Shares in Corero Network Security PLC (AIM:CNS, OTCQB:DDoSF) dropped 33% on Wednesday morning after the cyber-defence firm warned that full-year revenue and earnings would fall short of market expectations.
The AIM-listed company, which specialises in protecting against distributed denial of service (DDoS) attacks, said it was seeing strong momentum in its subscription-based model, with annualised recurring revenue rising 25% to $21.6 million.
But this shift away from traditional upfront licence sales towards longer-term contracts meant less revenue was recognised in the short term.
As a result, first-half revenue fell to $10.9 million, down from $12.2 million a year earlier, while the company swung to an EBITDA loss of $1.4 million.
Full-year revenue is now expected to come in between $24.0 million and $25.5 million, with EBITDA ranging from breakeven to a $1.5 million loss, both below analysts’ forecasts.
Corero blamed weaker partner performance, macroeconomic uncertainty and delays in customer decisions, particularly in the US, for a slower-than-expected start to the year. The company is now seeking an overdraft facility to manage its working capital needs.
The shares dropped 4.89p to 9.86p.