LONDON (ShareCast) - (Sharecast News) - Corero Network Security reported a sharp rise in first-half annualised recurring revenue on Tuesday, as it accelerated a shift towards subscription-based services, though overall revenue and earnings weakened during the period.
The AIM-traded distributed denial of service protection specialist said ARR rose 25% to $21.6m in the six months ended 30 June from $17.2m a year earlier, driven by growth in its DDoS protection-as-a-service offering.

Group revenue fell 10% to $10.9m, which it said reflected the transition to recurring revenues, while order intake dropped 12% to $12.5m.

The group swung to an EBITDA loss of $1.4m from a $0.7m profit.

Corero highlighted positive momentum in the second quarter, including a $1.2m deal and a strategic partnership with Brazil's Forte Telecom, and a broadened partnership with Juniper Networks to sell its full product portfolio.

It also secured the first two contracts for its new Corero Observability & Resiliency Ecosystem solution worth $1.8m.

"I am pleased with the rebound in Q2 order intake and demand for our recently expanded product offering," said chief executive Carl Herberger.

"The strong growth in ARR in the first half of the year, underpinned by the accelerated customer demand for DDPaaS solutions, will deliver more predictable revenues.

"We continue to see the shift in customer demand away from upfront licenses to ARR."

He added the company aimed to grow revenue in the second half by expanding its pipeline and partner network.

Corero also announced that chief technology officer Ashley Stephenson will retire at the end of the year after 12 years at the company, having previously served as chief executive.

"It has been a privilege to work with the outstanding Corero team over the past decade," Stephenson said.

"With an expanding product portfolio and strategic alliances, I am confident Corero is well positioned to continue to deliver best in class protection."

The company said trading in the third quarter had continued the positive momentum from the second, and that it remained comfortable with full-year guidance for revenue of between $24m and $25.5m and EBITDA between a $1.5m loss and break-even.

At 0834 BST, shares in Corero Network Security were up 2.7% at 9.5p.

Reporting by Josh White for Sharecast.com.

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