Corero finishes year 'strong'

Network security company Corero Network Security provided an update on trading for the year to 31 December on Thursday.

The AIM-traded company said it ended the year strongly, with record final quarter SmartWall order intake with 15 new customers added, including five new ‘as-a-service’ customers.

Corero said it has now deployed its SmartWall solution at more than 60 service providers, hosting providers and online enterprises, providing real-time DDoS and cyber threat protection.

A growing number of customers were now public references for Corero.

Revenue for the year was expected to be approximately $8.8m, up marginally year-on-year from $8.3m.

SmartWall revenue was up 62% over the prior year, whilst legacy product revenues declined as expected.

The 2016 revenue figure was lower than market expectations, in part impacted by the new ‘as-a-service’ customers signed in Q4, where the board said revenue was recognised monthly over the term of the contract.

It said the offsetting benefit was that those contract wins would add to the recurring revenue recognised in 2017 and beyond.

The EBITDA loss for the year was expected to be approximately $5.1m, narrowing from a loss of $6.4m in the prior year, and an improvement over market expectations.

Net cash at 31 December 2016 was $2.9 million, up from $2.7m.

Corero said it continued to focus on scaling SmartWall revenues, and as the business achieved critical mass it would be in a position to self-fund its ongoing product development and sales and marketing activities.

In order to get to the position of being cash generating, the company said it will require further growth financing support in the first half of 2017, and was exploring both equity and loan financing, with its major shareholder supportive of that.

“Corero enters 2017 well positioned to be the challenger in the fast growing DDoS mitigation market with SmartWall solution validation from over 60 customers and technology validation from NSS Labs,” said CEO Ashley Stephenson.

“Our goal is to grow faster than the market by taking share from others.

“Head to head trials are proving we are the number one solution for real-time DDoS mitigation.”

Stephenson said the company strengthened its sales leadership with the recent appointment of Andrew Lloyd as president and executive vice president Sales.

“We have also expanded our addressable market via the recently introduced as-a-service purchase model and are encouraged by the potential for strategic go-to-market partnerships such as the alliance with Juniper.

“This gives us confidence Corero will deliver strong revenue growth in 2017.”

The 2017 financial year was off to a strong start with a major contract win, Stephenson added, which demonstrated the “significant opportunity” for Corero in the cloud computing market.

“We expect an increasing number of corporations will see the value of investing in DDoS protection to protect their revenue streams and defend their brand reputations.”