Corero Network Security PLC (LSE:CNS) (H1 2024) Earnings Call Transcript Highlights: Strong ...

GuruFocus Research
4 min read

In This Article:

  • Group Revenue: $12.2 million, representing a 16% year-over-year increase.

  • Order Intake: $14.2 million, a 10% year-over-year growth rate.

  • Annual Recurring Revenue (ARR): $17.2 million, up 12%.

  • Gross Margin: Consistent at 91%.

  • EBITDA: $0.7 million for the first half of 2024.

  • Cash Balance: $7.9 million, representing $2.7 million of free cash flow.

  • US Revenue: Grew 8% to roughly $9 million.

  • Rest of the World Revenue: Grew over 40% to $3.1 million.

  • Software License Revenue: Contributed 42% of the total revenue in H1.

Release Date: September 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Group revenue increased by 16% year-over-year, driven by new multiyear channel partnerships and significant customer wins.

  • Annual recurring revenue (ARR) grew by 12%, indicating strong ongoing demand for Corero's solutions.

  • Order intake increased by 10%, demonstrating strong market confidence in Corero's offerings.

  • Gross margin remained consistent at 91%, reflecting the company's software-led approach.

  • Corero's cash position stands at a record high, with $7.9 million in cash and $2.7 million in free cash flow generated in H1 2024.

Negative Points

  • ARR growth was lower compared to H1 last year despite a 10% increase in order intake, attributed to the timing and mix of sales.

  • UK revenue was relatively low at $402,000, raising questions about the effectiveness of the sales strategy in that region.

  • The company has only 10 outside sales reps covering the entire globe, which may limit its ability to capture market share quickly.

  • Dependence on large partners like Akamai for sales growth could pose risks if these partnerships do not perform as expected.

  • The geopolitical environment and rising threats could increase operational challenges and require continuous adaptation.

Q & A Highlights

Highlights of Corero Network Security PLC (LSE:CNS) Earnings Call

Q: Is Corero's recent new business momentum a feature of your new approach to sales and marketing or simply market-driven demand? A: Carl Herberger, CEO: It's a combination of both. The market for DDoS products is growing due to increased reliance on internet-delivered services and rising threats. Our new sales and marketing strategies are also beginning to outperform the market, showing early signs of success.

Q: Carl, how would you assess your first nine months in the role? And is there more to come for the team? A: Carl Herberger, CEO: I'm very excited about the transition and the team. We have the right products at the right time and are well-positioned to take market share. There is much more ambition and momentum to come.

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