Corero Reports 25% ARR Growth Amid Revenue Dip and CTO Retirement in H1 2025

H1 2025: ARR surges while reported revenue dips as Corero pivots to subscriptions

Corero Network Security has posted a classic subscription-transition set of numbers. Annualised Recurring Revenue (ARR) jumped 25% to $21.6 million, but reported H1 revenue fell 10% to $10.9 million as customers shifted from up-front licences to DDoS Protection-as-a-Service (DDPaaS). EBITDA swung to a $1.4 million loss (H1 2024: $0.7 million profit) and cash reduced to $3.1 million. All figures are in US dollars unless stated.

Quick jargon check: ARR is the normalised annualised value of recurring contracts. DDPaaS is Corero’s subscription model for its DDoS protection. EBITDA is operating profit before interest, tax, depreciation and amortisation.

Key H1 2025 numbers investors should know

Metric	H1 2025	H1 2024	Change
ARR	$21.6 million	$17.2 million	+25%
Revenue	$10.9 million	$12.2 million	-10%
Order intake	$12.5 million	$14.2 million	-12%
Customer retention	98%	Not disclosed	–
EBITDA	$(1.4) million	$0.7 million	n/m
Gross margin	91%	91%	Flat
Cash	$3.1 million	$7.9 million	-61%

What drove the performance: subscription mix and a Q2 rebound

The headline is mix. More DDPaaS means less revenue recognised up front, with sales spread over contract terms that are typically three years. That depresses in-period revenue and EBITDA today, but builds ARR – the lifeblood of a predictable software business.

• Order intake was softer in Q1 due to weaker Alliance Partner performance and uncertainty around anticipated US tariffs.
• Q2 snapped back: order intake rose 13% year-on-year to $7.8 million, including three expansion orders totalling $2.7 million.
• Two early wins for the new CORE platform contributed $1.8 million of orders.

Geographically, the United States remained dominant at $9.0 million revenue, with the UK at $0.8 million and others at $1.1 million. Within revenue, software licence and appliance sales dropped to $3.1 million (H1 2024: $5.1 million) while DDPaaS rose modestly to $3.3 million and maintenance and support hit $4.4 million.

Cash, margins and guidance: visibility up, flexibility needed

Gross margin held a healthy 91%, evidence that pricing and delivery remain disciplined. Operating expenses before depreciation and amortisation increased to $11.3 million, largely reflecting sales investment. Cash fell to $3.1 million as the shift to subscriptions pushes cash receipts into future periods. There is no debt, and the Group is finalising a bank overdraft facility to smooth working capital as DDPaaS scales.

Guidance is unchanged from July: revenue of $24.0 million to $25.5 million for FY 2025 (FY 2024: $24.6 million) and EBITDA between a $1.5 million loss and breakeven (FY 2024: $2.5 million profit). Management says Q3 trading has continued Q2’s positive momentum and is confident in sustained ARR growth.

Strategy, partnerships and product momentum

Corero is leaning on four pillars: expand its footprint and partners, invest in sales and marketing, drive renewals and upsell, and out-compete with product innovation.

• Partnerships stepped up: an expanded agreement with Juniper Networks to sell Corero’s full DDoS portfolio should open doors with tier-one telcos; Certified Partner status with World Wide Technology adds reach; and Latin American channel partners delivered visible wins.
• Customer highlights: $1.5 million expansion with TierPoint deploying CORE; 3-year, $1.2 million deal with Forte Telecom in Brazil; 5-year, $1.2 million expansion with Lightedge; $0.8 million renewal with TechEnabler; and a $0.3 million CORE Zero Trust Admission Control deployment at Cooper Health.
• Post period: a multi-year European banking and insurance win via Akamai’s Prolexic On-Prem, powered by Corero’s SmartWallONE, with an initial 3-year DDPaaS contract worth $0.6 million total contract value to Corero.

On product, the new SaaS-based CORE platform extends Corero beyond DDoS into broader observability and resiliency, with features such as Traffic Analysis, Zero Trust Admission Control and Layer 7 protection. Recognition in the 2025 SPARK Matrix underlines the technology credibility the company is pushing.

Board changes: CTO retirement and succession

Ashley Stephenson, currently CTO and a director, will retire from Corero on 31 December 2025 and step down from the Board on 30 September 2025. He has been central to the SmartWallONE strategy since joining in 2013. Responsibilities will transition to the senior leadership team, with Ashley supporting the handover alongside CEO Carl Herberger through year-end. In April 2025, CFO Chris Goulden joined the Board.

My take for investors: why this matters

Positives I like

• ARR up 25% to $21.6 million with 98% retention. That is the right direction for a subscription security business and builds future revenue visibility.
• Q2 order intake recovery to $7.8 million shows the Q1 wobble was external and temporary, not structural.
• Partnerships are broadening the funnel – Juniper, WWT and momentum in Latin America should compound through H2 and into 2026.
• Gross margin at 91% suggests the core product remains premium and scalable.

Watch-outs to keep on the radar

• Cash is tight at $3.1 million. The overdraft facility will help working capital, but execution needs to stay sharp while the DDPaaS mix ramps.
• Order intake for H1 was down 12% year-on-year. Sustained Q2-style momentum is needed to hit the FY revenue range.
• EBITDA guidance points to a potential full-year loss. The narrative is “invest now for recurring later” – fair, but patience is required.

Near-term catalysts

• Evidence of continued Q3/Q4 order growth, particularly from Juniper channel opportunities and Latin America.
• Further CORE wins and upsells to existing SmartWallONE customers.
• Confirmation and terms of the new overdraft facility to underpin working capital through the transition.

Bottom line

Corero is taking the short-term pain that comes with a faster pivot to subscriptions in exchange for higher-quality, more predictable revenues. ARR growth, strong retention and the Q2 rebound support the strategy, while cash and profitability are the obvious pressure points to manage. If management delivers the H2 ramp they’re guiding to, the groundwork laid in H1 2025 could set up a sturdier, more scalable business model for 2026 and beyond.