THE DDOS
PROTECTION
SPECIALISTS
ANNUAL REPORT AND ACCOUNTS 2024
Corero Network Security plc
Corero is dedicated to improving the security and availability
of the internet through the deployment of innovative
Distributed Denial of Service (“DDoS”) protection solutions.
We are specialists in automatic detection
and mitigation solutions, that include
network visibility, analytics, and reporting
tools. Corero’s technology provides scalable
protection capabilities against DDoS
attacks, in even the most complex edge and
subscriber environments, ensuring internet
service availability and uptime.
We protect thousands of organisations worldwide,
across many verticals. Our customers are primarily
internet service providers, hosting providers, cloud
providers and SaaS providers.
We are deployed internationally and, through our own
teams and strategic partners, we continue to expand
our footprint.
Governance Report
Governance
36 Board of Directors
38 Chairman’s Corporate
Governance Introduction
39 QCA Code Compliance
40 Corporate Governance Report
42 Board Performance and
Remuneration Policy
44 Board Committee Reports
46 Directors’ Report
49 Statement of Directors’ Responsibilities
50 Independent Auditor’s Report
Financial Statements and associated notes
58 Consolidated Income Statement
59 Consolidated Statement of
Comprehensive Income
60 Consolidated Statement of
Financial Position
61 Consolidated Statement of Cash Flows
62 Consolidated Statement of Changes
in Equity
63 Notes to the Financial Statements
88 Company Statement of
Financial Position
89 Company Statement of Changes
in Equity
90 Notes to the Company Financial
Statements
Corporate Directory
95 Glossary
96 Corporate Directory
CONTENTS
Overview
01 2024 Highlights
02 At a glance
04 Business Model
06 Growth Strategy
08 Investment Case
10 Go to Market Strategy
12 Partnerships
16 Product Focus
20 Global Sales
Strategic Report
22 Chief Executive Officer’s Review
26 Financial Review
30 Key Stakeholders
Section 172 Statement
32 Principal Risks and Uncertainties
34 Environmental, Social and
FOR MORE INFORMATION VISIT
CORERO.COM
DDOS –
PROTECTION
WITHOUT THE
DOWNTIME
Corero Network Security plc Annual Report and Accounts 2024
1
ARR is defined as the normalised annualised
recurring revenues and includes recurring
revenues from contract values of annual
support, software subscription and from DDoS
Protection-as-a-Service (‘DDPaaS’) contracts
2
EBITDA is defined as Earnings before interest,
tax, depreciation and amortisation Order intake
is defined as orders received from customers in
FY 2024
3
Order intake is defined as orders received from
customers in FY 2024
FINANCIAL HIGHLIGHTS
•
Total revenue increased by 10% to
$24.6 million (FY 2023: $22.3 million).
•
ARR1 up 16% to $19.5 million as
at 1 January 2025 (1 January 2024:
$16.9 million).
•
Order intake3 increased by 13% to
$28.2 million (FY 2023: $24.8 million).
•
Gross margins of 91% (FY 2023: 90%).
•
EBITDA2 of $2.5 million (FY 2023:
$1.8 million).
•
Profit before taxation of $0.6 million
(FY 2023: loss of $0.2 million).
•
Earnings and diluted earnings per share
of 0.1 cents (FY 2023: 0.0 cents).
•
Net cash at 31 December 2024 of
$5.3 million (FY 2023: $5.2 million).
OPERATIONAL HIGHLIGHTS
•
Customer contract renewal rate of 97%
(FY 2023: 98%) demonstrating both
the quality of Corero solutions and
customer service.
•
Annualised Recurring Revenues (‘ARR’)
increased to $19.5 million (FY 2023: $16.9
million), underpinning future revenues
and reinforcing the importance of
Corero’s solutions for our customers.
•
The Group remains committed to
ongoing investment across its technology
platform and resource expansion to
strengthen its market-leading position.
EBITDA2
$2.5m
NET CASH
$5.3m
REVENUE
$24.6m
2024
$24.6m
2020
2021
2022
2023
$20.9m
$16.9m
$20.1m
$22.3m
ARR1
$19.5m
2024
$19.5m
2020
2021
2022
2023
$12.8m
$9.8m
$14.4m
$16.9m
GROSS MARGIN
91.3%
2024
91.3%
2020
2021
2022
2023
85.1%
77.3%
87.2%
90.0%
PROFIT/(LOSS)
BEFORE TAXATION
$0.6m
2024 HIGHLIGHTS
2024
$4.4m
$5.3m
$8.4m
$7.6m
$5.2m
2020
2021
2022
2023
2024
2020
2021
2022
2023
$1.4m
-$4.0m
$0.4m
-$0.2m
$0.6m
2020
2021
2022
2023
$4m
-$1.4m
$2.6m
$1.8m
2024
$2.5m
Corero Network Security plc Annual Report and Accounts 2024
01
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
HOW WE DO IT
•
Intelligent, automation-led solution that
protects from DDoS attacks in near real
time.
•
Flexible and highly scalable deployment
options to meet the needs of
any business.
•
Comprehensive visibility with reporting
and alerting for clear, actionable
intelligence on the DDoS attack activity.
WHY WE DO IT
•
To make the internet a safer place by
protecting organisations from financially
and reputationally damaging DDoS
attacks and the downtime they cause.
•
To enable Corero customers to sleep
better at night knowing they benefit from
rapid attack discovery, rapid mitigation,
and a flexible, adaptive solution.
OUR MISSION
Corero ensures businesses stay online
by stopping cyberattacks before they
cause downtime, protecting revenue and
customer trust.
WHAT WE DO
• Protect service availability in the event of a DDoS
attack
• Eliminate the need for operator intervention by
automatically mitigating over 98% of attacks
• Enable service providers to create additional revenue
streams by offering added-value DDoS protection
services
AT A GLANCE
WE ARE…
DYNAMIC AND
FAST-MOVING
Corero is dedicated to improving the
security and availability of the internet
through the deployment of innovative
DDoS protection solutions.
FOR MORE INFORMATION VISIT
CORERO.COM/ABOUT/
Corero Network Security plc Annual Report and Accounts 2024
02
OUR VISION
In an internet connected world, every
business, application and individual is
protected from DDoS attacks.
OUR PURPOSE
To best protect customers from the
damaging impact of DDoS cyber
security attacks.
OUR VALUES
Values and beliefs underpin the strategy.
These are lived to become the culture:
Trusted Partner and Problem-
Solver; Innovative & Ambitious;
Passionate & Committed; Transparent
Communication
OUR FOCUS
Maintain our superior technological
performance while delivering
sustainable, long-term value to
our stakeholders.
1. Grow our pipeline and
corresponding revenue
2. Leverage our existing reseller and
strategic partnerships further develop
the channel
3. Target and expand our Ideal Customer
Profile (‘ICP’) relationships
4. Continue to monetise our existing
services and introduce new services
5. Amplify our demand generation
programmes
6. Continue to enhance our technological
innovation leadership
OUR STRATEGIC GOALS
NUMBER OF
EMPLOYEES
90
NUMBER OF
GLOBAL OFFICES
3
NUMBER OF
CHANNEL PARTNERS
40
KEY FACTS
NUMBER OF
ALLIANCE PARTNERS
3
NUMBER OF
LIVE CUSTOMER
DEPLOYMENTS
375
RENEWAL
RATE
97%
COUNTRY
FOOTPRINT
50+
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
Corero Network Security plc Annual Report and Accounts 2024
03
BUSINESS MODEL
Corero’s technology provides scalable
protection capabilities against DDoS
threats, in even the most complex edge
and subscriber environments, ensuring
internet service availability and uptime.
A CUSTOMER DRIVEN BUSINESS MODEL:
KEY SOLUTIONS
INPUTS
SALES CHANNELS
OUR CULTURE
& VALUES
See page 30
GO-TO MARKET
STRATEGY AND
EVOLVING PRODUCTS
See page 10, 16-21.
INDIRECT SALES PARTNERS
Value-added resellers
and distributors.
DIRECT SALES
Corero sales team.
SECUREWATCH
Support, software updates,
maintenance, monitoring.
INLINE/DATA PATH
PROTECTION
Surgical protection
applicances for 10G,
100G and 400G network
deployment.
EDGE MITIGATION
Out-of-band detection,
using customers’ routers
to protect large networks
at the edge, without
deploying appliances.
CLOUD MITIGATION
Defends networks against
saturating attacks which
exceed their internet
bandwidth capacity.
STRATEGIC ALLIANCES
Akamai, Juniper and GTT.
SMARTWALL ONE
SCRUBBING PROTECTION
Out-of-band detection for larger
networks, with redirection to
surgical protection appliances in
central scrubbing centers.
Corero Network Security plc Annual Report and Accounts 2024
04
CUSTOMER SEGMENTS
SOURCE OF REVENUE
OUTPUTS
CASH FOR
REINVESTMENT
See page 28
FINANCIAL RETURNS
FOR INVESTORS
See page 27
ESG
See page 34
SAAS PROVIDERS
EDGE PROVIDERS
INTERNET
SERVICE PROVIDERS
SOFTWARE SUBSCRIPTION
LICENCE
SUPPORT AND SERVICES
REVENUE SHARE
APPLIANCE
AND
PERPETUAL
SOFTWARE
LICENCE
DDOS-PROTECTION-AS-A-
SERVICE
HOSTING AND CLOUD
PROVIDERS
Corero Network Security plc Annual Report and Accounts 2024
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Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
GROWTH
STRATEGY
GROWTH STRATEGY:
Expand Global Footprint
• Significant new deals and
partnerships driven by
a restructured sales and
marketing team
Leading with Innovation
• Continued R&D investment is
driving new product development
and enhancements of existing
offerings across on-premises,
hybrid, and cloud environments
• Development of the CORE
platform offers additional new
products to support our existing
customers and opens additional
markets in which to expand
Financial Discipline and
Profitability
• Focused on financial health,
cash generation, controlled
investment, and profitability
Partnership Leverage
• Relationships with key alliance
partners such as Akamai, Juniper
Networks, and GTT are supporting
regional expansion
Corero Network Security plc Annual Report and Accounts 2024
06
PRODUCT DEPLOYMENT METHODOLOGY
HYBRID CLOUD
• Supports hybrid-first strategies as
cloud repatriation grows
• Optimises cloud costs and
compliance
• Automatically redirects traffic to
the cloud when needed
• Always-on protection; no manual
intervention
ON-PREMISES
• Fastest DDoS protection with
near-zero latency
• Direct control over security
posture and compliance
• Maximise performance whilst
reducing cloud dependency
• Multi-site resilience ensures
uptime across locations
Our Product Proposition
FOR MORE INFORMATION VISIT
CORERO.COM/DDOS-SECURITY-PRODUCTS/
Corero Network Security plc Annual Report and Accounts 2024
07
Overview
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Financial Statements
Corporate Directory
$2bn+
addressable market and
growing at pace
Market-leading,
disruptive technology
Significantly enhanced
unique capabilities
compared to
competition
Experienced
management team with
extensive market and
competitor knowledge
and experience
Strong financial base –
debt-free aligned with
accelerated ARR growth
Growing alliance
and channel
partner footprint,
including global and
regional experts
OUR OPERATIONAL PROGRESS
June
2024
February
2024
May
2024
March
2024
April
2024
January
2024
INVESTMENT CASE
OUR STRENGTHS
Signed $1m contract
renewal and expansion
with DigitalOcean
Secured orders of
>$8m in Q1
Announced US
partnership with TierPoint,
agreeing $1.8m contract
over 3 years
Announced strategic Latin
American partnership with
TechEnabler
Commenced trading on
the US OTCQB Venture
Market (OTCQB: DDOSF)
Expanded strategic
European partnership
with Ingecom Ignition
Launched AI-assisted
Corero DDoS Intelligence
Service to enhance
SmartWall ONE offering
Corero Network Security plc Annual Report and Accounts 2024
08
Corero Network Security plc Annual Report and Accounts 2024
08
Ongoing R&D
investment propelling
new services and
product deployments
July
2024
November
2024
December
2024
October
2024
September
2024
August
2024
FOR MORE INFORMATION VISIT
CORERO.COM/DDOS-SECURITY-PRODUCTS/
Announced key customer
win in the Middle East
with stc Bahrain
Delivered contract win
with Everstream, a leading
US fibre connectivity
services provider
Launched Corero
Observability & Resiliency
Ecosystem (‘CORE’)
Upgraded to OTCQX
from OTCQB Venture
Market
Secured contract with
Brazil’s Forte Telecom,
worth $1.2m across
3 years
Corero Network Security plc Annual Report and Accounts 2024
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Overview
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09
Corero Network Security plc Annual Report and Accounts 2024
GO-TO-MARKET
STRATEGY
Expanding Global Footprint &
Partnership Channel
• Leveraging alliance and channel partnerships
to grow presence across key regions and
expanding into:
– LATAM
– Middle East
– Southeast Asia
• VP Alliances onboarded in May 2024 to
reshape and revitalise alliances go-to-market
strategy
• Hired an experienced senior Channel Partner
Manager in November 2024 to refresh the
Group’s channel partner network and drive
value-add partnership model
Investing in Sales &
Marketing Initiatives
• Grown direct Sales team, reinforcing
traditional markets in North America and
Europe, while expanding in other territories
such as LATAM, Middle East and Southeast
Asia
• Intent-based marketing strategy for more
accurate targeting and increased pipeline
velocity
• MarTech stack streamlining and integration
for increased visibility and efficiency
• Integrated multiple AI-based technologies for
content generation, market and competitor
analysis
• Marketing activity spend was up 43% year-on-
year in 2024
DELIVERING ACROSS FOUR REVENUE-GENERATING ACTIVITIES
Corero Network Security continues to focus on
increasing its market share across the globe without
compromising on the quality of its products and services
as the DDoS market continues to evolve at a fast pace,
and with a myriad of new digital threats emerging.
In 2024, the Company announced a reinvigorated go-
to-market strategy underpinned by four key strategic
pillars to generate revenues and drive long-term
growth.
Corero Network Security plc Annual Report and Accounts 2024
10
I AM CONFIDENT THAT OUR REINVIGORATED
GO-TO-MARKET STRATEGY WILL DELIVER
ON THE AMBITIOUS GROWTH TARGETS WE
HAVE SET.”
Carl Herberger
CHIEF EXECUTIVE OFFICER
Securing Client Renewals &
Realising Cross/Upsell Opportunities
• Maintaining or improving on excellent 97%
customer retention rate
• Delivering price increases for renewals and
extensions as standard
• 70% of customers upsold during contract
period or at renewal
• Continuing to diversify product suite to
generate cross-sell and upsell opportunities
with longstanding partners
Accelerating Market
Competitiveness
• Actively targeting competitor displacements
in key geographies, underpinned by
management’s confidence in Corero’s
market-leading product ecosystem
– Chosen by TierPoint LLC after rigorous
assessment process to replace incumbent
provider
• Launching product innovations and add-
on features to attract new customers and
strengthen position when approaching new
business exploration
Corero Network Security plc Annual Report and Accounts 2024
11
Overview
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Financial Statements
Governance
Strategic Report
Overview
LEVERAGING ALLIANCE
PARTNERSHIPS
TO ACCELERATE
INTERNATIONAL EXPANSION:
AKAMAI TECHNOLOGIES
OUR CUSTOMERS
CONTINUALLY SEEK MORE
ROBUST PROTECTIONS
AGAINST CYBERTHREATS,
SUCH AS DDOS ATTACKS,
WHILE ALSO ASPIRING
TO BROADEN THEIR
SECURITY SERVICES.
ADDING DDOS CLOUD-
BACKUP PROTECTION
POWERED BY PROLEXIC
TO OUR SMARTWALL
ONE PORTFOLIO IS A
TESTAMENT TO OUR
COMMITMENT TO
THIS GOAL AND OUR
ONGOING PARTNERSHIP
WITH AKAMAI.”
Carl Herberger
CORERO CHIEF EXECUTIVE OFFICER
UNVEILING CORERO’S
SMARTWALL ONE HYBRID
CLOUD DDOS PROTECTION
SOLUTION - POWERED BY
AKAMAI
As Corero’s partnership with Akamai
has progressed since 2023, it has further
deepened collaboration to provide
industry-leading infrastructure security
solutions. In April 2024, Corero announced
the launch of a SmartWall ONE Hybrid
Cloud DDoS Protection solution, powered
by Akamai Prolexic.
The cloud-based service has expanded
Corero’s product offering, combining
the Company’s on-premises solutions
with Akamai’s cloud capabilities. This has
created a robust, hybrid DDoS solution
able to meet the evolving needs of
customers by providing a comprehensive,
scalable cybersecurity solution.
The solution encompasses top-tier
DDoS cloud-backup service, equipping
customers with enhanced protection
capabilities and delivering significant
operational benefits.
Corero’s alliance partnership with
Akamai has fuelled revenue growth by
increasing routes to market, solidifying the
Company’s market-leading position in the
cybersecurity sector.
Corero initiated its
strategic international
partnership with Akamai,
the cloud computing and
cybersecurity giant, in
September 2023.
Through this unique
partnership, Corero has expanded
its product offering by combining
its on-premises solutions with
Akamai’s cloud capabilities,
fulfilling the market’s need for a
robust and highly flexible hybrid
DDoS solution.
The partnership has also enabled
Akamai to deliver superior DDoS
protection to customers through
solutions powered by Corero’s
SmartWall ONE.
PARTNERSHIPS
FOR MORE INFORMATION VISIT
CORERO.COM/DDOS-SECURITY-PRODUCTS/
Corero Network Security plc Annual Report and Accounts 2024
12
OUR PARTNERSHIP
WITH CORERO ALLOWS
US TO DELIVER A
ROBUST SOLUTION
WHILE ENABLING
ORGANISATIONS TO
SELECT THE MOST
OPTIMAL DDOS SOLUTION
FOR THEIR INDIVIDUAL
USE CASES WHETHER
IT BE ON-DEMAND,
ALWAYS-ON, CLOUD,
ON-PREMISES, OR IN A
HYBRID ENVIRONMENT.”
Sean Lyons
AKAMAI SENIOR VICE PRESIDENT
AND GENERAL MANAGER OF
INFRASTRUCTURE SECURITY
CORERO EXPANDS ITS GLOBAL FOOTPRINT BY
COLLABORATING WITH ALLIANCE PARTNERS
Alliance partnerships are central to Corero’s go-to-market strategy,
representing a core revenue stream and the opportunity to offer best-
in-class infrastructure security solutions through market leaders.
The strategy involves partnering with major global suppliers who offer
technology capabilities that are powered or enhanced by Corero’s
solutions, as well as combining complementary solutions to create
hybrid products that provide cutting-edge cyber protection.
Alliance partnerships support Corero’s commitment to providing
unparalleled DDoS protection services and underpin the Company’s
growth strategy by enabling it to reach a wider range of customers
accessible through large industry players like Akamai.
CONTINUED
COLLABORATION
DRIVING INNOVATION
Corero product powered by
Akamai
SmartWall ONE Cloud
Backup solution
Akamai products powered by
Corero
Akamai Prolexic On-Prem
Akamai Prolexic Hybrid
FOR MORE INFORMATION VISIT
CORERO.COM/PARTNERS/
Benefits of Alliance Partnerships
CORERO’S ALLIANCE PARTNERS
3
• Increased routes to market
• Delivered incremental revenue growth
opportunities
• Diversified product offering
• Gained insight and expertise from tier-1
cybersecurity businesses
Corero Network Security plc Annual Report and Accounts 2024
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Corporate Directory
KEY CUSTOMER WIN:
TIERPOINT LLC
In April 2024, Corero announced a strategic
partnership with TierPoint LLC, a leading provider of
hybrid IT platform solutions in the US, replacing its
incumbent solutions provider in the process. Corero
has since successfully integrated its solutions into
TierPoint’s infrastructure, significantly enhancing
its DDoS protection and mitigation capabilities to
benefit both TierPoint and its 1,000+ US customers.
WHY CORERO?
TierPoint had grown increasingly frustrated
with its existing DDoS protection solution,
with frequent disruptions and slow
mitigation times jeopardising customer trust.
Corero’s solutions, including its market-
leading application SmartWall ONE,
performed so well in a testing phase that
TierPoint decided to switch provider to
Corero even while still under contract with
the incumbent vendor.
CORERO’S IMPACT
By offering highly automated, real-time
threat detection, Corero has materially
reduced TierPoint’s mitigation time
during DDoS attacks from 6 minutes to
just 18 seconds. This reinforces the robust
capabilities of Corero’s DDoS protection
solutions and has enabled TierPoint to
vastly improve its core service offering
to customers.
Additionally, Corero’s ability to integrate
directly with TierPoint’s Juniper routers
has enabled a ‘protective mesh’ that has
bolstered defences without requiring
additional hardware investments,
highlighting the value and adaptability of
Corero’s solution.
KEY BENEFITS TO TIERPOINT
4. Significant Cost Savings
3. Collaborative Partnership
2. Real-Time Protection
1. Enhanced Defence with Existing Tech
CORERO HAS SIGNIFICANTLY
REDUCED TIERPOINT’S DDOS
ATTACK MITIGATION TIME
From
6 minutes to
18 seconds
PARTNERSHIPS CONTINUED
Corero Network Security plc Annual Report and Accounts 2024
14
WE ARE DELIGHTED WITH THE
ONGOING SUCCESS OF OUR
PARTNERSHIP WITH TIERPOINT,
WHICH IS TESTAMENT TO THE HARD
WORK AND TENACITY OF OUR ENTIRE
TEAM AND UNDERSCORES THE
TRUST AND CONFIDENCE LEADING
BUSINESSES PLACE IN OUR PREMIUM
DDOS SOLUTIONS.
Carl Herberger
CORERO CHIEF EXECUTIVE OFFICER
OUR TIME TO MITIGATION FOR DDOS
ATTACKS WENT FROM SIX MINUTES
WITH PREVIOUS SOLUTIONS TO 18
SECONDS WITH CORERO, ENSURING
THAT OUR CUSTOMERS EXPERIENCE
UNINTERRUPTED SERVICES, EVEN
DURING ATTACKS.
Paul Mazzucco
TIERPOINT CHIEF INFORMATION SECURITY OFFICER
Strategic Report
Overview
INCREASED MARKET REACH
With over 40 data centres across 20 US
markets, TierPoint supports thousands
of customers across the country,
highlighting the importance of advanced
DDoS protection in safeguarding
its extensive portfolio. Working in
partnership with TierPoint to support
their growing customer base will enable
Corero to expand its routes to market in
the geography.
CONTINUED NEW
CONTRACT MOMENTUM
WITH BUSINESSES
OPERATING IN THE
CYBERSECURITY SPACE
Through the partnership, Corero
is leveraging TierPoint’s extensive
customer network, which ranges
from small businesses to Fortune 500
enterprises, to support the Company’s
overarching US growth strategy.
Coupled with continued investment in
US sales and marketing initiatives and
strategic North American recruitment,
Corero’s partnership has already begun
to facilitate new business opportunities
across what is an increasingly important
region for the business.
NORTH AMERICA:
Corero’s Key Geography
NORTH AMERICA
REPRESENTS
71%
of Corero’s FY 2024 sales
Growing DDoS Defence
Market
NORTH AMERICA
ESTIMATED TO ACCOUNT
FOR
39% 2024
of the global DDoS protection and
mitigation market growth in the
period to 2027***
TIERPOINT’S US FOOTPRINT
(*** Technavio - DDoS Protection Mitigation Market by Component,
Application, and Geography - Forecast and Analysis 2023-2027,
https://www.technavio.com/report/ddos-protection-mitigation-market-analysis.)
Corero Network Security plc Annual Report and Accounts 2024
15
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
PRODUCT FOCUS
EVOLVING
SMARTWALL ONE
Corero’s flagship DDoS defence
solution, SmartWall ONE, is
valued by businesses across the
globe for its reliability, resilience
and affordability.
FOUR KEY PRODUCT ENHANCEMENTS
Across 2024, the Company unveiled a number of product
enhancements to ensure SmartWall ONE remains at the
forefront of the DDoS protection market and capable of
safeguarding any corporation from both well-known and
nascent DDoS cyberthreats.
Key launches during the period, detailed below, include the
introduction of a new platform to convert DDoS protection
from a cost into a revenue stream, and new features aimed
at improving customer experience, increasing SmartWall
ONE’s flexibility in line with industry trends, and maintaining
Corero’s excellent client retention track record.
FEBRUARY 2024 –
400G SmartWall ONE extension
Corero extended the capabilities of SmartWall ONE to
include additional support for 400G connected DDoS
detection, mitigation, and protection from the edge to the
network core.
This upgrade is facilitating new business opportunities
as organisations continue to favour using x1 400G
appliance instead of multiple 100G appliances to minimise
networking equipment footprint, cost, and complexity.
MARCH 2024 –
Launched the Corero DDoS Intelligence
Service (‘CDIS’)
CDIS is an automated, AI-assisted service for SmartWall
ONE customers that delivers pre-emptive, predictive attack
mitigation, before the first attack is even seen. CDIS has
bolstered SmartWall ONE by providing it with access to
Corero’s latest DDoS threat research and insights.
CDIS integrates seamlessly with the SmartWall ONE
platform and has been deployed as an additional annual
subscription service for all SmartWall ONE customers
that are subscribed to Corero SecureWatch Attack-Time
Assistance Service.
Corero Network Security plc Annual Report and Accounts 2024
16
JUNE 2024 –
Enhanced SmartWall ONE Service Portal
Corero introduced new features to enhance its SmartWall
ONE Service Portal and will support Corero’s service and
hosting provider clients seeking to differentiate their
services and drive revenue growth.
1 Executive reports - provides real-time, automated insights
into the effectiveness of DDoS protection investments,
enhancing transparency and building stakeholder trust.
2 Tenant prospecting - enables providers to target
unsubscribed customers who could benefit from
additional protection, creating an additional revenue
stream and facilitating customer retention.
OCTOBER 2024 –
Rolled out 400G appliance
Corero launched its new hardware appliance, Network
Threat Detector (‘NTD’) 3400, a 400G enhancement to the
SmartWall ONE DDoS protection appliance.
The new NTD 3400 offers four times the connectivity of
previous models with more efficient power consumption,
allowing providers and businesses to protect their
networks more efficiently while also accommodating
long-term scalability.
Corero Network Security plc Annual Report and Accounts 2024
17
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Corero continues to innovate and diversify
to generate new business opportunities
and enhance its value proposition.
PRODUCT FOCUS CONTINUED
CORERO OBSERVABILITY
& RESILIENCY ECOSYSTEM
(‘CORE’)
Corero has grown to become a leading name
in the DDoS protection and mitigation services
space, developing a cutting-edge suite of
products able to repel the most sophisticated and
aggressive DDoS attacks.
Although widespread and damaging from both
a financial and reputational perspective, DDoS
attacks are only one threat to service availability. To
unlock commercial opportunities across the wider
market, the Company launched CORE in October
2024, its first expansion beyond DDoS.
A NEW SAAS CLOUD-BASED
AVAILABILITY PROTECTION
PLATFORM
CORE is a new SaaS cloud-based availability
protection platform designed to integrate
seamlessly into customers’ existing security
infrastructure. A highly adaptive innovation,
CORE will deliver advanced defence capabilities,
providing greater flexibility and cost-efficiency to
keep organisations secure.
EXTENDING BEYOND
DDOS
FOR MORE INFORMATION VISIT
CORERO.COM/COREDDOS/
Corero Network Security plc Annual Report and Accounts 2024
18
HOW DOES CORE WORK?
CORE is a cloud-native availability
protection platform designed to handle
high-volume DDoS attacks, anomalous
traffic patterns, and application layer threats,
ensuring consistent service availability.
CORE seamlessly enhances existing security
environments and delivers advanced
defence, leveraging existing infrastructure
while offering flexibility and cost-efficiency
to keep organisations secure and agile.
CORE creates a comprehensive data lake by
gathering feeds from multiple sources across
a network and generating AI/ML-assisted
insights, turning isolated security events into
actionable intelligence. This enables smarter
coordination across a network, creating a
more resilient ecosystem.
BENEFITS OF CORE
Uses the power of AI to protect
customer networks from wider service
availability threats
Keeps organisations secure while
guaranteeing greater cost efficiencies and
flexible solutions
Creates new cross-sell opportunities with
existing clients and strengthens Corero’s
value proposition
Corero addresses an estimate $2bn+ of today’s DDoS security market, which we believe grows to $10bn with
the addition of the initial CORE competencies. This combined market is expected to grow 17% CAGR to 2030.
SIZE OF ADDRESSABLE MARKET
2023
$3.6bn
$5.1bn
$3.0bn
$28.0bn
2030
$9.1bn
$17.7bn
$6.0bn
$82.0bn
DDoS
L7 WAAP / WAF
Traffic Observability
Zero Trust
Corero Network Security plc Annual Report and Accounts 2024
19
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
Ongoing investment in sales and
marketing initiatives positions
Corero for further growth in 2025.
Increased Global Sales
Footprint Supports
Growth Ambitions
As part of its reinvigorated go-to-market strategy, Corero has
focused increasingly on direct investment in its sales function,
recognising the significant opportunity it has to broaden
the Group's sales footprint across previously unexplored
territories, as well as generate additional cross and upsell
revenues with existing customers in established geographies.
GLOBAL SALES
Recruited a sales representative in
Chile to further accelerate our Latin
America growth momentum
Reinforced existing sales teams
across North America and Europe to
increase touchpoints, strengthen client
relationships and drive new business
GROWING SALES TEAM FOOTPRINT
Corero Network Security plc Annual Report and Accounts 2024
20
Corero Network Security plc Annual Report and Accounts 2024
20
OUR SALES AND MARKETING TEAMS MADE GREAT STRIDES ACROSS 2024,
PLAYING A PIVOTAL ROLE IN GROWING CORERO’S MARKET REACH AND
GENERATING NEW CUSTOMER TRACTION.
OUR OVERARCHING PLAN TO INVEST IN SALES INITIATIVES HAS BEEN TWO-
PRONGED: FOCUSED ON FACILITATING BUSINESS EXPLORATION ACROSS
NEW JURISDICTIONS WHILE BOLSTERING OUR EXISTING TEAMS IN KEY
GEOGRAPHIES TO SUPPORT AND ENHANCE CUSTOMER RELATIONSHIPS.
WITH NEW CONTRACT WINS AND PARTNERSHIPS SECURED IN 2024 ACROSS
LATIN AMERICA AND THE MIDDLE EAST, I AM DELIGHTED WITH THE INITIAL
IMPACT OF OUR INVESTMENT AND WE ARE AIMING TO DELIVER EVEN
MORE CUSTOMER WINS IN THESE REGIONS AS WELL AS OUR EXISTING
GEOGRAPHIES WHERE, LEVERAGING RECENT PRODUCT LAUNCHES AND
ENHANCEMENTS, WE CONTINUE TO STRENGTHEN OUR PRESENCE AND
PURSUE CROSS AND UPSELL OPPORTUNITIES.
Carl Herberger
CORERO CHIEF EXECUTIVE OFFICER
Hired experienced sales personnel in
Dubai and Singapore for the first time
2023
2024
NEW REGIONS
3
NEW SALES REPS
6
INCREASED
MARKETING SPEND
43%
TOTAL GLOBAL
SALES TEAM
14
21
Corero Network Security plc Annual Report and Accounts 2024
Corero Network Security plc Annual Report and Accounts 2024
21
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
Carl Herberger
CHIEF EXECUTIVE OFFICER
CHIEF EXECUTIVE OFFICER’S REVIEW
THE COMPANY
DELIVERED A STRONG
PERFORMANCE
ACROSS FY 2024
REVENUE
10%
increase
ARR
16%
increase
Corero Network Security plc Annual Report and Accounts 2024
22
INTRODUCTION
•
FY 2024 was a strong operational and
financial year for Corero, with the
Company trading well throughout
the year and delivering new business
opportunities across key geographies.
The Group delivered solid topline
growth, achieving a 10% increase in
revenues to $24.6 million (2023: $22.3
million), and EBITDA of $2.5 million, up
42% year‑on-year.
•
In addition, Annual Recurring Revenues
('ARR') grew 16% to $19.5 million (2023:
$16.9 million) as customers continue
to integrate Corero’s subscription-
based solutions and DDoS Protection
as-a-Service ('DDPaaS') products for
comprehensive DDoS attack protection.
Order intake, another key performance
indicator for the Group, also rose 13%
to $28.2 million for FY 2024 (2023: $24.8
million).
•
Corero remained debt-free with cash of
$5.3 million at the end of the year. This
strong financial footing has enabled
the Group to accelerate its go-to-
market strategy and maintain ongoing
investment across its sales and marketing
functions, as well as additional R&D
expenditure to support further product
expansion. The Group’s reinvigorated
growth strategy which focuses on both
converting internally generated leads
and leveraging existing partnerships, as
well as a greater emphasis on actively
targeting competitor displacements,
continues to gain traction and this is
evidenced by Corero’s success across the
year in securing new mandates.
•
The Company’s growing portfolio
of strategic alliance and channel
partnerships, alongside direct sales
activities, continues to provide Corero
with multiple routes to market. This
global network of trusted partners and
regional experts has created a sales
platform to support Corero in growing
its reputation as a reliable, fair-priced
provider of DDoS defence solutions.
STRATEGIC PRIORITIES
Corero continues to focus on increasing
its DDoS defence market share across the
globe whilst maintaining and expanding
relationships with current customers who
value the quality of its award-winning
products and services.
In 2024, the Company announced a
reinvigorated go-to-market strategy
underpinned by four key strategic pillars to
accelerate revenue generation and drive
long-term growth:
•
Expanding global footprint and
partnership channels - leveraging alliance
and channel partnerships to grow presence
across key regions, including Latin America,
the Middle East and APAC
•
Investing in sales and marketing
initiatives – enhancing the field marketing
strategy, increasing marketing activity and
spend, and hiring experienced personnel
in new geographies
•
Securing client renewals and realising
cross/upsell opportunities - maintaining
or improving on excellent 97% customer
retention rate, delivering price increases for
renewals and extensions as standard, and
continuing to diversify the product mix
•
Accelerating market competitiveness
– actively targeting competitor
displacements in key geographies, and
launching new product innovations and
add-on features aimed at attracting new
customers
OPERATIONAL REVIEW
A key feature of 2024 has been to drive the
Company’s new business efforts globally
and share these successes with the Group’s
key stakeholders. Since January 2024, the
Group has secured a steady flow of contract
renewals, expansions and new mandates,
including those listed below.
Corero has continued to focus on securing
select new channel partners to broaden
the Group’s routes to market and, more
importantly, expand its global reach. These
include:
•
Three-year partnership with US-based A2
Hosting, an existing Corero customer and
leading provider of high-performance
hosting solutions
•
New strategic partner agreements in
Latin America with NovaRed, VGL, and
GreyMatter post-year end
CUSTOMER WINS
•
Three-year, $1.8 million partnership
with TierPoint, a leading provider of
secure, connected IT platform solutions,
with Corero replacing the incumbent
solutions provider
•
Significant contract renewal and
expansion with a leading US SaaS
provider, valued at over $2 million over
three years
•
Three-year, $1 million plus contract with
a top-10 US fibre provider, with Corero
replacing the incumbent solutions
provider in a number of the provider’s US
data centres
•
$1 million plus, three-year contract
extension with DigitalOcean, a leading
US cloud computing provider, expanding
the current range of services provided
by Corero
•
Three-year, $0.6 million contract renewal
with a large national US fibre provider. In
addition to the renewal, Corero was also
awarded a $1 million expansion to the
existing contract
•
Three-year, $0.3 million contract with a
fast-growing North American pioneer in
VoIP technology, with Corero replacing
the incumbent cloud provider
•
Expanded contract with a leading global
US-based SaaS provider for $0.4 million
additional term licence capacity and
associated support
•
Three-year contract with a leading
Icelandic IT services provider to support
its high media tenant profile of national
enterprises and government agencies
•
Post-year end, TechEnabler secured a
new contract to implement Corero’s
SmartWall ONE solution for a major
telecommunications provider in Brazil,
with Corero replacing the incumbent
solutions provider
Corero Network Security plc Annual Report and Accounts 2024
23
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
•
Significant partnership with stc
Bahrain, the market leader in Bahrain’s
telecommunications sector, to
support the Company’s Middle East
expansion goals
•
Three-year partnership worth $1.2 million
with Forte Telecom, one of the largest
telecommunications providers in Rio de
Janeiro, Brazil
•
Post-year end, new channel partnership
to expand into Peru with A51 Technology,
a firm with over 20 years of experience in
cybersecurity solutions
Together with the Group’s existing strategic
alliances with Juniper Networks, GTT
Communications and Akamai Technologies,
Corero’s reinvigorated channel partnership
momentum has ensured that the Group
has a strong network to support its global
expansion efforts. This is evidenced in
Corero’s recent wins in Latin America, where
the Company has secured a number of
exciting new customer mandates.
At the end of the year, the Group also
qualified for, and upgraded to, the OTCQX
from the OTCQB Venture Market. This
listing is directly in line with the Company’s
ambitions to further expand its reach and
visibility into the US investor market.
PRODUCT INNOVATION
Continued R&D investment is driving new
product development and enhancements
of existing offerings across on-premises,
hybrid, and cloud environments. Through
FY 2024, the Company unveiled a number
of product upgrades to ensure its SmartWall
ONE solution remains at the forefront of
the DDoS protection market and capable
of safeguarding any corporation from both
well-known and nascent DDoS cyberthreats.
Key launches include Corero DDoS
Intelligence Service (“CDIS”), an AI-assisted
service for SmartWall ONE customers, as
well as a 400G extension to SmartWall ONE
and the introduction of new features to
enhance the SmartWall ONE Service Portal.
Collectively, these innovations are projected
to further improve customer experience,
increase SmartWall ONE’s flexibility in line
with industry trends, and maintain Corero’s
excellent client retention track record.
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
In order to access commercial opportunities
across the wider service availability market,
the Company launched CORE in October
2024, its first expansion beyond DDoS.
CORE is a new SaaS cloud-based availability
protection platform designed to integrate
seamlessly into customers’ existing security
infrastructure. The Group is in the process
of extending the capabilities of CORE in
a phased development programme and
will update the market in due course on
its progress.
SALES AND MARKETING
INVESTMENT
During FY 2024, Corero focused increasingly
on direct investment in its sales function,
recognising the significant opportunity it
has to broaden the Group’s sales footprint
across previously unexplored territories,
as well as generate additional cross and
upsell revenues with existing customers in
established geographies.
Strategic marketing activity spend grew by
43% year-on-year, with capital designated
to lead generation programmes including
regional tradeshows, content syndication
campaigns, webinars, and sponsored social
media content.
Other key initiatives included:
•
Hiring an experienced senior channel
partner manager to refresh the Group’s
channel partner network and create
greater sales traction
•
Created regional sales hubs across Latin
America, APAC and the Middle East,
hiring experienced sales personnel in
Dubai, Singapore and Chile to accelerate
Corero’s ambition to increase its
market reach
•
Reinforced existing sales teams
across North America and Europe
to increase touchpoints, strengthen
client relationships and drive new
business development
Increased investment played a pivotal
role in growing Corero’s market reach and
generating new customer traction during
the year, particularly in regions such as
Latin America and the Middle East where
efforts are being made to expand the
Company’s presence.
The launch of the new CORE platform will
also enable Corero to capitalise on new
market opportunities with an expanded
product portfolio to take to market.
DDOS ADDRESSABLE MARKET
AND MARKET DRIVERS
The rapid growth of the global DDoS
mitigation market is showing no signs of
abating. Latest research indicates that the
market will be valued at $9.63 billion by
20291 (2024: $5.17 billion), growing at a
CAGR of 13.2%. Corero operates within a
significant segment of this overall market
and estimates that the total addressable
market for its principal SmartWall ONE
solution exceeds $2.0 billion.
Compared to other modes of cybercrime,
DDoS attacks are relatively low risk yet
high impact, and malicious actors are
increasingly becoming aware of the
significant damage they can inflict on
companies through DDoS strikes, both from
a financial and reputational standpoint.
As attacks become more complex, aided
by increased access to AI and machine-
learning, organisations are continuing to
seek comprehensive protection.
Demand for resilient and adaptable DDoS
defence solutions remains high in North
America, where Corero has its highest
customer and sales footprint, while hactivism
associated with Russia’s invasion of Ukraine
has also exacerbated the DDoS attack threat
level in Europe. Attacks are also widespread
in other key regions where Corero is actively
growing its influence – including the Middle
East and Latin America.
Corero Network Security plc Annual Report and Accounts 2024
24
OUTLOOK
Corero has entered FY 2025 in a strong
position, well placed to build on a positive FY
2024 and deliver on the Company’s near and
long-term growth ambitions. So far in FY 2025,
the Company has closed a number of key
customer wins in the US and EMEA.
The combination of new sales team hires
and recent product launches has created
additional momentum to unlock considerable
commercial opportunities across Corero’s
existing customer base through both cross
and upselling, alongside ongoing sales
penetration in new territories.
Global demand for DDoS protection
continues to grow, and the Group remains
focused on elevating its status as an effective
and affordable solutions provider capable of
combatting the most hostile of DDoS attacks.
Looking ahead to the remainder of FY
2025, Corero is committed to strengthening
and expanding its alliance and regional
partnerships to support new business pipeline
and revenue growth.
Carl Herberger
CHIEF EXECUTIVE OFFICER
31 March 2025
1 https://www.corero.com/ddos-protection-
market-to-reach-9-billion-by-2029/
Corero Network Security plc Annual Report and Accounts 2024
25
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
FINANCIAL REVIEW
ACCELERATED GO-TO-MARKET
STRATEGY DELIVERS STRONG
ARR GROWTH AND
PROFITABLE 2024
Chris Goulden
CHIEF FINANCIAL OFFICER
Corero Network Security plc Annual Report and Accounts 2024
26
2020
2021
2022
2023
$4m
-$1.4m
$2.6m
$1.8m
2024
$2.5m
REVENUE
$24.6m
2024
$19.5m
2020
2021
2022
2023
$12.8m
$9.8m
$14.4m
$16.9m
2024
91.3%
2020
2021
2022
2023
85.1%
77.3%
87.2%
90.0%
2024
2020
2021
2022
2023
$1.4m
-$4.0m
$0.4m
-$0.2m
$0.6m
GROSS MARGIN
91.3%
PROFIT/(LOSS)
BEFORE TAXATION
$0.6m
ARR (ANNUALISED
RECURRING REVENUES)1
$19.5m19.5%
REVENUE AND GROSS MARGINS
Revenue in the year ended 31 December
2024 increased by 10% to $24.6 million in
FY 2024 (2023: $22.3 million).
ARR increased by 16% in the year to
$19.5 million as at 1 January 2025, driven
by growth in DDPaaS and software
subscription orders (ARR at 1 January 2024:
$16.9 million).
The Group’s overall gross margin improved
in 2024 to 91% (2023: 90%) as hardware as a
percentage of overall sales value continued
to reduce.
PROFITABILITY
The Group reported a positive EBITDA of
$2.5 million in the year ended 31 December
2024 (2023: $1.8 million), trading at 10.2%
margin (2023: 8% EBITDA margin), with
gross margin improvement supported by
more efficient use of operating expenses.
The Group reported a profit before tax of
$0.6 million for the year (2023: loss $0.2
million), with earnings per share 0.1 cents
per share (2023: (0.0) cents per share).
1
ARR is defined as the normalised annualised recurring revenues and includes recurring revenues from contract
values of annual support, software subscription and from DDoS Protection-as-a-Service (‘DDPaaS’) contracts
2
EBITDA is defined as Earnings before interest, tax, depreciation, and amortisation.
EBITDA2
$2.5m
2024
$24.6m
2020
2021
2022
2023
$20.9m
$16.9m
$20.1m
$22.3m
Corero Network Security plc Annual Report and Accounts 2024
27
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
2024
2020
2021
2022
2023
$8.4m
$7.6m
$5.3m
$4.4m
$5.2m
2024
$3.2m
2020
2021
2022
2023
$1.8m
$1.4m
$1.7m
$1.8m
R&D INVESTMENT
$3.2m
FINANCIAL REVIEW CONTINUED
NET CASH
$5.3m
Chris Goulden
CHIEF FINANCIAL OFFICER
31 March 2025
OPERATING EXPENSES AND R&D INVESTMENT
Underlying operating expenses
excluding foreign exchange movements
on intercompany balances and before
depreciation and amortisation increased
by $1.9 million from $18.0 million to $19.9
million, primarily driven by an increased
sales function and marketing activities to
support the Group's accelerated go-to-
market strategy.
Underlying operating expenses included a
depreciation charge of $0.4 million (2023:
$0.3 million) and an amortisation charge for
R&D of $1.6 million (2023: $1.5 million).
During the year, the Group continued
to focus on product innovation, with
R&D investment of $3.2 million (2023:
$1.8 million). The increase in capitalised
development spend is driven by an
increase in development output from the
existing engineering team enhancing the
SmartWall ONE solution capabilities as well
as development of the DDoS Intelligence
Service launched during the year.
Additionally, the initial development of the
CORE platform was completed in the year.
Capital expenditures in property, plant and
equipment in the year were $0.8 million
(2023: $0.8 million).
The charge for share-based payments
amounted to $0.5 million in the year (2023:
$0.2 million).
Net finance income for the year was $0.1
million (2023: net cost $0.1 million).
OPERATING CASH AND CASH EQUIVALENTS
Overall, net cash generated from operating
activities amounted to $3.1 million in
the year (2023: $3.1 million). Cash and
cash equivalents excluding the impact of
exchange rates increased by $0.2 million
(2023: decrease of $0.5 million).
The Group remains debt-free and in a
position to leverage its strong balance
sheet to fund ongoing growth and
innovation strategies.
Net cash, defined as cash at bank less
total borrowings, at 31 December 2024
was $5.3 million (2023: $5.2 million).
Corero Network Security plc Annual Report and Accounts 2024
28
2024
$[X.X]m
2020
2021
2022
2023
$3.2m
-$0.6m
$1.7m
$2.2m
2024
2020
2021
2022
2023
$8.4m
$7.6m
$[X.X]m
$4.4m
$5.2m
2024
-$[X.X]m
2020
2021
2022
2023
$1.4m
-$4.0m
$0.4m
-$0.2m
Corero Network Security plc Annual Report and Accounts 2024
29
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
KEY STAKEHOLDERS SECTION 172 STATEMENT
The Directors are aware of their duty under Section 172 of the Companies Act 2006 to act in the way which they consider, in good
faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and, in doing so,
to have regard (amongst other matters) to the: likely consequences of any decisions in the long-term interests of the Company’s
employees; need to foster the Company’s business relationships with suppliers, customers and others; impact of the Company’s
operations on the community and environment; Company’s reputation for high standards of business conduct; and need to act fairly
as between members of the Company.
The Board reviewed and re-confirmed the Company’s key stakeholder groups during the year. These are set out below along with
details of the forms of engagement undertaken by the Board:
Corero customers have a need for products and services that protect
their online presence and operations from the increasing threat of DDoS
attacks, and that provide intelligence to support greater availability. High
availability of cloud services and applications are critical for modern
businesses and institutions, their revenue streams rely on having internet
connectivity protected from the threat of DDoS attacks.
CUSTOMERS
Customers are the lifeblood of a successful
growing business.
Shareholders are concerned with a broad range of issues including, but
not limited to, Corero’s financial and operational performance, strategic
execution, investment plans and governance.
Corero’s partners harness Corero’s market-leading technology to deliver
customer success through creation of unique joint value propositions.
They share insights into what current and future customers want, ultimately
impacting product strategy and roadmaps and accelerating business growth
through sales and marketing programmes, as well as technical training, often
with a greater and more geographically dispersed sales force.
Employees seek opportunities for personal development and career
progression, a culture of inclusion and diversity, compensation and benefits,
and the ability to make a difference within Corero.
SHAREHOLDERS
Shareholders own the business. They are the
providers of capital to grow and invest for
future success.
PARTNERS
Partners are an extension of Corero, representing
the Corero brand in the market, providing an
additional route to market to scale the business.
EMPLOYEES
Corero employees are a key resource, dedicated
to creating, selling and supporting solutions that
protect Corero’s customers from the increasing
threat of DDoS attacks.
WHY THEY MATTER
WHAT MATTERS TO THEM
STAKEHOLDER
STAKEHOLDER
STAKEHOLDER
STAKEHOLDER
Corero Network Security plc Annual Report and Accounts 2024
30
EVERY DAY CORERO IS INTERACTING WITH
CUSTOMERS AND PROSPECTIVE CUSTOMERS
– INCLUDING IN TENDERS, IN TECHNICAL
PRESENTATIONS, IN QUOTING, IN INVOICING,
IN DEPLOYMENT, AND IN AFTER-SALES AND
ONGOING CUSTOMER SUPPORT.”
Executive Directors meet with customers
throughout the year and provide
feedback to the Board.
The Board reviews strategy and monitors
performance during the year with the aim of
meeting customers’ needs more effectively.
The Board receives regular competitor
updates to understand Corero’s
competitive performance and its strengths
and weaknesses as regards meeting
customer needs.
Corero employees interact with customers
every day – including tenders, technical
presentations, quoting, invoicing, deployment,
and after-sales and ongoing customer support.
Executive Directors meet with customers at
regular intervals through key internal Corero
events as well as industry-wide events.
Communications such as annual
reports, interim reports and notices of
general meetings.
Investor roadshows, Stock Exchange
announcements and press releases;
www.corero.com.
The Board attends the AGM to answer
questions from shareholders.
Executive Directors meet with investors
and analysts regularly to ensure a strong
dialogue is maintained.
The Executive Directors and the Chairman
meet with shareholders at investor
roadshows and forums.
The Corero Partner Code of Conduct
defines expectations of responsible
business and behaviour.
The Board is provided with reports,
including updates on performance and key
partner issues. Senior management and
CEO conduct quarterly review of progress
of strategic partner relationships.
There are regular Board updates
regarding partner relationships,
development and engagement.
On an ongoing basis, the Board
reviews Corero's key strategic
partnerships.
The Board engaged in review of progress
of strategic partner relationships.
There is regular Executive Director
member engagement with Juniper, GTT
and Akamai management.
Corero uses various activities and forums
to foster participation in Group events, and
invite opinions, questions and ideas.
Regular ‘All Hands’ meetings are held and
engagement surveys are held twice each year.
During 2024, Corero has hosted a number
of employee webinars with experts
covering topics such as mental health,
employee well-being and mindfulness.
Board members attend the employee
‘All Hands’ meetings where appropriate
as well as other events like the Sales Kick
Off event.
Performance appraisal and objective
setting processes are performed annually.
CORERO’S ENGAGEMENT
THE BOARD’S ENGAGEMENT
KEY EVENTS IN THE YEAR
Overview
Strategic Report
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Financial Statements
Corporate Directory
31
Corero Network Security plc Annual Report and Accounts 2024
PRINCIPAL RISKS AND UNCERTAINTIES
THE GROUP HAS A
NUMBER OF PRINCIPAL
RISKS AND UNCERTAINTIES
REVENUE GROWTH
Corero’s strategy outlined on page 3 depends on
delivering revenue growth to meet these ambitions.
Clearly, higher order intake and related revenue
growth provides the opportunity for Corero to
invest further in its future. Revenue growth is highly
important to deliver profitable growth for the
business. Conversely, lower sales growth reduces the
Company’s cash resources which could impact the
Company’s investment in sales and marketing and
product development and its other associated goals.
To deliver this order intake and, revenue growth, Corero
needs to identify, meet and exceed customer needs.
If Corero is not successful in identifying customer
prospects with a business need Corero can solve,
or developing go-to-market partner and channel
partner relationships which generate revenue, this will
compromise growth plans and success.
To be successful Corero is:
• Targeting service providers and enterprise buyers
that need scalable, real-time DDoS protection to
ensure business continuity, stay ahead of evolving
threats, and support growing connectivity demands
• Aligning lead generation, sales, and product
development with the needs of our targets, backed
by analyst insights and market research
RISK MANAGEMENT
The Company operates a risk assessment process, which is
embedded in day-to-day management and governance processes.
As part of the annual planning and budgeting process, Corero
management document the significant risks identified, the
probability of those risks occurring, their potential impact and the
plans for managing and mitigating each of those risks.
The Board reviews the annual risk assessment including an annual
assessment of the effectiveness of the Group’s internal control
system, comprising financial, operational and compliance controls,
to ensure that the Company’s risk management framework
identifies and addresses all relevant risks in order to execute and
deliver the Company’s strategy.
The Directors are responsible for the Group’s system of internal
control and for reviewing its effectiveness, whilst the role of
management is to implement policies on risk management and
control. Corero’s system of internal control is designed to manage,
rather than eliminate, the risk of failure to achieve the Company’s
business objectives and can only provide reasonable, and not
absolute, assurance against material misstatement or loss.
The Group operates a series of controls to meet its needs. These
controls include, but are not limited to, the annual strategic
planning and budgeting process, a clearly defined organisational
structure with authorisation limits, reviews by senior management
of monthly financial and operating information including
comparisons with budgets, and forecasts to the Board. Given the
size of the Group, the Board has concluded it is not appropriate
to establish a separate, independent internal audit function. The
Board will keep this under review.
The Audit, Risk and Compliance Committee (‘ARCC’) reviews
the effectiveness of internal controls. The ARCC receives reports
from management and observations from the external auditors
concerning the system of internal control and any material control
weaknesses. Significant risk issues, if any, are referred to the Board
for consideration. The Corero Risk Register, Auditor’s report,
assessment of the effectiveness of the internal control system and
key judgements report for the Annual Report and Accounts are
tabled and reviewed by the ARCC.
Corero Network Security plc Annual Report and Accounts 2024
32
TECHNOLOGY CHANGE AND INNOVATION
The DDoS mitigation market is competitive
and characterised by changes in technology,
customer requirements and new product
introductions and improvements. Cybersecurity
and DDoS attacks are constantly evolving and
changing as attackers develop new methods and
tools to evade defences.
Corero is focused on its chosen markets and
delivering continuous innovation by adding new
DDoS attack defences and new machine learning
and artificial intelligence capabilities, and striving
to provide market-leading solutions to secure
customers from the threat of DDoS attacks.
MARKET AWARENESS
Corero is a leader in adaptive, cost-effective
DDoS protection. Competing against larger,
established vendors, Corero differentiates through
real-time mitigation, seamless integration, and a
commitment to service availability. To accelerate
market awareness and drive growth, Corero
continues to invest in targeted digital marketing,
lead generation, and strategic brand initiatives.
By strengthening the Company’s presence in key
markets, Corero empowers more organisations
to defend against evolving threats - ensuring
resilience, security, and peace of mind.
OTHER NON-PRINCIPAL RISKS AND
UNCERTAINTIES
There are a multitude of other risks and
uncertainties that face companies like Corero,
these include: risks and uncertainties associated
with local legal requirements, political and
geographic risk, the enforceability of laws and
contracts, changes in tax laws, terrorist activities,
wars and invasions, natural disasters and other
types of health epidemics.
PEOPLE
To grow and address the challenges resulting
from technology change and innovation in the
DDoS protection market, the Company needs
to retain and recruit the required sales, business
development, and software development skills.
Corero operates in a high-growth cyber security
market and if it is unable to recruit and retain the
right skills this will compromise growth plans.
Consequently, Corero targets paying salaries in
the upper quartile for comparable positions.
Corero Network Security plc Annual Report and Accounts 2024
33
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
We treat customers, partners, suppliers and employees in a professional,
courteous and honest manner.
We are committed to complying with ESG requirements and Corero is
dedicated to improving the security and availability of the internet for all.
CORERO ASPIRES TO CARRY
OUT ITS BUSINESS TO THE
HIGHEST ETHICAL STANDARDS
In common with most intellectual property
technology businesses, we know that the
expertise, experience, and passion of our
employees is genuinely what makes our
products and services market-leading.
For example, Corero’s Security Operation
Centre (‘SOC’) comprises a team of highly
experienced security analysts whose
role it is to assist our customers’ IT and
security teams to mitigate the growing
number of increasingly sophisticated
DDoS attacks. This service and customer
support offering is therefore an important
competitive differentiator.
Corero’s Engineering and Product teams
work very closely to evolve the Group’s
product offering and ensure that Corero’s
product suite is at the forefront of
technology available to our customers.
With developments of the CORE ecosystem
during FY 2024, there has been significant
development in this space.
Corero prides itself on being a great place
to work – we empower our employees to
develop and grow, and held a number of
employee well-being seminars during 2024
to support our teams, as well as conducting
bi-annual employee engagement surveys to
understand the views of employees.
CORERO’S APPROACH TO
RESPONSIBLE BUSINESS IN
SOCIETY
Corero recognises that long-term success
is underpinned by good relations with its
key stakeholders, both external (partners,
suppliers, customers, shareholders,
regulators and others) and internal
(employees). As part of Corero’s annual
planning and budgeting process, the
Company identifies its stakeholders and
their respective needs, interests and
expectations. In addition, the strategy for
engaging with these stakeholder groups is
formulated and implemented.
Corero values feedback from its
stakeholders and proactively endeavours
to address any matter identified. Feedback
is gathered from: customers and partners
relating to Corero’s products and services
in an ongoing, continuous manner;
shareholders, through investor relations
roadshows; and employees as a part of
regular ‘All Hands’ meetings.
During FY 2024, Corero has engaged closely
with customers, partners, shareholders
and investors through a number of events
throughout the year. Invited customers and
partners attended Corero’s inaugural Sales
Leadership Summit in May 2024, while Carl
Herberger and Chris Goulden met with
shareholders and investors at a number
of investor events including the Planet
Microcap conference in Las Vegas, and the
Cannacord Annual Growth Summit in Boston
and London.
EMPLOYEES, DIVERSITY AND
INCLUSION AND EMPLOYEE
INTERACTION
Corero’s employees are the Group’s
most important asset. The continued and
sustained development of the Company
relies on its ability to retain and attract
high calibre employees and Corero is
proud to have many experienced and
talented employees.
CORERO’S CULTURE
AND VALUES
We seek to live our culture and
values every day, in a dynamic
and professional manner.
Our defined values are:
Customers First
Technology Leadership
& Innovation
Operational Excellence
Integrity
Employee
Empowerment
& Team Work
Corero Network Security plc Annual Report and Accounts 2024
34
The Corero Equal Opportunities Policy
ensures that all job applicants and
employees are treated fairly, no matter
what age, race, colour, gender, religion
or beliefs, sexual orientation, marital or
partner status, ethnic origin or community,
disability, and without favour or prejudice.
We are committed to applying this policy
throughout all aspects of employment,
recruitment and selection, training,
development and promotion.
The Corero Equal Opportunity Policy has
been developed to maintain the following
policy objectives:
•
To provide a safe and welcoming
environment, in which individuals are
valued, included and respected.
•
To advance equality of opportunity.
•
To eliminate unfair discrimination.
•
To foster good relations between
different groups of people.
We are an increasingly international,
multi-cultural and diverse organisation.
For example, a number of our UK-based
software engineers are drawn from local
universities but also sponsored on EU
skilled-migrant visas. Inclusion is the
practice of providing everyone with equal
access to opportunities and resources. We
believe employees find an environment
of understanding and respect at Corero,
where voices and opinions are heard and
carefully considered. This is made easier by
the relatively flat hierarchy and agile nature
of the business and the values we share.
Corero’s global management team meets
face-to-face at least four times each year to
focus on strategic goals and performance,
and to drive results across the organisation.
Employees are regularly informed of
matters concerning their interest and the
financial factors affecting the Company. The
Company uses company-wide forums such
as All Hands meetings to communicate
matters as well as team and individual
meetings. Employees are offered a number
of benefits such as an extra day of holiday
on their birthday, a comprehensive leave
policy, as well as private medical insurance,
enhanced parental leave and remote and
flexible working arrangements.
ENVIRONMENTAL
SUSTAINABILITY
Corero has identified the following UN
Sustainable Development Goals (‘SDGs’)
most applicable to its activities listed in the
table below.
Corero is committed to promoting
sustainability. We aim to lead, follow and
to promote good sustainability practice,
to carry out our operations in a way which
manages and minimises any adverse
environmental impacts from our activities.
For many years Corero has operated a
flexible remote working policy before remote
working was necessitated by the COVID-19
pandemic. We aim to mitigate unnecessary
travel and the impact on climate change.
Our products are used by thousands
of businesses throughout the world to
protect against disruptions that could have
adverse economic, health, well-being and
environmental consequences. Disruptions
may emanate from individuals, groups,
corporates or state-sponsored actors.
Corero is committed to reducing our
resource consumption where possible.
Furthermore, employees are encouraged
to be environmentally aware. For
example, Corero encourages the reuse
or recycling of office waste, including
paper, packaging, computer supplies and
redundant equipment. Company cars are
not provided. Wherever possible we seek
to ensure that waste materials are disposed
of in an environmentally safe manner and
in accordance with regulations. We aim
to provide materials such as marketing
collateral in a paperless, digital way.
ETHICAL BUSINESS
Corero is committed to the fundamental
values of integrity, transparency and
accountability. We have a zero-tolerance
policy with regard to bribery and corruption
with reporting mechanisms in place.
Corero adopts and enacts an Ethics and
Anti-Bribery Policy to record the ethical
way in which we conduct business and
to make our ethical standards clear to
everyone, including those with whom we do
business, which includes resellers, agents
and distributors as well as our customers.
Corero provides training to all its employees
on Anti-Bribery and Corruption.
STRATEGIC REPORT SIGN-OFF
In accordance with Section 414D(1) of The
Companies Act 2006, the Strategic Report on
pages 26 to 41 is signed by order of the Board.
Emma Rockey
COMPANY SECRETARY
31 March 2025
UN SD Goals
How Corero contributes
Good Health
and Well Being
Ensuring healthy lives and promoting well-being at all ages is essential to sustainable
development. We are committed to our people and their well-being and are proud of our
supportive, collaborative culture and strong values.
Quality Education
Obtaining a quality education is the foundation to improving people’s lives and sustainable
development. Corero’s DDoS protection is favoured by many research and educational
network customers as a secure way to deliver and promote their objectives.
Decent Work and
Economic Growth
Sustained and inclusive economic growth can drive progress, create decent jobs for all and
improve living standards. Corero’s DDoS protection protects the remote working practices,
being a key feature of post-COVID-19 pandemic ways of working for most employers.
Peace, Justice and
Strong Institutions
Conflict, insecurity, weak institutions and limited access to justice remain a great threat to
sustainable development. Corero’s solutions provide cyber protection against nefarious
activities from individuals, crime and state-sponsored terrorist groups. Corero’s vision is an
internet connected world where every business, application and individual is protected from
DDoS attacks.
Corero Network Security plc Annual Report and Accounts 2024
35
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
Andrew Miller
NON-INDEPENDENT
NON-EXECUTIVE DIRECTOR
Jens Montanana
NON-EXECUTIVE CHAIRMAN
Richard Last
INDEPENDENT
NON-EXECUTIVE DIRECTOR*
Peter George
INDEPENDENT
NON-EXECUTIVE DIRECTOR
APPOINTED
6 August 2010
22 May 2008
3 January 2019
1 June 2020
BACKGROUND & EXPERIENCE
Jens has spent the majority
of his over 30-year career in
the technology industry with
considerable operational and
commercial experience in
the resale and distribution of
information technology hardware
and software solutions. He is the
founder and CEO of Datatec
Limited, established in 1986 and
which listed on the Johannesburg
Stock Exchange in 1994. Between
1989 and 1993 Jens served as
Managing Director and Vice-
President of US Robotics (UK)
Limited, a wholly owned subsidiary
of US Robotics Inc., which was
acquired by 3Com. In 1993, he
co-founded US start-up Xedia
Corporation in Boston, an early
pioneer of network switching and
IP bandwidth management, which
was subsequently sold to Lucent
Corporation in 1999 for $246
million. He has previously served
on the boards and sub-committees
of various public companies.
Richard has over 20 years’
senior experience in information
technology having worked at
board level for a number of
publicly quoted and private
companies in the technology
sector. He is a Fellow of the
Institute of Chartered Accountants
in England and Wales (‘FCA’).
*Richard Last is a Corero
shareholder and has been a
Non-executive Director of the
Company for over 10 years;
his independence has been
considered by the Board.
The Board is satisfied that
Richard Last operates in an
independent manner and
is independent.
Peter George is a US-based
executive with over 30 years’
experience in the IT networking
and cybersecurity industry.
He has a successful track record
as CEO of leading IT network and
security companies and provides
sales and marketing leadership
experience to the Board.
Until late 2024, Peter was the CEO
of Evolv Technology, a US-based
leader in human security screening.
Prior to that he was President and
CEO of empow cybersecurity, a
market innovator in AI, machine
learning and advanced security
analytics. Prior to empow, between
2008 and 2017, he was President
and CEO of Fidelis Cybersecurity,
a leading US-based Advanced
Threat Defense business. Before
joining Fidelis, Peter was President
and CEO of Crossbeam Systems,
a market leader in Unified Threat
Management. Prior to that he was
the President of Nortel Networks’
enterprise business where he was
responsible for growing a $2 billion
and 5,000 employee voice and
data business in EMEA.
Andrew Miller was until 31 May
2020 the CFO of the Company. He
was until February 2025, CFO of
Mycom, a telecoms SaaS provider
and prior to that up to January
2022 the CFO and COO of C5
Capital Limited, an investment
firm investing in the secure data
ecosystem including cybersecurity,
cloud infrastructure, data analytics
and space, and CFO of the
Haven Group, a private equity
backed cyber security services
provider. Prior to joining Corero,
Andrew was with the Datatec
Limited group in a number of
roles between 2000 and 2009
including the Logicalis Group
Limited (‘Logicalis’) Operations
Director and Corporate Finance
and Strategy Director. Prior to
this, Andrew gained considerable
corporate finance experience
in London with Standard Bank,
West Deutsche Landesbank and
Coopers & Lybrand. Andrew
trained and qualified as a
chartered accountant and has a
bachelor’s degree in commerce
from the University of Natal, South
Africa. Andrew is a Chartered
Accountant with over 20 years’
experience in the technology
industry.
CURRENT APPOINTMENTS
CEO of Datatec Limited and
Director of various Datatec Limited
subsidiary companies.
Director of Tribal Group plc, a
technology company, and Iomart
Group Plc, a cloud solutions
company. Richard is also a Director
of a number of private companies.
None.
None.
BOARD OF DIRECTORS
Corero Network Security plc Annual Report and Accounts 2024
36
Carl Herberger
CHIEF EXECUTIVE OFFICER
Rob Scott
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Nomination Committee
Remuneration Committee
Audit, Risk and
Compliance Committee
Chair of Committee
17 April 2024
1 January 2024
6 September 2013
15 July 2024
Rob Scott currently serves as
Managing Director of Strategic
Relationships for Venture Lending
at Avid Bank, leveraging his
extensive industry expertise and
strong connections with venture
capital and private equity firms.
He is also the co-founder of
Let’s Go Racing, a consultancy
that forges winning partnerships
between innovative brands
and motorsport teams to drive
commercial success. Additionally,
Rob sits on the board of Altaeros
- an autonomous aerostat
supporting both government
and commercial applications
- and serves as Chairman and
Board Member at Trilio, a next-
generation data protection and
recovery solution for scale-out
cloud architectures. He is also a
member of the Customer Advisory
Board at Fortinet, a global leader
in cybersecurity.
Previously, Rob served as CEO
of Cygilant, Inc., a cyber security
services provider that specialised
in helping organisations
hunt, detect, and respond to
cyberthreats. After its acquisition
by SilverSky, he transitioned to the
role of Chief Strategy Officer with
a focus on strategic partnerships.
Rob also led Bradford Networks
-a network security company later
acquired by Fortinet -and Clique
Intelligence, a software platform
for data sharing and collaboration.
Earlier in his career, he held
the role of Vice President of
Worldwide Sales and Marketing at
HP ProCurve Networking, joining
through its 2008 acquisition of
Colubris Networks Inc., where he
served as President and CEO.
Carl Herberger, CEO of Corero
Network Security, brings over 25
years of cybersecurity leadership
experience. As an internationally
recognised expert, he has held
executive roles at top security firms
including Radware, Evolve IP, Allied
InfoSecurity, and most recently as
Principal Security Consultant and
virtual CISO.
Among his many achievements,
Carl received the Technology
Executive of the Year award in
2019 and helped establish the US
Air Force’s first cyber warfare unit
during his time as an intelligence
officer. As CEO, he leverages
his deep expertise across all
facets of cybersecurity to lead
Corero’s corporate strategy and
help Corero’s customers manage
risk and build resilient systems
capable of withstanding today’s
cyber threats.
Ashley Stephenson (‘CTO/CPO’)
first joined Corero Network
Security as Executive Vice
President of the Network Security
division, with responsibility for
product and solution strategy in
March 2012, and was appointed
Chief Executive Officer of Corero
in January 2013. In May 2019, after
the successful introduction of the
Company’s SmartWall product line,
he transitioned to the role of CTO
and in 2025 has also assumed the
role of CPO. As a global IT industry
executive and internet technology
entrepreneur, Ashley has worked
in the United States, Europe and
Asia. His previous experience
includes: CEO of Reva Systems,
and CEO of Xedia Corporation.
Ashley began his career at IBM
Research & Development in the
UK. He is a graduate of Imperial
College, London with a degree in
Physics and is an Associate of the
Royal College of Science.
Emma Rockey joined Corero as
Group Financial Controller in
August 2023, and brings nearly
20 years of finance, technical
and governance expertise to
the Group. Emma qualified as a
chartered accountant with EY in
2008 and subsequently moved
to Melbourne, Australia with the
firm. Emma spent six years at SEEK
Ltd, an ASX50 global and highly
acquisitive group in a number
of senior financial reporting and
governance roles during a time
when the group was scaling and
grew to be a $1 billion company.
Subsequent to this, Emma spent
three years in leadership roles
at PKF, followed by two years at
newly listed Control Bionics Ltd,
building their finance team from
the ground up following listing on
the ASX. Emma returned to the UK
in 2022 and spent time at Acential
plc before joining Corero.
Emma is a member of the
Institute of Chartered Accountants
of Scotland.
Managing Director of Avidbank
Holdings Inc, Chairman and
Director of Trilio Data Inc.
Director of Trustle Inc,
a technology company.
Director of Eyealike, Inc.
and StepVest LLC.
Director of Corero Network
Security (UK) Ltd & Corero Group
Services Ltd.
Ashley Stephenson
CHIEF TECHNOLOGY OFFICER,
CHIEF PRODUCT OFFICER
Emma Rockey CA
COMPANY SECRETARY
Corero Network Security plc Annual Report and Accounts 2024
37
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
CHAIRMAN’S CORPORATE
GOVERNANCE INTRODUCTION
BOARD COMMITMENT
TO GOVERNANCE
The Board is committed to continue
to uphold high standards of corporate
governance, enhancing shareholder value,
and engaging in an open and transparent
manner with all of the Group’s stakeholders.
The Board therefore supports and is
committed to the principles of the QCA
Corporate Governance Code. Details of our
governance processes and procedures are
set in out in the following pages.
BOARD LEADERSHIP AND
EFFECTIVENESS
The Board recognises that to remain
effective it must ensure that it has the right
balance of skills, experience, knowledge and
independence to enable it to discharge its
duties and responsibilities. The Directors
believe in the necessity for open debate in
the boardroom and consider that existing
Board dynamics and processes encourage
honest, constructive and open debate
with the Executive Directors. We conduct
internal Board evaluation reviews to
monitor that the Corero Board is operating
effectively. In June 2024, an internal Board
effectiveness evaluation was conducted
with a range of areas covered such as vision
and strategy, communications, meeting
stakeholder expectations, Board skills and
balance, and overall view of performance
and development. It was pleasing that all
aspects of the Board evaluation showed
improvement from the 2023 assessment,
with highlights reflecting how the current
Board is working cohesively as a group and
with the executive management team. The
Board also recognises that diversity can be
improved across our members.
OUR CULTURE AND VALUES
We recognise the importance of our values
and how we live them within our culture.
The Board undertakes informal enquiries
of employees to ensure our values are
upheld and promoted to maintain a healthy
corporate culture. Board meetings held at
Corero’s office locations in the UK and US
provide the Board with the opportunity to
informally interact with employees.
BOARD COMPOSITION
Carl Herberger was appointed CEO and
joined the Board of Directors on 1 January
2024. Following Carl’s appointment to
the Board, I stepped back from the role
as Executive Chairman of the Company
and returned to my role as Non-Executive
Chairman, effective 1 January 2024.
Rob Scott joined the Board of Directors in
April 2024 and brings a wealth of experience
across cyber security internationally, sales
& marketing, people and governance. Phil
Richards resigned from the Board effective
12 July 2024.
STAKEHOLDER ENGAGEMENT
We seek to maintain an open dialogue with
all stakeholders including shareholders,
customers, partners, suppliers and our
employees. Details of our stakeholders
along with the forms of engagement
undertaken by the Board are set out on
pages 26 to 27.
In this context, I would like to give my
continued thanks to our institutional
and private investors for their continued
support; to all wider stakeholders including
our customers, strategic partners and
suppliers; and thank all our employees for
their determination, professionalism and
commitment to Corero.
LOOKING FURTHER AHEAD
Corero has delivered a solid performance in
2024 with growth reflected across all of our
key metrics. Under the strong leadership
of Carl Herberger as CEO, Corero has
improved sales execution with an enhanced
sales team and continued development
of the dynamic product suite. The Board
maintains its confidence that Corero is
well positioned to capitalise on the strong
forecast growth expected in the DDoS
market. We will continue to invest in 2025
to deliver our strategic goals with the
objective of creating long-term value for
all our stakeholders.
Jens Montanana
CHAIRMAN
31 March 2025
THE BOARD IS COMMITTED TO
CONTINUE TO UPHOLD HIGH STANDARDS
OF CORPORATE GOVERNANCE,
ENHANCING SHAREHOLDER VALUE,
AND ENGAGING IN AN OPEN AND
TRANSPARENT MANNER WITH ALL OF
THE GROUP’S STAKEHOLDERS.”
Jens Montanana
CHAIRMAN
Corero Network Security plc Annual Report and Accounts 2024
38
QCA CODE COMPLIANCE
As an AIM-listed company, Corero adopts the principles of the Quoted Companies Alliance Corporate Governance Code (the ‘QCA
Code’). The QCA Code identifies ten principles to be followed in order for companies to deliver growth in long-term shareholder value,
encompassing an efficient, effective and dynamic management framework accompanied by good communication to promote confidence
and trust. The following explains how Corero follows those QCA Code principles:
1
Establish a strategy and
business model to promote
long-term value for
shareholders
Corero’s strategy is focused on being the leader in real-time,
high performance DDoS protection and scaling the business for
profitability through revenue growth.
Corero’s product strategy is prevention of downtime in the
event of a DDoS attack, eliminating the need for operator
intervention, and enabling service providers to deliver added
value to their customers by offering DDoS protection services.
For more information please
see pages 4 and 5.
2
Seek to understand and
meet shareholder needs and
expectations
The CEO and CFO communicate regularly with shareholders,
investors and analysts, including at our full year and half-yearly
results roadshows. The full Board is available at the AGM to
communicate with shareholders.
For more information please
visit: http://www.corero.com/
about/investor-relations
3
Take into account wider
stakeholder and social
responsibilities and their
implications for long-term
success
Shareholders, our customers, partners and employees are
our most important stakeholders. We engage with these
communities via regular communications in our day-to-day
activities, and via formal feedback requests.
For more information please
see page 30 and 31.
4
Embed effective risk
management, considering both
opportunities and threats,
throughout the organisation
Ultimate responsibility for risk management rests with the
Board. Day-to-day management of risk is managed through
the strong processes and controls in place throughout the
organisation, and the positive culture embedded across the
Company.
For more information please
see pages 32 and 33.
5
Maintain the Board as a well-
functioning, balanced team led
by the Chair
The Board has a well-established Chair along with three
established Committees: Audit, Risk and Compliance
Committee; Nomination Committee; and Remuneration
Committee. The composition and experience of the Board is
reviewed primarily by the Nomination Committee.
For more information please
see pages 36, 37 and 39 – 45.
6
Ensure that between them the
Directors have the necessary
up-to-date experience, skills
and capabilities
The Board is satisfied that its current composition includes
an appropriate balance of skills, experience and capabilities,
including experience of the cyber security market, international
markets and growth organisations.
For more information please
see pages 36, 37 and 39 – 45.
7
Evaluate Board performance
based on clear and relevant
objectives, seeking continuous
improvement
The Board considers the effectiveness and relevance of its
contributions, any learning and development needs and the
level of scrutiny of the senior management team. An annual
Board effectiveness review is undertaken to enable the Board to
stand back and assess its strengths and areas for development.
For more information please
see page 42.
8
Promote a corporate culture
that is based on ethical values
and behaviours
Corero recognises the importance of culture and values across
the organisation, and the importance that employees play in
upholding the Company’s values of Customers first; Technology
leadership & innovation; Operational excellence; and Integrity.
These values are reinforced via training and performance
management.
For more information please
see pages 34 and 35.
9
Maintain governance
structures and processes
that are fit for purpose and
support good decision-making
by the Board
The Board is responsible for the Group’s overall strategic
direction and management, and for the establishment and
maintenance of a framework of delegated authorities and
controls to ensure the efficient and effective management
of the Group’s operations. The Board is satisfied that the
necessary controls and resources exist within the Company to
enable these responsibilities to be met.
For more information please
see pages 40 – 45.
10
Communicate how the
Company is governed and
is performing by maintaining a
dialogue with shareholders and
other relevant stakeholders
The investors section of our website includes our Annual
Report, results, presentations, notice of AGM and results of the
AGM and general meetings.
For more information please
visit: http://www.corero.com/
about/investor-relations
Corero Network Security plc Annual Report and Accounts 2024
39
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
CORPORATE GOVERNANCE REPORT
BOARD COMPOSITION AND RESPONSIBILITIES
The Board sets Corero’s overall strategic direction, reviews management performance and ensures that the Company has the necessary
financial and human resource in place to meet its objectives. Operational management of the Company is delegated to the Chief
Executive Officer. The Chairman is responsible overall for adherence to the QCA Code, and ensures this through effective chairing of Board
meetings, and regular review of the Group’s governance processes and procedures.
The Board comprises the Non-executive Chairman, three independent Non-executive Directors, one non-independent Non-executive
Director and two Executive Directors whose Board and Committee responsibilities are set out below:
Non-executive/
Executive Director
Board
Audit, Risk and
Compliance Committee
Remuneration Committee
Nomination
Committee
Jens Montanana
Non-executive
Chairman
Member
Chairman
Peter George1
Non-executive
Member
Member
Member
Richard Last2
Non-executive
Member
Member
Member
Member
Andrew Miller3
Non-executive
Member
Chairman
Member
Robert Scott4
Non-executive
Member
Member
Chairman
Member
Ashley Stephenson
Executive
Member
Carl Herberger5
Executive
Member
1 Stepped down from Audit, Risk and Compliance Committee on 30 January 2024.
2 Chairman of Audit, Risk and Compliance Committee until 7 June 2024.
3 Appointed as Chairman of Audit, Risk and Compliance Committee on 7 June 2024.
4 Appointed Director on 17 April 2024. Appointed Chairman of Remuneration Committee on 7 June 2024.
5 Appointed Director on 1 January 2024.
One-third of all Directors are subject to annual reappointment by shareholders, as well as any Director appointed to the Board in the
period since the last AGM, and any Non-executive Director whose tenure is more than nine years or whose independence is the subject of
Board judgement. Jens Montanana, Peter George and Richard Last will be offering themselves for re-election at the forthcoming AGM.
The Corero Board members’ biographies and their relevant experience, capabilities and skills and are set out on pages 36 and 37.
BOARD BALANCE AND INDEPENDENCE
The composition of the Board is reviewed regularly. Appropriate training, briefings, and inductions are available to all Directors on
appointment and subsequently as necessary, taking into account existing qualifications and experience.
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including
operational, commercial and technology expertise and experience. All members of the Board have more than 20 years’ technology
experience through investing in and working for a range of companies from start-ups to large, established technology companies, with
complementary financial, commercial, sales and marketing skills.
The skills and experience of the Board are summarised in the table below:
Technology
Cyber security
Sales and
marketing
People
International
Governance
Finance
Jens Montanana
Peter George
Richard Last
Andrew Miller
Robert Scott
Ashley Stephenson
Carl Herberger
Corero Network Security plc Annual Report and Accounts 2024
40
The Board is cognisant of the lack of gender
and age diversity and plans to address
this as the Company grows through its
recruitment policy.
All Directors are able to take independent
legal advice in relation to their duties, if
necessary at the Company’s expense. In
addition, the Directors have direct access
to the advice and services of the Company
Secretary. The Directors keep their skills up
to date through a combination of their other
roles (if applicable), attending appropriate
training courses and seminars funded
by the Company if appropriate, and by
reading widely.
There are no external advisers to the
Board or any of its Committees, other than
the Company’s joint brokers (Canaccord
Genuity and Zeus).
Corero’s Non-executive Chairman, Jens
Montanana, is a material shareholder with
an equity interest in Corero of 36.57% at
26 March 2025. His interests are strongly
aligned with all shareholders.
Richard Last is a Corero shareholder with a
0.88% equity interest in Corero at 26 March
2025 and has been a Non-executive Director
of the Company for over 10 years. His
independence has been considered by the
Board. The Board is satisfied that Richard
Last operates in an independent manner
and is independent.
EMPLOYMENT AND SERVICE
AGREEMENTS
The Director employment and service
contracts are summarised below:
•
Carl Herberger and Ashley Stephenson,
both Executive Directors, have
employment agreements which provide
for the payment of six months’ base
salary if the agreement is terminated by
the Company without cause.
•
The Non-executive Directors’ letters of
appointment are for 12-month terms and
provide that the appointment may be
terminated by either party giving to the
other not less than three months’ notice.
Non-executive Directors, per their letters
of appointment, have a time commitment
to the Company of not less than 12 days
per annum including the attendance of
Board meetings and the Company AGM.
In addition, Non-executive Directors are
expected to devote appropriate preparation
time ahead of each meeting.
BOARD RESPONSIBILITIES
The Board meets, virtually or in person,
on average once a quarter; additional
meetings or conference calls are held as
required. Each Director is provided with
sufficient information to enable them to
consider matters in good time for meetings
and enable them to discharge their
duties properly.
The Board also ensures that the principal
goal of the Company is to create
shareholder value, while having regard
to other stakeholder interests, and takes
responsibility for setting the Company’s
values and standards.
The Board has a formal schedule of
matters reserved to it for consideration
and approval. These include:
•
Strategy and management
•
Responsibility for the overall strategy and
management of the Company
•
Approval of strategic plans and budgets
and any material changes to them
•
Approval of the acquisition or disposal
of subsidiaries and major investments,
projects and contracts
•
Changes relating to the Company’s
capital structure
•
Delegation of the Board’s powers
and authorities
FINANCIAL MATTERS AND
INTERNAL CONTROLS
•
Oversight of the Company’s operations
ensuring competent and prudent
management, sound planning and
maintenance of adequate accounting
and other records.
•
Approval of the annual and
interim financial statements and
accounting policies.
•
Approval of the dividend policy.
•
Ensuring an appropriate system of
internal control and risk management
is in place.
CORPORATE GOVERNANCE
•
Review of the management structure and
senior management responsibilities.
•
With the assistance of the
Remuneration Committee, approval of
remuneration policies.
•
Consideration of the independence of
the Non-executive Directors.
•
Receiving reports and feedback from the
Company’s shareholders.
The Board receives regular briefings on
the Company’s performance (including
commentary and analysis), key issues and
risks affecting the Company’s business.
The Company maintains liability insurance
for its Directors and Officers. The Company
has also entered into indemnity agreements
with the Directors, in terms of which the
Company has indemnified its Directors,
subject to the Companies Act limitations,
against any liability arising out of the
exercise of the Directors’ powers, duties
and responsibilities as a Director or Officer.
In the year ended 31 December 2024,
the Board met, virtually or physically, on
five scheduled occasions; further meetings
and conference calls were held as and
when necessary. Details of Directors’
attendance at scheduled meetings in the
year to 31 December 2024 are shown in
the table below:
Meetings
attended
Jens Montanana
5/5
Peter George
5/5
Richard Last
5/5
Andrew Miller
5/5
Rob Scott
3/3
Ashley Stephenson
5/5
Carl Herberger
5/5
Phil Richards
3/3
DIRECTORS’ CONFLICT
OF INTEREST
The Company has effective procedures in
place to monitor and deal with conflicts of
interest. The Board is aware of the other
commitments and interests of the Directors,
and changes to these commitments and
interests are reported to and, where
appropriate, agreed with the rest of
the Board.
EVOLUTION OF THE
COMPANY’S GOVERNANCE
FRAMEWORK
The Board will, on an ongoing basis, and
as the Company’s business develops and
grows, review the appropriateness of the
governance framework, including the
composition of the Board and the need
for an internal audit function, to ensure
the Company delivers on its strategy
and goals whilst maintaining appropriate
governance structures.
Corero Network Security plc Annual Report and Accounts 2024
41
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
BOARD PERFORMANCE AND REMUNERATION POLICY
INTRODUCTION
An annual Board effectiveness review
is undertaken to enable the Board to
stand back and assess its strengths and
areas for development. This review is
conducted internally.
The Board may refresh the performance
assessment process based on external
advice and if appropriate engage a third-
party facilitator to assist in the performance
of such effectiveness reviews every
three years.
The Remuneration Committee’s (‘RC’)
remit is to measure the performance of and
determine the remuneration policy relating
to Directors and senior employees. To
support this responsibility, it has access to
professional and other advice external to the
Group. Taking the performance factors into
account, it then makes recommendations to
the Board.
To assist the work of the RC, the views
of the CEO and CFO are also invited
where appropriate. However, they do not
participate in any decision related to their
own remuneration.
The Nomination Committee reviews and
recommends nominees as new Directors
to the Board. Senior management
appointments are required to be approved
by the RC.
The Group is committed to the governing
objective of maximising shareholder value
over time. Each year the remuneration
framework and the packages of the
Directors are reviewed to ensure they
continue to achieve this objective.
The Group operates in the cyber security
market which is a market with significant
growth potential. It is also a competitive
market with a number of companies who
are significantly larger than Corero. The
Group’s Executive Director remuneration
policy is designed to attract and retain
Directors of the calibre required to maintain
the Group’s position in its marketplace.
This is maintained through the use of bonus
and share option schemes, as follows.
BONUS
A cash bonus designed to incentivise
specific short-term financial goals.
Goals and objectives are set for the
Executive Directors based on key financial
performance metrics. All Executive Directors
have bonus targets for Revenue (50% of
bonus) and EBITDA (25% of bonus). In
addition, each Executive Director has a
specific KPI which makes up the final 25%
of their bonus. The Chief Executive Officer
on-target bonus is set at 100% of base
salary (total achievement 70%) and the Chief
Technology Officer on-target bonus is set at
two-thirds of base salary (total achievement
51%).
SHARE OPTIONS
Share options are granted to encourage and
reward delivery of the Company’s long-term
strategic objectives and provide alignment
with shareholders through the use of share-
based incentives.
All share-based incentives offered to
Directors have a three-year vesting schedule,
with one-third vesting on the first anniversary
of the grant/start date, a further third on the
second anniversary of the grant/start date
and the final third on the third anniversary
of the grant/start date. Share options are
granted with an exercise price set at the
higher of market price or such other price as
determined by the RC.
CONFLICTS OF INTEREST
The members of the RC do not have any
conflicts from cross-directorships that
relate to the business of the Committee.
The members of the RC do not have any
day-to-day involvement in the running of
the Group.
BOARD CHANGES
On 17 April 2024, Rob Scott was appointed
to the Board of Directors which was
approved by shareholders at the AGM on
20 June 2024.
Given Corero’s size, the Company does
not have internal succession candidates
for the Executive Directors. In the event
an Executive Director replacement is
required, the Company would seek to
recruit a replacement through a recruitment
search process. The Board is satisfied
that the Company’s middle management
will ensure the Company’s business is not
adversely impacted in the period between
an Executive Director leaving and a
replacement being recruited.
42
Corero Network Security plc Annual Report and Accounts 2024
Corero Network Security plc Annual Report and Accounts 2024
43
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
BOARD COMMITTEE REPORTS
The Board has three established Committees:
•
Audit, Risk and Compliance
Committee: responsible for reviewing
the Group’s interim and year end
results announcements, and the Annual
Report and Accounts; determining the
application of the financial reporting and
internal control and risk management
procedures and assessing the scope,
quality and results of the external audit
•
Remuneration Committee: responsible
for the policy for the remuneration
of the Executive Directors and senior
management; setting the remuneration of
the Executive Directors, determining the
payment of bonuses to Executive Directors;
and approving the Company’s bonus and
incentive arrangements for employees
•
Nomination Committee: responsible
for reviewing the composition, structure
and size of the Board; assessing the
leadership needs of the Group; and
recommending nominees as new
Directors to the Board
AUDIT, RISK AND COMPLIANCE
COMMITTEE (‘ARCC’) REPORT
The ARCC members comprise Andrew
Miller, who is the Committee Chairman, and
members Richard Last and Rob Scott, and
meets at least twice a year. The Company’s
Chief Financial Officer and Group Financial
Controller, and the Company’s external
auditors attend the meetings.
Rob Scott was appointed to the ARCC on
7 June 2024.
In the year ended 31 December 2024, the
ARCC met on two occasions. The attendance
of individual Committee members at ARCC
meetings in the year to 31 December 2023 is
shown in the table below:
Meetings
attended
Andrew Miller
(Committee Chairman)
2/2
Richard Last
2/2
Rob Scott
1/1
The ARCC’s activities during the year, based
on its terms of reference, are set out below:
•
Reviewed the scope and results of the
external audit, its cost effectiveness and the
objectivity of the auditors through review
of documentation and reporting provided
to the Committee, direct discussion with
the Audit Partner, and discussion with
management who are directly involved
with the external audit. The current
auditors, MHA, have been in place for two
financial years and have reconfirmed their
independence ahead of the 2024 audit
•
Reviewed, prior to publication, the interim
financial statements, preliminary results
announcement, the annual financial
statements and the other information
included in the Annual Report. Considered
the regulatory, technical and operational
risks of the Company and ensured these
risks are properly assessed, monitored and
reported on and the appropriate policies
and procedures are in place
•
Receive internal assurance as to the
control framework through review
and discussion with the internal
finance function, and review of external
audit reports to the Committee concluding
on the internal control environment
•
Consideration as to the effectiveness of
the risk and control framework and that
the processes are operating properly
from discussion with key management
and the external auditors
The key financial reporting judgements
relating to the financial statements for the
year ended 31 December 2024 which the
ARCC have considered and discussed with
the auditors, include:
Financial
statements
note
Revenue recognition
2.4
Capitalisation of development
costs
2.9 and 10
Carrying value of investments
and impairment assessment
2.12, Plc 2.4
and Plc 3
The ARCC is satisfied with the treatment in
the financial statements and the disclosure
in the notes.
REMUNERATION COMMITTEE
(‘RC’) REPORT
The RC comprises Rob Scott (Chairman) and
members Peter George, Jens Montanana
and Richard Last. The RC meets at least
twice a year.
Rob Scott was appointed to the RC on 7
June 2024 and appointed Chairman on 7
June 2024. Prior to this, Peter George was
Chairman of the RC.
In the year ended 31 December 2024, the
RC met on one scheduled occasion; further
meetings and conference calls were held
as and when necessary. The attendance of
individual Committee members at scheduled
RC meetings in the year to 31 December
2024 is shown in the table below:
Meetings
attended
Rob Scott (Committee Chairman)
0/0*
Richard Last
1/1
Peter George
1/1
Jens Montanana
1/1
* Appointed to RC after meeting held. Peter George
was Chairman for the meeting held.
The RC’s activities during the year, which
are based on its terms of reference, are set
out below:
•
Reviewed the performance of the
Executive Directors and set the
remuneration of the Executive Directors
•
Determined the payment of bonuses
to Executive Directors and approved
the Company’s bonus and incentive
arrangements for employees
•
Ensured the Company’s share option
schemes were operated properly and
approved the share option grants to
Executive Directors and employees
The remuneration of the Chairman and
Non-executive Directors is decided upon
by the Board.
Details of Directors’ remuneration for the
year ended 31 December 2024 is set out in
note 22 of the financial statements.
Corero Network Security plc Annual Report and Accounts 2024
44
NOMINATION COMMITTEE
(‘NC’) REPORT
The NC comprises Jens Montanana
(Chairman), Richard Last, Peter George,
Andrew Miller and Rob Scott. The NC
meets as required.
In the year ended 31 December 2024,
the NC met on one scheduled occasion.
The attendance of individual Committee
members at NC meetings in the year to
31 December 2024 is shown in the table below:
Meetings
attended
Jens Montanana (Committee
Chairman)
1/1
Richard Last
1/1
Peter George
1/1
Andrew Miller
0/0
Rob Scott
0/0
The NC’s activities during the year, which
are based on its terms of reference, are set
out below:
•
Reviewed the composition, structure, and
size of the Board
•
Reviewed the leadership needs of
the Group
Corero Network Security plc Annual Report and Accounts 2024
45
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
DIRECTORS’ REPORT
GROUP RESULTS
The Group’s Income Statement on page 58
shows a profit after tax for the year of $0.5
million (2023: loss of $0.2 million).
GOING CONCERN
The financial position and cash flows are
described in the Financial Review on
page 26. An indication of likely future
developments affecting the Group is
included in the Strategic Report on pages
22 to 35.
The Directors have prepared detailed
income statement, balance sheet and
cash flow projections for the period to 30
June 2026 (‘going concern assessment
period’). The cash flow projections have
been subjected to sensitivity analysis of
the revenue, cost and combined revenue
and cost levels which demonstrate that the
Group will maintain a positive cash balance
through the going concern assessment
period. As part of the sensitivity analysis,
the Directors have noted that should the
forecasted revenues not be achieved,
mitigating actions can be taken to address
any cash flow concerns. These actions
include the deferral of capital expenditure,
reduction in marketing and other variable
expenditure alongside a hiring freeze.
The Directors have also considered the geo-
political environment, including inflationary
fluctuations in some of our key markets
and the conflicts in Ukraine and the Middle
East, and whilst the impact on the Group
is currently deemed minimal, the Directors
remain vigilant and ready to implement
mitigation action in the event of a downturn
in demand or an impact on operations.
On this basis, the Directors have therefore
concluded that it is appropriate to prepare
the financial statements on a going
concern basis.
DIVIDENDS
The Directors have not recommended a
dividend (2023: $nil).
SHARE CAPITAL
The issued share capital of the Company,
together with details of movements in the
Company’s issued share capital during the
financial period, are shown in note 20 to the
financial statements. As at the date of this
report, 512,165,134 ordinary shares of 1p
each (‘ordinary shares’) were in issue and
fully paid with an aggregate nominal value
of $7.1 million.
The market price of the ordinary shares at
31 December 2024 was 19.7p and the shares
traded in the range 8.0p to 27.5p during
the year (as at 31 December 2023 was 8.25p
and the shares traded in the range 5.75p to
10.25p during the year ended 31 December
2023).
ISSUE OF SHARES POWERS
AT THE AGM
At the AGM held on 20 June 2024,
shareholders granted authority to the Board
under the Articles and Section 551 of the
Companies Act 2006 (the ‘Act’) to exercise
all powers of the Company to allot relevant
securities up to an aggregate nominal
amount of £750,276.
Also at the AGM held on 20 June 2024,
shareholders granted authority to the Board
under the Articles and Section 570(1) of the
Act to exercise all powers of the Company
to allot equity securities wholly for cash
up to an aggregate nominal amount of
£508,828.47 without application of the
statutory pre-emption rights contained in
Section 561(1) of the Act.
SUBSTANTIAL SHAREHOLDINGS
The Company has been notified of the following holdings that are 3% or more of the Group’s ordinary share capital as at 24 March 2025:
Ordinary shares of 1 pence each
Number
%
Jens Montanana*
187,300,406
36.57
Sabvest Capital Holdings Ltd**
57,500,000
11.23
Caraway Group Inc
53,600,000
10.47
Juniper Networks Inc
49,179,772
9.60
Herald Investment Trust
44,657,121
8.72
Charles Stanley private clients
22,711,564
4.43
Peter Kennedy Gain
16,378,246
3.20
* of which 33,674,846 are held in the name of JPM International Limited, which is wholly owned by Jens Montanana, and 125,871,751 are held in the name of The New
Millennium Technology Trust of which Jens Montanana is a beneficiary.
** In the FY 2023 Annual Report, Sabvest Capital Holdings Ltd was incorrectly disclosed as holding 50,000,000 shares at 9.83%. The correct amount of shares held at
31 December 2023 was 51,000,000 representing 10.02% of ordinary share capital.
Corero Network Security plc Annual Report and Accounts 2024
46
DIRECTORS’ SHAREHOLDINGS
31 March 2025
31 December 2024
31 December 2023
Number
%
Number
%
Number
%
Jens Montanana
187,300,406
36.57
187,300,406
36.57
187,300,406
37.35
Peter George
–
–
–
–
–
–
Richard Last
4,500,000
0.88
2,500,000
0.88
2,500,000
0.50
Andrew Miller
1,091,437
0.21
1,091,437
0.21
1,091,437
0.22
Rob Scott
–
–
n/a
n/a
n/a
n/a
Phil Richards
n/a
n/a
n/a
n/a
–
–
Ashley Stephenson
38,000
0.01
38,000
0.01
38,000
0.01
Carl Herberger
1,451,027
0.28
1,344,497
0.26
1,344,497
0.27
DIRECTORS’ INDEMNITIES
The Company has qualifying third-party
indemnity provisions in place for the benefit
of its Directors. These remain in force at the
date of this report.
DIRECTORS AND DIRECTORS’
INTERESTS
The Directors who served in office during
the year and up to the date of this report
and their interests in the Company’s shares
were as above.
The biographical details of the current
Directors of the Company are set out on
pages 36 and 37.
Details of the share options held by
Directors are shown in note 24 to the
financial statements.
FINANCIAL RISK
MANAGEMENT OBJECTIVES
AND POLICIES
The Group’s business activities expose it to
a variety of financial risks. The policies for
managing these risks are described below:
•
Liquidity risk – arises from the Group’s
management of working capital and
finance charges. It is a risk that the Group
will encounter difficulty in meeting its
financial obligations as they fall due.
Liquidity risk is managed by the Finance
function. Annual budgets are agreed by
the Board, enabling the Group’s cash
flow requirements to be anticipated.
•
Credit risk – arises from cash and cash
equivalents and from credit exposures
to the Group’s customers including
outstanding receivables and committed
transactions. Credit risk is managed with
regular reports of exposures reviewed
by management, and due diligence
processes completed ahead of new
contracts being signed.
The Group does not set individual credit
limits but seeks to ensure that customers
enter into legally enforceable contracts that
include settlement terms that demonstrate
the customers’ commitment to the
transaction and minimise this risk exposure.
The amounts of trade receivables presented
in the Statement of Financial Position
are shown net of allowances for doubtful
accounts estimated by management based
on prior experience and their assessment of
the current economic environment (note 14).
The Group has no significant concentration
of credit risk, with exposure spread over a
number of customers.
The credit risk on liquid funds and financial
instruments is limited because the
counterparties are banks with acceptable
credit ratings assigned by international
credit rating agencies.
•
Currency risk – there was no material
impact from trading currency risk on the
Group’s profit or loss for the year from
exchange rate movements, as foreign
currency transactions are entered into
by Group companies whose functional
currency is aligned with the currencies
in which it transacts. Exchange rate
risks do arise in relation to (i) equity
fund raises which are in GBP, given the
Company’s AIM listing, to the extent such
funds are required to support US dollar
denominated funding requirements, and
(ii) GBP denominated obligations of the
Group given the invoicing currency of
the Group is US dollar denominated. The
Group has not currently implemented
a policy to hedge foreign currency
movements as there has been available
GBP denominated funds available
from debt and equity fund raises. US
denominated funds received by the
Group’s US subsidiary have been used
to fund that subsidiary during 2024 as
revenues have grown. Management
and the Board continue to consider
implementation of a hedging policy to
ensure predictability of costs for the
Group’s UK subsidiary which receives
revenues in USD but incurs costs mainly
in GBP. The Group keeps this policy
under review based on the expected
timing of US dollar and GBP operational
funding requirements.
The principal risk which applies to the
Parent Company’s financial statements is
the risk that the returns generated by the
subsidiaries might not support the carrying
value of the cost of the investments in
subsidiaries. The carrying value is tested
at least annually for impairment and, if
necessary, impaired as appropriate.
CAPITAL MANAGEMENT
The Group monitors its available capital,
which it considers to be all components of
equity against its expected requirements.
The Group’s objectives when maintaining
capital are to safeguard the entity’s ability to
continue as a going concern, so that it can
continue to provide returns for shareholders
and benefits for other stakeholders, and to
ensure that sufficient funds can be raised for
investing activities. In order to maintain or
adjust the capital structure, the Company
may return capital to shareholders, issue
new shares, or sell assets. The Group does
not review its capital requirements according
to any specified targets or ratios.
Corero Network Security plc Annual Report and Accounts 2024
47
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
TREASURY MANAGEMENT
The objectives of Group treasury policies are
to ensure that adequate financial resources
are available for development of the
business while at the same time managing
financial risks. Financial instruments may
be used to reduce financial risk exposures
arising from the Group’s business activities
and not for speculative purposes.
The Group’s treasury activities are managed
by the Group Financial Controller who
reports to the Board on the implementation
of the Group treasury policy.
ENVIRONMENT
The Group’s activities are primarily office-
based and as such the Directors believe
that there is no significant environmental
impact arising from the Group’s activities.
The Group complies with local Waste
Electrical and Electronic Equipment (‘WEEE’)
regulations. No environmental performance
indicators are therefore included within this
report. The Group’s environmental policy
states: ‘We endeavour to recycle appropriate
materials where possible and to efficiently
use natural resources and energy supplies
so as to minimise our environmental impact.
We will comply with the relevant statutes
and legislation. Furthermore, employees are
encouraged to be environmentally aware.
Company cars are not provided.’
RESEARCH AND DEVELOPMENT
The development of computer software is
an integral part of the Group’s business and
the Group continues to develop its software
in response to user demand, and particularly
the changing IT security threat landscape.
During the year the Group enhanced the
features and functionality of its existing
products. A capital investment of $3.2
million (2023: $1.8 million) was made during
the year. Amortisation of $1.6 million (2023:
$1.5 million) and costs not capitalised of
$1.6 million (2023: £1.8 million) were charged
to the Group Income Statement during the
year.
EMPLOYEES
The quality and commitment of the Group’s
employees has played a major role in
the Company’s continued progress. This
has been demonstrated in many ways,
including strong customer satisfaction, the
development of new product offerings
and the flexibility employees have
shown in adapting to changing business
requirements. The Group operates sales
commission, incentive bonus plans and
share option plans to provide incentives
for achievements which add value to
the business.
ANNUAL GENERAL MEETING
Notice of the AGM together with details of
the business to be considered will be sent to
shareholders in due course.
AUDITORS
In so far as each Director is aware:
•
There is no relevant audit information
of which the Company’s auditors are
unaware
•
The Directors have taken all the steps
that they ought to have taken to make
themselves aware of any relevant audit
information and to establish that the
Company’s auditors are aware of that
information
POST YEAR END EVENTS
There have been no events that have
occurred after the balance sheet date which
require disclosure.
By order of the Board
Emma Rockey
COMPANY SECRETARY
31 March 2025
DIRECTORS’ REPORT CONTINUED
Corero Network Security plc Annual Report and Accounts 2024
48
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the
Annual Report and financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law the Directors
have elected to prepare the Group financial
statements in accordance with UK adopted
international accounting standards. The
Directors have chosen to prepare the
Company financial statements in accordance
with applicable United Kingdom accounting
standards, including FRS 101 Reduced
Disclosure Framework (‘FRS 101’). Under
company law the Directors must not
approve the financial statements unless
they give a true and fair view of the state of
affairs of the Group and Parent Company
and of the profit or loss of the Group for that
period. The Directors are also required to
prepare financial statements in accordance
with the rules of the London Stock Exchange
for companies trading securities on the AIM.
In preparing these financial statements, the
Directors are required to:
•
Select suitable accounting policies and
then apply them consistently
•
Make judgements and estimates that are
reasonable and prudent
•
State whether they have been prepared
in accordance with UK adopted
international accounting standards in
conformity with the requirements of
the Companies Act 2006, subject to
any material departures disclosed and
explained in the financial statements
•
Prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
will continue in business
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
transactions and disclose with reasonable
accuracy at any time the financial position
of the Group and enable them to ensure
that the financial statements comply with
the Companies Act 2006. They are also
responsible for safeguarding the assets of
the Group and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for ensuring
the Annual Report and the financial
statements are made available on a website.
Financial statements are published on the
Company’s website in accordance with
legislation in the United Kingdom governing
the preparation and dissemination of
financial statements, which may vary from
legislation in other jurisdictions. The
maintenance and integrity of the Company’s
website is the responsibility of the Directors.
The Directors’ responsibility also extends
to the ongoing integrity of the financial
statements contained therein.
Corero Network Security plc Annual Report and Accounts 2024
49
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF CORERO NETWORK SECURITY PLC
For the purpose of this report, the terms “we” and “our” denote MHA in relation to UK legal, professional and regulatory responsibilities
and reporting obligations to the members of Corero Network Security plc. For the purposes of the table on pages 52 to 53 that sets out
the key audit matters and how our audit addressed the key audit matters, the terms “we” and “our” refer to MHA. The Group financial
statements, as defined below, consolidate the accounts of Corero Network Security plc and its subsidiaries (the “Group”). The “Parent
Company” is defined as Corero Network Security plc, as an individual entity. The relevant legislation governing the Company is the United
Kingdom Companies Act 2006 (“Companies Act 2006”).
OPINION
We have audited the financial statements of Corero Network Security plc for the year ended 31 December 2024.
The financial statements that we have audited comprise:
•
the Consolidated Income Statement
•
the Consolidated Statement of Comprehensive Income
•
the Consolidated Statement of Financial Position
•
the Consolidated Statement of Cash Flows
•
the Consolidated Statement of Changes in Equity
•
Notes to the consolidated financial statements, including significant accounting policies
•
the Company Statement of Financial Position
•
the Company Statement of Changes in Equity and
•
Notes to the company financial statements, including significant accounting policies.
The financial reporting framework that has been applied in the preparation of the group’s financial statements is applicable law and UK
adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent
Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
•
give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2024 and of the Group’s
profit for the year then ended;
•
have been properly prepared in accordance with UK adopted international accounting standards; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
Our opinion is consistent with our reporting to the Audit Committee.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in
the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our ethical responsibilities in accordance with
those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Corero Network Security plc Annual Report and Accounts 2024
50
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and the Parent Company’s ability to continue to adopt the going concern basis
of accounting included:
•
The consideration of inherent risks to the Group and Parent Company’s operations and specifically its business model, and the
evaluation of how those risks might impact on the Group and Parent Company’s available financial resources.
•
Evaluating the directors’ assessment of the group’s ability to continue as a going concern, including testing the mechanical accuracy of
the cash flow model, assessing the reasonableness of key assumptions including revenue growth, operating expenditure, and software
development spend, and corroborating these to historical trends and post-period-end data.
•
Consideration of availability of funds required to settle obligations, as they fall due, during the going concern review period. Assessing
the reasonableness and practicality of the mitigation measures identified by management in their conservative case scenario and
considered by them in arriving at their conclusions about the existence of any uncertainties in respect of going concern.
•
Reviewing board meeting minutes and management reports prepared after the balance sheet date, including current trading and
funding status, to identify any events which may cast significant doubt on the going concern assumption.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
OVERVIEW OF OUR AUDIT APPROACH
Scope
Our audit was scoped by obtaining an understanding of the Group, including the Parent Company, and its
environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management override of internal controls, including assessing
whether there was evidence of bias by the directors that may have represented a risk of material misstatement.
Materiality
2024
2023
Group
$450k
$400k
1.75% of revenue (2023: 1.8% of revenue)
Parent
Company
$445k
$300k
1% of gross assets capped at group materiality (2023: 1% of net assets capped
at group materiality)
Key audit
matters
Group
• Risk of fraud in revenue recognition (cut off and accuracy)
• Capitalisation of development costs (existence and valuation)
Parent
Company
• Carrying value of investments and impairment assessment (valuation)
Corero Network Security plc Annual Report and Accounts 2024
51
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
KEY AUDIT MATTERS
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Risk of fraud in revenue recognition (cut off and accuracy)
Key audit matter
description
As detailed in note 4, the Group generated revenue of $24.6m (2023: $22.3m) during the year through the
sale of the following products and services:
• appliance and perpetual software licenses;
• software subscription licenses for a defined term;
• support services for a defined term;
• installation and training services;
• DDoS Protection as-a-Service (‘DDPaaS’) for a defined term; and
• SecureWatch Managed Service (enhanced security monitoring services) for a defined term.
The Group enters into complex multi-element contracts that include combinations of hardware, software,
and services. Judgement is required in identifying distinct performance obligations and in determining the
appropriate timing and allocation of revenue in accordance with IFRS 15. Additionally, the determination of
standalone selling prices (‘SSP’), which underpins the allocation of revenue, involves management estimates
that are subject to potential bias.
Due to the material impact of these transactions, the impact of this area on the overall audit strategy,
in addition to the allocation of time and resources to this area, we considered this a key audit matter.
How the scope of our
audit responded to the
key audit matter
Our audit work included, but was not restricted to the following:
• We reviewed the group’s revenue recognition policy for each revenue stream through discussions with
management and examined of the Group’s documentation;
• We assessed whether the policies comply with UK adopted international accounting standards;
• We obtained an understanding of the process, systems, and controls in place surrounding
revenue recognition;
• We recorded our assessment of controls and tested the design and implementation of those controls;
• We substantively tested revenue recognised in the period including the allocation of the SSP to
components of bundled contracts, and corroborated revenue recognised with supporting evidence;
• We compared revenue recognition for similar contracts to ensure uniform application of the revenue
recognition policy;
• We tested balance sheet items related to revenue, including cut off for the deferred and accrued revenue
balances and valuation and amortisation of the sales commission contract asset;
• We identified and investigated unusual or large journal entries impacting revenue; and
• We reviewed financial statement disclosures in respect of revenue.
Key observations
communicated to the
Group’s Audit Committee
Based on our audit work detailed above, nothing has come to our attention that indicates that the Group’s
revenue recognition accounting policy is not in line with the requirements of IFRS 15, or that revenue has not
been recognised in accordance with the Group’s revenue recognition policy.
Capitalisation of development costs (existence and valuation)
Key audit
matter description
The Group undertakes significant amounts of software development which is capitalised as intangible assets,
as detailed in Note 10. Judgement is required in distinguishing between research and development phases,
assessing the technical and commercial feasibility of projects, and determining whether the capitalisation
criteria of IAS 38 are met, particularly regarding the probable future economic benefits of the asset.
Due to the judgement required, material nature of these costs, and the allocation of resources in the audit
to this area, we determined this to be a key audit matter.
INDEPENDENT AUDITOR’S REPORT CONTINUED
Corero Network Security plc Annual Report and Accounts 2024
52
Risk of fraud in revenue recognition (cut off and accuracy)
How the scope of our
audit responded to the
key audit matter
Our audit work included, but was not restricted to the following:
• We assessed management’s accounting policy and ensured it aligned with IAS 38;
• We held discussions with senior representatives across the Engineering, Product development and Finance
teams to understand the key projects and releases during the year, the systems, processes and controls
around the recording of capitalised costs and the key areas of judgement;
• We recorded our assessment of controls and tested the design and implementation of those controls;
• We substantively tested the capitalised development expenditure to ensure the definition and recognition
criteria per IAS 38 were met;
• We compared the recorded activity of development teams to the tasks allocated in the product
development management system;
• We held discussions with key team members to confirm the reasonableness of project time and allocation;
• We analytically considered the completeness of recorded non-chargeable time of the development teams;
• We challenged management’s assumptions in their valuation of intangible assets including the need
for impairment;
• We evaluated the reasonableness of the useful lives of intangible assets; and
• We reviewed financial statement disclosures in respect of capitalised development costs.
Key observations
communicated to the
Group’s Audit Committee
Based on our audit work detailed above, nothing has come to our attention that indicates that the
application of the Group’s accounting policy in respect of capitalised development costs is not in line with the
requirements of IAS 38, or that costs have not been capitalised in accordance with the policy.
Carrying value of investments and impairment assessment (valuation)
Key audit matter
description
The Parent Company holds investments in its subsidiary undertakings, which are carried at cost less any
impairment provisions. Impairment provisions have been recorded against these investments in previous
financial years. See note 3 of the Parent Company financial statements for details.
The investments are subject to impairment reviews, at least annually, or more regularly should circumstances
require it. This involves subjective estimates in models which are forward-looking and inherently uncertain,
including revenue growth assumptions, which if over estimated, could lead to material variances in the
impairment reversal indicated.
Due to the judgement involved in estimating recoverable amounts, the use of valuation models, and the audit
effort required (including the involvement of valuation specialists) we determined this to be a key audit matter.
How the scope of our
audit responded to the
key audit matter
Our audit work included, but was not restricted to the following:
• We assessed management’s accounting policies and ensured they aligned with the appropriate accounting
standards;
• We evaluated management’s assessment of impairment indicators and impairment reversal;
• We tested the accuracy of management’s discounted cash flow (‘DCF’) model, including the: arithmetic,
inputs, methodology and cross checking for consistency with other forecast models.
• We challenged the key inputs to the DCF model, such as revenue growth rates and the discount rate:
– We corroborated the revenue growth rates against external market data and the Group’s historic
performance; and
– We evaluated management’s discount rate against a range calculated by our specialist.
• We sensitised key inputs to the DCF model to understand the impact on the valuation, and challenged
management based on the results of these valuation scenarios; and
• We reviewed financial statement disclosures for completeness and reasonableness of sensitivity
disclosures.
Key observations
communicated to the
Group’s Audit Committee
• Based on our audit work detailed above, nothing has come to our attention that indicates that the
application of the Parent Company’s accounting policy in respect of investments in subsidiaries is not
in line with the requirements of IAS 36, or that the level of impairment provision is not in accordance
with the policy.
Corero Network Security plc Annual Report and Accounts 2024
53
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
OUR APPLICATION OF MATERIALITY
Our definition of materiality considers the value of error or omission on the financial statements that, individually or in aggregate, would
change or influence the economic decision of a reasonably knowledgeable user of those financial statements. Misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Materiality is used in planning the
scope of our work, executing that work and evaluating the results.
Group
Overall
Materiality
$450,000
(2023: $400,000)
1.75% (2023: 1.8%)
of the Group’s
revenue
The Group’s total revenue was deemed to be the appropriate benchmark for the
calculation of Group materiality as this is the main measure by which the users
of the financial statements assess the financial performance and success of the
Group and is a key performance indicator identified by management.
Performance
Materiality
$315,000
(2023: $280,000)
70% (2023: 70%)
of the above
materiality levels
Performance materiality is the application of materiality at the individual account
or balance level, set at an amount to reduce, to an appropriately low level, the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.
The determination of performance materiality reflects our assessment of the risk
of undetected errors existing, the nature of the systems and controls and the
level of misstatements arising in previous audits.
De Minimis
reporting
threshold
£22,500
(2023: $20,000)
5% of Overall
Materiality
We agreed to report any corrected or uncorrected adjustments exceeding this
threshold to the Audit Committee as well as differences below that in our view
warranted reporting on qualitative grounds.
Parent Company
Overall
Materiality
$445,000
(2023: $300,000)
1% of the Parent
Company’s gross
assets (2023: 1%
of net assets)
Gross assets were deemed to be the most appropriate benchmark to set
materiality as the parent primarily holds investments in the group’s subsidiaries.
The materiality applied to the Parent Company was capped at below group
materiality to mitigate the aggregated risk of material error on consolidation.
Performance
Materiality
$311,850
(2023: $210,000)
70% (2023: 70%)
of the above
materiality levels
Performance materiality is the application of materiality at the individual account
or balance level, set at an amount to reduce, to an appropriately low level, the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.
The determination of performance materiality reflects our assessment of the risk
of undetected errors existing, the nature of the systems and controls and the
level of misstatements arising in previous audits.
De Minimis
reporting
threshold
$22,275
(2023: $15,000)
5% of Overall
Materiality
We agreed to report any corrected or uncorrected adjustments exceeding this
threshold to the Audit Committee as well as differences below that in our view
warranted reporting on qualitative grounds.
Overview of the scope of the Group and Parent Company audits
Our assessment of audit risk, evaluation of materiality and our determination of performance materiality sets our audit scope for each
company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. This assessment
takes into account the size, risk profile, organisation / distribution and effectiveness of group-wide controls, changes in the business
environment and other factors such as recent internal audit results when assessing the level of work to be performed at each component.
In assessing the risk of material misstatement to the consolidated financial statements, and to ensure we had adequate quantitative and
qualitative coverage of significant accounts in the consolidated financial statements, we identified the UK and USA trading subsidiaries as
principal business units within the Group.
INDEPENDENT AUDITOR’S REPORT CONTINUED
•
Components for which audit procedures
on the full financial information will
be performed to defined component
performance materiality.
•
Audit procedures to be performed
on classes of transaction and account
balance to a specified performance
materiality.
•
Out of scope.
Consolidated
revenues
0%
100%
Operating loss
before tax
0%
100%
Consolidated
assets
0%
100%
Corero Network Security plc Annual Report and Accounts 2024
54
Full scope audits – Audits of the complete
financial information of Corero Network
Security plc, Corero Network Security (UK)
Ltd, Corero Group Services Ltd and Corero
Network Security Inc were undertaken. These
entities were selected based upon their size
or risk characteristics.
Coverage – The group audit approach
provides 100% audit coverage of the group’s
revenues, operating loss before tax and
total assets.
The control environment
We evaluated the design and
implementation of those internal controls of
the Group, including the Parent Company,
which are relevant to our audit, such as those
relating to the financial reporting cycle.
REPORTING ON OTHER
INFORMATION
The other information comprises the
information included in the annual report
other than the financial statements and
our auditor’s report thereon. The directors
are responsible for the other information
contained within the annual report. Our
opinion on the financial statements does
not cover the other information and,
except to the extent otherwise explicitly
stated in our report, we do not express
any form of assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the course
of the audit, or otherwise appears to be
materially misstated. If we identify such
material inconsistencies or apparent
material misstatements, we are required
to determine whether this gives rise to
a material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude
that there is a material misstatement of this
other information, we are required to report
that fact.
We have nothing to report in this regard.
STRATEGIC REPORT AND
DIRECTORS REPORT
In our opinion, based on the work
undertaken in the course of the audit:
•
the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
•
the strategic report and the directors’
report have been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and
understanding of the Group and the Parent
Company and their environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or the directors’ report.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT
BY EXCEPTION
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report to
you if, in our opinion:
•
adequate accounting records have not
been kept by the Parent Company, or
returns adequate for our audit have not
been received from branches not visited
by us; or
•
the Parent Company financial statements
are not in agreement with the accounting
records and returns; or
•
certain disclosures of directors’
remuneration specified by law are not
made; or
•
we have not received all the information
and explanations we require for our audit.
In the light of the knowledge and
understanding of the Group and the Parent
Company and their environment obtained
in the course of the audit, we have not
identified material misstatements in the
strategic report or the directors’ report.
RESPONSIBILITIES
OF DIRECTORS
As explained more fully in the directors’
responsibilities statement, the directors
are responsible for the preparation of the
financial statements and for being satisfied
that they give a true and fair view, and
for such internal control as the directors
determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing the
Group’s and the Parent Company’s ability to
continue as a going concern, disclosing, as
applicable, matters related to going concern
and using the going concern basis of
accounting unless the directors either intend
to liquidate the Group or Parent Company
or to cease operations, or have no realistic
alternative but to do so.
AUDITOR RESPONSIBILITIES
FOR THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high
level of assurance but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or error
and are considered material if, individually
or in aggregate, they could reasonably
be expected to influence the economic
decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities
for the financial statements is located
on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description
forms part of our auditor’s report.
Corero Network Security plc Annual Report and Accounts 2024
55
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
Extent to which the audit was
considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are
instances of non-compliance with laws and
regulations. We design procedures in line
with our responsibilities, outlined above, to
detect material misstatements in respect of
irregularities, including fraud.
These audit procedures were designed
to provide reasonable assurance that the
financial statements were free from fraud
or error. The risk of not detecting a material
misstatement due to fraud is higher than
the risk of not detecting one resulting from
error and detecting irregularities that result
from fraud is inherently more difficult than
detecting those that result from error, as
fraud may involve collusion, deliberate
concealment, forgery or intentional
misrepresentations. Also, the further
removed non-compliance with laws and
regulations is from events and transactions
reflected in the financial statements, the less
likely we would become aware of it.
Identifying and assessing potential
risks arising from irregularities,
including fraud
The extent of the procedures undertaken
to identify and assess the risks of material
misstatement in respect of irregularities,
including fraud, included the following:
•
We considered the nature of the industry
and sector the control environment,
business performance including
remuneration policies and the Group’s,
including the Parent Company’s, own risk
assessment that irregularities might occur
as a result of fraud or error. From our
sector experience and through discussion
with the directors, we obtained
an understanding of the legal and
regulatory frameworks applicable to the
Group focusing on laws and regulations
that could reasonably be expected
to have a direct material effect on the
financial statements, such as provisions
of the Companies Act 2006, AIM listing
rules and tax legislation.
•
We enquired of the directors and
management concerning the Group’s
and the Parent Company’s policies and
procedures relating to:
– identifying, evaluating and complying
with the laws and regulations and
whether they were aware of any
instances of non-compliance;
– detecting and responding to the risks
of fraud and whether they had any
knowledge of actual or suspected
fraud; and
– the internal controls established to
mitigate risks related to fraud or non-
compliance with laws and regulations.
•
We assessed the susceptibility of
the financial statements to material
misstatement, including how fraud might
occur by evaluating management’s
incentives and opportunities for
manipulation of the financial statements.
This included utilising the spectrum of
inherent risk and an evaluation of the
risk of management override of controls.
We determined that the principal
risks related to revenue recognition,
the inappropriate capitalisation of
development costs and impairment
of investments.
Audit response to risks identified
In respect of the above procedures:
•
we corroborated the results of our
enquiries through our review of the
minutes of the Group’s and the Parent
Company’s board meetings;
•
audit procedures performed by the
engagement team in connection with the
risks identified included:
– reviewing financial statement
disclosures and testing to supporting
documentation to assess compliance
with applicable laws and regulations
expected to have a direct impact on
the financial statements;
– testing journal entries, including
those processed late for financial
statements preparation, those
posted by infrequent or unexpected
users, those posted to unusual
account combinations;
– evaluating the business rationale
of significant transactions outside
the normal course of business, and
reviewing accounting estimates
for bias;
– enquiry of management around actual
and potential litigation and claims;
– challenging the assumptions and
judgements made by management in
its significant accounting estimates,
in particular those relating to
capitalisation of development costs
and discounted cash flow models; and
– performed substantive procedures
on the recognition and existence of
revenues and the capitalisation of
development costs in the period.
•
the Senior Statutory Auditor considered
the experience and expertise of the
engagement team to ensure that the
team had the appropriate competence
and capabilities; and
•
we communicated relevant laws and
regulations and potential fraud risks to
all engagement team members and
remained alert to any indications of
fraud or non-compliance with laws and
regulations throughout the audit.
USE OF OUR REPORT
This report is made solely to the Parent
Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has
been undertaken so that we might state
to the Parent Company’s members those
matters we are required to state to them in
an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we
do not accept or assume responsibility to
anyone other than the Parent Company and
the Parent Company’s members as a body,
for our audit work, for this report, or for the
opinions we have formed.
Andrew Gandell, FCA
(SENIOR STATUTORY AUDITOR)
for and on behalf of MHA, Statutory Auditor
London, United Kingdom
31 March 2025
MHA is the trading name of MacIntyre Hudson LLP,
a limited liability partnership in England and Wales
(registered number OC312313)
INDEPENDENT AUDITOR’S REPORT CONTINUED
Corero Network Security plc Annual Report and Accounts 2024
56
FINANCIAL
STATEMENTS
Financial Statements and associated notes
58 Consolidated Income Statement
59 Consolidated Statement of Comprehensive Income
60 Consolidated Statement of Financial Position
61 Consolidated Statement of Cash Flows
62 Consolidated Statement of Changes in Equity
63 Notes to the Financial Statements
88 Company Statement of Financial Position
89 Company Statement of Changes in Equity
90 Notes to the Company Financial Statements
Corporate Directory
95 Glossary
96 Corporate Directory
Corero Network Security plc Annual Report and Accounts 2024
57
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
Continuing operations
Note
Year ended
31 December
2024
$’000
Year ended
31 December
2023
$’000
Revenue
4
24,559
22,349
Cost of sales
(2,134)
(2,164)
Gross profit
22,425
20,185
Operating expenses
(21,933)
(20,201)
Consisting of:
Operating expenses before depreciation and amortisation
(19,925)
(18,428)
Depreciation and amortisation of intangible assets
10,11
(2,008)
(1,773)
Operating profit/(loss)
5
492
(16)
Finance income
99
44
Finance costs
5
(36)
(181)
Profit/(loss) before taxation
555
(153)
Taxation charge
6
(56)
(17)
Profit/(loss) after taxation
498
(170)
Profit/(loss) after taxation attributable to equity owners of the parent
498
(170)
Basic and diluted earnings/(loss) per share
Cents
Cents
Basic earnings per share
7
0.1
0.0
Diluted earnings per share
7
0.1
0.0
EBITDA
8
2,500
1,757
The notes on pages 63 to 94 form part of these financial statements.
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58
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended
31 December
2024
$’000
Year ended
31 December
2023
$’000
Profit/(loss) for the year
498
(170)
Other comprehensive income:
Items reclassified subsequently to profit or loss upon derecognition:
Foreign exchange differences
(49)
628
Other comprehensive income for the year net of taxation attributable
to the equity owners of the parent
449
458
Total comprehensive income for the year attributable to the equity owners of the parent
449
458
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Note
As at
31 December
2024
$’000
As at
31 December
2023
$’000
Assets
Non-current assets
Goodwill
9
8,991
8,991
Intangible assets
10
6,422
4,820
Property, plant and equipment
11
944
633
Leased right-of-use assets
12
139
309
16,496
14,753
Current assets
Inventories
13
389
96
Trade and other receivables
14
11,290
8,427
Cash and cash equivalents
5,321
5,160
17,000
13,683
Total assets
33,496
28,436
Liabilities
Current liabilities
Trade and other payables
15
(4,340)
(3,902)
Lease liabilities
12
(102)
(164)
Deferred income
18
(6,861)
(4,992)
(11,303)
(9,058)
Net current assets
5,697
4,625
Non-current liabilities
Lease liabilities
12
(48)
(151)
Deferred income
18
(3,481)
(2,491)
(3,529)
(2,642)
Net assets
18,664
16,737
Capital and reserves attributable to the equity owners of the parent
Share capital
20
7,133
6,999
Share premium
21
83,290
82,430
Capital redemption reserve
7,051
7,051
Share options reserve
2,491
2,007
Foreign exchange translation reserve
(2,014)
(1,965)
Accumulated profit and loss reserve
(79,287)
(79,785)
Total shareholders’ equity
18,664
16,737
These financial statements were approved and authorised for issue by the Board of Directors on 31 March 2025 and signed on their behalf.
Carl Herberger
DIRECTOR
The notes on pages 63 to 94 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Operating activities
Year ended
31 December
2024
$’000
Year ended
31 December
2023
$’000
Profit/(loss) before taxation for the year
555
(153)
Adjustments for movements:
Amortisation of acquired intangible assets
–
2
Amortisation of capitalised development expenditure
1,588
1,504
Depreciation
467
423
Depreciation – leased assets
170
116
Assets redesignated from PPE to Cost of Sales
–
30
Finance income
(99)
(44)
Finance expense
8
164
Finance lease interest costs
28
17
Share-based payments expense
484
233
Cash generated from operating activities before movement in working capital
3,201
2,292
Movement in working capital:
(Increase)/decrease in inventories
(293)
68
(Increase)/decrease in trade and other receivables
(2,863)
(1,248)
Increase in trade and other payables
3,297
2,035
Net movement in working capital
141
855
Cash generated from operating activities
3,342
3,147
Taxation paid
(56)
(17)
Net cash generated from operating activities
3,286
3,130
Cash flows from investing activities
Investment in development expenditure
(3,190)
(1,824)
Purchase of property, plant and equipment
(789)
(812)
Finance income
99
44
Net cash used in investing activities
(3,879)
(2,592)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital
994
165
Lease liability payments
(193)
(143)
Finance expense
(36)
(78)
Repayments of borrowings
–
(1,317)
Net cash generated from/(used in) financing activities
765
(1,373)
Increase/(decrease) in cash and cash equivalents
171
(835)
Effects of exchange rates on cash and cash equivalents
(10)
349
Cash and cash equivalents at 1 January
5,160
5,646
Cash and cash equivalents at 31 December
5,321
5,160
The notes on pages 63 to 94 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Share
capital
$’000
Share
premium
account
$’000
Capital
redemption
reserve
$’000
Share
options
reserve
$’000
Foreign
exchange
translation
reserve
$’000
Accumulated
profit and
loss reserve
$’000
Total
attributable
to equity
owners of
the parent
$’000
1 January 2023
6,980
82,284
7,051
1,777
(2,593)
(79,615)
15,884
Loss for the year
–
–
–
–
–
(170)
(170)
Other comprehensive income
–
–
–
–
628
–
628
Total comprehensive income for the year
–
–
–
–
628
(170)
458
Contributions by and distributions to owners
Issue of share capital – exercise of options
19
146
–
–
–
–
165
Fully exercised share options
–
–
–
(3)
–
–
(3)
Share-based payments
–
–
–
233
–
–
233
Total contributions by and distributions to
owners
19
146
–
230
–
–
395
31 December 2023 and 1 January 2024
6,999
82,430
7,051
2,007
(1,965)
(79,785)
16,737
(Loss)/Profit for the year
–
–
–
–
–
498
498
Other comprehensive income
–
–
–
–
(49)
–
(49)
Total comprehensive income for the year
–
–
–
–
(49)
498
449
Contributions by and distributions to owners
Issue of share capital – exercise of options
134
860
–
–
–
–
994
Share-based payments
–
–
–
484
–
–
484
Total contributions by and distributions to
owners
134
860
–
484
–
–
1,478
31 December 2024
7,133
83,290
7,051
2,491
(2,014)
(79,287)
18,664
The share capital comprises the nominal values of all shares issued. The share premium account comprises the amounts subscribed for
share capital in excess of the nominal value, net of issuance costs. The capital redemption reserve comprises the amount transferred from
deferred shares on redemption of the deferred shares.
The share options reserve represents cumulative share based payment charges. The foreign exchange translation reserve arises on
retranslating the net assets of UK operations into US dollars. The retained earnings are all other net gains and losses and transactions with
owners not recognised elsewhere.
The notes on pages 63 to 94 form part of these financial statements.
Corero Network Security plc Annual Report and Accounts 2024
62
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Corero Network Security plc (Company
number 02662978) is a public company
limited by shares, incorporated in the United
Kingdom under the Companies Act 2006
and registered in England and Wales. The
functional currency of the Company entity
is GBP.
Presentation currency
These consolidated financial statements
are presented in US dollars (‘$’) rounded to
the nearest $’000 unless otherwise stated.
US dollars represents the presentational
currency of the Group as all commercial
activity is denominated in US dollars as
per industry standards.
The average $-GBP (‘GBP’) exchange rates
used for the conversion of the Consolidated
Monthly Income Statements for the year
ended 31 December 2024 was between
1.25 and 1.32 (2023: between 1.21 and 1.29).
The closing $-GBP exchange rate used for
the conversion of the Group’s assets and
liabilities at 31 December 2024 was 1.25
(2023: 1.27).
2. MATERIAL ACCOUNTING
POLICIES
2.1 Basis of preparation
The Group financial statements have been
prepared in accordance with UK adopted
International Accounting Standards (‘UK
adopted IFRS’) and those parts of the
Companies Act 2006 relevant to companies
which report in accordance with UK
adopted IFRS.
2.2 Going concern
The financial statements have been
prepared on a going concern basis.
The Directors have prepared detailed
income statement, balance sheet and
cash flow projections for the period to 30
June 2026 (‘going concern assessment
period’). The cash flow projections have
been subjected to sensitivity analysis of
the revenue, cost and combined revenue
and cost levels which demonstrate that
the Group and Company will maintain a
positive cash balance through the going
concern assessment period. As part of the
sensitivity analysis, the Directors have noted
that should the forecasted revenues not be
achieved, mitigating actions can be taken to
address any cash flow concerns.
These actions include deferral of capital
expenditure, reduction in marketing and
other variable expenditure alongside a
hiring freeze.
The Directors are also not aware of any
significant matters in the remainder of
calendar 2025 that occur outside the going
concern period that could reasonably
possibly impact the going concern
conclusion.
The Directors have also considered the
geo-political environment, including rising
inflation in some of our key markets and the
conflict in Ukraine and the Middle East, and
whilst the impact on the Group is currently
deemed minimal, the Directors remain
vigilant and ready to implement mitigation
action in the event of a downturn in demand
or an impact on operations.
On this basis, the Directors have therefore
concluded that it is appropriate to prepare
the financial statements on a going concern
basis.
2.3 Basis of consolidation
The consolidated financial statements
incorporate the results, assets, liabilities,
and cash flows of the Company and each of
its subsidiaries for the financial year ended
31 December 2024.
Subsidiaries are entities controlled by the
Group. Control is deemed to exist when
the Group has all of the following elements:
a) power over the subsidiary, b) exposure
or rights to variable returns from that
subsidiary, and c) ability to use its power
to affect the amount of the return from the
subsidiary. The results, assets, liabilities and
cash flows of subsidiaries are included in the
consolidated financial statements from the
date control commences until the date that
control ceases.
Where necessary, adjustments are made to
the financial statements of subsidiaries to
bring the accounting policies used into line
with those used by the Group.
Intra-group balances and transactions are
eliminated on consolidation.
2.4 Revenue
The Group’s revenue is derived from the
following products and services:
•
Appliance and perpetual software
licences
•
Software subscription licences for a
defined term
•
Support services for a defined term
•
Installation and training services
•
DDoS Protection as-a-Service (‘DDPaaS’)
for a defined term
•
SecureWatch Managed Service
(enhanced security monitoring services)
for a defined term
The element of DDPaaS revenues pertaining
to as-a-Service assets is included in reported
revenues and is recognised on a straight–
line basis over the term of the contract.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Performance obligations, timing of revenue recognition and revenue recognition
Revenue is recognised when performance obligations are completed and control of the goods (appliances and software) transfer to the
customer and services are delivered. Goods are shipped ex works (‘EXW’) from Corero, or Corero’s contract manufacturer, to the customer.
The point at which the performance obligation of delivery of goods is fulfilled is at the point of EXW shipment to the customer and for
software at the point of electronic transfer to the customer. Standard payment terms for customers are set at 30 days.
Revenue recognised on shipment (EXW) of appliance and
software products (point in time)
Appliance, perpetual software licences and software subscription licences
Revenue recognised over-time (over the term of the contract)
Support, DDPaaS and SecureWatch Managed services
Revenue recognised once the service has been delivered
Installation and training services
Determining the transaction price
The contract price is determined by
reference to the Corero Sales Quotation
or DDPaaS Agreement and is a fixed
price. Certain DDPaaS contracts have an
element of the transaction value or all
of the transaction value determined by
reference to a share of the customers’
revenue generated from the Corero solution
(‘Revenue Share’). This Revenue Share
revenue is recognised when the Revenue
Share is determined.
Corero does not have any other variable
consideration payable by the customer
and does not pay any consideration to the
customer. There is no provision for purchase
price adjustments, right of return or price
concessions.
Allocating amounts to
performance obligations
For contracts containing only a single
performance obligation (annual support
services, DDPaaS and SecureWatch
Managed Service) there is no requirement to
make an allocation of the contract price.
For contracts containing multiple products,
the transaction price is allocated to the
separate performance obligations based on
relative stand–alone selling prices (‘SSP’).
The SSP is determined using defined price
lists and historic customer discount rates.
Incremental costs of obtaining a
contract
Deferred sales commission relating to the
support and DDPaaS revenue from a new
sales contract is recorded in prepayments
and amortised over five years. Corero
follows the requirements of the IFRS 15
standard with regards to the amortisation
period which requires amortisation on a
systematic basis that is consistent with the
transfer to the customer of the goods or
services to which the asset relates. The
expectation, supported by historic evidence,
is that customers will generally renew their
support contracts for more than three years
with the additional expectation of follow-
on hardware and software (and associated
services) business from a significant number
of existing customers. Based on this, and
consistent with previous treatment, Corero
has assessed that a reasonable period
for capitalised sales commission to be
amortised is five years. Periodic customer
reviews will be undertaken to ascertain if
there is any evidence that the value of the
customer relationship has been negatively
impacted, in which case the prepayment will
be appropriately written down. Applying
the practical expedient, Corero recognises
the incremental costs of obtaining contracts
as an expense when incurred if the
amortisation period of the prepayment that
Corero otherwise would have recognised is
one year or less.
Fulfilment costs
Corero’s principal fulfilment costs relate
to the costs of the Corero customer
support team which delivers the customer
support services, DDPaaS services and the
SecureWatch Managed services. These costs
are not separately allocated or identifiable
against specific customers. Therefore,
these costs are recognised in the period in
which they are incurred in the Consolidated
Income Statement. Refer to note 14 for
details of deferred commissions recognised.
Contract assets and liabilities
Contract assets arise when goods and
services have been delivered and invoiced
but payment is not yet due. Contract
liabilities arise for future delivery of services
which have been invoiced and payment
is due. Contract liabilities are shown as
deferred income in the Statement of
Financial Position.
2.5 Interest income
Interest income, including income arising
from finance leases and other financial
instruments, is recognised using the
effective interest method.
2.6 Government grants
Government grants are recognised at fair
value when there is reasonable assurance
that the Group will comply with the conditions
attaching to them and the grant will be
received. Grants related to purchase of assets
are treated as deferred income and allocated
to the Consolidated Income Statement over
the useful lives of the related assets while
grants related to expenses are netted off
against the related item of expenditure in
the Consolidated Income Statement.
2.7 Cost of sales
Cost of sales includes all direct costs
associated with revenue generation,
including goods directly related to revenue,
services delivery, operation costs, DDoS as-
a-service depreciation and amounts charged
by external third parties for services.
Examples of such costs would include
third-party appliance costs and third-party
software licence costs.
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2. MATERIAL ACCOUNTING
POLICIES CONTINUED
2.8 Foreign currencies
Transactions in foreign currencies are
translated at the exchange rate ruling
at the date of each transaction. Foreign
currency monetary assets and liabilities are
retranslated using the exchange rates at the
reporting date. Gains and losses arising from
changes in exchange rates after the date of
the transaction are recognised in profit or
loss in the Consolidated Income Statement.
Non-monetary assets and liabilities that
are measured in terms of historical cost
in a foreign currency are translated at the
exchange rate at the date of the original
transaction.
In the consolidated financial statements,
the net assets of the Group’s UK operations
are translated from GBP into US dollars at
the exchange rate at the reporting date.
Income and expense items are translated
into US dollars at the average exchange
rates for the period. The resulting exchange
differences are recognised in the foreign
exchange translation reserve and in Other
Comprehensive Income.
2.9 Intangible assets
Internally generated intangible
assets
The Group’s internally generated
intangible asset relates to its development
expenditure.
Development expenditure is capitalised only
when it is probable that future economic
benefit will result from the project and the
following criteria are met:
•
the technical feasibility of the product
and its availability for use or sale has
been ascertained;
•
adequate technical, financial and other
resources are available to complete
the development and sell or use the
intangible asset;
•
the Group can demonstrate the
existence of a market for the output of
the intangible asset or the intangible
asset itself or, if it is to be used internally,
the usefulness of the intangible asset;
•
it is the intention of management to
complete the intangible asset and use it
or sell it; and
•
the development costs can be measured
reliably.
Expenditure not meeting these criteria,
such as expenditure incurred on research,
is expensed in the Consolidated Income
Statement when it is incurred.
After initial recognition, internally generated
intangible assets are carried at cost
less accumulated amortisation and any
impairment losses. Amortisation is charged
once the asset is capable of generating
economic benefits.
Acquired intangible assets
Identifiable intangible assets acquired as
part of a business combination are initially
recognised separately from goodwill,
irrespective of whether the assets have
been recognised by the acquiree before the
business combination. An intangible asset is
considered identifiable only if it is separable
or if it arises from contractual or other legal
rights, regardless of whether those rights are
transferable or separable from the entity or
from other rights and obligations.
Intangible assets acquired as part of a
business combination and recognised by the
Group are computer software and customer
relationships.
Purchased computer software is carried at
cost less accumulated amortisation and any
impairment losses.
Customer contracts and the related
customer relationships are carried at cost
less accumulated amortisation and any
impairment losses.
Amortisation
Intangible assets are amortised on a
straight–line basis to reduce their carrying
value to zero over their estimated useful
lives. The following useful lives were applied
during the year:
•
Computer software acquired – three
years straight line.
•
Capitalised development expenditure
– five years straight line.
Amortisation costs are included within
operating expenses in the Consolidated
Income Statement. Methods of amortisation
and useful lives are reviewed, and if
necessary adjusted, at each reporting date.
2.10 Property, plant
and equipment
Depreciation commences when an asset is
available for use. Depreciation is calculated
so as to write off the cost or value of an
asset, net of anticipated disposal proceeds,
over the useful life of that asset as follows:
•
Leasehold improvements – period of
the lease (straight-line basis).
•
Right-of-use assets – period of the lease
(straight-line basis).
•
Computer equipment, evaluation
assets and DDoS Protection as-a-
Service assets – three years (straight-line
basis).
•
Fixtures and fittings – five years
(straight-line basis).
Property, plant and equipment is stated at
cost less accumulated depreciation and
any impairment losses. Cost comprises
the purchase cost of property, plant and
equipment together with any directly
attributable costs. Evaluation assets are
used by customers during proof-of-concept
trials. Evaluation assets are stated at cost
less accumulated depreciation. When an
evaluation asset is retained by a customer
as part of a sale, the net book value of the
evaluation asset is charged to cost of sales.
Depreciation of DDoS Protection as-a-
Service assets is charged to cost of sales.
Subsequent costs are included in an
asset carrying value or are recognised as
a separate asset when it is probable that
future economic benefits associated with the
additional expenditure will flow to the Group
and the cost of the item can be measured
reliably. All other costs are charged to the
Consolidated Income Statement as incurred.
Methods of depreciation, residual values and
useful lives are reviewed, and if necessary
adjusted, at each balance sheet date.
The gain or loss arising from the disposal or
retirement of an item of property, plant and
equipment is determined as the difference
between the net disposal proceeds and the
carrying amount of the item and included in
the Consolidated Income Statement.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2.11 Inventory
Inventory is stated at the lower of cost or
net realisable value. Cost is computed
using standard cost, which approximates to
actual cost, on a first-in, first-out basis. Rapid
technological change and new product
introductions and enhancements could
result in excess or obsolete inventory, the
value of which may not be recoverable.
To minimise this risk, the Group evaluates
inventory levels and expected usage on
a periodic basis and records valuation
allowances as required.
2.12 Impairment
At each reporting date, the Group assesses
whether there is any indication that its assets
have been impaired. If any such indication
exists, the recoverable amount of the asset
is estimated in order to determine the
extent of any impairment. If it is not possible
to estimate the recoverable amount of the
individual asset, the recoverable amount of
the cash-generating unit (‘CGU’) to which
the asset belongs is determined.
The recoverable amount of an asset or a
CGU is the higher of its fair value less costs
to sell and its value in use. The recoverable
amount is calculated using the present value
of the future cash flows expected to be
derived from an asset or CGU. This present
value is derived using a cost of capital rate
that reflects current market assessments of
the time value of money and of the risks
specific to the asset for which future cash
flow estimates have not been adjusted.
If the recoverable amount of an asset is
less than its carrying amount, the carrying
amount of the asset or CGU is reduced to
its recoverable amount. That reduction is
recognised as an impairment loss.
An impairment loss relating to assets carried
at cost less any accumulated depreciation
or amortisation is recognised immediately in
the Consolidated Income Statement.
Goodwill acquired in a business combination
is, from the acquisition date, allocated to
each of the CGUs or groups of CGUs that
are expected to benefit from the synergies
of the combination.
Goodwill is tested for impairment at least
annually, and whenever there is an indication
that the asset may be impaired.
An impairment loss is recognised for CGUs
if the recoverable amount of the CGU is less
than the carrying amount of the CGU. The
impairment loss is allocated to reduce the
carrying amount of the assets of the CGU
by first reducing the carrying amount of any
goodwill allocated to the CGU, and then
reducing the carrying amounts of the other
assets of the CGU pro-rata.
If an impairment loss subsequently reverses,
the carrying amount of the asset or CGU
is increased to the revised estimate of its
recoverable amount but limited to the
carrying amount that would have been
determined had no impairment loss been
recognised in prior years.
A reversal of an impairment loss is
recognised in the Consolidated Income
Statement. Impairment losses on goodwill
are not subsequently reversed.
2.13 Leases
All leases are accounted for by recognising a
right-of-use asset and a lease liability except
for:
•
leases with a duration of 12 months or
less; and
•
leases of low value assets.
Lease liabilities are measured at the present
value of the contractual payments due to
the lessor over the lease term, with the
discount rate determined by reference to
the rate implicit in the lease unless this is
not readily determinable, in which case
the Group’s incremental borrowing rate on
commencement of the lease is used. To
determine the incremental borrowing rate,
the Group, where possible, uses recent third-
party financing received by the individual
lessee as a starting point, adjusted to reflect
changes in financing conditions since third-
party financing was received. The Group
uses a build-up approach that starts with a
risk-free interest rate adjusted for credit risk
for leases held by the Group, which does not
have recent third-party financing, and makes
adjustments specific to the lease, e.g. term,
country, currency and security.
If a readily observable amortising loan rate
is available to the individual lessee (through
recent financing or market data) which has a
similar payment profile to the lease, then the
Group uses that rate as a starting point to
determine the incremental borrowing rate.
On initial recognition, the carrying value of
the lease liability also includes:
•
amounts expected to be payable under
any residual value guarantee;
•
the exercise price of any purchase option
granted in favour of the Group if it is
reasonably certain to assess that option;
and
•
any penalties payable for terminating the
lease, if the term of the lease has been
estimated on the basis of termination
option being exercised.
Right-of-use assets are initially measured at the
amount of the lease liability, reduced for any
lease incentives received, and increased for:
•
lease payments made at or before
commencement of the lease;
•
initial direct costs incurred; and
•
the amount of any provision recognised
where the Group is contractually required
to dismantle, remove, or restore the
lease.
Subsequent to initial measurement, lease
liabilities increase as a result of interest
charged at a constant rate on the balance
outstanding and are reduced for lease
payments made. Lease payments are
analysed between capital and interest.
The interest element is charged to the
Consolidated Income Statement over the
period of the lease. The capital element
reduces the balance owed to the lessor.
Right-of-use assets are amortised on a
straight-line basis over the remaining term
of the lease or over the remaining economic
life of the asset.
The total rentals payable under leases which
are not recognised as a right-of-use asset
and a lease liability (an ‘operating lease’)
are charged to the Consolidated Income
Statement on a straight-line basis over the
lease term.
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2. MATERIAL ACCOUNTING
POLICIES CONTINUED
2.14 Taxation
The tax expense represents the sum of
current tax and deferred tax.
Current tax
Current tax is based on taxable profit for the
year and is calculated using tax rates and
laws enacted or substantively enacted at the
reporting date. Taxable profit differs from
accounting profit either because items are
taxable or deductible in periods different
to those in which they are recognised in the
financial statements (temporary differences),
or because they are never taxable or
deductible (permanent differences).
Deferred tax
Deferred tax on temporary differences at
the reporting date between the tax bases
of assets and liabilities and their carrying
amounts for financial reporting purposes
is accounted for using the balance sheet
liability method.
Using the balance sheet liability method,
deferred tax liabilities are recognised in
full for all taxable temporary differences
and deferred tax assets are recognised
to the extent that it is probable that
taxable profits will be available against
which deductible temporary differences
can be utilised. However, if the temporary
difference arises from the initial recognition
of goodwill or the initial recognition of an
asset or liability in a transaction other than
a business combination, that at the time of
the transaction affects neither accounting
nor taxable profit, it is not recognised as a
deferred tax asset or liability.
Deferred taxation is measured at the tax rates
and laws that are expected to apply when
the asset is realised, or the liability settled,
based on tax rates and laws enacted or
substantively enacted at the reporting date.
2.15 Post-retirement benefits
The Group makes contributions in respect of
certain employees to defined contribution
pension plans under which it is required
to pay fixed contributions to Group and
personal pension funds.
Contributions to the schemes are based on
a proportion of the employees’ earnings and
are charged to the Consolidated Income
Statement. The Group has no obligation
beyond these contributions.
2.16 Financial instruments
The Group classifies financial instruments, or
their component parts, on initial recognition
as a financial asset, a financial liability, or an
equity instrument in accordance with the
substance of the contractual arrangement.
Financial assets and financial liabilities are
recognised in the Group’s Statement of
Financial Position when the Group becomes
party to the contractual provisions of the
instrument.
The particular recognition and measurement
methods adopted for the Group’s financial
instruments are disclosed below:
Trade and other receivables
Trade and other receivables are stated at
their fair value at time of initial recognition,
reflecting, where material, the time value
of money. A provision for impairment of
trade receivables is established when there
is evidence that the Group has an expected
credit loss over the lifetime of the assets
based on historical trends. The simplified
approach is used for assessing the expected
credit loss on trade receivables, requiring
the lifetime expected credit loss to be
recorded as the provision for impairment.
Cash and cash equivalents
Cash and cash equivalents include cash on
hand and short-term deposits with an original
maturity of three months or less that are
readily convertible to known amounts of cash.
Trade and other payables
Trade and other payables are not interest
bearing and are stated at their fair value at
time of initial recognition. Thereafter they
are accounted for at amortised cost.
Debt obligations
Debt obligations include interest bearing
bank borrowings which are stated at their
fair value less transaction costs at time of
initial recognition. Debt obligations are
subsequently measured at amortised cost.
2.17 Equity instruments
An equity instrument is any contract that
evidences a residual interest in the assets of
the Company after deducting all its liabilities.
Equity instruments issued by the Company
are recorded at the proceeds received, net
of directly attributable issue costs.
2.18 Employee share option
schemes
The Group operates an equity-settled
share-based compensation plan. The fair
value of the employees’ services received
in exchange for the grant of share options
is measured at grant date and recognised
as an expense on a straight-line basis over
the vesting period, based on the Group’s
estimate of shares that will eventually vest.
Fair value is determined by reference to
the Black-Scholes option pricing model. If a
granted option is cancelled and regranted,
the increase in fair value of the granted
option measured immediately before and
after the cancellation and regrant is added
to the value of the employee’s service
received in exchange for the grant. If an
option grant is cancelled, the previously
recorded expense is credited to the
Consolidated Income Statement.
At each reporting date, the Group revises its
estimate of the number of options that are
expected to become exercisable.
When share options are exercised, the
proceeds received, net of any transaction
costs, are credited to share capital (nominal
value) and share premium.
2.19 Standards and
Interpretations not yet effective
The Group has applied the following
standards and amendments for the first time
for its annual reporting period commencing
1 January 2024:
•
Lease liability in a sale and leaseback
transaction (Amendments to IFRS 16)
•
Classification of Liabilities as Current or
Non-current (Amendments to IAS 1)
•
Non-Current Liabilities with Covenants
(Amendments to IAS 1)
•
Supplier Finance Arrangements –
Amendments to IAS 7 and IFRS 7
The amendments listed above did not have
any impact on the amounts recognised in prior
periods and are not expected to significantly
affect the current or future periods.
There are a number of standards,
amendments to standards, and interpretations
which have been issued that are effective in
future accounting periods that the Group has
decided not to adopt early as they will not
have a significant impact on the presentation
of the Group financial statements.
Corero Network Security plc Annual Report and Accounts 2024
67
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3. CRITICAL ACCOUNTING
JUDGEMENTS AND KEY
SOURCES OF ESTIMATION
UNCERTAINTY
3.1 Critical judgements in
applying the Group’s accounting
policies
In the process of applying the Group
accounting policies, the following judgements
have had a significant effect on the amounts
recognised in the financial statements:
Internally generated research and
development costs
Management monitors progress of internal
research and development projects.
Judgement is required in distinguishing
the research phase from the development
phase. Development costs are recognised
as an asset when all criteria are met and a
project has passed the feasibility phase,
whereas research costs are expensed as
incurred. Management monitors whether the
recognition requirements for development
costs continue to be met. This is necessary
as the economic success of any product
development is uncertain.
Going concern
The Directors have reviewed the future profit
and cash flow projections in conjunction
with the current economic climate in order
to express an opinion on the adequacy of
working capital and the ability to continue
as a going concern for the foreseeable
future. The methodology contained in the
projections is detailed in the note 2.2.
3.2 Key accounting estimates
and assumptions
Key assumptions concerning the future and
other key sources of estimation uncertainty
that have a significant risk of causing a
material adjustment to the carrying amounts
of assets and liabilities within the next
financial year are as follows:
Impairment of intangible assets
and property, plant and equipment
The Group tests goodwill at least annually
for impairment, and whenever there is an
indication that the asset may be impaired.
All other intangible assets and property,
plant and equipment are tested for
impairment when indicators of impairment
exist. Impairment is determined with
reference to the higher of fair value less
costs to sell and value in use. Fair value less
costs to sell is estimated using discounted
future cash flows. Significant assumptions
are made in estimating future cash flows
about future events including future
market conditions, future growth rates and
appropriate discount rates. Changes in
these assumptions could affect the outcome
of impairment reviews. Details of the main
assumptions used in the assessment of the
carrying value of the Group’s CGU are set
out in note 9.
Standalone Selling Price – revenue
recognition
On a regular basis the Group analyses the
selling prices for each deal compared to
the current Standalone Selling Price (‘SSP’).
This analysis includes grouping similar
deals based on qualitative factors such as
customer profile, size, and region, together
with a quantitative comparison to the
then current SSP. SSP fair value prices are
adjusted for future quarters if management
identifies a pattern of variances of greater
than 10% between actual selling prices and
the then current SSP.
4. SEGMENT REPORTING
Operating segments
The Group is managed according to one
business unit, Corero Network Security,
which makes up the Group’s reportable
operating segment. This business unit
forms the basis on which the Group reports
its operating segment information to the
Board, which management consider to be
the Chief Operating Decision Maker for the
purposes of IFRS 8 Operating Segments.
The Group’s revenues from external
customers for the country of the Group’s
domiciles and each individually material
country (those over 10% of Group revenues)
are as follows:
2024
$’000
2023
$’000
United States
17,488
15,855
United Kingdom
1,756
2,122
Others
5,315
4,372
Total
24,559
22,349
Revenues from external customers are
identified on the basis of invoicing systems
and adjusted to take into account the
difference between invoiced amounts and
deferred revenue adjustments as required
by IFRS.
In 2024, no individual customer accounted
for over 10% of revenue. The Group’s largest
customer accounted for 9.0% of 2024
revenue (2023: largest customer accounted
for 9.3% of revenue).
The revenue is analysed as follows for each
revenue category:
2024
$’000
2023
$’000
Software licence and
appliance revenue
10,066
8,186
DDoS Protection as-a-
Service revenue
5,912
5,599
Maintenance and
support services revenue
8,581
8,564
Total
24,559
22,349
The revenue is analysed by timing of delivery
of goods or services as:
2024
$’000
2023
$’000
Point in time delivery
10,066
8,186
Over time
14,493
14,163
Total
24,559
22,349
No unsatisfied performance obligations
arise except from those revenues which
are recognised over time. See note 18 for
further details.
Corero Network Security plc Annual Report and Accounts 2024
68
4. SEGMENT REPORTING CONTINUED
Non-current assets
The Group’s non-current assets located in countries of domicile and in each material country are as follows:
2024
$’000
2023
$’000
United States
10,617
9,698
United Kingdom
5,879
5,055
Total
16,496
14,753
Contract balances
Contract assets
Contract liabilities
2024
$’000
2023
$’000
2024
$’000
2023
$’000
At 1 January
2,783
2,793
7,483
5,608
Transfers in the period to/from trade receivables
from/to contract assets
(891)
(10)
–
–
Amounts included in contract liabilities that were recognised
as revenue in the period from the opening balance
–
–
(3,217)
(4,085)
Amounts included in contract liabilities that were recognised
as revenue from amounts invoiced in the period
–
–
(11,275)
(9,892)
Amounts invoiced in the period and not recognised as revenue
in the period
–
–
17,351
15,852
At 31 December
1,892
2,783
10,342
7,483
5. PROFIT/(LOSS) FOR THE YEAR
The following items have been included in arriving at the Group’s (loss)/profit for the year before taxation:
2024
$’000
2023
$’000
Unrealised loss on intercompany loan
–
429
Finance expense – Clydesdale loan interest and fees
8
164
Finance expense – lease liability
28
17
Research and development expenditure not capitalised
1,643
1,981
Inventory recognised as an expense in cost of sales
1,011
1,354
Lease expenses for short-term leases
77
58
Amortisation of acquired intangible assets (note 10)
–
2
Research & development expenditure credit
(245)
(201)
Amortisation of capitalised development expenditure (note 10)
1,588
1,504
Depreciation of property, plant and equipment (note 11)
420
267
DDoS Protection as-a-Service asset depreciation (note 11)
217
272
Auditor’s remuneration
2024
$’000
2023
$’000
Remuneration received by the Company’s auditor for the audit of these financial statements
132
127
The audit of the financial statements of other Group companies
48
47
180
174
Corero Network Security plc Annual Report and Accounts 2024
69
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6. TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
2024
$’000
2023
$’000
Current tax (charge)/credit
(56)
(17)
Total
(56)
(17)
The tax assessed on the profit on ordinary activities for the year differs from the weighted average UK corporate rate of tax of 25.0% per the
2023/2024 governmental budgets (2023: 25.0%). The differences are reconciled below:
2024
$’000
2023
$’000
Total tax reconciliation
Profit/(loss) before taxation
555
(153)
Theoretical tax charge at UK corporation tax rate 23.5% (2023: 23.5%)
138
(36)
Effect of:
– Expenditure that is not tax deductible
212
103
– R&D expenditure credits
(46)
–
– Tax losses and other temporary differences where deferred tax not recognised
(248)
(50)
Taxation charge
56
17
Factors affecting future tax charges
As at 31 December 2024, the Group’s cumulative fixed asset timing differences were $129,000 (2023: $131,000) and no deferred tax asset
has been recognised in respect of these items.
Tax losses at 31 December 2024 amounted to $86.2 million (2023: $88.3 million). This comprised UK tax losses of $14.9 million and US tax
losses of $71.3 million. The utilisation of US tax losses which are all attributable to Corero Network Security, Inc. is subject to the provisions
of Section 382 of the United States Treasury Internal Revenue Code of 1986, as amended. Corero Network Security, Inc did not undergo an
ownership change within the meaning of Section 382 for the period 1 February 2017 to 31 December 2021, and thus $10.8 million of the US
tax losses are available at full value to set-off against future taxable profits. The utilisation of the remaining US tax losses of $60.5 million will
be subject to meeting the change of ownership test for the period prior to 1 February 2017. This test will be undertaken as and when these
tax losses are required to offset against taxable profits of Corero Network Security, Inc. US tax losses expire 20 years from the end of the
accounting period in which the loss arose.
UK tax losses arising in the period prior to 1 April 2017 can only used against taxable profits of the same trade; after 1 April 2017 the losses
can be used against total Company profits.
Deferred tax assets of $3.7 million (2023: $3.65 million) relating to the UK tax losses (applying a tax rate of 25.0% to tax losses expected to
unwind after 1 April 2023, the rate substantively enacted on 10 June 2021) and the deferred tax assets of $15.0 million (2023: $15.5 million)
relating to the US tax losses and taxable temporary fixed asset differences (applying a tax rate of 21.0%) have not been recognised due to
uncertainties as to the extent and timing of their future recovery.
Corero Network Security plc Annual Report and Accounts 2024
70
7. EARNINGS PER SHARE
Earnings per share is calculated by dividing the earnings attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares in issue during the year. Diluted earnings per share is calculated by dividing the earnings attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares in issue during the year plus the number of ordinary
shares to be issued from the exercise of attributable share options.
2024
$’000
2023
$’000
Basic Earnings per share
From profit/(loss) for the year
0.1
0.0
Diluted Earnings per share
From profit/(loss) for the year
0.1
0.0
2024
2023
Basic earnings/(loss) per share
Profit
$’000
Weighted
average
number of
1p shares
Thousand
Profit
per share
Cents
Loss
$’000
Weighted
average
number of
1p shares
Thousand
Loss
per share
Cents
From profit/(loss) for the year
498
509,096
0.1
(170)
500,221
0.0
Diluted earnings/(loss) per share
Basic earnings/(loss) per share
498
509,096
0.1
(170)
500,221
0.0
Dilutive effect of share options
–
56,383
–
–
–
–
Diluted earnings per share
498
565,479
0.1
(170)
500,221
0.0
8. KEY PERFORMANCE MEASURES
EBITDA
Earnings before interest, tax, depreciation and amortisation (‘EBITDA’) is defined as earnings from operations before interest, tax,
depreciation and amortisation charges. The following is a reconciliation of EBITDA for the periods presented:
Year ended
31 December
2024
$’000
Year ended
31 December
2023
$’000
Profit/(loss) before taxation
555
(153)
Adjustments for:
Finance income
(99)
(44)
Finance expense
8
164
Finance lease interest costs
28
17
Depreciation – owned assets
250
151
Depreciation – right-of-use assets
170
116
Amortisation of acquired intangible assets
–
2
Amortisation of capitalised development expenditure
1,588
1,504
EBITDA
2,500
1,757
Corero Network Security plc Annual Report and Accounts 2024
71
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9. GOODWILL
Group
$’000
Cost
At 1 January 2024
17,983
At 31 December 2023
17,983
At 31 December 2024
17,983
Impairment
At 1 January 2023
(8,992)
At 31 December 2023
(8,992)
At 31 December 2024
(8,992)
Carrying amount
At 1 January 2023
8,991
At 31 December 2023
8,991
At 31 December 2024
8,991
Goodwill is tested at least annually for impairment and when there are indications that goodwill might be impaired.
Goodwill is allocated to the Group’s single cash generating unit (‘CGU’), Corero Network Security (‘CNS’).
The recoverable amount for the CNS CGU was determined based on a discounted cash flow calculation to calculate fair values less costs
to sell using cash flow projections over a five-year period (2023: 10-year period). The discounted cash flow approach is a level 3 fair value
calculation in the IFRS 13 fair value hierarchy.
The key assumptions for the discounted cash flow calculation are those regarding revenue growth and discount rates as summarised in the
table below and commented on below:
2024
2023
Forecast cash flow period
Years 1-2
Years 1-2
Extrapolated cash flow period
Years 3-5
Years 3-10
Cumulative annual growth rate (‘CAGR’) for revenue used for the forecast/extrapolated periods
14.0%
9.5%
Growth rates (‘CAGR’) used for the forecast/extrapolated periods:
Year 1–2 (forecast period)
14.0%
9.0%
Years 3–5 (extrapolated period)
14.0%
15.0%
Years 6–10 (extrapolated period)
n/a
6.5%
Revenue growth rate used beyond the extrapolated period
3.3%
2.5%
Discount rate
13.7%
18.5%
The pre-tax cash flows for the forecast period are derived from the most recent financial budget for the year ending 31 December 2025
(‘2025 Budget’) and the plan for the year ending 31 December 2026 (‘2026 Plan’) approved by the Board, with a sensitivity reflecting prior
year experience and progress made in 2024 (9% applied to the 2025 Budget revenue and 13% to the 2026 Plan revenue). The extrapolation
for the period 2027 to 2029 is based on management estimates (with the key assumptions set out below).
The future pre-tax cash flows are discounted by a WACC of 13.7% (2023: 18.5%).
The key assumptions underlying the cash flow projections and which the recoverable amount is most sensitive to are (i) the revenue growth
rates forecast and extrapolated for the period 2027 to 2029 (ii) and the discount rate.
The cash flow forecasts assume a CAGR revenue growth of 14% in the period 2027 to 2029 (2023: 15% for the period 2025 to 2029) and the
period 2030 to 2034 now falls into the terminal value part of the calculation (2023: 6.5% for the period 2029 to 2033). The cash flow forecasts
reflect a sensitivity of 9% applied to the CNS 2025 Budget revenues and a sensitivity of 13% applied to the 2026 Plan revenues (and a
sensitivity of 5% to 2025 and 2026 operating costs and capital expenditure) reflecting prior year experience. The management of the Group
believe these growth rates are appropriate for the forecasts given the significant progress the business made in 2024, the strategy for 2025
which is focused on accelerated go-to-market strategy and continued investment in current and new products. This strategy is expected to
deliver further increases in revenue in the forecast period.
Corero Network Security plc Annual Report and Accounts 2024
72
9. GOODWILL CONTINUED
The assumed growth rates are supported by the fact that the IT security market is forecast to grow strongly for the foreseeable future. The
DDoS market is expected to reach $9.6 billion by 2029 (Source: Verified Market Research DDoS Protection and Mitigation Market Size and
Forecast, 2025) – a CAGR of 13.2% during this period.
The above market growth rates used in the future cash flow assumptions reflect growth that has commenced for the Group, and which
is forecast to continue with the Group’s accelerated GTM strategy. In addition, the business’s strategy, aside from greater sales growth
penetration, is to continue to develop its product and solution offerings to retain its market leadership technological credentials in its
chosen markets, thereby providing the opportunity to generate above market average growth rates.
The growth rate assumed in the period beyond the five-year extrapolation period of 3.3% is considered reasonable as historically IT spend
has exceeded GDP growth.
The discount rate is based on a cost of equity using the Capital Asset Pricing Model with the key inputs being a risk-free interest rate
estimate of 4.55% (based on 10-year US government bonds) (2023: 4.0%), comparable company betas, an equity risk premium of 6.7%
(2023: 6.2%), and small company risk premium of 4.5% (2023: 4.5%). The WACC has been initially assessed based on that fact that the
Group had no debt at 31 December 2024 (31 December 2023: nil), and adjusted to reflect an appropriate market rate for WACC if the
Group were to hold debt at this time. The WACC used in the valuation reflects current market assessments of the time value of money and
the risks specific to the Group.
As stated above, the valuation to support the value in use of the CNS CGU is sensitive to changes in the cash flow forecasts and the
discount rate assumptions, and there is no absolute guarantee that the expected growth will be achieved. If the discount rate is increased
from 13.7% to 48%, this would mathematically result in an impairment of the carrying value of goodwill of $9 million meaning the goodwill
would be fully impaired. If the sensitivity of 9% applied to the CNS 2025 Budget and 13% to the 2026 Plan revenues (and sensitivity of 5%
to CNS 2025 Budget and 2026 Plan operating costs and capital expenditure) was increased to 35% for both the CNS 2025 Budget and
2026 Plan revenues (and sensitivity of 17% to both CNS 2025 Budget and 2026 Plan operating costs and capital expenditure), this would
mathematically result in an impairment of the carrying value of goodwill of $9 million meaning the goodwill would be fully impaired.
Apart from the considerations in determining the value in use of the CNS CGU extensively described above, the management of the Group
is not currently aware of any other reasonably possible changes that would necessitate changes in its key estimates.
Corero Network Security plc Annual Report and Accounts 2024
73
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
10. INTANGIBLE ASSETS
Capitalised
development
expenditure
$’000
Computer
software
$’000
Customer
relationships
$’000
Total
$’000
Cost
At 1 January 2023
25,768
6,017
197
31,982
Additions
1,824
–
–
1,824
At 31 December 2023 and at 1 January 2024
27,592
6,017
197
33,806
Additions
3,190
–
–
3,190
At 31 December 2024
30,782
6,017
197
36,996
Amortisation
At 1 January 2023
(21,268)
(6,015)
(197)
(27,480)
Charge for year
(1,504)
(2)
–
(1,506)
At 31 December 2023 and at 1 January 2024
(22,772)
(6,017)
(197)
(28,986)
Charge for year
(1,588)
–
–
(1,588)
At 31 December 2024
(24,360)
(6,017)
(197)
(30,574)
Net book value
At 31 December 2024
6,422
0
0
6,422
At 31 December 2023
4,820
–
–
4,820
At 1 January 2023
4,500
2
–
4,502
During the year ended 31 December 2024, $3.2 million of costs were capitalised in relation to development expenditure (2023: $1.8 million)
and amortisation of $1.6 million was charged (2023: $1.5 million).
Capitalised development expenditure relates to ongoing development by the Company in the following areas:
•
SmartWall ONE product development – Corero’s Engineering team develop and enhance Corero’s SmartWall ONE product and the
cost of this development time is capitalised accordingly. $2.3 million of cost was capitalised during 2024 (2023: $1.8 million). A key
development during the year related to the launch of the Company’s new hardware appliance, Network Threat Detector (‘NTD’) 3400, a
400G enhancement to the SmartWall ONE DDoS protection appliance. Assets used in the development of the 400G product suite have
also been capitalised; $0.5 million of asset cost was capitalised during 2024 (2023: nil).
•
Corero Observability & Resiliency Ecosystem (‘CORE’) product development – Corero’s new SaaS cloud-based availability protection
platform was launched in late 2024, with development being capitalised throughout the year. A highly adaptive innovation, CORE will
deliver advanced defence capabilities, providing greater flexibility and cost-efficiency to keep organisations secure. $0.2 million of cost
was capitalised during 2024 (2023: nil).
•
Threat Research Team (‘TRT’) product development – Corero’s TRT generates new intellectual property that improves existing products
and services and is used by Corero’s Engineering team to upgrade product capabilities. Customers who pay for this service receive
regular updates to their product for these new known threats. Other customers will receive updates when the next major release is
released by the Engineering team. $0.2 million of cost was capitalised during 2024 (2023: nil).
Corero Network Security plc Annual Report and Accounts 2024
74
11. PROPERTY, PLANT AND EQUIPMENT
Group
Computer
equipment
$’000
Sales
evaluation
assets
$’000
DDoS
protection
as-a-Service
assets
$’000
Fixtures
and fittings
$’000
Leasehold
improvements
$’000
Right-of-use
assets
$’000
Total
$’000
Cost
1 January 2023
1,091
187
1,748
103
104
344
3,577
Additions
131
136
182
–
–
363
812
Transfers
–
(8)
8
–
–
–
–
Disposals
(403)
(105)
–
–
–
–
(508)
Foreign currency translation
8
22
37
–
1
–
68
At 31 December 2023
and at 1 January 2024
827
232
1,975
103
105
707
3,949
Additions
115
343
331
–
–
–
789
Disposals
(33)
(32)
(606)
–
–
–
(671)
Foreign currency translation
(2)
(1)
(12)
–
–
–
(15)
At 31 December 2024
907
542
1,688
103
105
707
4,052
Depreciation
At 1 January 2023
(984)
(96)
(1,369)
(92)
(88)
(282)
(2,911)
Charge for year
(66)
(62)
(272)
(7)
(16)
(116)
(539)
Transfers
–
3
(3)
–
–
–
–
Disposals
403
75
–
–
–
–
478
Foreign currency translation
(6)
–
(28)
–
(1)
–
(35)
At 31 December 2023
and at 1 January 2024
(653)
(80)
(1,672)
(99)
(105)
(398)
(3,007)
Charge for year
(105)
(141)
(217)
(4)
–
(170)
(637)
Disposals
33
24
606
–
–
–
663
Foreign currency translation
1
7
7
–
–
–
12
At 31 December 2024
(724)
(190)
(1,279)
(103)
(105)
(568)
(2,969)
Net book value
At 31 December 2024
183
352
409
–
–
139
1,083
At 31 December 2023
174
152
303
4
–
309
942
At 1 January 2021
107
91
379
11
16
62
666
DDoS Protection as-a-Service assets’ depreciation is charged to cost of sales.
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Overview
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Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
12. LEASES
Right-of-use assets
2024
$’000
2023
$’000
Right-of-use asset
707
707
Accumulated depreciation
(568)
(398)
Total carrying amount of Right-of-use assets
139
309
Reconciliation of the carrying amount of lease assets at the beginning and end of the current and previous financial years are set out below:
2024
$’000
2023
$’000
Opening carrying amount
309
62
Additions
–
363
Depreciation
(170)
(116)
Closing carrying amount
139
309
The Group leases buildings for its offices under agreements of two to four years with, in some cases, options to extend. Options to extend
current leases have not been included in lease calculations as the Group did not have sufficient certainty at the time of commencement of
the lease as to whether such options would be taken up. On renewal, the terms of the leases will be renegotiated.
The current lease on the US office in Marlborough, Massachusetts ends on 31 March 2025. In January 2025, an extension was agreed to this
lease for a further 5 years and 2 months, now ending on 31 May 2030 on favourable terms. The new Right-of-Use Asset and Lease Liability
will be recognised in the 2025 financial year.
During the prior year, the Group entered into a lease agreement with Keysight Technologies for lease of equipment by the Corero
Engineering department. This lease was recognised as a Right-of-Use Asset addition of $218,000 in the year, with a corresponding lease
liability recognised. The lease runs for 36 months ending 31 July 2026. Carrying amount of the Right-of-Use Asset at 31 December 2024 is
$118,000 (2023: $187,000).
Lease liabilities
2024
$’000
2023
$’000
At 1 January
315
78
Additions
–
363
Payments
(193)
(143)
Interest cost
28
17
At 31 December
150
315
2024
$’000
2023
$’000
Within 1 year
102
164
Between 2 and 5 years
48
151
At 31 December
150
315
The Directors consider that the carrying amount of lease liabilities approximates to their fair value. All lease liabilities are held in US dollars
within the Group.
Corero Network Security plc Annual Report and Accounts 2024
76
13. INVENTORIES
2024
$’000
2023
$’000
Gross inventory
454
160
Less: provision for impairment
(65)
(64)
Net inventory
389
96
Net inventory comprises finished goods and raw materials. The value of inventory recognised as an expense in cost of sales was $1.0 million
(2023: $1.4 million).
14. TRADE AND OTHER RECEIVABLES
2024
$’000
2023
$’000
Trade receivables
4,407
2,306
Contract assets (note 4)
1,892
2,783
Less: provision for impairment of trade receivables*
(314)
(25)
Net trade receivables
5,985
5,064
Other debtors
778
179
Prepayments
2,922
1,827
Deferred commissions
1,605
1,357
11,290
8,427
* The movement has not been presented in the Consolidated Income Statement as the charge is not considered material.
None of the Company’s trade and other receivables are secured by collateral or on a credit enhancement (2023: None).
The Group applies the simplified approach to measuring expected credit losses using a lifetime expected credit loss (‘ECL’) for trade receivables
and contract assets. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on a
similar credit risk and aging. The expected loss rates are based on the Group’s historical credit losses experienced over a two-year period prior
to the period end. The historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting
the Group’s customers. The Group has identified gross domestic product growth rates, unemployment rates and inflation rates as the key
macroeconomic factors in the countries in which the Group operates. The Directors consider that the carrying amount of trade and other
receivables approximates their fair value. The Group assesses the credit risk and credit worthiness of potential customers on a case by case basis.
During 2024, a specific provision has been recognised for $0.3 million in relation to three invoices which are at risk at 31 December 2024. No
further ECL provision has been recognised or released in the year. During the year, $0.5 million of deferred commission was amortised (2023: $0.4
million). On that basis, the loss allowance as at 31 December 2024 and 31 December 2023 was determined as follows for trade receivables:
61-90 days
past due
91-120 days
past due
121+ days
past due
2024
Expected credit loss rate
0.574%
0.574%
0.574%
Year end balances outstanding
166
72
2,088*
Adjusted year end balance
166
72
60
Expected credit loss allowance
1
–
–
*$1.7m of this amount relates to invoices with multi-year payment terms which are not due yet and so have been excluded from any ECL provision calculations.
$0.3m of this amount has been provided for already and so has also been excluded from the calculations.
Corero Network Security plc Annual Report and Accounts 2024
77
Overview
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Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14. TRADE AND OTHER RECEIVABLES CONTINUED
61-90 days
past due
91-120 days
past due
121+ days
past due
2023
Expected credit loss rate
0.274%
0.274%
0.274%
Year end balances outstanding
83
40
48
Adjusted year end balance
83
40
48
Expected credit loss allowance
-
-
-
The maturity profile of trade and other receivables is set out in the table below:
2024
$’000
2023
$’000
In one year or less, or on demand
8,769
6,914
In more than one year, but not more than five years
2,520
1,513
11,290
8,427
The analysis of trade and other receivables by foreign currency is set out in the table below:
2024
$’000
2023
$’000
US dollars
8,429
6,200
UK pound sterling
2,861
2,227
11,290
8,427
The Group’s foreign currency receivables are denominated in the functional currency of the subsidiaries in which they arise. There is no
impact on the result for the year from exchange rate movements on such financial instruments.
An asset of $1.6 million is held in relation to Deferred commissions at 31 December 2024 (2023: $1.4 million). Amortisation of $0.4 million
was charged to the income statement in FY 2024 (2023: $0.4 million).
Corero Network Security plc Annual Report and Accounts 2024
78
15. TRADE AND OTHER PAYABLES
2024
$’000
2023
$’000
Trade payables
1,574
1,399
Other payables
114
619
Accruals
2,652
1,884
4,340
3,902
None of the Group or Company’s trade and other payables are secured by collateral or credit enhancements.
The Directors consider that the carrying amount of trade and other payables approximates their fair value. 70% (2023: 74%) of the trade and
other payables are due in less than three months.
The analysis of trade and other payables by foreign currency is set out in the table below:
2024
$’000
2023
$’000
US dollars
2,998
2,123
UK pound sterling
1,342
1,779
340
3,902
The Group’s foreign currency payables are denominated in the functional currency of the subsidiaries in which they arise. There is no impact
on the result for the year from exchange rate movements on such financial instruments.
16. BORROWINGS
There are no external borrowings held by the Group at 31 December 2024 (2023: nil). The RCF was closed in February 2024 with all fees due
paid at that time.
17. FINANCIAL INSTRUMENTS
The Group’s financial instruments are categorised as shown below:
Book Value
2024
$’000
Book Value
2023
$’000
Financial assets
Trade and other receivables
6,763
5,243
Cash
5,321
5,160
12,084
10,403
Book Value
2024
$’000
Book Value
2023
$’000
Financial liabilities
Trade and other payables
(4,340)
3,902
Lease liabilities
(150)
315
(4,490)
4,217
For the purpose of this note financial assets – trade and other receivables exclude prepayments.
The Group manages liquidity and credit risk in line with the financial risk management objectives and policies as set out on page 32.
At the present time the Group does not have significant exposure interest rate risk. There are no differences between the fair values and
book values held by the Group.
Corero Network Security plc Annual Report and Accounts 2024
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Overview
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Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
18. CONTRACT LIABILITIES
2024
$’000
2023
$’000
Current
6,861
4,992
More than one year but less than five years
3,481
2,491
10,342
7,483
The Group’s contract liability balance will be recognised as revenue evenly over the remaining term of the service and support agreements
in place. The service and support agreements expire at various times throughout the year with no particular seasonality.
19. PENSIONS
The Group’s pension arrangements are operated through defined contribution schemes.
Defined contribution schemes
2024
$’000
2023
$’000
Defined contribution pension costs
303
245
20. SHARE CAPITAL
Authorised share capital
The authorised share capital comprises 745,821,970 (2023: 745,821,970) ordinary shares of 1 penny (‘p’) (1.4 cents (‘c’)) each.
Issued ordinary share capital
$’000
1 January 2023
499,953,971 ordinary shares of 1p each
6,980
230,000 ordinary shares of 1p each
3
1,344,497 ordinary shares of 1p each
16
31 December 2023
501,528,468 ordinary shares of 1p each
6,999
300,000 ordinary shares of 1p each
4
7,000,000 ordinary shares of 1p each
88
500,000 ordinary shares of 1p each
6
1,000,000 ordinary shares of 1p each
13
1,833,333 ordinary shares of 1p each
23
3,333 ordinary shares of 1p each
–
31 December 2024
512,165,134 ordinary shares of 1p each
7,133
Corero Network Security plc Annual Report and Accounts 2024
80
21. SHARE PREMIUM
$’000
1 January 2023
82,284
Issued by way of option exercises
230,000 ordinary shares of 4.25p each (5.37c)
13
Issued by way of new shares allotted to CEO
1,344,497 ordinary shares of 8p each (9.9c)
133
31 December 2023
82,430
Issued by way of option exercises
300,000 ordinary shares of 4.25p each (5.4c)
16
7,000,000 ordinary shares of 4.25p each (5.4c)
375
500,000 ordinary shares of 5.75p each (7.2c)
36
1,000,000 ordinary shares of 12.0p each (15.0c)
150
1,833,333 ordinary shares of 12.0p each (15.4c)
283
3,333 ordinary shares of 5.75p each (7.5c)
–
31 December 2024
83,290
Consideration received in excess of the nominal value is included in share premium, less registration, commission, and professional fees.
Transaction costs amounted to $5,000 during 2024.
22. EMPLOYEES AND DIRECTORS
Employee expenses, including Directors, during the period
Total
2024
$’000
Total
2023
$’000
Wages and salaries
13,758
12,694
Social security costs
1,184
1,355
Share-based payments
484
336
Other pension costs
303
245
15,729
14,630
Average monthly numbers of employees (including Directors) employed
2024
Number
2023
Number
Sales and marketing
29
25
Technical, support and services
48
43
Management, operations and administration
10
8
87
76
Corero Network Security plc Annual Report and Accounts 2024
81
Overview
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Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22. EMPLOYEES AND DIRECTORS CONTINUED
Directors, being the Key Management Personnel
2024
Salary
& fees
$’000
Bonus
$’000
Benefits
$’000
Pension
$’000
Subtotal
$’000
Options
$’000
Company
National
Insurance
Contributions
$’000
Total
2024
$’000
Directors
Ashley Stephenson
373
126
21
4
524
-
10
534
Andrew Miller
41
-
-
-
41
-
4
45
Carl Herberger1
350
247
27
4
628
362
10
1,000
Jens Montanana
40
-
-
-
40
-
-
40
Peter George
43
-
-
-
43
-
-
43
Phil Richards2
128
-
-
7
135
(3)
17
149
Richard Last
41
-
-
-
41
-
4
45
Rob Scott3
33
-
-
-
33
-
-
33
1,049
373
48
15
1,485
-
45
1,889
1 Carl Herberger was appointed to the Board effective 1 January 2024 and his remuneration has been pro-rated accordingly.
2 Phil Richards resigned from the Board effective 12 July 2024 and his remuneration has been pro-rated accordingly.
3 Rob Scott was appointed to the Board effective 17 April 2024 and his remuneration has been pro-rated accordingly.
2023
Salary
& fees
$’000
Bonus
$’000
Benefits
$’000
Pension
$’000
Subtotal
$’000
Options
$’000
Company
National
Insurance
Contributions
$’000
Total
2023
$’000
Directors
Ashley Stephenson
369
186
6
-
561
11
10
582
Andrew Miller1
234
-
-
-
234
-
32
266
Jens Montanana
41
-
-
-
41
11
-
52
Lionel Chmilewsky2
587
-
3
-
590
-
147
737
Peter George
36
-
-
-
36
11
-
47
Richard Last
35
-
-
-
35
11
3
49
Phil Richards3
63
31
3
4
101
13
15
129
1,365
217
12
4
1,598
57
207
1,862
1 Andrew Miller held the position of interim COO for the period from 1 March to 31 August 2023.
2 Lionel Chilewsky resigned as a Director of the Company on 28 February 2023.
3 Phil Richards was appointed to the Board effective 21 September 2023 and his remuneration has been pro-rated accordingly.
Bonus payments of $373,000 were awarded to Directors in respect of the year to 31 December 2024 (2023: $267,000).
Carl Herberger and Ashley Stephenson both have employment agreements with a wholly owned subsidiary of the Company which provides
for the payment of six months’ base salary if the agreement is terminated by the Company without cause.
Rob Scott became a Director on 17 April 2024 and his remuneration has been included in the above table from date of appointment to
the Board. Phil Richards joined the Company on 21 November 2022 and was appointed to the Board as a Director effective 21 September 2023.
This remuneration has been included in the above tables from date of appointment to the Board until date of resignation on 12 July 2024.
Carl Herberger joined the Company on 13 November 2023 and was appointed to the Board as a Director effective 1 January 2024.
This remuneration has been included in the above table from date of appointment to the Board.
Andrew Miller has a non-interest bearing Director’s Loan of $72,000 (2023: $72,000) which is repayable in August 2030. Andrew Miller was
appointed Interim Chief Operating Officer on 1 March 2023 until 1 October 2023.
Corero Network Security plc Annual Report and Accounts 2024
82
23. CONTINGENT LIABILITIES
There are no contingent liabilities at 31 December 2024. At 31 December 2023, there was a contingent liability disclosed in relation to
a grant awarded to Corero Network Security (UK) Limited from Scottish Enterprise for £600,000 in December 2015. Any monies became
repaybles if grant terms were breached within 5 years of the final grant payment date, being 14 March 2019. Grant terms were not breached
and therefore this contingent liability is not longer recognised at 31 December 2024.
24. SHARE OPTIONS
The Company has the following share option schemes:
•
Enterprise Management Incentive Scheme for its employees, which has been approved by HMRC.
•
Executive Enterprise Management Incentive Scheme, which has been approved by HMRC.
•
Unapproved Share Option Scheme.
•
Deferred Payment Share Plan.
Options granted have a three-year vesting period, vesting one-third on the first anniversary of grant, one-third on the second anniversary
of grant and one-third on the third anniversary of grant. Shares acquired on the exercise of an option may not be sold until the expiry of
the second anniversary following the date of option grant. With the exception of options granted in April 2017 to Directors which include a
revenue growth performance vesting condition, there are no vesting conditions for options granted.
If an option holder ceases to be in employment or hold office within the Group, options granted shall immediately lapse unless such
cessation is because of the option holder’s death; the option holder’s ill health or disability; the Company that employs the option holder
ceasing to be under the control of the Company or such company ceasing to be within the Group; the transfer of sale of the undertaking
or part-undertaking in which the option holder is employed to a person who is neither under the control of the Company nor within the
Group; or any other reason that the Board in its absolute discretion shall determine.
On a cessation of employment or office as set out above, options shall be exercisable to the extent they have vested according to the
terms of the option agreement and the provisions of the relevant share option scheme and must be exercised within 30 days following such
cessation unless otherwise determined by the Board or if such cessation is by reason of death, in which case the option holder’s personal
representatives must exercise the option within 12 months following the date of the option holder’s death.
For option agreements granted post June 2020 and subject to the approval of the Board, where an option holder has, as at the date of
the grant, been employed by a Group Company for a period of at least three years and whose employment is terminated either: (a) by
the Company other than for cause; or (b) by resignation on the part of the option holder, such option holder shall be entitled to retain the
options granted under the option agreement following the effective date of the termination and such retained options shall continue to
vest and be exercisable by the option holder in accordance with the vesting terms set out in the agreement.
At 31 December 2023, a contingent liability was disclosed in relation to a grant awarded to Corero Network Security (UK) Ltd by Scottish
Enterprise for £600,000 in December 2015. If grant terms were breached within five years from the final grant payment date (being 14 March
2015), any monies became repayable. A contingent liability is therefore no longer recognised at 31 December 2024.
Share options granted at 31 December 2024 were as follows:
Option holders
Date granted
Expiry date
Exercise
price – pence
(cents)
At
1 January
2024
Granted
Exercised
Forfeit/
cancelled
At
31 December
2024
Enterprise Management Incentive Scheme
Other Holders
April 2019
April 2029
8.4p (10c)
10,000
–
–
–
10,000
April 2020
April 2030
4.2p (5c)
347,500
–
–
–
347,500
June 2020
June 2030
5.3p (7c)
5,990,500
–
(300,000)
–
5,690,500
September 2020
September 2030
7.8p (10c)
5,000
–
–
–
5,000
October 2020
October 2030
9.0p (12c)
12,500
–
–
–
12,500
January 2021
January 2031
13.0p (18c)
510,000
–
–
–
510,000
September 2022
September 2032
10.8p (12c)
390,000
–
–
–
390,000
April 2023
April 2033
6.8p (8c)
155,000
–
(3,333)
–
151,667
April 2024
April 2034
9.0p (11c)
–
200,000
–
–
200,000
September 2024
September 2034
19.3p (25c)
–
150,000
–
–
150,000
Corero Network Security plc Annual Report and Accounts 2024
83
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Option holders
Date granted
Expiry date
Exercise
price – pence
(cents)
At
1 January
2024
Granted
Exercised
Forfeit/
cancelled
At
31 December
2024
Executive Enterprise Management Incentive Scheme
Andrew Lloyd
April 2017
April 2027
8.0p (10c)
2,083,333
–
–
–
2,083,333
Phil Richards
April 2023
April 2033
6.8p (8c)
1,500,000
–
(500,000) (1,000,000)
–
September 2023
September 2033
7.1p (9c)
500,000
–
–
(500,000)
–
Chris Goulden
May 2024
May 2034
12.5p (16c)
–
1,500,000
–
–
1,500,000
Unapproved French Share Option Scheme
Lionel Chmilewsky
June 2020
June 2030
5.3p (7c)
7,000,000
–
(7,000,000)
–
–
January 2021
January 2031
13.0p (18c)
333,333
–
–
–
333,333
Unapproved Share Option Scheme
Jens Montanana
April 2017
April 2027
8.0p (10c)
994,000
–
–
–
994,000
May 2018
May 2028
13.6p (18c)
425,000
–
–
–
425,000
October 2018
October 2028
11.0p (14c)
400,000
–
–
–
400,000
Richard Last
April 2017
April 2027
8.0p (10c)
450,000
–
–
–
450,000
June 2017
June 2027
13.6p (18c)
180,000
–
–
–
180,000
October 2018
October 2028
11.0p (14c)
200,000
–
–
–
200,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
–
350,000
Andrew Lloyd
April 2017
April 2027
8.0p (10c)
580,001
–
–
–
580,001
June 2017
June 2027
13.6p (18c)
200,000
–
–
–
200,000
Ashley Stephenson
June 2020
June 2030
5.3p (7c)
7,919,000
–
–
–
7,919,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
–
350,000
Andrew Miller
June 2020
June 2030
5.3p (7c)
5,775,000
–
–
–
5,775,000
Peter George
January 2019
January 2029
11.3p (15c)
750,000
–
–
–
750,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
–
350,000
Carl Herberger
November 2023
November 2033
9.0p (11c) 11,533,492
–
–
–
11,533,492
Rob Scott
April 2024
April 2034
11.8p (15c)
–
750,000
–
–
750,000
Other holders
May 2014
May 2024
25.0p (42c)
670,666
–
–
(670,666)
–
September 2016
September 2026
22.5p (33c)
5,000
–
–
–
5,000
October 2018
October 2028
11.0p (14c)
50,000
–
–
–
50,000
September 2019
September 2029
2.5p (3c)
100,000
–
–
–
100,000
April 2020
April 2030
4.2p (5c)
205,000
–
–
–
205,000
April 2020
April 2030
4.2p (5c)
50,000
–
–
–
50,000
June 2020
June 2030
5.3p (7c)
4,423,500
–
–
–
4,423,500
January 2021
January 2031
13.0p (18c)
410,000
–
–
–
410,000
January 2022
January 2032
13.0p (18c)
4,260,000
–
(2,833,333)
(1,416,667)
10,000
September 2022
September 2032
10.8p (12c)
400,000
–
–
(200,000)
200,000
April 2023
April 2033
6.8p (8c)
245,000
–
–
–
245,000
April 2024
April 2034
9.0p (11c)
–
500,000
–
–
500,000
September 2024
September 2034
19.3p (25c)
–
500,000
–
–
500,000
60,112,825
3,600,000
(10,636,666)
(3,787,333) 49,288,826
The closing mid-market price for the Company’s shares at 31 December 2024 was 19.70p (24.7c) (2023: 8.25p (10.5c)) and the low and high
for the year was 8.0p (10.0c) and 27.5p (34.4c) (2023: 5.5p (7.0c) and 10.6p (13.5c)).
In the 12 months to 31 December 2024, 10,636,666 options were exercised (2023: 230,000) and 3,787,333 options were forfeited
(2023: 1,491,667). The weighted average share price at date of exercise was 11.70p (14.7c).
24. SHARE OPTIONS CONTINUED
Corero Network Security plc Annual Report and Accounts 2024
84
Share options granted at 31 December 2023 were as follows:
Option holders
Date granted
Expiry date
Exercise
price –
pence
(cents)
At
1 January
2023
Granted
Exercised
Forfeit/
cancelled
At
31 December
2023
Enterprise Management Incentive Scheme
Other Holders
April 2019
April 2029
8.4p (10c)
10,000
–
–
–
10,000
September 2019
September 2029
2.5p (3c)
5,000
–
-
(5,000)
-
April 2020
April 2030
4.2p (5c)
357,500
-
(10,000)
347,500
June 2020
June 2030
5.3p (7c)
6,220,500
–
(230,000)
-
5,990,500
September 2020
September 2030
7.8p (10c)
10,000
–
–
(5,000)
5,000
October 2020
October 2030
9.0p (12c)
12,500
–
–
–
12,500
January 2021
January 2031
13.0p (18c)
535,000
–
–
(25,000)
510,000
September 2022
September 2032
10.8p (12c)
410,000
–
–
(20,000)
390,000
April 2023
April 2033
6.8p (8c)
410,000
155,000
–
–
155,000
Executive Enterprise Management Incentive Scheme
Andrew Lloyd
April 2017
April 2027
8.0p (10c)
2,083,333
–
–
–
2,083,333
Phil Richards
April 2023
April 2033
6.8p (8c)
– 1,500,000
–
–
1,500,000
September 2023
September 2033
7.1p (9c)
–
500,000
–
–
500,000
Unapproved French Share Option Scheme
Lionel Chmilewsky
June 2020
June 2030
5.3p (7c)
7,000,000
–
–
–
7,000,000
January 2021
January 2031
13.0p (18c)
500,000
–
–
(166,667)
333,333
Unapproved Share Option Scheme
Jens Montanana
April 2017
April 2027
8.0p (10c)
994,000
–
–
–
994,000
May 2018
May 2028
13.6p (18c)
425,000
–
–
–
425,000
October 2018
October 2028
11.0p (14c)
400,000
–
–
–
400,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
(350,000)
–
Richard Last
April 2017
April 2027
8.0p (10c)
450,000
–
–
–
450,000
June 2017
June 2027
13.6p (18c)
180,000
–
–
–
180,000
October 2018
October 2028
11.0p (14c)
200,000
–
–
–
200,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
–
350,000
Andrew Lloyd
April 2017
April 2027
8.0p (10c)
580,001
–
–
–
580,001
June 2017
June 2027
13.6p (18c)
200,000
–
–
–
200,000
Ashley Stephenson
June 2020
June 2030
5.3p (7c)
7,919,000
–
–
–
7,919,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
–
350,000
Andrew Miller
June 2020
June 2030
5.3p (7c)
5,775,000
–
–
–
5,775,000
Peter George
January 2019
January 2029
11.3p (15c)
750,000
–
–
–
750,000
January 2021
January 2031
13.0p (18c)
350,000
–
–
–
350,000
Carl Herberger
November 2023
November 2033
9.0p (11c)
– 11,533,492
–
–
11,533,492
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Overview
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Financial Statements
Corporate Directory
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Option holders
Date granted
Expiry date
Exercise
price –
pence
(cents)
At
1 January
2023
Granted
Exercised
Forfeit/
cancelled
At
31 December
2023
Unapproved Share Option Scheme continued
Other holders
April 2013
April 2023 25.0p (38c)
100,000
–
–
(100,000)
–
May 2014
May 2024
25.0p (42c)
670,666
–
–
–
670,666
September 2016
September 2026 22.5p (33c)
5,000
–
–
–
5,000
October 2018
October 2028
11.0p (14c)
50,000
–
–
–
50,000
September 2019
September 2029
2.5p (3c)
100,000
–
–
–
100,000
April 2020
April 2030
4.2p (5c)
405,000
–
–
(200,000)
205,000
April 2020
April 2030
4.2p (5c)
50,000
–
–
–
50,000
June 2020
June 2030
5.3p (7c)
4,423,500
–
–
–
4,423,500
September 2020
September 2030
7.8p (10c)
0
–
–
–
–
January 2021
January 2031
13.0p (18c)
485,000
–
–
(75,000)
410,000
November 2021
November 2031
9.25p (12c)
25,000
–
–
(25,000)
–
January 2022
January 2032
13.0p (18c)
4,260,000
–
–
–
4,260,000
September 2022
September 2032
10.8p (12c)
910,000
–
–
(510,000)
400,000
April 2023
April 2033
6.8p (8c)
–
245,000
–
–
245,000
47,901,000 13,933,492
(230,000)
(1,491,667)
60,112,825
Total number of options granted to Directors
31 December 2024
Options granted
31 December 2023
Options granted
Relevant Share Option scheme
Ashley Stephenson
8,269,000
8,269,000
Unapproved Share Option Scheme
Andrew Miller
5,915,000
5,915,000
Executive Enterprise Management Scheme and Unapproved Share
Option Scheme
Jens Montanana
1,819,000
1,819,000
Unapproved Share Option Scheme
Peter George
1,100,000
1,100,000
Unapproved Share Option Scheme
Richard Last
1,180,000
1,180,000
Unapproved Share Option Scheme
Rob Scott
750,000
Unapproved Share Option Scheme
Phil Richards
–
2,000,000
Executive Enterprise Management Incentive Scheme
Carl Herberger
11,533,492
–
30,566,492
20,283,000
None of the Directors holding office at the balance sheet date exercised options during the year (2023: none).
Andrew Miller has a contractual right (granted in March 2011) to purchase 140,000 ordinary shares in the Company from the Employee
Share Ownership Trust at 40p per share pursuant to a grant made to him under the Deferred Payment Share Plan.
24. SHARE OPTIONS CONTINUED
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86
Share-based payments
The Remuneration Committee (‘RC’) approves the grant of share options to employees of the Group under the Group’s share option schemes.
Share options are granted with a fixed exercise price which is equal to the market price at the date of the grant or higher price determined by
the RC. The share options granted are required to be exercised within 10 years from the date of grant.
Share options are valued using the Black-Scholes option-pricing model.
The weighted average fair value of the options granted in the year was 5.6p (6.3c). The value of share options granted during the year was
calculated using the Black-Scholes option pricing model. The following variables and ranges were used:
2024
2023
Share price at date of grants
9.0p–19.3p (11c–25c)
6.8p–9.0p (9c–11c)
Exercise price
9.0p–19.3p (11c–25c)
6.8p–9.0p (9c–11c)
Expected volatility
41.5%–43.1%
44.7%–49.5%
Estimated years to exercise
4.0–5.0
4.0–5.0
Risk-free interest rate
3.7%–4.2%
3.7%–4.2%
The table below provides information on all options outstanding at the end of the year:
2024
2023
Weighted average remaining contractual life
6.3 years
7.0 years
Average remaining contractual life
6.8 years
6.6 years
Options exercisable
36,565,387
42,044,889
Exercise price range
2.5p–19.3p (3c–25c)
2.5p–25p (3c–32c)
Weighted average share price
7.5p (9.4c)
7.4p (8.3c)
Weighted average exercise price
7.6p (9.6c)
7.6p (8.5c)
Expected volatility
0.2%–75.6%
0.2%–75.6%
Risk-free rate – 5-year gilt rate
-0.08%–4.2%
-0.08%–4.2%
Expected dividend yield
Nil
Nil
Volatility is calculated as the standard deviation of the closing daily share price over a period of 24 months prior to the grant date.
Operating expenses in the Group Income Statement included a charge of $484,000 (2023: $230,000) relating to employee
share‑based payments.
25. RELATED PARTIES AND TRANSACTIONS
Other than for exercises of share options, there have been no equity placings or offers in the year ended 31 December 2024 or 2023.
The Directors consider the Group’s key management personnel to be the Board of Directors of the Company whose compensation is
detailed in note 22.
26. EVENTS AFTER THE BALANCE SHEET DATE
There have been no events that have occurred after the balance sheet date which require disclosure.
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Financial Statements
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Note
As at
31 December
2024
$’000
As at
31 December
2023
$’000
Assets
Non-current assets
Investments in subsidiaries
3
57,574
50,124
57,574
50,124
Current assets
Trade and other receivables
4
5,977
4,952
Cash and cash equivalents
2,156
2,544
8,133
7,496
Liabilities
Current liabilities
Trade and other payables
5
20
114
20
114
Net current assets
8,113
7,382
Net assets
65,687
57,506
Total equity attributable to owners of the parent
Share capital
7,133
6,999
Share premium
83,290
82,430
Capital redemption reserve
7,051
7,051
Share options reserve
2,143
1,659
Foreign exchange translation reserve
(15,781)
(14,764)
Accumulated profit and loss reserve
(18,149)
(25,869)
Total equity
65,687
57,506
The Company made a profit for the year 31 December 2024 of $7,720,000 (2023: loss of $15,291,000).
These financial statements were approved and authorised for issue by the Board of Directors on 31 March 2025 and signed on their behalf.
Carl Herberger
DIRECTOR
The notes on pages 90 to 94 form part of these financial statements.
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88
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Share
capital
$’000
Share
premium
account
$’000
Capital
redemption
reserve
$’000
Share options
reserve
$’000
Foreign
exchange
translation
reserve
$’000
Accumulated
profit and loss
reserve
$’000
Total
attributable to
equity owners
of the parent
$’000
1 January 2023
6,980
82,284
7,051
1,465
(18,354)
(10,578)
68,848
Loss for the year
–
–
–
–
–
(15,291)
(15,291)
Other comprehensive income
–
–
–
–
3,590
–
3,590
Total comprehensive income for
the year
–
–
–
–
3,590
(15,291)
(11,701)
Contributions by and distributions
to owners
Issue of share capital – exercise of
options
19
146
–
–
–
–
165
Fully exercised share options
–
–
–
(3)
–
–
(3)
Share-based payments
–
–
–
197
–
–
197
Total contributions by and
distributions to owners
19
146
–
194
–
–
359
31 December 2023
6,999
82,430
7,051
1,659
(14,764)
(25,869)
57,506
Profit for the year
–
–
–
–
–
7,720
7,720
Other comprehensive income
–
–
–
–
(1,017)
–
(1,016)
Total comprehensive income for
the year
–
–
–
–
(1,017)
7,720
6,703
Contributions by and distributions
to owners
Issue of share capital – exercise of
options
134
860
–
–
–
–
994
Share-based payments
–
–
–
484
–
–
484
Total contributions by and
distributions to owners
134
860
–
484
–
–
1,478
31 December 2024
7,133
83,290
7,051
2,143
(15,781)
(18,149)
65,687
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NOTES TO THE COMPANY FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Corero Network Security plc (Company
number 02662978) is a public limited
company incorporated in the United Kingdom
under the Companies Act 2006 and registered
in England and Wales. The functional currency
of the Company entity is GBP.
Presentation currency
These Company financial statements are
presented in US dollars (‘$’) rounded to the
nearest $’000 unless otherwise stated which
represents the presentational currency of the
Company.
The average $-GBP sterling (‘GBP’)
exchange rates used for the conversion of
the Monthly Income Statements for the year
ended 31 December 2024 was between 1.25
and 1.32 (2023: between 1.21 and 1.29). The
closing $-GBP exchange rate used for the
conversion of the Company’s assets and
liabilities at 31 December 2024 was 1.25
(2023: 1.27).
2. MATERIAL ACCOUNTING
POLICIES
2.1 Basis of preparation
The Company financial statements were
prepared in accordance with Financial
Reporting Standard 101 Reduced
Disclosure Framework. The Company
has taken advantage of the following
disclosure exemptions:
The requirements of IFRS 2 Share-based
payments, IFRS 7 Financial Instruments:
Disclosures, IAS 7 Statement of Cash Flows,
IAS 12 Income Taxes and IAS 24 Related
Party Disclosures.
The Company has taken advantage
of Section 408 of the Companies Act
2006 and has not included an income
statement in these financial statements. The
Parent Company’s profit for the year was
$7.7 million (2023: $15.3 million loss).
2.2 Going concern
The financial statements have been prepared
on a going concern basis.
The Company is a holding company and does
not trade in its own right. The Company incurs
expenditure, mainly in relation to professional
fees on behalf of the Group.
The Company had net current assets and
cash and cash equivalents as at 31 December
2024 of $8.1 million and $2.2 million
respectively (2023: $7.5 million and $2.5
million respectively), and has cash and cash
equivalents at the date of approval of these
financial statements that were more than
adequate to cover the Company’s projected
level of expenditure for at least the next 12
months.
The Directors are also not aware of any other
significant matters in the going concern
assessment period that could reasonably
expected to impact the going concern
conclusion.
On this basis, the directors consider it
appropriate to adopt the going concern basis
of accounting in preparing these financial
statements.
2.3 Investments in subsidiaries
In the Company’s separate financial
statements, investments in subsidiaries are
carried at cost less any impairment provisions.
Refer to note 3 in the Company financial
statements for further details.
2.4 Financial instruments
The Company classifies financial
instruments, or their component parts, on
initial recognition as a financial asset, a
financial liability, or an equity instrument
in accordance with the substance of the
contractual arrangement. Financial assets
and financial liabilities are recognised in the
Company’s Statement of Financial Position
when the Company becomes party to the
contractual provisions of the instrument.
The particular recognition and measurement
methods adopted for the Company’s
financial instruments are disclosed below:
Other receivables
Other receivables are stated at their fair
value at time of initial recognition, reflecting,
where material, the time value of money.
Cash and cash equivalents
Cash and cash equivalents include cash on
hand and short-term deposits with an original
maturity of three months or less that are
readily convertible to known amounts of cash.
Other payables
Other payables are not interest bearing and
are stated at their fair value at time of initial
recognition. Thereafter they are accounted
for at amortised cost.
Debt obligations
Debt obligations include interest bearing
bank borrowings which are stated at their
fair value less transaction costs at time of
initial recognition. Debt obligations are
subsequently measured at amortised cost.
2.5 Key accounting estimates
and assumptions
Impairment of investments
The Directors have reviewed the cost of
investments in subsidiaries of the Company
with reference to current and future trading
conditions. The investment in subsidiaries
has been reviewed with reference to a
valuation based on a discounted free cash
flow, in conjunction with the goodwill
impairment review, which the Directors
consider to be an appropriate valuation
methodology.
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90
3. INVESTMENT IN SUBSIDIARIES
Investment in Corero
Network Security, Inc.
and Corero Network
Security (UK) Limited
$’000
Investment
in Corero
Group Services
Limited
$’000
Loan note
$’000
Total
$’000
Cost
At 1 January 2023
65,325
9,635
8,443
83,403
Additions
–
–
224
224
Repayment of Loan note
–
–
(9,089)
(9,089)
Foreign currency translation
3,374
502
422
4,298
At 31 December 2023 and at 1 January 2024
68,699
10,137
–
78,836
Additions
–
–
–
–
Foreign currency translation
(1,149)
(168)
–
(1,318)
At 31 December 2024
67,550
9,969
–
77,519
Impairment
At 1 January 2023
(9,358)
(3,836)
–
(13,194)
Impairment charge
(10,859)
(4,069)
–
(14,928)
Foreign currency translation
(87)
(503)
–
(590)
At 31 December 2023 and at 1 January 2024
(20,304)
(8,408)
–
(28,712)
Impairment credit/(charge)
8,664
(373)
–
8,291
Foreign currency translation
337
139
–
476
At 31 December 2024
(11,303)
(8,642)
–
(19,945)
Net book value
At 31 December 2024
56,247
1,327
–
57,574
At 31 December 2023
48,395
1,729
–
50,124
At 1 January 2023
55,967
5,799
8,443
70,209
The Company owns:
•
100% of the issued share capital of Corero Network Security, Inc. a company incorporated in Delaware, USA. The Company’s business
address is 293 Boston Post Road, Marlborough, MA 01752, USA. The principal business of the Company consists of the development
and sale of appliance and software security products and solutions.
•
100% of the issued share capital of Corero Group Services Limited, a company incorporated and registered in England and Wales.
The Company’s business address is Salisbury House, 29 Finsbury Circus, London, EC2M 5QQ, England, United Kingdom. The principal
business of the Company consists of providing administration services to the Group.
•
100% of the issued share capital of Corero Network Security (UK) Limited, a company incorporated and registered in England and
Wales. The Company’s business address is 3rd Floor, 53 Hanover Street, Edinburgh, EH2 2PJ and registered address is Salisbury
House, 29 Finsbury Circus, London, EC2M 5QQ, England, United Kingdom. The principal business of the Company consists of sale of
appliances and software security products and solutions, providing development and marketing services on behalf of Corero Network
Security, Inc.
The Directors have reviewed the carrying value of the cost of investments in subsidiaries of the Company against the recoverable amount. The
recoverable amount was determined based on a discounted free cash flow valuation to calculate fair value less costs to sell using cash flow
projections over a 5 year period, which the Directors consider to be an appropriate valuation methodology. Based on the pre-tax cash flows of
the investment held in Corero Network Security Inc. and Corero Network Security (UK) Limited (combined cash flows) as at 31 December 2024,
an impairment credit has been recognised to the value of $8.7 million. There is also a small impairment to the value of the investment in Corero
Group Services Limited of $0.4 million. The total impairment provision against the investment in subsidiaries was therefore $19.9 million at 31
December 2024 (2023: $28.7 million).
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3. INVESTMENT IN SUBSIDIARIES CONTINUED
Investment in Corero Network Security Inc. and Corero Network Security (UK) Limited
Key assumptions used in the discounted cash flow (‘DCF’) calculation are those regarding revenue growth and discount rates as summarised in
the table below and commented on below. Refer to note 9 in the consolidated financial statements for further details about the key assumptions
and sensitivities used.
2024
2023
Forecast cash flow period
Years 1-2
Years 1-2
Extrapolated cash flow period
Years 3-5
Years 3-10
Cumulative annual growth rate (‘CAGR’) for revenue used for the forecast/extrapolated periods
14.0%
9.5%
Growth rates (‘CAGR’) used for the forecast/extrapolated periods:
Year 1–2 (forecast period)
14.0%
9.0%
Years 3–5 (extrapolated period)
14.0%
15.0%
Years 6–10 (extrapolated period)
n/a
6.5%
Revenue growth rate used beyond the extrapolated period
3.3%
2.5%
Discount rate
13.7%
18.5%
The DCF calculation has been used to assess the level of impairment or impairment credit required to be recognised at 31 December
2024 in the investment held in Corero Network Security, Inc. and Corero Network Security (UK) Limited. The valuation to support the value
of the investment held, and corresponding impairment required is sensitive to changes in the cash flow forecasts and the discount rate
assumptions, and there is no absolute guarantee that the expected growth will be achieved.
The assumptions which have the greatest impact on the valuation are discount rate and revenue growth in 2025 and 2026 (‘Year 1-2
(forecast period)’).
If the discount rate is increased from 13.7% to 20%, this would result in an impairment of $15 million to the carrying value of the investment
held in Corero Network Security, Inc. and Corero Network Security (UK) Limited.
If forecast revenue growth for 2025 and 2026 were reduced from 14.0% to nil, this would result in an impairment of $20.5 million to the
carrying value of the investment in Corero Network Security, Inc. and Corero Network Security (UK) Limited as at 31 December 2024.
Based on the pre-tax cash flows of the investment held in Corero Network Security, Inc. and Corero Network Security (UK) Limited (combined
cash flows) as at 31 December 2024, an impairment credit has been recognised to the value of $8.7 million. Net book value of the investment
held at 31 December 2024 is $56.2 million.
Investment in Corero Group Services Limited
At 31 December 2024, net assets of Corero Group Services Limited amounted to $1.3 million which the Directors have determined to
be the value of the Company at that time. The investment held in Corero Group Services Limited at 31 December 2023 was $1.7 million.
Therefore, at 31 December 2024, an additional impairment charge has been recognised against the investment in Corero Group Services
Limited of $0.4 million.
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92
4. OTHER RECEIVABLES
2024
$’000
2023
$’000
Other debtors
80
82
Prepayments
35
4
Trading amounts due from subsidiaries
5,862
4,866
5,977
4,952
None of the Company’s trade and other receivables are secured by collateral or credit enhancements (2023: None).
The maturity profile of trade and other receivables is set out in the table below:
2024
$’000
2023
$’000
In one year or less, or on demand
5,977
4,952
In more than one year, but not more than five years
–
–
5,977
4,952
The analysis of trade and other receivables by foreign currency is set out in the table below:
2024
$’000
2023
$’000
US dollars
–
–
UK pound sterling
5,977
4,952
5,977
4,952
5. OTHER PAYABLES
2024
$’000
2023
$’000
Trading amounts due to subsidiaries
–
–
Other payables
20
1
Accruals
–
113
20
114
None of the Company’s trade and other payables are secured by collateral or credit enhancements.
The Directors consider that the carrying amount of trade and other payables approximates their fair value. 100% (2023: 100%) of the trade
and other payables are due in less than three months. The amounts due to subsidiaries are repayable on demand.
The analysis of trade and other payables by foreign currency is set out in the table below:
2024
$’000
2023
$’000
US dollars
–
–
UK pound sterling
20
114
20
114
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6. BORROWINGS
There are no external borrowings held by the Group at 31 December 2024 (2023: nil). The RCF was closed in February 2024 with all fees due
paid at that time.
7. RELATED PARTIES AND TRANSACTIONS
Company key management compensation was $nil (2023: $nil) as the key management are employed by subsidiaries.
8. SHARE CAPITAL
Refer to Group disclosure note 20 for movements in share capital of the Company.
9. SHARE PREMIUM
Refer to Group disclosure note 21 for movements in share premium of the Company.
10. EVENTS AFTER THE BALANCE SHEET DATE
There have been no events that have occurred after the balance sheet date which require disclosure.
Corero Network Security plc Annual Report and Accounts 2024
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GLOSSARY
5G
Fifth Generation Cellular Network Technology
Adjusted EBITDA
Represents the operating profit less unrealised foreign exchange differences on an intercompany loan, PPPL
forgiveness, depreciation, amortisation and any impairment of goodwill. The Board considers the Adjusted
EBITDA to be a further useful measure of profitability as it excludes other significant non‑cash items in addition to
classic typical EBITDA non-cash items.
AI
Artificial Intelligence
AIM
Alternative Investment Market
ARR
Annualised Recurring Revenues represents the normalised annualised recurring revenues and includes recurring
revenues from contract values of annual support, software licence subscription and from DDoS Protection-as-a-
Service (‘DDPaaS’) contracts.
CAGR
Compound Annual Growth Rate
CGU
Cash-Generating Unit
CNS
Corero Network Security
CPU
Central Processing Unit
CSPs
Communication Service Providers
DDoS
Distributed Denial of Service
DDPaaS
DDoS Protection as-a-Service
DPDK
Data Plane Development Kit
DPI
Deep Packet Inspection
EBITDA
Earnings Before Interest, Tax, Depreciation and Amortisation
EU
European Union
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
FRS
Financial Reporting Standard
Gross margin
Represents gross profit divided by revenue. It measures the Group’s profitability before overheads.
IAS
International Accounting Standards
IFRS
International Financial Reporting Standards
IoT
Internet of Things
ISA
International Standard on Auditing
MSSP
Managed Security Service Provider
Net cash
Represents cash at bank less total borrowings.
NICs
Network Interface Cards
POPs
Points of Presence
PPPL
Paycheck Protection Program Loan
Profit/(Loss)
before taxation
Represents the Company’s loss arising from operations, after depreciation, amortisation and any finance income
or expenditure before any taxation charges or credits.
Revenue
Represents revenue from the sale of Corero solutions.
RCF
Revolving Credit Facility
R&D
Research and Development
ROI
Return On Investment
SOC
Security Operations Center
SSP
Stand–alone Selling Prices
TCO
Total Cost of Ownership
TDC
SmartWall® Threat Defense Cloud
TDD
SmartWall® Threat Defense Director
TDS
SmartWall® Threat Defense System
Corero Network Security plc Annual Report and Accounts 2024
95
Overview
Strategic Report
Governance
Financial Statements
Corporate Directory
CORPORATE DIRECTORY
DIRECTORS
Jens Montanana (Non-executive Chairman)
Richard Last (Non-executive Director)
Peter George (Non-executive Director)
Andrew Miller (Non-executive Director)
Robert Scott (Non-executive Director)
Carl Herberger (Chief Executive Officer)
Ashley Stephenson (Chief Technology Officer)
SECRETARY AND REGISTERED OFFICE
Emma Rockey
Salisbury House
29 Finsbury Circus
London
EC2M 5QQ
UK
NOMINATED ADVISERS AND BROKER
Canaccord Genuity Ltd
88 Wood Street
London
EC2V 7QR
UK
Zeus Capital Limited
82 King Street
Manchester
M2 4WQ
FINANCIAL PUBLIC RELATIONS
Vigo Communications
Sackville House
40 Piccadilly
London
W1J 0DR
UK
AUDITOR
MacIntyre Hudson LLP
2 London Wall Place,
London
EC2Y 5AU
UK
SOLICITORS
Dorsey and Whitney LLP
199 Bishopsgate
London
EC2M 3UT
UK
BANKERS
Barclays Bank PLC
Corporate Banking
11th Floor, 1 Churchill Place
London E1 5HP
Wells Fargo Bank N.A.
420 Montgomery Street
San Francisco, CA 94104
USA
REGISTRARS
MUFG Pension & Market Services (formerly Link Group)
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
UK
WEBSITE ADDRESS
www.corero.com
Corero Network Security plc Annual Report and Accounts 2024
96
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Registered Office
Salisbury House
29 Finsbury Circus
London
EC2M 5QQ
UK
Corero Network Security plc