TIDMCNS
RNS Number : 0061A
Corero Network Security PLC
21 December 2017
21 December 2017
Corero Network Security plc
("Corero", the "Company" or the "Group")
Trading Update
-- Q4 2017 expected to be a record SmartWall order intake
-- Strong SmartWall revenue and recurring revenue growth in 2017
-- 2017 revenue will be impacted by delays in customer implementation schedules
-- Corero enters 2018 with a strengthened market proposition and
well positioned for continued growth
Corero Network Security plc (AIM: CNS), the AIM listed network
security company, provides an update on trading for the year ending
31 December 2017.
Trading update
Corero is expected to end the year strongly, with a record final
quarter SmartWall(R) Threat Defense System ("SmartWall") order
intake.
Notwithstanding this, Group revenue for the year ending 31
December 2017 is now expected to be in the range $8.5 million to
$9.0 million. It is expected that SmartWall revenue and recurring
revenue will show strong growth over the prior year, with the
contribution from legacy product revenue only $0.6 million (2016:
SmartWall revenue of $5.5 million versus legacy product revenue of
$3.3 million for a total of $8.8 million).
Revenue for the year ending 31 December 2017 will be impacted by
delays in world-wide implementation schedules for a large digital
enterprise customer win in Q3 2017 and an existing customer's
ongoing deployment (with the majority of the revenue from these two
customer's now expected in H1 2018).
SmartWall order intake for the year ending 31 December 2017 is
expected to be between $9.3 million and $9.8 million, with
approximately 50% representing recurring revenue in the form of
support, services, and DDoS protection as a service (DDPaaS)
contracts (2016: SmartWall order intake was $6.7 million including
recurring revenue order intake of $2.6 million).
Given the above, the Group EBITDA* loss for the year ending 31
December 2017 is expected to be in the range $4.8 million to $5.3
million (2016: EBITDA* loss $6.4 million). Corero is encouraged
that the Q4 2017 Group EBITDA* loss is expected to be in the range
$0.1 to $0.5 million, bringing the Group close to its goal of being
EBITDA positive.
Corero has continued to manage its cost base in 2017 with
overheads* expected to be approximately 10% below the prior
year.
Net cash at 31 December 2017 is expected to be approximately
$1.0 million (2016: $2.9 million). Corero is planning to fund the
Company's working capital requirements for 2018 via a debt
financing which it expects to complete in the first half of
2018.
* before depreciation, amortisation, financing and unrealised
foreign exchange differences on an intercompany loan
2018 outlook
Corero enters 2018 with the foundation in place for continued
acceleration of SmartWall revenue growth as a result of:
-- Strong market demand from the growing awareness of the threat
and impact of DDoS attacks, and increased risk associated with the
projected growth of IoT deployments;
-- Pending regulations in the US, UK and Europe, including the
Directive on the Security of Network and Information's Systems (NIS
Directive) which comes into force for all EU member states on the
9(th) May 2018), are expected to positively impact demand for DDoS
mitigation investment in 2018 particularly by Digital Enterprises
(including critical national infrastructure providers);
-- Corero go-to-market partner recruitment and enablement
efforts in 2017 with partners expected to contribute to revenue in
H1 2018; and
-- Investment in channel sales development in 2017 to grow Corero's routes to market in 2018.
It is expected that Corero will enter 2018 with a recurring
revenue contract base, including support, services and DDPaaS
contracts, of approximately $5.0 million.
The DDoS mitigation market fundamentals remain strong with a
leading technology analyst forecasting double digit growth and the
market to grow to $1.4 billion in 2021 (Source: IHS Markit).
Corero has a market leading SmartWall product portfolio which
has been further enhanced for 2018 with the deliverables from a
two-year development program to expand the existing product
offerings with:
-- A new 100Gbps capable product to capture growth in customer
demand for 100Gbps connectivity; and
-- A virtual appliance software-only product to capture demand
for hybrid on-premises / Cloud DDoS mitigation deployments.
Ashley Stephenson, Corero CEO, said:
"Corero enters 2018 with confidence following a year of strong
growth in SmartWall order intake with proof points of multiple $1.0
million plus customers, a growing catalog of industry awards and
several disruptive contract wins against competitors. The Group has
also expanded its ecosystem of world class partners and introduced
an enhanced product portfolio. We are excited about the prospects
for the future of the business."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Enquiries:
Corero Network Security plc
Andrew Miller, CFO Tel: 01895 876
382
Cenkos Securities plc Tel: 020 7397
8900
Mark Connelly/Bobbie Hilliam - NOMAD
Michael Johnson - Sales
Redleaf Communications Tel: 020 7382
4747
Elisabeth Cowell/Robin Tozer/Ian cns@redleafpr.com
Silvera
About Corero Network Security
Corero Network Security is the leader in real-time,
high-performance DDoS defense solutions. Service providers, hosting
providers and digital enterprises rely on Corero's award winning
technology to eliminate the DDoS threat to their environment
through automatic attack detection and mitigation, coupled with
complete network visibility, analytics and reporting. This industry
leading technology provides cost effective, scalable protection
capabilities against DDoS attacks in the most complex environments
while enabling a more cost effective economic model than previously
available. For more information, visit www.corero.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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