Release Date: April 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Corero Network Security PLC (DDOSF, Financial) reported a 10% revenue growth in 2024, reaching $24.6 million.
- The company achieved a 16% growth in annual recurring revenue (ARR), with an exit rate of $19.5 million.
- Gross margin remained above 90%, reflecting the software-led nature of their solutions.
- Customer renewal rates were high at 97%, indicating strong customer satisfaction.
- Corero expanded its product portfolio beyond DDoS protection, introducing new products like CORE, which is expected to drive future growth.
Negative Points
- R&D expenses increased significantly from $1.8 million to $3.2 million, raising questions about future spending levels.
- Despite the growth, the company remains heavily reliant on the US market, with limited penetration in other regions.
- The company faces strong competition from established players like NETSCOUT, Radware, and Cloudflare.
- There is a lack of detailed reporting on net dollar retention, which could provide more insights into customer growth.
- The company's focus on expanding partnerships may risk spreading resources too thin, potentially impacting execution.
Q & A Highlights
Q: Do you expect to generate more from the Juniper partnership following its expansion? Some investors were expecting more contract momentum. Will this change with the new agreement?
A: Yes, we expect more from the expanded Juniper partnership. Previously, our relationship was limited to Juniper routers, but now Juniper can sell our entire portfolio in multi-router environments. This expansion should lead to improved sales and execution, growing our relationship from the current base. - Carl Herberger, CEO
Q: R&D spend increased from $1.8 million to $3.2 million. Is this the new normal, or a one-off? Where were the additional funds spent?
A: The increase was primarily for enhancements to the SmartWall ONE solution, particularly the 400 gig platform. We expect SmartWall ONE development to return to base levels, but CORE platform development will continue, as it offers significant revenue opportunities. - Chris Goulden, CFO
Q: What are the main revenue growth drivers for FY 2025 and beyond?
A: The DDoS market is growing at 15% CAGR, and we aim to exceed this with our differentiated product set, competitive pricing, and new product offerings like CORE. Our expanded sales hubs and partnerships will also drive growth. - Carl Herberger, CEO
Q: Could you explain your new CORE product and its potential to transform the business?
A: CORE is a cloud-native platform offering web application firewall, traffic observability, and zero trust access control. It expands our addressable market and enhances our SmartWall ONE product, providing transformational growth opportunities. - Carl Herberger, CEO
Q: How important is your hybrid cloud offering versus traditional on-premise in driving revenue and profit growth?
A: Hybrid solutions are crucial as they offer the highest quality, fastest, and most cost-effective protection. Our unique hybrid offering allows network devices to perform detection and mitigation, reducing complexity and cost. - Carl Herberger, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
