2022 revenue up 59% to £3.7m.
2023 revenue growth of target 60% to c£6m.
16 January 2023 – London, UK - Crossword Cybersecurity Plc (AIM:CCS, "Crossword", the "Company" or the "Group"), the cybersecurity solutions company focused on cyber strategy and risk, is pleased to confirm that it expects to report total revenue of £3.7m, including £56k of grant income, (unaudited) for the year ended 31 December 2022, an increase of 59% from the previous year. Furthermore, the Company is projecting the revenue growth rate for 2023 to be circa 60%, to achieve total revenue of circa £6m in 2023.
Crossword had a strong H2 2022, with cybersecurity consulting and product related revenue growth of over 100% compared to H1 2022. Organic growth for the year was 56%. Recurring revenue of 58% was achieved, and 2022 closing ARR was £2.4m, which is growth of 81% over the previous year. The intensified demand for Crossword’s products and services in H2 2022 provides strong momentum going into 2023. In the product division, Rizikon and Trillion were the major contributors to growth. The Services division likewise recorded strong growth, driven by larger contract sizes, both in Consulting and Managed Services.
Rizikon, Crossword’s leading product, continued to perform strongly. Demand was driven by its attractive features that provide recurring savings and increased efficiency for clients needing to manage cyber risk emanating from their suppliers. With over 1,000 organisations using Rizikon to assess over 8,000 suppliers at the end of 2022, Rizikon achieved its target of 1,000 users by the year end. In November, Crossword announced a major agreement with the UK arm of international defence and security company, Leonardo. Leonardo UK will utilise Crossword's Rizikon platform to enhance visibility, automation and efficiency in their assessment of cyber risks throughout their supply chain of 2,100 companies in the UK, two thirds of which are SMEs.
Crossword’s Trillion product experienced strong revenue growth in H2 2022, as its vast scalability and ease of adoption drives client demand. Trillion continuously tracks, correlates and analyses billions of stolen usernames and passwords, providing clients with account breach protection. Trillion’s average client contract size continued to grow during the period, as adoption by larger companies and entities increased. By way of example, in H2 2022 Spain's National Cryptological Centre deployed Trillion to provide a central view of threats across the Spanish public administration and public education sector, protecting hundreds of thousands of users.
In H2 2022, Crossword continued with the ongoing development and commercialisation of Identiproof, its verifiable credentials suite of products. In parallel, Crossword worked on the merging of Arc and Nixer into an enhanced product focused on account protection for B2C commerce platform owners.
The Services division again performed strongly during the period. Consulting saw continued improvement in gross margin as Crossword continues to grow the number of larger clients and records increasing revenue per client. In Managed Services, demand for Nightingale, Crossword’s comprehensive security monitoring platform, continues to grow. Nightingale brings together multiple facets to identify organisational assets, users, traffic, networks and endpoints in order to mitigate the threats and vulnerabilities an organisation faces. Nightingale’s clients at present are mainly financial services companies, providing recurring fees.
Internationally, Crossword made good progress on a number of fronts. In November 2022, Oman Data Park (ODP) signed a strategic cooperation agreement to provide cyber security risk services to over 800 government, corporate and SME organisations and enhance the protection of the cyber security structure of sensitive information in Oman. Crossword sees multiple opportunities to grow its products and services in Oman and the Gulf region and is continuing to grow its sales pipeline. In Singapore, Crossword’s team is now well established and is enabling the conversion of the pipeline of larger clients that require around the clock monitoring.
Revenue growth in 2023 will be led by growth in both cybersecurity consulting and product related revenue, driven by the attractive features of Crossword’s products in the market and increased cross-selling. Since May 2021, Crossword has successfully integrated three acquisitions, resulting in an expanded portfolio of SaaS products and services to offer clients. Growth in cross-selling to Crossword’s established client base will make a significant contribution to overall revenue growth in 2023. During 2022 Crossword has continued to invest in cross-selling processes with the objective of optimising cross-selling opportunities. The three acquisitions means that the sales team now benefits from an expanded product portfolio to grow established client relationships as well as develop new ones and is well placed to integrate further acquisitions.
The closing cash as at the end of December 2022 was £2.1m. During 2022, the Company extended £700k of its £1.4m convertible loan notes in issue at December 2021, to June 2025. Two loan note holders loaned a further £150,000 to the Company. The extensions and new loan notes from current lenders had a conversion price of 25.2p. Additionally, 3 year convertible loan notes of £650k were issued at a conversion price of 26.1p in July 2022. £700k of loan notes were repaid at the end of their term in December 2022. The current convertible loan note balance is £1.5m, and they have a repayment date of mid-2025. As announced on 13 July 2022, Tom Ilube, CEO of Crossword intended to extend his £250,000 loan note on the same terms as the other loan note holders. Tom Ilube’s loan note has expired and Tom intends to make his investment in the form of a new investment, the form, content and timing of which are currently under discussion with the Company and its advisers.
Tom Ilube CBE, CEO at Crossword Cybersecurity Plc, said:
“Demand for Crossword’s leading products and services grew strongly in 2022 by 59% thanks to servicing areas of high demand and the quality of our offering. I am delighted that in 2022 Crossword made outstanding progress in growing its average contract value and increasing the contribution of cross-selling to revenue growth. In 2022, Crossword completed its third successful acquisition, delivering on its acquisition strategy. As previously highlighted, Crossword’s strategy is to continue building on its organic revenue growth and to acquire outstanding cyber security companies that complement and diversify its revenue base. Regarding acquisitions, discussions are being held that are leading to positive conversations currently taking place. Crossword enters 2023 with strong momentum and a highly capable team to leverage a growing pipeline and we look forward to updating shareholders on progress."
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The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Crossword Cybersecurity plc - Tel: +44 (0) 333 090 2587
Tom Ilube, Chief Executive Officer
Mary Dowd, Chief Financial Officer
Grant Thornton (Nominated Adviser) - Tel: +44 (0) 20 7383 5100
Colin Aaronson / Jamie Barklem / Ciara Donnelly
Hybridan LLP (Broker) - Tel: +44 (0)203 764 2341