Cyngn Inc. (CYN) Bundle
Understanding Cyngn Inc. (CYN) Revenue Streams
Understanding Cyngn Inc.’s Revenue Streams
Cyngn Inc. generates revenue from several key sources, primarily through fixed-price Non-Recurring Engineering (NRE) contracts, EAS subscriptions, hardware sales, and other professional services. Below is a detailed breakdown of these revenue streams:
Breakdown of Primary Revenue Sources
- Fixed-Price NRE Contracts: These contracts are related to trial projects that include design, data gathering, hardware installation, and customer-specific software configuration. For the nine months ended September 30, 2024, the revenue from NRE contracts was $0, compared to $1,420,000 for the same period in 2023.
- EAS Subscriptions: Revenue from these subscriptions includes monthly fees for services, recognized monthly over the contract life. For the nine months ended September 30, 2024, subscription revenue was $11,162, an increase from $9,870 in 2023.
- Hardware Sales: This includes sales or leases of industrial vehicles modified with proprietary hardware kits. For the nine months ended September 30, 2024, hardware revenue was $15,450, up from $10,755 in 2023.
- Other Revenue: This category includes fees for distinct professional services. Other revenues amounted to $35,150 for the nine months ended September 30, 2024, compared to $8,336 in 2023.
Year-over-Year Revenue Growth Rate
The overall revenue for Cyngn Inc. showed a significant decline year-over-year. For the three months ended September 30, 2024, total revenue was $47,584, compared to $25,210 for the same period in 2023, reflecting a growth rate of approximately 88.5%.
However, for the nine months ended September 30, 2024, total revenue was $61,762, down from $1,448,961 in 2023, indicating a decrease of approximately 95.7%. This highlights a significant shift in revenue generation, primarily due to the lack of NRE contract revenue in the current year.
Contribution of Different Business Segments to Overall Revenue
The revenue contributions for the nine months ended September 30, 2024, are summarized as follows:
| Revenue Source | Revenue (2024) | Revenue (2023) | Percentage Change |
|---|---|---|---|
| NRE Contracts | $0 | $1,420,000 | -100% |
| EAS Subscriptions | $11,162 | $9,870 | 13.1% |
| Hardware Sales | $15,450 | $10,755 | 43.5% |
| Other Revenue | $35,150 | $8,336 | 320.2% |
| Total Revenue | $61,762 | $1,448,961 | -95.7% |
Analysis of Significant Changes in Revenue Streams
The most notable change in revenue streams for Cyngn Inc. is the complete absence of revenue from NRE contracts in 2024, which contributed significantly in the previous year. This dramatic reduction has led to an overall drop in total revenue.
While EAS subscriptions and hardware sales have shown growth, they are insufficient to offset the loss from NRE contracts. The increase in other revenue indicates a diversification of income, but the overall revenue decline remains a critical concern for investors.
As of September 30, 2024, total revenue was primarily composed of EAS subscription and hardware sales, reflecting a shift towards recurring revenue models, albeit at a lower overall revenue level.
A Deep Dive into Cyngn Inc. (CYN) Profitability
Profitability Metrics
Understanding the profitability metrics of a company is crucial for investors. Here, we delve into key profitability indicators such as gross profit, operating profit, and net profit margins for Cyngn Inc. as of 2024.
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, Cyngn reported:
- Revenue: $47,584
- Cost of Revenue: $157,251
- Gross Profit: Revenue - Cost of Revenue = $47,584 - $157,251 = ($109,667)
- Operating Loss: $5,508,202
- Net Loss: $5,427,399
The gross profit margin can be calculated as follows:
Gross Profit Margin: (Gross Profit / Revenue) x 100 = (−$109,667 / $47,584) x 100 = (230.0%)
Trends in Profitability Over Time
Comparing the nine months ended September 30, 2024, with the same period in 2023:
- 2024 Revenue: $61,762
- 2023 Revenue: $1,448,961
- 2024 Net Loss: $17,216,430
- 2023 Net Loss: $17,453,669
Thus, the revenue decreased significantly year-over-year, while the net loss slightly improved.
Comparison of Profitability Ratios with Industry Averages
As of 2024, the industry average gross profit margin in technology sectors is approximately 60%. Cyngn's gross profit margin of (230.0%) indicates significant operational inefficiencies, primarily due to high costs relative to revenue.
Analysis of Operational Efficiency
Analyzing operational efficiency through cost management, we observe:
- Research and Development Expense (Nine months 2024): $9,149,357
- General and Administrative Expense (Nine months 2024): $7,913,222
- Total Costs and Expenses (Nine months 2024): $17,348,528
These expenses indicate a focus on R&D, but the overall operational losses highlight inefficiencies in converting investment into revenue.
Summary Table of Profitability Metrics
| Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Revenue | $47,584 | $25,210 | $61,762 | $1,448,961 |
| Cost of Revenue | $157,251 | $42,414 | $285,949 | $1,121,732 |
| Gross Profit | ($109,667) | ($17,204) | ($224,187) | $327,229 |
| Operating Loss | ($5,508,202) | ($5,609,701) | ($17,286,766) | ($17,949,983) |
| Net Loss | ($5,427,399) | ($5,471,512) | ($17,216,430) | ($17,453,669) |
These metrics reflect the financial struggles of Cyngn Inc., showcasing high operational costs relative to its revenue, which is a critical area for potential investors to consider.
Debt vs. Equity: How Cyngn Inc. (CYN) Finances Its Growth
Debt vs. Equity: How Cyngn Inc. Finances Its Growth
The company's financial structure is primarily composed of both debt and equity, which play crucial roles in its growth strategy. As of September 30, 2024, the following key metrics provide insight into its debt and equity levels:
Overview of the Company's Debt Levels
As of September 30, 2024, the total liabilities stood at approximately $1,831,977, with no long-term debt reported. The short-term debt primarily includes various accrued expenses and other current liabilities amounting to:
| Liability Type | Amount ($) |
|---|---|
| Credit Card Payable | 135,197 |
| Accrued Expenses | 457,275 |
| Accrued Payroll | 543,786 |
| Total Current Liabilities | 1,136,258 |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is a critical measure of financial leverage. As of September 30, 2024, the total stockholders' equity was approximately $6,649,165. Therefore, the debt-to-equity ratio is calculated as follows:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity = 1,831,977 / 6,649,165 = 0.28
This ratio is significantly lower than the industry average, which typically ranges from 0.5 to 1.0, indicating a conservative approach to leveraging debt for growth.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
The company has not engaged in any significant debt issuance or refinancing activities in the recent quarters. The absence of long-term debt reflects a strategy that relies more on equity financing. The liquidity position as of September 30, 2024, shows $2,000,000 in unrestricted cash and $800,000 in short-term investments, suggesting a focus on maintaining a stable financial base without incurring additional debt obligations.
How the Company Balances Between Debt Financing and Equity Funding
In its recent financing activities, the company has primarily relied on equity funding. Notably, it raised approximately $11,358,940 through equity financing during the nine months ended September 30, 2024. This included:
- Proceeds from at-the-market equity financing: $6,789,427
- Proceeds from private placement offering: $4,570,110
Such strategies show a clear preference for equity financing to fund operations and growth initiatives while maintaining a low debt profile.
Assessing Cyngn Inc. (CYN) Liquidity
Assessing Cyngn Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at approximately 1.10, calculated from current assets of $3.0 million and current liabilities of $2.73 million. This ratio indicates a modest liquidity position, suggesting the company can cover its short-term obligations.
Quick Ratio: The quick ratio is approximately 0.80, derived from quick assets of $2.4 million (excluding inventories) against current liabilities of $2.73 million. This indicates potential liquidity concerns, as the company may struggle to meet its short-term liabilities without liquidating inventory.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is approximately $270,000 as of September 30, 2024. This represents a decrease from $590,000 reported as of December 31, 2023, indicating a tightening liquidity situation.
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, the net cash used in operating activities was approximately $15.55 million, which is an increase from $14.44 million for the same period in 2023. The increase is primarily attributed to rising costs in customer deployment and inventory increases.
Investing Cash Flow: Net cash provided by investing activities was approximately $2.57 million in the first nine months of 2024, down from $6.37 million in 2023. This decrease is due to smaller investment maturities and increased purchases of short-term investments.
Financing Cash Flow: Cash provided by financing activities totaled $11.36 million for the nine months ended September 30, 2024, significantly up from $1.02 million in the previous year, largely driven by proceeds from the sale of common stock.
Liquidity Concerns or Strengths
As of September 30, 2024, the company holds approximately $2.0 million in unrestricted cash and $0.8 million in short-term investments, down from $3.6 million and $4.6 million respectively at the end of 2023. This decline raises concerns regarding the company's ability to sustain operations without additional financing, as it may not meet its payment obligations if sufficient funding is not secured.
| Financial Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Current Assets | $3.0 million | $3.5 million |
| Current Liabilities | $2.73 million | $2.91 million |
| Working Capital | $270,000 | $590,000 |
| Cash Used in Operating Activities | $15.55 million | $14.44 million |
| Cash Provided by Investing Activities | $2.57 million | $6.37 million |
| Cash Provided by Financing Activities | $11.36 million | $1.02 million |
| Unrestricted Cash | $2.0 million | $3.6 million |
| Short-term Investments | $0.8 million | $4.6 million |
Is Cyngn Inc. (CYN) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio is not applicable as the company reported a net loss. For the nine months ended September 30, 2024, the net loss attributable to common stockholders was $17,216,430, resulting in a basic and diluted loss per share of $12.91.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the book value per share is calculated as follows:
- Total stockholders' equity: $6,649,165
- Shares outstanding: 2,026,575
- Book value per share: $3.28
The current stock price is $10.92, leading to a price-to-book (P/B) ratio of approximately 3.33.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the enterprise value (EV) can be approximated as follows:
- Market Capitalization: $22,100,000 (based on the stock price of $10.92 and shares outstanding)
- Total Debt: $1,831,977
- Cash and Cash Equivalents: $2,000,000 (unrestricted cash)
- Enterprise Value: $21,931,977
EBITDA for the nine months ended September 30, 2024, is not directly available, as the company reported a loss from operations of $17,286,766. Thus, the EV/EBITDA ratio is not calculable this period due to negative EBITDA.
Stock Price Trends
Over the past 12 months, the stock price has experienced significant volatility. The stock price ranges from a high of $102.40 to a low of $10.92 as of September 30, 2024, reflecting a substantial decline.
Dividend Yield and Payout Ratios
The company does not currently pay dividends, reflected in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Analysts have varied opinions on the stock, with some suggesting a "Hold" rating due to the company's ongoing losses and the need for capital financing. Recent ratings indicate a cautious outlook given the company's financial health and market conditions.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | 3.33 |
| EV/EBITDA Ratio | N/A (Negative EBITDA) |
| Stock Price (as of 09/30/2024) | $10.92 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Cyngn Inc. (CYN)
Key Risks Facing Cyngn Inc.
The financial health of Cyngn Inc. is influenced by various internal and external risk factors. These can significantly impact the company's operations and financial performance.
Industry Competition
Cyngn operates in a highly competitive market where numerous companies are developing autonomous vehicle technologies. This competition can lead to price wars and reduced margins. In the nine months ended September 30, 2024, the company reported a net loss of $17.2 million, reflecting the pressure from rivals in the sector.
Regulatory Changes
Changes in regulations concerning autonomous vehicles can pose risks. Compliance with varying state and federal regulations may lead to increased operational costs. The company has noted that the regulatory landscape is continually evolving, which can affect product development timelines.
Market Conditions
Fluctuations in market demand due to economic conditions can impact sales. For the three months ended September 30, 2024, Cyngn generated revenue of only $47,584, a significant decrease compared to previous periods, indicating sensitivity to market shifts.
Operational Risks
Operational challenges, including supply chain disruptions, can hinder production capabilities. The company's cost of revenue for the nine months ended September 30, 2024, was $285,949, primarily due to deployment costs and personnel expenses. Such operational expenses can escalate if supply chain issues arise.
Financial Risks
Financial instability is a concern for Cyngn, as evidenced by its accumulated deficit of $177.2 million as of September 30, 2024. The company's ability to secure funding to sustain operations is critical, especially given its reliance on equity financing, which can be affected by market conditions and investor sentiment.
Strategic Risks
The strategic direction of Cyngn may be impacted by its ability to innovate and develop new technologies. The company reported research and development expenses of $9.2 million for the nine months ended September 30, 2024, which is crucial for maintaining competitive advantage but also adds to the financial burden.
Mitigation Strategies
- To address competitive pressures, Cyngn is focusing on innovation and enhancing its product offerings.
- Engagement with regulatory bodies to anticipate changes and ensure compliance is a priority.
- The company aims to diversify its supply chain to mitigate operational risks.
- Financial strategies include pursuing additional financing options to bolster liquidity.
| Risk Factor | Description | Impact (as of September 30, 2024) |
|---|---|---|
| Industry Competition | High competition in autonomous vehicle technology | Net loss of $17.2 million |
| Regulatory Changes | Compliance with evolving regulations | Increased operational costs |
| Market Conditions | Fluctuations in demand | Revenue of $47,584 |
| Operational Risks | Supply chain disruptions | Cost of revenue: $285,949 |
| Financial Risks | Accumulated deficit impacting funding | Deficit of $177.2 million |
| Strategic Risks | Innovation challenges | R&D expenses: $9.2 million |
Future Growth Prospects for Cyngn Inc. (CYN)
Future Growth Prospects for Cyngn Inc.
Key Growth Drivers:
- Product Innovations: The company is focusing on enhancing its autonomous vehicle technology, specifically the DriveMod software, which is designed to be modular and integrate seamlessly with vehicles from various manufacturers.
- Market Expansions: Cyngn has begun licensing its Enterprise Autonomy Suite (EAS) commercially, targeting industrial organizations looking to implement autonomous solutions.
- Strategic Partnerships: Collaborations with leading hardware technology providers enhance Cyngn's capability to deliver integrated solutions, positioning it favorably in the competitive landscape.
Future Revenue Growth Projections:
For the nine months ended September 30, 2024, the company reported revenue of $61,762, a significant decrease from $1,448,961 for the same period in 2023. The anticipated growth in licensing agreements and deployment of autonomous vehicle technology is expected to drive revenues upward in the coming years.
Earnings Estimates:
Analysts project that as Cyngn expands its market reach and product offerings, the company could achieve a revenue growth rate of approximately 30% annually over the next five years, contingent upon successful deployment of its EAS and increased demand for autonomous solutions.
Strategic Initiatives and Partnerships
Cyngn has entered into an at-the-market sales agreement that allows for the potential sale of up to $8.8 million in common stock to raise funds for operational growth. This strategic initiative is aimed at bolstering liquidity and funding development projects.
Furthermore, the company has engaged with Aegis Capital Corp. to facilitate the sale of 333,334 shares in a public offering, generating gross proceeds of approximately $5 million.
Competitive Advantages
Cyngn's competitive edge lies in its proprietary technologies and the ability to offer a full-stack autonomous driving solution. The DriveMod system has been tested in diverse real-world environments, reinforcing its reliability and effectiveness in operational settings.
Additionally, the company is positioned as an emerging growth company, allowing it to leverage reduced reporting requirements and potential cost savings in compliance.
| Metric | 2024 (Projected) | 2023 (Actual) |
|---|---|---|
| Revenue | $61,762 | $1,448,961 |
| Net Loss | $(17,216,430) | $(17,453,669) |
| Cash from Operations | $(15,550,011) | $(14,440,102) |
| Cash Balance | $1,974,441 | $3,536,381 |
| Common Stock Issued | 2,026,575 shares | 759,831 shares |
| Projected Annual Growth Rate | 30% | N/A |
These factors collectively indicate a strategic path for Cyngn Inc. to capitalize on growth opportunities in the autonomous vehicle market, enhancing its financial health and positioning for future success.
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Resources:
- Cyngn Inc. (CYN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cyngn Inc. (CYN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cyngn Inc. (CYN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.