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Corero Network Security keeps operating as essential service during coronavirus crisis

Snapshot

  • Specialises in cybersecurity software
  • Growing customer base
  • Smartwall revenues growing strongly with hosting providers
  • Deemed essential service during coronavirus pandemic
Corero Network Security PLC - Corero Network Security targets sales acceleration

Quick facts: Corero Network Security PLC

Price: 8.75 GBX

AIM:CNS
Market: AIM
Market Cap: £43.3 m
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We believe there continues to be a significant growth opportunity for Corero, underpinned by our differentiating technology and strong market dynamics

Lionel Chmilewsky, CEO

What it does

Corero Network Security PLC (LON:CNS) is a specialist cybersecurity provider. Its SmartWall software specialises in protecting a network against the threat posed by distributed denial of service (DDoS) attacks - where traffic flow on the network grinds to a halt as a result of an overwhelming flood of input/output requests.

How it is doing

The firm is deemed as an essential service during the pandemic, therefore it continues operating.

Corero said order intake in the first half of 2020 increased by 58% to US$7.9mln from US$5.0mln in the first half of the previous year. Half-year revenue is expected to be up 48% year-on-year to US$6.2mln.

By July 12, 20230, annualised recurring revenues (ARR) had increased to US$8.8mln, driven by growth in DDoS (distributed denial of service) protection-as-a-service (DDPaaS) and software subscription orders.

Meanwhile, around two-thirds of the orders received in 2019 were from telecommunication service and cloud providers, markets that are anticipated to benefit from the shift to work-from-home as a result of the coronavirus pandemic.

The company ended 2019 with a strong balance sheet, with net cash of US$5.4mln, up from US$4.4mln a year earlier.

Group revenue was US$9.7mln in the year to 31 December, virtually unchanged from US$10.0mln the year before. The percentage of revenue that is recurring improved to 60.7% from 51.1%.

Loss before tax widened to US$6.6mln from US$5.2mln the previous year.

Inflexion points

  • Shift to remote working expected to improve trading

  • In mid-June, the company unveiled five new customer wins for its SmartWall DDoS protection products totalling over US$1.5mln

  • In May, former CEO Ashley Stephenson switched to the role of chief technology officer and was replaced as CEO by Lionel Chmilewsky

What the boss says: Lionel Chmilewsky, chief executive

"I am very pleased to see the momentum achieved in the first half of the year including the addition of 18 new customers, a growing pipeline and an increased number of deployed proof of concepts.”

“Whilst we continue to monitor the macroeconomic impact of COVID-19 closely, we believe there continues to be a significant growth opportunity for Corero, underpinned by our differentiating technology and strong market dynamics."

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