Summary

  • Corero reported $15.5 million of H1 2026 revenue, up 42%, and a 93% gross margin. Its $24.1 million annualised recurring revenue was up 12% year on year but only $0.2 million above the December 2025 level.
  • Both subscription revenue and upfront software-licence revenue increased. The stronger income statement is real; it does not establish that the recurring contract base is expanding at the same rate.

The conspicuous number in Corero Network Security’s 9 September interim results is 42%. Revenue for the six months to June reached $15.522 million, against $10.908 million a year earlier. Gross margin reached 93%, two points above the prior first half. Those are sizeable improvements for a DDoS protection supplier. They measure work recognised in this accounting period, however, rather than the speed at which the contracted recurring base is now growing.

Corero’s annualised recurring revenue, or ARR, stood at $24.1 million at the half-year point. That is 12% above the $21.6 million recorded a year earlier, yet only $0.2 million above the $23.9 million reported for the end of 2025. ARR is a normalised annual rate that includes support, software subscriptions and DDoS Protection-as-a-Service contracts. It is a run-rate measure, not six months of sales, and not a pure software-as-a-service subscription count. The company defines its 96% retention figure as recurring revenue retained from existing customers at renewal, rather than the percentage of customer names retained.

The interim report’s revenue table prevents an easy “one-off sales explain everything” reading. Recognised subscription revenue, including as-a-service, increased from $3.317 million to $6.318 million. That $3.001 million increase accounts for roughly 65% of the $4.614 million total revenue increase. Software licences and appliances rose from $3.149 million to $5.215 million, adding $2.066 million, while maintenance and support fell $0.453 million to $3.989 million. A larger recurring base built before this half year therefore flowed through the current income statement even as the ARR stock made little further progress from December.

Timing still matters. Revenue recognised at a point in time rose to $5.215 million from $3.149 million; its share of total revenue moved from about 29% to 34%. Last year Corero’s finance review explained that licence and appliance deals generally recognise most revenue upfront while support runs over the contract, whereas DDoS Protection-as-a-Service is recognised across its term. The 2025 shift toward service contracts had held back reported sales while ARR grew. In 2026 the mix moved partly the other way. The software-licence-and-appliance line cannot be treated as a disclosed count of COTS deals, but management specifically says higher-margin upfront software licences helped lift this half’s margin.

This is also why management’s own forecast matters more than extrapolating 93%. Chief financial officer Chris Goulden expects H2 gross margin to trend toward 90–91%. He attributes relatively modest H1 ARR growth to timing and a greater proportion of buyers choosing upfront licences rather than subscriptions; Corero’s COTS software-only option was introduced in the second half of 2025. An upfront licence may still have an associated support relationship, but it does not add to subscription ARR in the same way as a service contract.

The announcement gives no precise split of new COTS deal value, so the contribution cannot be reconstructed from the aggregate category alone.

The sales evidence is substantive. H1 order intake rose 14% to $14.3 million, and EBITDA swung from a $1.4 million loss to a $2.6 million profit. After June, Corero announced a five-year, $3.4 million UK telecoms managed-service deal and a three-year, $0.5 million initial NeoCloud contract. They demonstrate customer demand, but their total contract values are not H1 revenue. Potential NeoCloud expansion is still a possibility, not an order already won.

Nor is EBITDA the cash left over. The accounts show $0.110 million net operating cash generation, $2.082 million of capitalised development spending and cash of $2.103 million at 30 June, down from $4.034 million at December. Corero reported no debt and an unused $2 million overdraft. This does not negate the profit recovery; it identifies the collection and investment cycle that must accompany it. The company expects full-year revenue to exceed its $29.2 million consensus reference and EBITDA to significantly exceed $3.3 million. Those remain management expectations, not realised results.

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