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Corero Network Security lands one of its biggest ever SmartWall contract wins

The order is from a global pharmaceuticals company that has a strong online presence
Modular network system
Full-year results are expected to be in-line with market expectations

Network security company Corero Network Security PLC (LON:CNS) has won what it called “a significant contract” for its flagship SmartWall Threat Defense System.

The company said one of the world’s leading pharmaceutical companies has selected Smartwall to protect its on-line presence against distributed denial of service (DDoS) attacks; a DDoS attack is when a malicious agency bombards a network with input & output requests, slowing the service to a crawl.

WATCH: Corero Network Security kicks off third quarter with 'significant' contract win

Corero said the $0.2mln initial order is part of an expected US$1.5 million global deployment over the next few quarters, and represents one of the company’s largest contract wins to date.

To put the contract win into context, the company announced this morning in its half-year results that revenue in the first six months of the year was US$4.8mln, of which US$4.4mln – up 51% year-on-year – came from Smartwall.

Expanding customer base

Importantly, the contract win is another example of the company selling its network defence system to a customer that is not operating in its traditional target the internet service providers and data centres.

READ: Corero Network Security wins US contract for cyber security technology

"The demand from digital enterprises for real-time DDoS mitigation solutions is being driven by the increasing number and severity of DDoS attacks and the growing awareness of the threat of cyber-attacks brought about by high profile attacks such as the crippling DDoS attack on Dyn in 2016 and recent WannaCry ransomware attacks,” said Andrew Lloyd, president and executive vice president of sales & marketing at Corero.

“In addition, new cyber security regulatory requirements such as the European Network Information Security (NIS) Directive, General Data Protection Regulation and the revised Payment Services Directive (PSD2) are requiring companies invest in appropriate cyber security defences,” he added.

SmartWall shores up revenue

As for the half-year results, they showed revenue unchanged year-on-year, with strong growth in sales of SmartWall offsetting an expected decline in revenue – down to US$0.4mln from US$1.9mln the year before – from legacy products.

Recurring revenue from SmartWall was up 177% on the first half of 2016; the company signed seven new customers to its platform-as-a-service offering during the reporting period.

Order intake for SmartWall was up 41% to US$4.8mln from US$3.4mln the year before, while follow-on orders from existing customers surged to US$1.4mln from US$0.3mln.

READ: Corero wins contract with US federal government agency

The underlying loss (LBITDA) widened to US$3.4mln from US$2.5mln, including a non-cash foreign exchange loss of US$0.3mln on an inter-company loan, whereas last year the company recorded a paper-based US$0.8mln gain related to foreign exchange movements.

The loss before tax deepened to US$4.8mln from US$4.1mln.

At the end of June the company had net cash of US$5.1mln, versus net cash a year earlier of US$8.7mln.

On track for full year

The company said it expected full-year performance would be in line with market expectations.

"Corero has made good progress in the first half of 2017 with several significant milestones including our first $1 million customer, a continued increase in recurring revenues, expansion of our product line to 100Gbps capability and the launch of a virtual appliance, software only DDoS mitigation solution,” said Ashley Stephenson, chief executive officer of Corero.

"We continue to win customers in our target markets of service and hosting providers and digital enterprises, almost doubling the number of SmartWall customers in the past 12 months to some 80 customers at the end of June 2017. In addition, our focus on increasing our routes to market through partnerships has resulted in formal agreements with Gigamon, Juniper Networks and McAfee. We expect the benefits of these and other such relationships we are pursuing to contribute in the second half of 2017," he added.

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Corero Network Security PLC Timeline

April 11 2019

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