Corero swings to loss despite improved order intake

Corero Network Security reported a 19% improvement in its first-half order intake on Thursday, reaching $13m.

The AIM-traded company said revenue for the six months ended 30 June also grew by 19% to reach $10.5m, a leap from $8.8m during the first half of 2022.

Annualised recurring revenues increased 13% to $15.3m, while the firm swung to an EBITDA loss of $0.2m from an EBITDA profit of $0.9m a year earlier.

However, its adjusted EBITDA came in at a profit of $0.2m, up from a break-even result a year earlier.

Corero recorded a net cash position of $6.2m as of 30 June, slightly up from $5.8m the year before.

The company said it had made an early repayment of $1.2m on a bank term loan facility and was now free of any outstanding debt, compared to a deficit of $1.7m in 2022.

On the operational front, Corero said it had forged a new strategic go-to-market alliance with Akamai Technologies.

The company said its focus on its ‘ideal customer profile’ (ICP) had contributed to a significant customer base expansion throughout the first half.

It said the second quarter alone brought in $6m through significant customer contracts, showcasing the firm's continued momentum.

The company added that it saw consistent growth in its subscription-based products and DDoS protection-as-a-service (DDPaaS) offering, solidifying its revenue and earnings forecast.

Corero said it had made an encouraging start to the second half, marked by multiple major customer acquisitions.

The robust business pipeline remained on an upward trajectory, while sustained demand for DDoS mitigation, especially from diverse-sized enterprises, was seen as a result of persistent high-profile DDoS attacks.

Its board said it was optimistic about the company's near-term expansion possibilities and confirmed that Corero was performing as per market anticipations.

“I am extremely pleased with the momentum that we have built during the first half of 2023, securing a number of key customer wins across the period,” said executive chairman Jens Montanana.

“The increase in revenue, order intake and annual recurring revenue all demonstrate the fundamental strength of both Corero's business model and ongoing demand for our market-leading products.”

Montanana said the firm’s new strategic partnership with Akamai would further expand its routes to market, adding that it was expected to deliver incremental revenue growth in the medium term.

“The robust foundations created during the first half, and the strength of the company's balance sheet following the repayment of the outstanding term bank loan, gives us confidence for the full year as we continue to focus on delivering on our growth strategy.”

At 1421 BST, shares in Corero Network Security were down 3.4% at 7.1p.

Reporting by Josh White for Sharecast.com.