Company Announcements

24 January 2022

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")

Trading Update

Record performance underpins transition to profitability

Corero Network Security plc (AIM: CNS), a leading provider of real-time, high-performance, automatic Distributed Denial of Service (DDoS) cyber defense solutions, is pleased to provide the following trading update for the year ended 31 December 2021¹.

As announced in the Group's pre-close update on 22 December 2021, Corero performed strongly in FY 2021 with revenues expected to be broadly in-line with market expectations at c. $20.9 million (2020: $16.9 million), up 24%, and EBITDA anticipated to be materially ahead of market expectations in an estimated range of $3.8 to $4.2 million (2020: EBITDA loss of $1.4 million). In addition, Corero anticipates reporting a maiden profit before taxation in an estimated range of $1.2 to $1.6 million (2020: loss before taxation of $4.0 million). This performance has been underpinned by continued strong demand for the Group's market-leading DDoS mitigation solutions, coupled with ongoing margin improvement and controlled operating expenses. Included within EBITDA and profit before tax is c$0.2m of foreign exchange gains (2020: $0.4m foreign exchange losses); and non-recurring income from the forgiveness of a US Payment Protection Plan (PPP) loan of $0.6 million as reported in the interim results.

Annualised Recurring Revenues² ("ARR") increased to c. $12.8 million as at 1 January 2022 (ARR at 1 January 2021: $9.8 million), driven by strong traction for Corero's subscription-based and DDoS Protection as-a-service ("DDPaaS") products, which underpins higher levels of earnings predictability for the Company going forward.

Cash at 31 December 2021 was $11.2 million reflecting the improved performance of the business (H1 2021: $8.8 million; 2020: $10.1 million). Net cash, taking into account borrowings, at 31 December 2021 was $8.4 million (H1 2021: $5.1 million; 2020: $7.6 million).

Corero added 44 new customers in 2021 (2020: 42 new customers), of which, 18 were secured through Corero's strategic partnership with Juniper Networks (2020: 17 new Juniper customers). Corero has now deployed its unique solutions across 47 countries.

An announcement regarding the date of publication of the Company's audited full year results will be made in due course. 

Lionel Chmilewsky, Corero's CEO, said:

"Corero has delivered an excellent performance across 2021, highlighted by a significant improvement in profit growth, and we are pleased to be reporting our maiden profit before tax.  We have built strong momentum during 2021 which we fully expect to continue during 2022 and beyond. Given the on-going strategy and strong 2021 performance, we intend to invest in additional resources in 2022 to further drive growth.  We look forward to continuing our strong growth trajectory and updating the market with our strategic progress over the coming months."

¹ All numbers for the year ended 31 December 2021 disclosed within this announcement 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. 

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About Corero Network Security

Corero Network Security plc is a global leader in real-time, high-performance, automatic DDoS cyber defense solutions. Both Service and Hosting providers, alongside digital enterprises across the globe rely on Corero's award winning cybersecurity technology to eliminate the threat of Distributed Denial of Service (DDoS) to their digital environment through automatic attack detection and mitigation, coupled with network visibility, analytics and reporting. Corero's industry leading SmartWall and SecureWatch technology provides scalable protection capabilities against external DDoS attackers and internal DDoS botnets in the most complex edge and subscriber environments, while enabling a more cost-effective economic model than previously available. Corero's key operational centers located in Marlborough, Massachusetts, USA and Edinburgh, UK, with the Company's headquarters in Amersham, UK. The Company is listed on the London Stock Exchange's AIM market under the ticker CNS.  For more information, visit   www.corero.com