REG - Corero Network Sec. - Unaudited H1 2024 Interim Results
24/09/2024 07:00
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RNS Number : 3331F Corero Network Security PLC 24 September 2024
24 September 2024
Corero Network Security plc
("Corero," the "Company" or the "Group")
Unaudited H1 2024 Interim Results
Strong contract momentum and channel partnerships underpin financial and
operational growth
FY 2024 results expected to be in line with expectations
Corero (https://www.corero.com/) (AIM: CNS)
(https://www.londonstockexchange.com/stock/CNS/corero-network-security-plc/company-page)
(OTCQB: DDOSF) (https://www.otcmarkets.com/stock/DDOSF/overview) , the
distributed denial of service ("DDoS") protection specialists, announces its
unaudited results for the six months ended 30 June 2024 ("H1 2024" or the
"Period").
Financial Highlights
· Group revenue up 16% to $12.2 million (H1 2023: $10.5 million)
· Order Intake(1), which reflects revenues to be recognised over the
lifetime of each of the contracts, up 10% to $14.2 million (H1 2023: $13.0
million)
· Annualised Recurring Revenues(2) ("ARR") up 12% to $17.2 million (H1
2023: $15.3 million)
· EBITDA(3) profit of $0.7 million (H1 2023: loss of $0.2 million)
· Gross margins remained high and consistent at 91% (H1 2023: 91%)
· Debt free with a net cash balance of $7.9 million (H1 2023: $6.2
million)
(1) Order intake is defined as orders received from customers in the period.
(2) 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.
(3) EBITDA is defined as earnings before interest, tax, depreciation, and
amortisation.
Operational Highlights
· Generated significant contract momentum across H1 2024 delivering
robust incremental revenue growth in the Period
· Secured new sales partnership agreements, broadening the Group's
sales footprint in Latin America, Europe and the US
· Launched new services, including SmartWall ONE(TM) Service Portal and
the Corero DDoS Intelligence Service, an automated, AI-assisted subscription
service
· Commenced trading on the OTCQB Venture Market, a regulated US stock
exchange, to increase the Group's US investor reach
Outlook
· Excellent trading performance across H1 2024, reflecting good
progress in accelerating the Group's go-to-market strategy announced on 25
April 2024
· Strong momentum expected to continue across the remainder of the
current financial year
· Management remains confident that the full year results will be in
line with market expectations(4) and believes Corero is well-placed for
further growth
( )
(4) For the purpose of this announcement, the Group believes market consensus
for FY24 to be revenue of £25.4m, and adjusted profit before tax of £0.5m.
Carl Herberger, Chief Executive Officer at Corero, commented:
"I am pleased with the operational and financial progress in the first half of
the year and confident that our reinvigorated go-to-market strategy will
deliver on the ambitious growth targets we have set. These results are
testament to the outstanding commitment and skill set of the Corero team which
continues to ensure our products and services are not only considered best in
class by our customers but also industry experts.
Our ARR growth demonstrates the long-term value and trusted customer
relationships we continue to develop, whilst our strong balance sheet provides
us with the foundations to build on our current growth trajectory.
As DDoS attacks continue to surge and nascent trends emerge, we remain in
prime position to grow our share of the DDoS protection market. We are focused
on new business and channel partnership opportunities to ensure corporations
are effectively safeguarded from these highly disruptive and harmful
cyberattacks."
Enquiries:
Corero Network Security plc Tel: +44(0)20 7390 0230
Carl Herberger, Chief Executive Officer
Chris Goulden, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser and Joint Broker) Tel: +44(0)20 7523 8000
Simon Bridges / Andrew Potts / Harry Rees
Zeus Capital (Joint Broker) Tel: +44(0)20 3829 5000
Ben Robertson / Alexandra Campbell-Harris
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 DDoS protection solutions,
specialising in automatic detection and protection solutions with network
visibility, analytics, and reporting tools. Corero's technology protects
against external and internal DDoS threats in complex edge and subscriber
environments, ensuring internet service availability. With operational centres
in Marlborough, Massachusetts, US, and Edinburgh, UK, Corero is headquartered
in London and listed on the London Stock Exchange's AIM market (ticker: CNS)
and the US OTCQB market (OTCQB: DDOSF).
For more information, visit www.corero.com (http://www.corero.com/) , and
follow us on LinkedIn (https://www.linkedin.com/company/corero/) and X
(https://twitter.com/Corero) .
Chief Executive Officer's Review
Introduction
Corero has continued its 2023 positive trading momentum, maintaining strong
levels of new business success across H1 2024 including competitive wins
displacing incumbent solutions, contract renewals and strategic relationship
expansions. Corero's go-to-market strategy is producing tangible results and
new business traction, further elevating the Group's reputation and position
within the fast-growing and innovation-driven DDoS security market.
This ongoing operational progress has resulted in the Group delivering a
strong financial performance during the period, with revenues up 16% to $12.2
million (H1 2023: $10.5 million) and EBITDA growing to $0.7 million (H1 2023:
loss of $0.2 million).
Corero generated ARR growth of 12% to $17.2 million (H1 2023: $15.3 million),
which can be attributed to the Group's enhanced software subscription-based
products, revamped pricing strategies and best in class DDPaaS offering, as
well as increased upsell and cross sell momentum. ARR is a key performance
indicator for Corero and the continued growth in this metric demonstrates the
Group's strong customer retention track record whilst providing a solid base
to support further customer acquisition and geographic expansion. Gross
margins were consistent at 91% (H1 2023: 91%).
Order intake, which reflects revenues to be recognised over the lifetime of
each contract, increased 10% to $14.2 million (H1 2023: $13.0 million),
demonstrating the effectiveness of the Group's investment in sales and
marketing activities.
The Group reported a healthy net cash balance of $7.9 million (H1 2023: $6.2
million) and has no outstanding debt.
A key growth initiative across FY 2024 has been to expand the Group's
geographical sales and customer footprint. Corero has secured contracts in
eight countries across four continents, adding ten new direct customer wins in
the period, in addition to new deals facilitated by strategic alliance
partners with extensive networks across target regions. Five of the new direct
customer wins in the period were replacements of a competitor as incumbent
provider, building on the recently implemented strategy to strategically
target competitor customer renewals.
During the period, Corero commenced trading on the OTCQB, a regulated US stock
exchange. The listing enhances Corero's US market reach and investor
engagement and is highly complementary to Corero's existing AIM listing.
The DDoS attack landscape continued to evolve during the period, with threat
actors inflicting severe financial and reputational damage on companies
operating across a vast array of sectors worldwide. As new technology and the
proliferation of AI continue to fuel the rise in global DDoS offensives,
demand for Corero's best in class DDoS protection and mitigation services is
expected to remain strong for the foreseeable future.
Strategic Priorities
Corero is focused on executing the following key strategic priorities to
accelerate both operational and financial progress in the near to medium term:
· Further increase customer base and market reach organically
· Leverage strategic alliances and partnerships to expand global
footprint
· Enhance monetisation of existing services and introduce new services
· Expand demand generation marketing capabilities and refine thought
leadership campaigns
· Increase investment in technological innovation to remain at the
forefront of the market
As highlighted below, Corero has made significant progress across all of its
strategic priorities, with a particular focus on new business generation and
extending the Group's sales reach globally.
Operational Review
A key feature of 2024 has been to both drive our new business efforts globally
and to share these successes with the Group's key stakeholders. Since January
2024, the Group has secured a steady flow of contract renewals, expansions and
new mandates, many of which are listed below:
· Significant contract renewal and expansion with a leading US SaaS
provider, valued at over $2 million over three years, enabling Corero to
expand the customer's existing DDoS protection infrastructure to support its
continued international growth
· 3-year, $1.8m partnership with TierPoint, a leading provider of
secure, connected IT platform solutions, to provide the backbone for its
next-generation DDoS defence infrastructure, replacing the incumbent solutions
provider
· 3-year, $1 million plus contract with a top-10 US fiber provider,
with Corero replacing the incumbent solutions provider in a number of the
provider's US data centres
· $1 million plus, 3-year contract extension with DigitalOcean, a
leading US cloud computing provider, expanding the current range of services
provided by Corero
Corero has continued to focus on securing channel partners to broaden the
Group's routes to market and, more importantly, expand the Group's global
reach. These include:
· 3-year partnership with leading global hosting services provider
RoyaleHosting to integrate Corero's award-winning DDoS mitigation technology
across its global network infrastructure.
· New 3-year partnership with US-based A2 Hosting, an existing Corero
customer and leading provider of high-performance hosting solutions.
· New strategic partner agreements in Latin America with NovaRed, VGL,
and GreyMatter post-period end.
The new partnerships complement the Group's established relationships with
Juniper Networks, GTT Communications and Akamai Technologies ("Akamai"),
broadening Corero's market reach.
Product Innovation
Corero continues to invest in, and evolve, its market-leading solutions
through R&D investment. Insights gained from observing millions of DDoS
attacks not only inform customers but also serve to provide unique data which
underpins the development of the Group's technology roadmap, ensuring Corero
remains at the forefront of the industry and well-positioned to respond to the
latest DDoS cybercrime trends.
The Group launched the Corero DDoS Intelligence Service ("CDIS") in March
2024, an automated, AI-assisted service for Corero SmartWall ONE™ customers
delivering pre-emptive attack mitigation before the first attack is even
detected. In June 2024, the Group launched its SmartWall Service Portal, with
new features including executive reports and tenant prospecting.
DDoS Addressable Market and Market Drivers
The global DDoS mitigation market continues to grow at pace and is expected to
be worth an estimated $9.1 billion by 2030*. Corero operates within a
significant segment of this overall market and estimates that the total
addressable market for its SmartWall ONE solution exceeds $2.0 billion.
Latest trends, including the emergence of high-performance botnets** and the
deployment of AI, has enabled threat actors to increase the scale and
frequency of DDoS attacks whilst keeping costs and time expenditure low,
meaning securing sophisticated DDoS protection services such as those Corero
offers is becoming even more crucial for businesses dependent on online
operations.
North America is estimated to account for 39% of the global DDoS protection
and mitigation market growth in the period to 2027***. Corero's partnership
with Akamai, together with investment in US sales and marketing initiatives
and strategic North American recruitment, means the Group remains well placed
to capitalise on new customer opportunities within the US market. Hactivism
associated with Russia's invasion of Ukraine has also exacerbated the DDoS
attack threat level in Europe whilst attacks are also prevalent in other key
geographies where Corero is actively growing its influence.
(*) MarketsandMarkets - DDoS Protection and Mitigation Security Market
Report, https://shorturl.at/gsCKX (https://shorturl.at/gsCKX) .
(**) A botnet is a network of interconnected computers or devices that are
infected with malicious software, allowing a remote attacker to control them
without the users' knowledge or consent.
(***) Technavio - DDoS Protection Mitigation Market by Component,
Application, and Geography - Forecast and Analysis
2023-2027, https://www.technavio.com/report/ddos-protection-mitigation-market-analysis
(https://www.technavio.com/report/ddos-protection-mitigation-market-analysis)
.
Senior Management and Board Changes
Chris Goulden was appointed Corero's Chief Financial Officer in May 2024,
replacing Phil Richards. Chris has over 15 years' experience in finance and
operational roles across international B2B service environment and spent 13
years at CBRE Global Workplace Solutions, a US-listed global facilities
management and property services provider, in a number of senior finance
roles.
Robert Scott was appointed Non-Executive Director in April 2024, bringing to
Corero over 30 years of network and cybersecurity experience. Mr Scott is
currently Chief Strategy Officer of Silversky, Inc., a provider of
cybersecurity managed services, Chairman of AssetPass, a disruptive fintech
startup, and is also on the Customer Advisory Board of Fortinet, a global
leader in cybersecurity.
Peter George, who had previously announced his intentions to step down as a
Non-Executive Director, informed the Board that he wished to remain a Corero
director. The Board unanimously agreed that Mr George continues in this role.
Outlook
Corero delivered a strong trading performance across H1 2024, reflecting good
progress in accelerating the Group's go-to-market strategy. This momentum,
underpinned by new and existing channel partnerships, alongside new customer
wins, is expected to continue across the remainder of the current financial
year.
With this positive trend, coupled with the continued strong global demand for
DDoS mitigation solutions, management remains confident that FY 2024 results
will be in line with market expectations and that Corero is well-placed for
further growth.
Carl Herberger
Chief Executive Officer
23 September 2024
Chief Financial Officer's Review
The Group reported revenues of $12.2 million in the six months ended 30 June
2024 (H1 2023: $10.5 million). Gross margin remained high during H1 2024 at
91% (H1 2023: 91%).
Total operating expenses before depreciation and amortisation were $10.4
million (H1 2023: $9.7million). When adjusting for realised and unrealised FX
movements on trading and intercompany balances, operating expenses for H1 2024
amounted to $10.4 million (H1 2023: $8.9 million). The underlying $1.5 million
increase in operating expenses year-on-year is primarily attributable to
additional investment across the Group to support future growth, notably sales
and marketing activities.
Depreciation and amortisation of intangible assets amounted to $1.0 million
(H1 2023: $0.9 million), with capitalised R&D costs of $1.1 million (H1
2023: $0.9 million).
EBITDA for H1 2024 was a profit of $0.7 million (H1 2023: loss of $0.2
million). Adjusted EBITDA, adjusted for unrealised FX losses of $nil (H1 2023:
losses of $0.4 million), was a profit of $0.7 million (H1 2023: $0.2
million).
Loss before taxation was $0.2 million (H1 2023: loss of $1.2 million) and loss
after taxation was $0.3 million (H1 2023: $1.2 million). The reported loss per
share was 0.1 cents (H1 2023: loss per share 0.2 cents).
Cash and cash equivalents for H1 2024 was $7.9 million (H1 2023: $6.2 million;
FY 2023: $5.2 million), an increase of $2.7 million in the six month period
(H1 2023: increase of $0.7 million). There was no outstanding debt at 30 June
2024.
Chris Goulden
Chief Financial Officer
23 September 2024
Condensed Consolidated Income Statement
for the six months ended 30 June 2024
Continuing operations Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000
$'000
$'000
Revenue 12,162 10,526 22,349
Cost of sales (1,053) (995) (2,164)
Gross profit 11,109 9,531 20,185
Operating expenses (11,352) (10,619) (20,201)
Consisting of:
Operating expenses before depreciation and amortisation (10,372) (9,741) (18,428)
Depreciation and amortisation of intangible assets (980) (878) (1,773)
Operating loss (243) (1,088) (16)
Finance income 50 7 44
Finance costs (24) (142) (181)
Loss before taxation (217) (1,223) (153)
Taxation charge (56) (17) (17)
Loss after taxation for the period (273) (1,240) (170)
Loss after taxation attributable to equity holders of the parent for the (273) (1,240) (170)
period
Basic and diluted (loss)/earnings per share Cents Cents Cents
Basic (loss)/earnings per share (0.1) (0.2) 0.0
Diluted (loss)/earnings per share (0.1) (0.2) 0.0
EBITDA(1) 737 (210) 1,757
Adjusted EBITDA(1) - adjusted for unrealised foreign exchange differences 736 220 2,186
(1) See note 6 for definitions and reconciliation.
Condensed Consolidated Statement of Total Comprehensive Income
for the six months ended 30 June 2024
Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
Loss for the period (273) (1,240) (170)
Other comprehensive income/(expense):
Items reclassified subsequently to profit or loss upon derecognition:
Foreign exchange differences (7) 631 628
Other comprehensive expense for the period net of taxation attributable to the (7) (631) 628
equity owners of the parent
Total comprehensive expense for the period attributable to the equity owners (280) (609) 458
of the parent
Condensed Consolidated Statement of Financial Position
as at 30 June 2024
Unaudited as at Unaudited as at Audited as at
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
Assets
Non-current assets
Goodwill 8,991 8,991 8,991
Intangible assets 5,101 4,648 4,820
Property, plant and equipment - owned assets 772 538 633
Leased right of use assets 224 21 309
Total Non-current assets 15,088 14,198 14,753
Current assets
Inventories 295 108 96
Trade and other receivables 9,047 5,432 8,427
Cash and cash equivalents 7,852 6,172 5,160
Total Current assets 17,194 11,712 13,683
Total assets 32,282 25,910 28,436
Liabilities
Current Liabilities
Trade and other payables (3,812) (2,975) (3,902)
Lease liabilities (149) (71) (164)
Deferred income (5,837) (4,614) (4,992)
Total Current liabilities (9,798) (7,660) (9,058)
Net current assets 7,396 4,052 4,625
Non-current liabilities
Deferred income (5,219) (2,844) (2,491)
Lease liabilities (87) - (151)
Total Non-current liabilities (5,306) (2,844) (2,642)
Net assets 17,178 15,406 16,737
Capital and reserves attributable to the equity owners of the parent
Share capital 7,091 6,983 6,999
Share premium 82,821 82,296 82,430
Capital redemption reserve 7,051 7,051 7,051
Share options reserve 2,245 1,890 2,007
Foreign exchange translation reserve (1,972) (1,962) (1,965)
Accumulated profit and loss reserve (80,058) (80,852) (79,785)
Total shareholders' equity 17,178 15,406 16,737
Condensed Consolidated Statement of Cash Flows
for the six month period ended 30 June 2024
Operating activities Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
Loss before taxation for the period (217) (1,223) (153)
Adjustments for movements:
Amortisation of acquired intangible assets - 1 2
Amortisation of capitalised development expenditure 787 764 1,504
Depreciation - owned assets 210 231 423
Depreciation - leased assets 85 41 116
Assets redesignated from PPE to Cost of sales - - 30
Finance income (50) (7) (44)
Finance expense 7 140 164
Finance lease interest costs 17 2 17
Share based payments expense 238 116 233
Cash generated from operating activities before movement in working capital 1,077 65 2,292
Movement in working capital:
Decrease/(increase) in inventories and sales evaluation assets (199) 80 68
Decrease/(increase) in trade and other receivables (620) 2,356 (1,248)
Increase/(decrease) in trade and other payables 3,483 664 2035
Net movement in working capital 2,664 3,100 855
Cash generated from operating activities 3,741 3,165 3,147
Taxation (56) (17) (17)
Net cash generated from/(used in) operating activities 3,685 3,148 3,130
Cash flows from investing activities
Investment in development expenditure (1,069) (911) (1,824)
Purchase of property, plant and equipment (350) (177) (812)
Finance income 50 7 44
Net cash used in investing activities (1,369) (1,081) (2,592)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 483 15 165
Lease liability payments (96) (53) (143)
Finance expense (7) (61) (78)
Repayments of borrowings - (1,317) (1,317)
Net cash generated from / (used in) financing activities 380 (1,416) (1,373)
Increase/(decrease) in cash and cash equivalents 2,696 651 (835)
Effects of exchange rates on cash and cash equivalents (4) (125) 349
Cash and cash equivalents at 1 January 5,160 5,646 5,646
Cash and cash equivalents at balance sheet dates 7,852 6,172 5,160
Condensed Consolidated Statement of Changes in Equity
for the six month period ended 30 June 2024
Share capital Share premium Capital redemption reserve Share options reserve Foreign exchange translation reserve Accumulated profit and loss reserve Total attributable to equity owners of the parent
$'000 $'000 $'000 $'000 $'000 $'000 $'000
1 January 2023 6,980 82,284 7,051 1,777 (2,593) (79,615) 15,884
Loss for the period - - - - - (1,240) (1,240)
Other comprehensive expense - - - - 631 - 631
Total comprehensive expense for the period - - - - 631 (1,240) (609)
Contributions by and distributions to owners
Issue of share capital - exercise of options 3 12 - - - - 15
Fully exercised share options - - - (3) - 3 -
Share based payments - - - 116 - - 116
Total contributions by and distributions to owners 3 12 - 113 - 3 131
30 June 2023 6,983 82,296 7,051 1,890 (1,962) (80,852) 15,406
Profit for the period - - - - - 1070 1070
Other comprehensive expense - - - - (3) - (3)
Total comprehensive income for the period - - - - (3) 1070 1067
Contributions by and distributions to owners
Issue of share capital - exercise of options 16 134 - - - - 150
Fully exercised share options - - - - - (3) (3)
Share based payments - - - 117 - - 117
Total contributions by and distributions to owners 16 134 - 117 - (3) 264
31 December 2023 and 1 January 2024 6,999 82,430 7,051 2,007 (1,965) (79,785) 16,737
Loss for the period - - - - - (273) (273)
Other comprehensive expense - - - - (7) - (7)
Total comprehensive expense for the period - - - - (7) (273) (280)
Contributions by and distributions to owners
Issue of share capital - exercise of options 92 391 - - - - 483
Share based payments - - - 238 - - 238
Total contributions by and distributions to owners 92 391 - 238 - - 721
30 June 2024 7,091 82,821 7,051 2,245 (1,972) (80,058) 17,178
Notes to the Condensed Consolidated financial statements
1. General information and basis of preparation
Corero Network Security plc (the "Company") is a company domiciled in England.
The condensed consolidated interim financial statements of the Company for the
six months ended 30 June 2024 comprise the Company and its subsidiaries
(together referred to as the "Group").
1.1 Basis of Preparation
These condensed interim consolidated financial statements have been prepared
in accordance with UK-adopted IAS 34,"Interim Financial Reporting". They do
not include all disclosures that would otherwise be required in a complete set
of financial statements and should be read in conjunction with the Annual
Report and Accounts for the year ended 31 December 2023 ("2023 Annual Report
and Accounts"). Estimates and judgements that can have a significant impact on
the Group's interim consolidated financial statements are the same as that
of the prior year annual financial statements. The financial information for
the half years ended 30 June 2024 and 30 June 2023 do not constitute statutory
accounts within the meaning of Section 434(3) of the Companies Act 2006 and
have neither been audited nor reviewed by the Group Auditor.
The annual financial statements of Corero Network Security plc are prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006. The comparative financial information
for the year ended 31 December 2023 included within this report does not
constitute the full statutory accounts for that period. The statutory Annual
Report and Financial Statements for 2023 have been filed with the Registrar of
Companies. The Independent Auditors' Report on the Annual Report and Accounts
for 2023 was unqualified and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006.
There have been no related party transactions or changes in related party
transactions described in the latest Annual Report and Accounts that could
have a material effect on the financial position or performance of the Group
in the first six months of the financial year.
These consolidated interim financial statements were approved by the Board on
23 September 2024 and approved for issue on 24 September 2024.
A copy of this Interim Report can be viewed on the company's website:
www.corero.com (http://www.corero.com) .
1.2 Going Concern
The financial statements have been prepared on a going concern basis.
The Directors have prepared detailed income statement, balance sheet and cash
flow projections for the period to 31 September 2025 ('going concern
assessment period'). The cash flow projections have been subjected to
sensitivity analysis of the revenue, cost and combined revenue and cost levels
which demonstrate that the Group will maintain a positive cash balance through
the going concern assessment period. As part of the sensitivity analysis, the
Directors have noted that should the forecasted revenues not be achieved,
mitigating actions can be taken to address any cash flow concerns.
These actions include deferral of capital expenditure, reduction in marketing
and other variable expenditure alongside a hiring freeze.
The Directors are also not aware of any significant matters in the remainder
of calendar 2025 that occur outside the going concern period that could
reasonably possibly impact the going concern conclusion.
The Directors have also considered the geo-political environment, including
rising inflation in some of our key markets and the conflict in Ukraine and
the Middle East, and whilst the impact on the Group is currently deemed
minimal, the Directors remain vigilant and ready to implement mitigation
action in the event of a downturn in demand or an impact on operations.
On this basis, the Directors have therefore concluded that it is appropriate
to prepare the financial statements on a going concern basis.
2. Material accounting policies
The basis of preparation and accounting policies used in preparation of these
interim financial statements have been prepared in accordance with the same
accounting policies set out in the 2023 Annual Report and Accounts.
3. Segment reporting and revenue
The Group is managed according to one business unit, Corero Network Security,
which makes up the Group's reportable operating segment. This business unit
forms the basis on which the Group reports its primary segment information to
the Board, which management consider to be the Chief Operating Decision maker
for the purposes of IFRS 8 Operating Segments. Consequently, there is no
separable 'other segmental information' not otherwise shown in these Condensed
Consolidated Financial statements.
The Group's revenues from external customers are divided into the following
geographies:
Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
United States 9,015 8,270 15,855
United Kingdom 402 992 2,122
Others 2,745 1,264 4,372
Total 12,162 10,526 22,349
Revenues from external customers are identified by invoicing systems and
adjusted to take into account the difference between invoiced amounts and
deferred revenue adjustments as required by IFRS accounting standards.
The revenue is analysed for each revenue category as:
Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
Software licence and appliance revenue 5,063 3,866 8,186
DDoS Protection-as-a-Service revenue 3,023 2,786 5,599
Maintenance and support services revenue 4,076 3,874 8,564
Total 12,162 10,526 22,349
The revenue is analysed by timing of delivery of goods or services as:
Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
Point-in-time delivery 5,063 3,866 8,186
Over time 7,099 6,660 14,163
Total 12,162 10,526 22,349
4. Taxation
Due to the utilisation of past tax losses, the Group does not recognise a
material taxation income tax expense or credit.
5. Earnings per share
Earnings/(loss) per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares in
issue during the period. The effects of anti-dilutive ordinary shares
resulting from the exercise of share options are excluded from the calculation
of loss per share.
30 June 2024 loss 30 June 2024 weighted average number of 1p shares 30 June 2024 loss per share 30 June 2023 loss 30 June 2023 weighted average number of 1p shares 30 June 2023 loss per share
$'000 Thousand Cents $'000 Thousand Cents
Basic loss per share
From loss for the year (273) 505,623 (0.1) (1,240) 499,962 (0.2)
Diluted loss per share
Basic loss per share (273) 505,623 (0.1) (1,240) 499,962 (0.2)
Dilutive effect of share options - - - - 47,823 -
Diluted loss per share (273) 505,623 (0.1) (1,240) 547,785 (0.2)
31 Dec 2023 31 Dec 2023 31 Dec 2023
loss
weighted average number of 1p shares
loss per share
$'000
Thousand
Cents
Basic earnings per share
Basic earnings per share (170) 500,221 0.0
Diluted earnings per share
Basic earnings per share (170) 500,221 0.0
Dilutive effect of share options - - -
Diluted earnings per share (170) 500,221 0.0
6. Key performance measures
EBITDA and Adjusted EBITDA
Earnings before interest, tax, depreciation, and amortisation ("EBITDA") is
defined as earnings from operations before all interest, tax, depreciation,
and amortisation charges. The following is a reconciliation of EBITDA and
further adjustment for all three periods presented:
Unaudited Unaudited Audited
six months ended
six months ended
year ended
30 June 2024
30 June 2023
31 December 2023
$'000 $'000 $'000
Loss before taxation (217) (1,223) (153)
Adjustments for:
Finance income (50) (7) (44)
Finance expense 7 140 164
Finance lease interest costs 17 2 17
Depreciation - owned assets 108 72 151
Depreciation - lease liabilities 85 41 116
Amortisation of acquired intangible assets - 1 2
Amortisation of capitalised development expenditure 787 764 1,504
EBITDA 737 (210) 1,757
Unrealised foreign exchange differences (1) 430 429
Adjusted EBITDA - for unrealised foreign exchange differences 736 220 2,186
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