25 October 2022 

Corero Network Security plc

("Corero" or the "Company")

Trading Update

Corero Network Security plc (AIM: CNS), a leading provider of real-time, high-performance, automatic Distributed Denial of Service ("DDoS") cyber defense solutions, provides the following trading update for the year ending 31 December 2022¹.

Order intake, which reflects revenues recognised over the lifetime of each of the contracts, is expected to remain strong with growth of between 15 and 25% over the prior year (2021: $21.2 million).  

Notwithstanding the expected growth in order intake, Corero estimates that revenue for the year ending 31 December 2022 is now expected to show growth of between 5% and 10% over the prior year (2021: $20.9 million).  Corero has seen customer decision making and buying cycles being extended which has impacted customer order timing as we approach the end of the financial year and the resultant ability to recognise the revenue in the current period.  The Company expects that the final quarter of the financial year will, consistent with seasonality patterns of business in previous years, display characteristic greater weighting of business activity and as a result the second half will show a material increase on the results from the first half.

As a result, adjusted EBITDA² for the year ending 31 December 2022 is expected to be between $1.0 and $2.0 million (2021: $4.1 million) reflecting the expected growth from the first half and the previously described investments in sales and marketing. The cash position continues to be strong.

Corero continues to make progress in delivering against its six core strategic drivers.  One of the key business drivers, the amplification of demand generation programmes, together with the planned increased sales and marketing investment in 2022, is delivering strong growth in the sales pipeline with a record number of new customer opportunities as well as incremental business with existing customers.  The Company also continues to experience high levels of customer retention and renewals as the underpin to annual recurring revenue.

 Lionel Chmilewsky, CEO of Corero, said:

"Our expected growth in order intake is pleasing but the extensions we are seeing in decision making and sales cycles are impacting the timing of orders and ultimately our revenues this year. 

"Our primary focus remains on sales and marketing with our defined go-to-market strategy including the further development of sales channel partners.  We are confident the investments made in product development and sales and marketing in 2022 will position Corero to deliver strong growth in 2023 with a strong pipeline of opportunities already being developed."

 ¹ All numbers for year ending 31 December 2022 disclosed within this announcement are management estimates based on current information and are unaudited.

² Adjusted EBITDA is defined as earnings before interest, interest, tax, depreciation, and amortisation excluding unrealised gains on an intercompany loan.

The information contained within this announcement was deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014, as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310, prior to release of this announcement. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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About Corero Network Security

Corero Network Security plc is a global leader in real-time, high-performance, automatic DDoS cyber defense solutions. Both Service and Hosting providers, alongside digital enterprises across the globe rely on Corero's award winning cybersecurity technology to eliminate the threat of Distributed Denial of Service (DDoS) to their digital environment through automatic attack detection and mitigation, coupled with network visibility, analytics and reporting. Corero's industry leading SmartWall and SecureWatch technology provides scalable protection capabilities against external DDoS attackers and internal DDoS botnets in the most complex edge and subscriber environments, while enabling a more cost-effective economic model than previously available. Corero's key operational centers located in Marlborough, Massachusetts, USA and Edinburgh, UK, with the Company's headquarters in London, UK. The Company is listed on the London Stock Exchange's AIM market under the ticker CNS.  For more information, visit www.corero.com