All-Flash Storage Vendor Tintri Cuts Staff To 'Streamline' Its Business

All-flash storage array vendor Tintri is facing investor lawsuits and is in the process of laying off over 10 percent of its workforce following its first quarterly financial report since going public.

At least 12 law firms announced investigations against Tintri or filings of securities actions between September 9 and September 20; these followed the company's quarterly results, reported September 7, that covered its second fiscal quarter of 2018, which ended July 31.

Tintri reported quarterly revenue of $34.9 million, up 27 percent over its second fiscal quarter 2017 revenue. The company also reported a GAAP net loss of $25.3 million, with was basically flat with the $25.7 million net loss it reported the previous year.

[Related: CRN Exclusive: Tintri Co-Founder Harty Talks IPO Delay, Post-IPO Plans, And Why Tintri Is Not Really A Storage Company]

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Before going public, Tintri's last round of financing, which closed in August of 2015, brought the company $125 million. That gave Tintri a total funding of $260 million. The company's cash and cash equivalents and short-term investments totaled $80.6 million as of July 31, up from $48 million as of January 31, the company said.

Tintri early this week sent an internal email from company Chairman and CEO Ken Klein, a copy of which was viewed by CRN, to employees about the need to take "the difficult action to reduce the size of our organization."

"While painful, this was done to align our cost structure with our growth – part of a commitment to our Board of Directors and Investors, and a means to stay on our planned path to profitability," Klein said in the email.

A Tintri spokesperson last night confirmed that the company is laying off over 10 percent of its workforce.

"On Sept 7, 2017, during its earnings call, Tintri committed to streamline its core business and reduce operating expenses. To support this initiative Tintri will be reducing headcount across a number of areas of the business through September 2017. This figure is a little more than 10% of the company’s global workforce," a company spokesperson wrote in an email to CRN.

Tintri declined to discuss the investor lawsuits.

Tintri went public on June 30 after a slight delay during which it cut its IPO price from the expected $10.50 to $12.50 per share to $7.00 to $8.00 per share. The company's stock price stayed in the $5 to $7 range but fell sharply to the $3 range following its Sept. 7 earnings call.

Tintri has incredible technology, but really needs to find ways to strengthen its business, said Aaron Cardenas, CEO and founder of P1 Technologies, a Hermosa Beach, Calif.-based solution provider and an early channel partner to Tintri.

"I'm a huge fan of Tintri technology, as are our customers," Cardenas told CRN. "Everyone who uses it likes it. The customer base of Tintri is unique. It customers are at the very high end of the enterprise base which is impressive considering the company has a $3 share price."

Cardenas said he wants to see Tintri succeed, but "I don't believe they can get out of the hole without distinct changes at the top."

Cardenas said he would like to see Tintri restructure itself and present a better face to the public markets.

"Most important, I'd like to see the Tintri executive team take some culpability for bungling its IPO, and for doing an IPO without having at least two follow-on quarters of good results locked in," he said.

Chris Pyle, president of Champion Solutions Group, a Boca Raton, Fla.-based solution provider, told CRN that his company is one of Tintri's first partners, and that customers have not been asking about the vendor's financial situation.

"We sell the hell out of it," Pyle said. "It's a great solution. But customers don't ask about the lawsuits. They're not aware of the situation. Not one has asked about share prices."

Pyle said how a company goes public is a difficult decision.

"Who knows what pressures the executives had to go public," he said. "It's not always the executives' problem. Often, there's pressure from the investors."

Tintri's stock closed at 3.02+0.06 (+2.03%) in trading on Friday. In the last three months the company's shares have lost more than 58 percent of their value.