17 January 2024
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")
Year End Trading Update
Strong Close to 2023 Year End
Significant Brazil Contract Win & Akamai Partnership Progress
Corero Network Security plc (AIM: CNS), a leading provider of real-time, high-performance, automatic Distributed Denial of Service ("DDoS") cyber defence solutions, provides the following trading update for the year ended 31 December 20231 ("FY 2023").
Annualised Recurring Revenues2 ("ARR") increased to $16.9 million as at 1 January 2024, an increase of 17% over the prior year (ARR at 1 January 2023: $14.4 million), driven by continued demand for Corero's subscription-based and DDoS Protection as-a-service ("DDPaaS") products. This strong performance continues to improve earnings visibility for the Company going forward, which, when aligned with the Group's new business pipeline built through 2023, ensures Corero remains well positioned for revenue growth in 2024 and beyond.
Subject to audit, revenue for FY 2023 is expected to be approximately $22.3 million, an increase of 11% from the prior year (FY 2022: $20.1 million), whilst adjusted EBITDA3 is expected to be in the range of $1.9 to $2.3 million (FY 2022: $2.6 million).
Order intake4, which reflects revenues recognised over the lifetime of each contract, grew 4% to $24.8 million for FY 2023 (FY 2022: $23.9 million). In addition, the Company delivered a customer support contract renewal rate of 98% (FY 2022: 98%), further demonstrating the strength and quality of Corero's market-leading solutions, supported by the continued focus on product development.
Cash at 31 December 2023 was $5.2 million, with no outstanding debt (net cash 31 December 2022: $4.4 million). The Company used its strong balance sheet position to repay in full its bank term loan facility early during the year. The total amount of the bank term loan repaid during 2023 amounted to $1.2 million.
Significant DDoS Protection Service Win in Brazil
During H2 2023, the Company secured a $1 million plus contract with a new channel partner customer in the Brazilian market, its largest ever contract in the LATAM region, which will expand Corero's ability to offer DDoS protection solutions in this new geographic market (the "Contract"). The Contract, which has a total value in excess of $1 million over three years, will deliver SmartWall® ONE ultra-low latency DDoS protection across the channel partner's own network.
In addition, Corero and the customer have entered into a revenue sharing agreement which will enable this channel partner to sell Corero DDoS protection services producing an incremental revenue stream for Corero. This agreement will allow Corero to gain deeper penetration across the LATAM region with a trusted provider, opening further opportunities for revenue generation and market expansion.
Update on Strategic Global Partnership with Akamai
Following the global partnership agreement with Akamai announced on 20 September 2023, Corero is pleased to report that it has secured its first two new DDPaaS customer wins through the partnership. These two material contracts were secured late in the final quarter of 2023 and therefore had a negligible contribution to Corero's revenue in 2023 given that DDPaaS contract revenue is recognised over the contract term.
Corero and Akamai have been closely engaged in the second half of 2023 on the workstreams to drive the successful commercial execution of the partnership and drive new customer opportunities. This close collaboration has resulted in a growing pipeline of opportunities which will generate incremental revenue for Corero in 2024 and beyond.
CEO Appointment
As announced on 13 November 2023, Carl Herberger became CEO and joined the Board of Directors on 1 January 2024. Following Carl's appointment to the Board, Jens Montanana has stepped back from his role as Executive Chairman of the Company and returned to his role as Non-Executive Chairman, effective 1 January 2024.
There are no changes to the disclosures made in relation to Schedule 2(g) and AIM Rule 17 in the 13 November 2023 announcement in respect of Carl Herberger.
The Company intends to issue its audited FY 2023 results in late March / early April 2024 and will provide an update on the actual date in due course.
Carl Herberger, CEO of Corero, said:
"I am delighted to be joining the business at such an exciting time, with Corero achieving growth across all our key metrics, alongside the continued expansion of both our customer base and market reach.
Our new Akamai partnership is already yielding positive contract momentum and the new Brazilian win highlights the expansion of Corero's global footprint.
The global demand for DDoS protection remains robust, driven by the ever-growing activity from threat-actors, with 2023 being another record year. Corero expects this trend to continue and is therefore well placed to take advantage of this ever more complex and growing market.
During 2024, we will continue to build upon the foundations laid in 2023. Our focus on profitability and positive cash-flow generation, whilst delivering both ARR and revenue growth, will allow us to further demonstrate our scalable business model as we continue to realise the Company's potential."
1 All numbers for year ending 31 December 2023 disclosed within this announcement are management estimates based on current information and are unaudited.
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 Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and amortisation excluding unrealized FX gains/(losses).
4 Order intake is defined as orders received from customers in the period.
Enquiries:
| Corero Network Security plc | Tel: +44(0)20 7390 0230 |
| Carl Herberger, Chief Executive Officer | |
| 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 | |
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About Corero Network Security
Corero Network Security is a leading provider of DDoS protection solutions, specializing 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, USA, and Edinburgh, UK, Corero is headquartered in London and listed on the London Stock Exchange's AIM market (ticker: CNS). For more information, visit: https://www.corero.com.
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