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Packet optical vendor Cyan reported on it second-quarter earnings call late Monday that it had surpassed revenue expectations for the quarter, but Cyan CEO Mark Floyd was already looking ahead.

After company officials quickly ran through their second-quarter numbers, Floyd disclosed that Cyan Inc. recently received one of its largest orders ever, totaling more than $10 million, from an existing customer for its Z-Series 100G packet optical platform and Blue Planet orchestration software. He did not say who the customer was, and said the revenue would not be realized until the first quarter of 2015.

Cyan's largest customer on a quarter-to-quarter basis is Windstream Communications Inc. (Nasdaq: WIN), and its quarterly results in the past have fluctuated based on Windstream's spending patterns. During the second quarter, Cyan said revenue from Windstream was greater than had been expected, about $6.7 million of the vendor's $24.4 million total revenue for the quarter. (See Cyan Packs One-Two Product Upgrade Punch and Cyan Reports Q2 Revenue Uptick.)

However, the mystery customer also could be Colt Technology Services Group Ltd (London: COLT), which uses Cyan as part of its Carrier Ethernet Multi-Service Platform (MSP), a service which won a 2014 Leading Lights award. Or, what about Japanese operator KVH Co. Ltd. ? Cyan has in fact been finding increasing success in international markets. Company officials said Monday that international sales were up 15% during the second quarter versus the first quarter, and that the third quarter could see more of the same. (See Colt Wins Leading Lights Innovative Ethernet Service Award , Colt a Significant Win for Cyan and Cyan's Blue Planet Now in KVH's Orbit.)

There are a number of customers that possibly could be behind the order, though some of Cyan's customers are small telcos that are not likely to commit to that large an order. The Tier 3 telcos have been a source of some market softness for Cyan recently, Floyd said, though in the long term he believes Connect America program funds will stir spending at that level of the market.


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Meanwhile, Floyd also boasted that Cyan had recently demonstrated its Blue Planet platform working in tandem with the hardware of a major equipment vendor. The platform proved itself "automating, managing and orchestrating several of [the unnamed vendor's] hardware systems," Floyd said. He said the successful demonstration could create a significant global market opportunity for Cyan.

— Dan O'Shea, Managing Editor, Light Reading

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brooks7
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brooks7,
User Rank: Light Sabre
8/12/2014 | 2:59:27 PM
Re: 1 Problem with that order
MGoBlue,

I am simply pointing out that by their financials that they announced yesterday and their guidance that they are out of cash in 6 months.  The order is due to ship in Q1 15 according to the call.  Which is too late.

I have a lot of friends at Cyan and worry about what will happen to them.  Even in this past quarter OPEX exceeded Revenue.

seven

 
MGoBlue
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MGoBlue,
User Rank: Lightning
8/12/2014 | 12:37:40 PM
Re: 1 Problem with that order
Sounds like you are a bit jealous of their success and innovation. Did your past start up flame out? Maybe you needed a better product or better management. Cyan has a team of studs. Don't worry about them, they will be just fine. Also, nice try trying to pose as brookseven who wouldn't write anything as childish. What a tool. Good luck poser.
brooks7
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brooks7,
User Rank: Light Sabre
8/12/2014 | 10:49:07 AM
1 Problem with that order
Dan,

You did notice that the order will ship AFTER Cyan runs out of money.

seven

 
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