TIDMCNS
RNS Number : 3868A
Corero Network Security PLC
21 January 2020
21 January 2020
Corero Network Security plc
("Corero" or the "Company")
Trading update
Record order intake in H2 2019
Strong recurring revenue growth and order book pipeline
underpins outlook for 2020
Corero (AIM: CNS), the network security company, provides an
update on trading for the year ended 31 December 2019.
Corero had a record H2 2019 order intake of $8.0 million, an
increase of 62% over H1 2019 and 36% over H2 2018, with a total
order intake for the year of $13.0 million, up 17% versus 2018
(2018: $11.1 million). Revenue for the year ended 31 December 2019
is expected to be approximately $10.0 million (2018: $10.0 million)
due to the increase in deferred revenue resulting from the higher
mix of DDoS protection as a service ("DDPaaS") long term contract
orders in 2019. These revenues are recognised over the term
(typically 3 years).
H2 2019 revenue is expected to have increased over 30% versus H1
2019 and 10% versus H2 2018. Recurring revenue for the year ended
31 December 2019 is expected to be approximately $6.0 million
(2018: $5.1 million), up 17%.
Corero enters 2020 with a growing recurring revenue base and an
annualised recurring revenue value of over $7.0 million (2018: $5.4
million), of which $2.0 million represents multi-year DDPaaS
contracts.
Highlights from orders received in 2019 include:
-- Significant increase in the mix of DDPaaS recurring revenue
orders - 32% of new business in 2019;
-- 12 new customers added in H2 2019, with a total of 18 in 2019; and
-- Six new Juniper customer orders in 2019, with 5 in the second half of 2019.
The Company is also developing an impressive pipeline of new
business prospects for 2020 in both direct customer sales and
through Corero's Juniper partnership.
Corero has enjoyed continued high levels of customer
satisfaction resulting in strong service and support contract
renewals 98.8% (2018: 98.5%) and existing customer follow-on orders
of $5.7 million (2018: $4.4 million). In addition, gross margins
remain robust at approximately 80% (2018: 78%).
Operating costs* for the year ended 31 December 2019 are
expected to be approximately $10.5 million (2018: $9.9 million),
the increase in the year was due to an increased share options
charge, lower capitalised development costs and higher headcount
related costs.
The EBITDA* loss for the year ended 31 December 2019 is expected
to be approximately $3.0 million (2018: EBITDA* loss $2.1
million).
Cash at bank as at 31 December 2019 was $8.3 million (2018: $8.0
million) and debt was $2.9 million (2018: $3.6 million) resulting
in net cash of $5.4 million (2018: $4.4 million). Corero
successfully closed an over-subscribed equity fund raise on 13
December 2019, raising $4.1 million before costs, providing the
funding required to execute on the Company's growth plans.
Corero has delivered further operational progress in the second
half of the year, including:
-- Sales team headcount doubling since the start of 2019;
-- Revenue from the Company's partnership with GTT Communications increased 300%; and
-- A new partnership secured with a leading cloud DDoS service
provider to deliver hybrid DDoS protection, which facilitated
Corero's largest DDPaaS order to date.
* before depreciation, amortisation, financing and unrealised
foreign exchange differences on an intercompany loan
Ashley Stephenson, CEO of Corero, commented:
"Our strong order momentum in the second half of 2019, combined
with our higher levels of recurring revenue and strong new business
pipeline, provide Corero with solid foundations for 2020.
"Following the fundraising in December 2019, we have already
commenced our investment programme, which includes expanding our
routes to market and broadening our sales coverage.
"This improvement in our operational platform underpins our
confidence in the growth potential of our business and reinforces
our drive to deliver on our plans for 2020 and beyond."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
Corero Network Security plc
Andrew Miller, CFO Tel: 01895 876 382
Cenkos Securities plc Tel: 020 7397 8900
Mark Connelly/Ben Jeynes - NOMAD
Michael Johnson - Sales
Vigo Communications Tel: 020 7390 0230
Jeremy Garcia / Antonia Pollock / Ben Simons
corero@vigocomms.com
About Corero Network Security
Corero Network Security is a leader in real-time,
high-performance DDoS defense solutions. Service providers, hosting
providers and digital enterprises rely on Corero's award winning
technology to eliminate the DDoS threat to their environment
through automatic attack detection and mitigation, coupled with
complete network visibility, analytics and reporting. This industry
leading technology provides cost effective, scalable protection
capabilities against DDoS attacks in the most complex environments
while enabling a more cost effective economic model than previously
available. For more information, visit www.corero.com
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END
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