Sphere 3D: Fiscal 2Q19 Financial Results

(in $ million)	2Q18	2Q19	6 mo. 18	6 mo. 19
Revenue	2,698	963	5,071	3,093
*Growth*		-64%		*-39%*
Net income (loss)	(3.5)	(6.0)	(12.8)	(3.5)

Sphere 3D Corp. reported financial results for its second quarter ended June 30, 2019.

“The second quarter revenue was negatively impacted by our cash constraints and our move to new hardware suppliers for our HVE line of products. Despite the drop in revenue, we were able to reduce our net loss, quarter over quarter, through a reduction in our operating expenses in Q2,” said Peter Tassiopoulos, CEO. “For the first 6 months of 2019, when compared to the same period in 2018, we were able to reduce our net loss by over 60% and will continue to look for opportunities to improve operating results.”

On November 13, 2018, the company closed the divestiture of its Overland subsidiary and related business. The financial results of Overland for the second quarter and six months ended 2018 have been reflected in the company’s consolidated statements of operations as discontinued operations.

Results below exclude discontinued operations.

2FQ19 Financial Results:

Revenue was $1.0 million, compared to $2.7 million for 2FQ18.
Gross margin was 25.4%, compared to 17.5% for the second quarter of 2018.
Operating expenses were $1.8 million, compared to $3.3 million for 2FQ18.
Share-based compensation expense was $0.1 million, compared to $0.4 million for 2FQ18. Depreciation and amortization was $0.3 million in both 2FQ19 and 2FQ18.
Net loss from continuing operations was $1.7 million, or a net loss of $0.72 per share, compared to a net loss from continuing operations of $4.0 million, or a net loss of $2.36 per share, for 2FQ18.
Net loss from discontinued operations was $2.0 million, or a net loss of $1.16 per share.

Six Months Ended June 30, 2019 Financial Results:

Revenue was $3.1 million, compared to $5.1 million for the first six months of 2018.
Gross margin was 30.4%, compared to 18.1% for the first six months of 2018.
Operating expenses were $4.2 million, compared to $8.2 million for the first six months of 2018.
Share-based compensation expense was $0.2 million, compared to $1.3 million for the first six months of 2018. Depreciation and amortization was $0.5 million, compared to $1.1 million for the first six months of 2018.
Net loss from continuing operations was $3.5 million, or a net loss of $1.55 per share, compared to a net loss from continuing operations of $9.2 million, or a net loss of $6.86 per share, in the first six months of 2018.
Net loss from discontinued operations was $3.7 million, or a net loss of $2.75 per share.

Sphere 3D will not be hosting a second quarter fiscal year 2019 earnings conference call.