REG - Corero Network Sec. - Half Year Trading Update

Corero Network SecurityAnnouncement

13/07/2023 07:15

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RNS Number : 8596F  Corero Network Security PLC  13 July 2023

13 July 2023

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

Corero Network Security plc

("Corero" or the "Company")

 

Half Year Trading Update

Strong YOY revenue growth of 20%

Repayment of bank debt in full

 

Corero Network Security plc (AIM: CNS), a leading provider of distributed
denial of service ("DDoS") protection solutions, provides the following
trading update for the six months ended 30 June 2023(1) ("H1 2023").

 

The Group has traded strongly across H1 2023, in line with management
expectations, with revenues expected to increase 20% to approximately $10.6
million (H1 2022: $8.8 million). This growth was driven by Corero securing a
number of important customer wins for its SmartWall® DDoS protection
solutions, including strong contract momentum in Q2 2023 with significant
orders announced totalling $6.0 million (average value per customer of
$597,000) over the course of the contracts. These customer contract wins
across both Q1 2023 and Q2 2023 were announced by the Company on 13 April and
4 July respectively.

 

Corero's focus on its Ideal Customer Profile ("ICP") has significantly
contributed to the growth in revenue for H1 2023, with the Company continuing
to build its sales pipeline to maintain the momentum into H2 2023.

 

Order intake(2), which reflects revenues recognised over the lifetime of each
of the contracts, was up 13% to $13.0 million for H1 2023 (H1 2022: $10.9
million), demonstrating further traction from the Company's continued sales
and marketing efforts.

 

Annualised Recurring Revenues(3) ("ARR") increased 13% to $15.3 million as at
1 July 2023, (ARR at 1 July 2022: $13.6 million), driven by robust growth in
Corero's subscription-based products and DDoS Protection as-a-service
("DDPaaS"), which importantly underpins higher levels of earnings
predictability for the business going forward.

 

The Company expects to report an adjusted EBITDA(4) profit for H1 2023 of c.
$0.2 million (H1 2022: $0.0 million) and an EBITDA(5) loss for H1 2023 of c.
$0.2 million, which includes an unrealised foreign exchange loss of $0.4
million (H1 2022: profit of $0.9 million, which included an unrealised foreign
exchange gain of $0.9 million), reflecting Corero's ongoing investment in
sales and marketing initiatives, which in turn is driving the growth of the
business.

 

Corero's gross cash balance as at 30 June 2023 was $6.2 million (31 December
2022: $5.6 million; H1 2022: $7.5 million). The Company used its strong
balance sheet position to repay in full its bank term loan facility early,
which will result in a saving in financing costs in H2 2023.  As a result
there is no outstanding debt as at 30 June 2023 (net cash: 31 December 2022:
$4.4 million; H1 2022: $5.8 million). The total amount of bank term loan
facility repaid during H1 2023 amounted to $1.2 million.

 

The Company expects to report its unaudited interim results for the six months
ended 30 June 2023 in late September 2023.

 

Jens Montanana, Corero's Executive Chairman, said:

 

"I am extremely pleased with the momentum that we have built during the first
half of 2023, securing a number of key customer wins in the period. The
increase in revenue, order intake and ARR all demonstrate the fundamental
strength of both Corero's business model and ongoing demand for our
market-leading products.

 

"I am also delighted that with the strength of the Company's balance sheet we
have been able to repay the outstanding term bank loan in full during the
period.

 

"The performance in H1 2023 gives us confidence for the full year as we
continue to focus on delivering on our growth strategy."

 

(1) All numbers for the six months ending 30 June 2023 disclosed within this
announcement are management estimates based on current information and are
unaudited.

(2) Order intake is defined as orders received from customers in the period.

(3) ARR is defined as the normalised annualised recurring revenues and
includes recurring revenues from contract values of annual support, software
subscriptions including terms greater than one year, and from DDoS
Protection-as-a-Service ("DDPaaS") contracts.

(4) Adjusted EBITDA is defined as earnings before interest, tax, depreciation,
amortization, and unrealised foreign exchange differences on intercompany
loans.

(5) EBITDA is defined as earnings before interest, tax, depreciation, and
amortization.

 

Enquiries:

 

 Corero Network Security plc                                    Tel: +44(0)20 7390 0230
 Jens Montanana, Executive Chairman
 Phil Richards, Chief Financial Officer

 Canaccord Genuity Limited (Nominated Adviser and Broker)      Tel: +44(0)20 7523 8000
 Simon Bridges / Andrew Potts / Harry Rees

 Vigo Consulting                                               Tel: +44(0)20 7390 0230
 Jeremy Garcia / Kendall Hill
 corero@vigoconsulting.com (mailto:corero@vigoconsulting.com)

 

 

About Corero Network Security

 

Corero Network Security is a leading provider of distributed denial of
service (DDoS) protection solutions. We are specialists in automatic
detection and protection solutions, that include network visibility,
analytics, and reporting tools. Corero's technology provides scalable
protection capabilities against both external DDoS attackers and
internal DDoS threats, in even the most complex edge and subscriber
environments, ensuring internet service availability and uptime. Corero's key
operational centres are in Marlborough, Massachusetts, USA, and Edinburgh,
UK, with the Company's headquarters in London, UK. The Company is listed on
the London Stock Exchange's AIM market under the ticker CNS.

 

For more information, visit www.corero.com (http://www.corero.com) , and
follow us on LinkedIn (https://www.linkedin.com/company/corero/)
 and Twitter (https://twitter.com/Corero) .

 

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