Corero Network Security posts first-half profit and raises guidance
Corero Network Security shares jumped on a swing to profit driven by a shift to subscription revenue, with the firm raising its full-year outlook above consensus estimates.
Corero Network Security shares surged as much as 28% on Wednesday after the AIM-listed DDoS protection specialist reported a first-half profit. The stock touched 10.9p intraday, up from a prior close of 8.5p, following the release of its unaudited H1 2026 interim statement. The positive market reaction was triggered by a significant improvement in profitability metrics and a decision to raise full-year guidance above market expectations.
The company’s revenue increased by 42% to $15.5m from $10.9m in the same period last year. This growth allowed EBITDA to swing to a $2.6m profit from a $1.4m loss, while pre-tax profit reached $1.4m, reversing a $2.4m deficit in H1 2025. Management attributed these results to a strategic pivot toward DDPaaS, a subscription-based model that provides more predictable recurring income compared to one-off license sales.
Subscription shift drives margin growth
The transition to a recurring revenue model was a key driver of financial health, with gross margins improving to 93% from 91% in the prior year. CEO Carl Herberger noted that growth in revenue, annual recurring revenue, and EBITDA reflects the ongoing move toward a more stable income stream. Order intake rose by 14% to $14.3m, and annual recurring revenue grew 12% to $24.1m, although customer retention slipped slightly to 96% from 98%.
New contracts support raised outlook
Corero secured several major deals immediately after the reporting period, including a $3.4m five-year contract with a Tier-1 UK telecoms provider. The company also signed a $1.4m three-year deal with a Tier-1 US telecoms group and a $0.5m three-year NeoCloud contract. These wins provided the foundation for management to guide FY2026 revenue and EBITDA above the company-stated consensus of $29.2m and $3.3m, respectively, signaling confidence in continued momentum.
Cash position remains debt-free
Despite the cash balance falling to $2.1m at the end of June from $4.0m at the end of 2025, the group maintains a debt-free status. It retains an unused $2.0m overdraft facility, providing a liquidity buffer. As reported by GN stocks, the company’s financial position remains robust, supporting its operational expansion and strategic goals without the burden of external debt servicing.
