9 February 2017
Corero Network Security plc
("Corero" or the "Company")
Trading update, major contract win and new alliance partnership
Q4 2016 record SmartWall order intake, Q1 2017 $1.0 million order and Juniper Networks technology alliance partnership
Corero Network Security plc (AIM: CNS), the AIM listed network security company, provides an update on trading for the year ended 31 December 2016, and announces a material order for its SmartWall® Threat Defense System ("SmartWall") from a leading Cloud computing company and Juniper Networks technology alliance partnership (NASDAQ: JNPR).
Trading update
Corero ended the year strongly, with record final quarter SmartWall order intake with 15 new customers added, including five new "as-a-service" customers. Corero has now deployed its SmartWall solution at more than 60 service providers, hosting providers and on-line enterprises, providing real-time DDoS and cyber threat protection. A growing number of customers are now public references for Corero.
Revenue for the year ended 31 December 2016 is expected to be approximately $8.8 million (2015: $8.3 million). SmartWall revenue was up 62% over the prior year whilst legacy product revenues declined as expected. The 2016 revenue was lower than market expectations, in part impacted by the new "as-a-service" customers signed in Q4, where the revenue is recognised monthly over the term of the contract. The offsetting benefit is that these contract wins will add to the recurring revenue recognised in 2017 and beyond.
The EBITDA loss (operating loss before depreciation, amortisation and financing) for the year ended 31 December 2016 is expected to be approximately $5.1 million (2015: EBITDA loss $6.4 million), an improvement over market expectations.
Net cash at 31 December 2016 was $2.9 million (2015: $2.7 million). Corero continues to focus on scaling SmartWall revenues and as the business achieves critical mass it will be in a position to self-fund its ongoing product development and sales and marketing activities. In order to get to the position of being cash generating, the Company will require further growth financing support in the first half of 2017 and is exploring both equity and loan financing, and the Company's major shareholder is supportive of this.
The service provider and hosting provider requirements for real-time, automatic DDoS mitigation solutions are growing, driven by the increasing demand from their customers for DDoS protection. Corero is confident of the market opportunity for SmartWall in the service provider and hosting provider markets, and is pleased with the validation from numerous material customer wins in the past year and from the achievement of a "Recommended" rating from NSS Labs, the world's leading independent security product test laboratory.
Major contract win
The Company is pleased to announce that it has been awarded a new material SmartWall contract valued at $1.0 million with supporting SecureWatch® services for one year (with the vast majority of the revenue to be recognised in the year ending 31 December 2017). This contract win follows a successful Proof of Concept trial during which Corero was able to demonstrate the effectiveness of automatic, real-time DDoS protection.
Juniper Networks technology alliance partnership
Corero has entered into a technology alliance partnership with Juniper Networks, a US based multinational corporation that develops and markets networking and security products. This relationship enables the combination of Corero's SmartWall solution with Juniper Networks® MX Series Router and QFX Series switches to create highly scalable DDoS mitigation solutions as an integral component of service provider and enterprise networks.
As a result of Corero's relationship with Juniper, organisations can take advantage of these proven solution designs for highly scalable and flexible DDoS mitigation capacity at the enterprise or provider network edge. This relationship will enable Corero to expand its market reach by leveraging Juniper Networks global footprint.
Corero's strategy is to work with network vendors to make DDoS mitigation an integral component of any well-engineered Internet facing network design.
Ashley Stephenson, CEO commented:
"Corero enters 2017 well positioned to be the challenger in the fast growing DDoS mitigation market with SmartWall solution validation from over 60 customers and technology validation from NSS Labs. Our goal is to grow faster than the market by taking share from others. Head to head trials are proving we are the number one solution for real-time DDoS mitigation.
"We have strengthened our sales leadership with the recent appointment of Andrew Lloyd as President and Executive Vice President Sales. We have also expanded our addressable market via the recently introduced as-a-service purchase model and are encouraged by the potential for strategic go-to-market partnerships such as the alliance with Juniper. This gives us confidence Corero will deliver strong revenue growth in 2017.
"The 2017 financial year is off to a strong start with this major contract win, which demonstrates the significant opportunity for Corero in the Cloud computing market. We expect an increasing number of corporations will see the value of investing in DDoS protection to protect their revenue streams and defend their brand reputations."
This announcement contains inside information.
Enquiries:
Corero Network Security plc |
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Andrew Miller, CFO |
Tel: 01895 876 382 |
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Cenkos Securities plc |
Tel: 020 7397 8900 |
Bobbie Hilliam - NOMAD Alex Aylen - Corporate Broking |
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Redleaf Communications |
Tel: 020 7382 4747 |
Rebecca Sanders-Hewett/David Ison/Susie Hudson |
[email protected] |
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About Corero Network Security
Corero Network Security is the leader in real-time, high-performance DDoS defense solutions. Service providers, hosting providers and online 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 next-generation technology provides a First Line of Defense® 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
