Smarttech247 Group plc (LON:S247), a multi-award-winning provider of AI-enhanced cybersecurity services providing automated managed detection and response for a portfolio of international clients, has announced its audited final results for the 12 months ended 31 July 2023.
Operational highlights
· Admitted to trading on AIM in December 2022, raising £3.7 million via a placing of new ordinary shares
· A number of new contracts have been won during the period, and since the period end, spearheaded by the Group’s Managed Detection and Response (MDR) platform, VisionX
· In April 2023 the Company announced its participation in Managed Security Service Provider Program by its partner, Forcepoint, a global security leader
· Named as Cybersecurity Company of the Year by Chambers of Ireland InBusiness Recognition Awards in May 2023
· In July 2023 Smarttech247 partnered with SentinelOne, a cybersecurity platform company, to deliver cybersecurity solutions
· The Group has expanded, with headcount increased significantly, to be positioned to deliver growth and develop new products
· Continued development of new products, including new VisionX features with further development of ThreatHub and NoPhish
Post-period end
· Listing of VisionX on the Amazon Web Services (AWS) Marketplace in August 2023
· Strategic partnership with Abnormal Security, a leading behavioural AI-based email security platform in August 2023
· In October 2023 Smarttech247 announced a strategic partnership with Splunk, a cybersecurity platform company, to deliver automation-driven and human-led MDR capabilities to global clients
· Won a tender contract from an existing Government of Ireland department client and secured a contract renewal with AutoNation, the largest automotive retailer in the United States, in October 2023
· New three-year contract secured with a global pharmaceutical solutions organisation in November 2023
· Ranked as a Deloitte Fast 50 Technology Company and won the ‘Email Security Solution of the Year’ at The Computing Security Award 2023 for the Company’s NoPhish product
· Announced the launch of Aio, a new AI Assistant and the launch of the Company’s Mid-Market MDR solution for its VisionX platform in January 2024
Financial highlights
· Revenue increased by 19.3% to €12.18 million (31 July 2022: €10.21 million)
· Gross profit increased by 22.7% to €6.81 million (31 July 2022: €5.55 million)
· Adjusted EBITDA increased by 36% to €2.70 million (31 July 2022: €1.98 million)
· Adjusted operating profit of €2.15 million (31 July 2022: €1.76 million)
· Cash of €6.06 million at the period end (31 July 2022: €2.36 million)
Raluca Saceanu, CEO of Smarttech247, commented:
“I am pleased to announce our first, full-year results as an AIM-quoted company, marking a major milestone for Smarttech247. We have entered into several new contracts during the period, and since the period end, with large, international organisations, and hope to continue this momentum with our larger sales capacity to further increase our revenue and profit growth going forward.
“The year under review, and the period to date, has been marked by significant strides in our Research and Development as well as forming strategic partnerships with top companies like Forcepoint, SentinelOne, Abnormal Security, and Splunk. These synergies have empowered us to offer our clients a comprehensive security ecosystem, one that is not only robust, but also dynamically tailored to meet the evolving demands of their unique business landscapes.
“Smarttech247 now has the platform in place to support and accelerate its growth in the cybersecurity sector. We are confident as we enter 2024 and look forward to updating the market on our further progress in due course.”
The Annual Report and Accounts for the financial year ended 31 July 2023 will be available to download from the Group’s website via: https://www.smarttech247.com/aim-rule-26/
Chairman’s statement
Introduction
Smarttech247 Group plc is a public limited company whose shares are quoted on the AIM market of the London Stock Exchange. The Company is a multi-award-winning provider of AI-enhanced cybersecurity services providing automated managed detection and response for a portfolio of international clients. It has four directly and indirectly owned subsidiaries, Zefone Limited, Smart Systems Security Limited, Smarttech 247 Cyber Security Sarl incorporated and Smarttech Sp z.o.o.
We are pleased to report our results for the year to 31 July 2023.
Highlights
The key highlights for the year are as follows:
| Year ended | 31 July 2023Audited | 31 July 2022Unaudited | Change |
| €000 | €000 | % | |
| Revenue | 12,180 | 10,206 | +19.3 |
| Gross profit | 6,806 | 5,545 | +22.7 |
| Gross profit margin | 55.9% | 54.3% | |
| Operating costs | 6,981 | 3,850 | |
| Adjusted EBITDA (Note 6)* | 2,698 | 1,984 | +36.0% |
| Operating profit | 303 | 1,756 | |
| Profit before tax | 204 | 1,534 | |
| As at | |||
| Cash | 6,062 | 2,358 | |
| Net assets | 11,483 | 4,533 |
* Adjusted EBITDA is a non-IFRS measure and has been reconciled to the underlying IFRS numbers in Note 6
· Listing achieved on the London Stock Exchange, raising £3.7 million
· Revenue and profits continue to grow strongly
· A number of new contracts have been won during the period, spearheaded by the Group’s Managed Detection and Response (“MDR”) VisionX
· A number of significant partnerships have been entered into with leading players in the industry
· The platform has been expanded and headcount increased in order to be in a position to deliver growth and develop new products
· New sales capacity established to increase the rate of revenue growth
· New products are being developed including a new VisionX product with further development of ThreatHub and NoPhish
Review of the year
2023 has had a transformational year for the Group with a listing being achieved on the London Stock Exchange in December 2022 and funds successfully raised from new investors. At the same time, the business has continued to grow significantly, building out its platform and headcount to service demand.
The Group now has the platform in place to support and accelerate its revenue growth. We have also launched new products and won multiple new contracts with major global companies and institutions. These contracts are important as they provide clear validation of the service that we provide and clear reference points for new customers. We are often competing with global companies to win new business and succeeding, more details on which will be covered in the Chief Executive Officer’s (“CEO”) Statement.
We firmly believe that our listing will give Smarttech247 greater visibility and credibility in overseas geographies, including the USA and Europe, and will support our growth plans in the short and long term. I am extremely proud of the team that we now have in place and would like to thank them for their hard work and dedication in getting the Group to its current position. I would also like to welcome our new investors.
Outlook and strategy
Cyber-attacks continue to increase with serious implications for the companies concerned. There is no simple solution to defend an organisation against everything that it can be exposed to but our combination of managed detection and response capabilities can help to significantly reduce the impact of an attack and manage the situation. We therefore see clear opportunities for future growth.
We have started FY2024 well with more contracts being won and a number of existing contracts being renewed so we are very much looking forward to continuing this progress in FY2024.
Ronan Murphy
Executive Chairman
26 January 2024
Chief Executive Officer’s statement
During the year under review, the Group made notable progress on a number of fronts. It has focused on building out its platform and launching new products and is now extremely well-placed to grow revenue. As we embark on a new era at Smarttech247, we are pleased with the Group’s prospects and the strategic advances that we are making.
Products
To support its extensive capabilities for Managed Detection and Response (“MDR”), the Group launched its VisionX technology during the year. This technology, together with our award-winning capabilities and expertise, provides 24/7 proactive threat detection and response, using cloud data analytics, machine learning and an incident response capability.
This AI-enabled platform is used in tandem with human-led monitoring from Smarttech247’s expert team, empowering organisations to leverage AI and intelligent automation to enhance their security operations.
During the year, we have also embarked on the development of a new version of the VisionX product. This offers a very different functionality in that it is multi-tenancy and has a completely new User Interface – this is a very important element of the VisionX platform as it is heavily relied upon by product users to enable them to assess the effectiveness of their security operations in real time. This new design offers users an intuitive approach that simplifies complex security operations. With improved functionality, advanced analytics, threat hunting and customisable dashboards, customers will gain unprecedented insights into their organisation’s security posture.
Post period end in August 2023, the Group also announced that its VisionX platform is available on the Amazon Web Services (“AWS”) Marketplace. AWS’s well-established, trusted platform allows us to showcase VisionX to a wider range of customers, demonstrating our commitment to delivering leading security solutions to a global audience.
The Group is continuing to develop its threat and vulnerability software called Threathub. Threathub has attack surface intelligence management features which allow organisations to manage their risk continuously by providing them with automated threat modelling and dynamic risk governance capabilities based on their internal and external attack surface.
We are progressing with the revamping of our Managed Phishing Response Platform, NoPhish, underscoring our steadfast commitment to addressing the dynamic landscape of cybersecurity threats. The latest developments represent a pivotal advancement, facilitating expeditious responses to phishing incidents through a streamlined and intuitive user experience. This enhancement is poised to significantly contribute to the efficacy of our platform by minimising response times and optimising operational agility.
Contracts
Smarttech247 holds a strong position within the cybersecurity market, and we are pleased to be able to deliver revenue and adjusted EBITDA growth. Just prior to joining AIM, the Group won a three-year contract with a total sales value of US$800,000 with a Fortune 150 leading automotive retailer in the USA with annual revenues of over US$20 billion. This was followed by a three-year agreement with a large US tech company headquartered in Massachusetts and a two-year agreement with a prestigious university in Ireland worth circa US$400,000 and US$450,000 respectively over the length of the contracts. All these contracts are centred on the Group’s MDR platform, VisionX.
In July 2023, the Group announced that it had received an order from an existing client, a global, automotive technology company, worth in total circa US$3 million over three years. This order includes the provision and implementation of the Group’s cutting-edge security intelligence technology, VisionX to provide enhanced visibility and threat detection. Once integrated, it provides a unified and proactive security solution by combining real-time threat monitoring, rapid incident response and advanced analytics. This will enable the digital resilience of the client’s assets to be strengthened thereby safeguarding them more effectively.
Post period end in August 2023, as part of Smarttech247’s partnership with Abnormal Security a multi-year contract worth nearly €400k, over two years, was won with a global organisation within the aviation industry sector.
In October 2023, the Group won a tender contract from an existing Government of Ireland department client, worth circa €400,000 over two years. This deal will see Smarttech247 leverage its strategic partnership with IBM to provide its IBM QRadar Security Information and Event Management (“SIEM”) solution. The technology is designed to provide security teams with centralised visibility into enterprise-wide security data. This resource empowers Smarttech247 clients with actionable insight into the most critical threats, enabling more effective threat management, near real-time visibility and the production of detailed data access and user activity reports.
Smarttech247’s client, and the largest automotive retailer in the United States, AutoNation, has recently extended its existing partnership for a further three years. This will allow Smarttech247 to continue supporting this Fortune 150 global enterprise in its cybersecurity solutions and is a testament to the success of the ongoing partnership. Furthermore, AutoNation’s Vice President and CISO, Chip Regan, recently explained in a recent case study why Smarttech247 was the obvious choice when it came to its cybersecurity needs and specifically how partnering with Smarttech247 has allowed AutoNation to achieve a granular level of security and monitoring on a scale that suits such a large, global enterprise.
In November 2023, the Group announced that it had signed a new deal with a global pharmaceutical solutions organisation, based in the USA, worth approximately €900,000 over three years, deploying its AI-enhanced VisionX platform.
Combining the VisionX MDR platform with the managed services offering creates competitive differentiation for the Group. Major new customers have highlighted factors like this as the reason for selecting Smarttech247.
Smarttech247 currently has multiple contracts with leading global organisations. The majority of these contracts are multi-year thereby providing greater certainty of revenue. Also, with contracts now in place with such prestigious organisations, this represents an excellent source of reference for new business.
Partnerships
In the dynamic field of cybersecurity, our strategic technology alliances play a pivotal role in providing best-of-breed solutions to our clients. These collaborations and integrations with our platform VisionX represent a proactive approach to addressing evolving threats, incorporating cutting-edge technologies such as Secure Access Service Edge (“SASE”), Data Loss Prevention (“DLP”), autonomous security, and AI-driven email protection.
In April 2023, the Group announced its participation in the newly released Managed Security Service Provider Program (“MSSP”) by its partner, Forcepoint, a global security leader. The program is centred on Forcepoint ONE SSE cloud-native and Forcepoint enterprise data security solutions. As a partner of Forcepoint, Smarttech247 will be able to quickly incorporate Secure Access Service Edge (“SASE”) and DLP managed services into its offerings through the MSSP program. Partners of this service can also benefit from flexible consumption of Forcepoint converged, cloud-delivered security solutions, update customer configurations and offer multi-tenant services, all with a few clicks.
With the Group’s hosted and managed services centred on Forcepoint ONE SSE cloud-native and Forcepoint enterprise data security solutions, this will allow today’s enterprises to manage risk holistically and simplify security operations. This is a potential game-changer when adversaries are constantly finding new ways to steal confidential data.
In July 2023, the Group announced that it had joined forces with SentinelOne (NYSE: S), the autonomous cybersecurity platform company, to deliver comprehensive cybersecurity solutions to businesses of all sizes.
SentinelOne, a recognised leader in protecting endpoints, cloud, networks and identities in an intelligent, holistic way. Its technology is at the forefront of the industry and combined with Smattech247’s expertise in cybersecurity consulting and MDR services, businesses can be provided with a complete security solution that can adapt and scale with their changing needs.
The partnership combines Smarttech247’s expertise in cybersecurity consulting, MDR services and threat intelligence with SentinelOne’s market-leading autonomous security technology to provide a comprehensive security solution that protects against cyber threats.
Smarttech247 will maximise the benefits and value of SentinelOne’s leading technology for its customers with specialist-managed endpoint protection and response services, whilst SentinelOne will provide Smarttech247 with access to its latest threat intelligence and research.
Post period end, in August 2023, the Group announced a strategic partnership agreement with Abnormal Security, a leading behavioural AI-based email security platform. Unlike traditional secure email gateways, Abnormal Security takes a different approach to stopping email attacks. The cloud-native API architecture ingests thousands of signals across multiple platforms to build a baseline of the known-good behaviour of every employee and vendor in an organisation based on communication patterns, sign-in events and thousands of other attributes. It then applies advanced AI models including natural language processing (“NLP”) and behavioural analytics to detect abnormalities in email behaviour that indicate a potential threat and prevent attacks from reaching end users.
Abnormal Security will be integrated into Smarttech247’s comprehensive MDR service, VisionX, to provide a unified and proactive security solution.
In October 2023, the Group announced a strategic partnership agreement with Splunk Inc. Splunk Inc. (NASDAQ: SPLK), a cybersecurity and observability leader, helps make organisations more digitally resilient. Businesses use Splunk’s unified security and observability platform to keep digital systems secure and reliable. This partnership brings together Smarttech247’s automation-driven and human-led VisionX MDR capabilities and Splunk’s powerful SIEM technology solutions.
The Group also works with a number of other leading industry players whose products can be incorporated within its MDR platform as required. Such partners include Microsoft, IBM and Crowdstrike among many others.
People and platform
During FY2023, the Group has increased its headcount significantly in order to provide the capacity for future revenue growth. This in itself is a significant achievement given the demand for suitably qualified high-quality personnel. This has also been implemented against the background of tight control over costs to maintain existing margins.
During FY2023, one key area of focus was to build out the Group’s sales capability and operations. Investment has now been made in this area and progress achieved which will support the Group’s revenue growth going forward.
Also, during the period Paul Garvey was appointed to the Group’s Advisory Board. Paul Garvey is currently Vice President and Head of Global Accounts at Check Point Software Technologies Ltd, a leading provider of cyber security solutions to over 100,000 global customers, where he oversees the entire Go To Market capability for Check Point’s largest customers. Subsequently, and post period end, Sascha Maier was also appointed to the Group’s Advisory Board. Sascha is currently the Group Chief Information and Security Officer at SV Group, a leading hospitality and catering group in Europe. In this role, he oversees the Cyber Resilience strategy for the entire group, including all brands, subsidiaries, and the foundation.
Awards and profile
On 9 March 2023, the Group hosted its annual Zero Day Con conference at the Dublin Convention Centre, bringing together leading technology firms, industry experts and government officials to allow business leaders to learn more about the latest cybersecurity trends. This year, over 500 international cybersecurity industry leaders attended, and speakers included senior professionals from the FBI, the Government of Ireland, and top cybersecurity and medical companies.
In May 2023, the Group was named Cyber Security Company of the Year by Chambers Ireland InBusiness Recognition Awards 2023. This is a prestigious award and an important recognition for Smarttech247 to receive in its first year as a publicly quoted organisation.
The Group has once again been nominated as a Deloitte Fast 50 Technology Company for 2023. Deloitte Fast 50 is one of Ireland’s foremost technology award programs, each year highlighting the 50 fastest-growing technology companies across Ireland.
The Group also secured the ‘Email Security Solution of the Year’ title at The Computing Security Awards 2023 for its product ‘NoPhish’. This cutting-edge solution operates in real-time, detecting and responding to phishing attempts. By analysing reported emails and identifying malicious elements, such as attachments or URLs, NoPhish enables organisations to stay ahead of cyber threats. Phishing remains a critical concern for companies globally and NoPhish offers clients a defence through its proactive approach and intelligence. The ‘Email Security Solution of the Year’ award signifies Smarttech247’s commitment to innovation and the security of its clients.
Furthermore, Smarttech247 has been recognised as a finalist for the ‘Scale Up of the Year’ award at the prestigious Tech Industry Alliance Awards and has also received a nomination for the ‘Cyber Security Solution Provider of the Year’ award at the 2023 EU Cyber Awards. Smarttech247 was also shortlisted for the ‘Best Newcomer’ Award at the AIM Awards 2023, for seven awards at the Computing Security Awards 2023 (these include New Product/Solution of the Year, One to Watch Security and Data Protection as a Service Provider of the Year) and for Tech Scale up of the Year award at the Tech Industry Alliance Awards in October 2023.
Financial commentary
In terms of financial performance, the revenue of the Group increased by around 20% over the prior year as a result of winning several new contracts during FY2023. Gross profit margins improved slightly leading to a gross profit increase of around 23%.
Operating costs increased significantly, principally as a result of the costs of the Company’s Initial Public Offering on AIM (“IPO”) and other costs incurred during the year. Underlying operating costs, after adjusting for IPO related and other costs increased during the period reflecting the increase in the scale of operations and the commencement of amortisation of certain of the Group’s new products.
Underlying adjusted EBITDA (as reconciled in Note 6), after adjusting for certain costs and amortisation/depreciation, grew by over 36% during the period. The Group’s underlying cash generation was strong, providing cash to deploy in the development of new products which is fundamental to a business like Smarttech247.
The Group’s financial position also improved significantly over the period as a result of the conversion of the convertible loan note and the funds raised at IPO. Consequently, the Group is very well positioned to fund future growth.
FY2024 has started well with both new contracts being won and a number of existing clients renewing their contracts.
Raluca Saceanu
CEO
26 January 2024
