Plurilock Security Inc. Reports Third Quarter Fiscal 2024 Financial Results

Rhea-AI Summary

Plurilock Security reports Q3 2024 financial results with total revenue of $38.5 million YTD compared to $48.0 million YTD in 2023. Critical Services grew 70% YTD to $3.3 million. Gross profit improved to $5.4 million (14.2% of sales) from $4.9 million (10.3%) YTD 2023. Adjusted EBITDA loss decreased to $(2.7M) from $(3.8M) YTD 2023.

The company secured significant contracts in Q4, including a US$19.3 million deal with an S&P 500 semiconductor company. Revenue and gross margin for the first 10 months of 2024 have already exceeded total figures for 2023, with Q4 2024 expected to outperform Q4 2023.

Positive

• Critical Services revenue grew 70% YTD to $3.3M from $2.0M
• Gross profit margin improved to 14.2% from 10.3% YTD
• Adjusted EBITDA loss reduced by 29.2% YTD to $2.7M
• Secured major US$19.3M contract with S&P 500 semiconductor company
• 2024 revenue and gross margin already exceeded full-year 2023 figures as of October

Negative

• Total revenue declined to $38.5M YTD from $48.0M YTD 2023
• Q3 2024 revenue decreased to $14.3M from $20.0M in Q3 2023
• Hardware and systems sales revenue dropped to $30.9M YTD from $40.3M
• Cash used in operating activities increased to $6.4M YTD from $1.6M
• Q3 2024 Adjusted EBITDA loss widened to $2.1M from $1.4M in Q3 2023

Fiscal 2024 Revenue on track to exceed Fiscal 2023 Revenue

Full Year Revenue and Gross Margin ahead of 2023 as of October

Q4 2024 performance expected to outpace Q4 2023

Plurilock will host a webinar and live Q&A Tuesday November 26, 2024, at 4:30 pm ET

• Total revenue of $38.5 million YTD in 2024 vs. $48.0 million YTD in 2023. Critical Services grew 70% YTD in 2024 to $3.3 million from $2.0 million YTD in 2023

• Gross Profit $5.4 million (14.2% of sales YTD 2024) vs. $4.9 million (10.3% YTD 2023)

• Adjusted EBITDA increased to a loss of $(2,724,010) YTD in 2024 vs. a loss of $(3,848,144) YTD in 2023

• Q3 saw significant order activity, which is expected to lead to a strong finish to the year in Q4

Vancouver, British Columbia--(Newsfile Corp. - November 26, 2024) - Plurilock Security Inc. (TSXV: PLUR) (OTCQB: PLCKF) ("Plurilock" or the "Company"), a global cybersecurity services and solutions provider, announces its financial results for the three (Q3 2024) and nine-months (YTD 2024) ended September 30, 2024. All dollar figures are stated in Canadian dollars, unless otherwise indicated.

"While Q3 recognized revenue was impacted by the timing of certain orders and mix, we have already secured and recognized more sales in Q4 than in the prior year's Q4," said Ian L. Paterson, CEO of Plurilock. "Looking at the first nine-month period of 2024 we have seen continued margin growth, in line with our stated objectives at the beginning of the year. With strong client additions, our largest deal to date, and a robust pipeline, we are on track this year to surpass total revenue from fiscal 2023. Plurilock expects Q4 to be a record quarter as the Company continues to prioritize its high-end cybersecurity consulting, which carries higher margins. This strategic shift is evident in the more than doubled revenue contribution from our Professional Services, underscoring our commitment to enhancing profitability and scaling our high-margin business lines."

Summary of Key Financial Metrics for Q3 2024 and YTD 2024

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Q3 2024 Financial Highlights

• Total revenues for Q3 2024 and YTD 2024 were $14,328,564 and $38,545,520, respectively, compared to $20,000,867 and $48,019,338 for Q3 2023 and 9 months ended September 30, 2023 (YTD 2023), respectively. Revenue for the three and nine months ended September 30, 2024 and 2023 included revenue from both the Technology Division and the Solutions Division. Revenue YTD 2024 is lower than the comparative period as a result of the timing on a few large orders and lower volume from the Integra acquisition offset partially by growth in professional services sales.

• Hardware and systems sales revenue for Q3 2024 and YTD 2024 totalled $11,913,548 and $30,942,715, respectively, compared to $17,514,024 and $40,326,636, respectively, in the prior year for the same periods. Software, license, and maintenance sales revenue for Q3 2024 and YTD 2024 was $1,539,906 and $4,266,395, respectively, compared to $1,862,921 and $5,727,266, respectively, for the same periods in the prior year. Professional services revenue was $875,110 and $3,336,410 for Q3 2024 and YTD 2024, respectively, compared to $623,922 and $1,965,436, respectively, for the same periods in the prior year.

• Hardware and systems sales revenues for the Q3 2024 and YTD 2024 accounted for 83.1% and 80.3%, respectively, of total revenues compared to 87.6% and 84.0%, respectively, for Q3 2023 and YTD 2023. Software, license and maintenance sales revenues for Q3 2024 and YTD 2024 accounted for 10.7% and 11.1%, respectively, compared to 9.3% and 11.9%, respectively, for Q3 2023 and YTD 2023. Professional services revenue for Q3 2024 and YTD 2024, accounted for 6.1% and 8.7%, respectively, of total revenues, compared to 3.1% and 4.1%, respectively, for Q3 2023 and YTD 2023.

• Gross margin for Q3 2024 and YTD 2024 was 6.8% and 14.2%, respectively, compared to 7.2% and 10.3%, respectively, for Q3 2023 and YTD 2023.

• Adjusted EBITDA for Q3 2024 and YTD 2024 was $(2,116,276) and $(2,724,010), respectively, compared to $(1,397,007) and $(3,848,144), respectively, in the prior year for the same periods.

• Cash and cash equivalents and restricted cash on September 30, 2024 was $3,427,977 compared to $2,058,193 on December 31, 2023.

• During Q3 2024 and YTD 2024, the Company used $4,398,395 and $6,456,035 cash from operating activities, respectively, compared to $2,457,065 and $1,627,839 used from operating activities in the prior year during the same periods.

Q3 2024 Operational Highlights

• July 9, 2024: Plurilock Critical Services expands existing engagement with S&P 500, NASDAQ 100 semiconductor company

• July 15, 2024: Appoint former White House lawyer/senior CIA officer to Industry Advisory Council

• July 16, 2024: Appoint former CrowdStrike board member / AppDynamics President to Industry Advisory Council

• July 25, 2024: Named 2024 Quadrant Champion by Info-Tech for fifth year

• July 30, 2024: Appoints 35-year veteran of enterprise technology IT and solutions sales to Industry Advisory Council

• August 14, 2024: File nonprovisional patent application for AI-driven cloud access security broker technology for generative AI

• August 19, 2024: Appoint Ron Wilson, President of Best Buy Canada, to Industry Advisory Council

• August 20, 2024: New sales to the United States Department of Transportation

• August 26, 2024: Engages Clear Street review U.S. strategic options

• August 28, 2024: Announce gross proceeds of over $2 million from warrant exercises

• September 3, 2024: Win US$1.1 million contract with U.S. agency

• September 4, 2024: Plurilock AI integration with Acronis Cyber Protect Cloud Platform

• September 12, 2024: Critical Services partnership with TD SYNNEX to provide AI services in North America

• September 16, 2024: David Kris, former Head of the Department of Justice's National Security Division, appointed to Industry Advisory Council

Subsequent to Q3 2024 Operational Highlights

• October 1, 2024: US$1.9 million in Critical Services contracts with S&P 500 semiconductor company

• October 3, 2024: US$19.3 million contract with S&P 500 semiconductor company

• October 7, 2024: US$1.7 million cybersecurity sale to major semiconductor manufacturer

• October 10, 2024: Plurilock and CrowdStrike partner to secure critical infrastructure and organizations

• October 18, 2024: Plurilock CEO invited as a panelist at the Vancouver International Security Summit

• November 5, 2024: Plurilock Security Achieves CMMC Level 1 Compliance for the United States Department of Defense

• November 11, 2024: CAD$5.4 million order with a law enforcement agency

• November 14, 2024: Plurilock Security corporate update for shareholders

• November 18, 2024: US$820,000 order with a state law enforcement agency

• November 26, 2024: US$1.2 million Critical Services contract with NASDAQ listed semiconductor manufacturer

Outlook for 2024

The Company expects Q4 2024 to be up sequentially from Q3 2024 on the back of strong order growth in Q3 and sales closed in early Q4. Revenue and gross margin for the first 10 months of 2024 (year-to-date as of the end of October) have already exceeded the total revenue and gross margin for the entire year of 2023.

The cybersecurity sector is experiencing explosive growth as organizations prioritize safeguarding their digital assets amidst an increasingly sophisticated threat landscape. The accelerated pace of digital transformation has magnified the urgency for robust cybersecurity frameworks, driving businesses to integrate advanced security solutions into their core operations and rethink cybersecurity's role at every organizational level. This seismic shift presents a significant opportunity for Plurilock, as demand for its high-margin Critical Services continues to grow. With expertise in delivering comprehensive, high-value solutions, Plurilock is well-positioned to capitalize on this growing market, driving substantial revenue growth.

Plurilock has a proven track record of delivering stronger results in the latter half of the fiscal year, and 2024 is no exception. The Company's expanding sales team, rising market demand, and well-executed strategic initiatives position it for a strong performance to end the year and beyond. Plurilock's focus on best-in-class cybersecurity services and its ability to deepen relationships with a trusted client base are core drivers of its success. Furthermore, the Company's active pursuit of strategic, accretive acquisitions over the next 12 to 24 months underscores its ambition to accelerate growth, solidify its leadership position, and create long-term value for stakeholders.

Financial Results Webinar

Plurilock CEO Ian L. Paterson and CFO Scott Meyers will host a live webinar on Tuesday, November 26, 2024, at 4:30 pm ET / 1:30 pm PT to review the results, provide Company updates and answer investor questions following the presentation.

Plurilock invites shareholders, analysts, investors, media representatives, and other stakeholders to attend the earnings webinar to discuss Q3 2024 results.

Webinar Details

DATE: Tuesday, November 26, 2024
TIME: 4:30 pm ET / 1:30 pm ET
WEBINAR: Register

Note:

(1) Non-GAAP measure. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines EBITDA as earnings before interest, taxes, and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation, financing, and acquisition related expenses. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.

Non-IFRS measures

This news release presents information about EBITDA and Adjusted EBITDA, both of which are non-IFRS financial measures, to provide supplementary information about operating performance. Plurilock defines EBITDA as net income or loss before interest, income taxes, depreciation, and amortization. Adjusted EBITDA removes non-cash share-based compensation, financing, and acquisition-related expenses from EBITDA. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. EBITDA and Adjusted EBITDA are not intended as a substitute for IFRS measures. A limitation of utilizing these non-IFRS measures is that the IFRS accounting effects of the adjustments do in fact reflect the underlying financial results of Plurilock's business, and these effects should not be ignored in evaluating and analyzing Plurilock's financial results. Therefore, management believes that Plurilock's IFRS measures of net loss and the same respective non-IFRS measure should be considered together. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Readers should refer to the Company's most recently filed MD&A for a more detailed discussion of these measures and their calculations.

Quarterly Filings

Management's Discussion and Analysis and Interim Condensed Consolidated Financial Statements and the notes thereto for the fiscal period ended September 30, 2024 can be obtained from Plurilock's corporate website at www.plurilock.com and under Plurilock's SEDAR+ profile at www.sedarplus.ca.

About Plurilock

Plurilock sells cybersecurity solutions to the United States and Canadian Federal Governments along with Global 2000 companies. Through these relationships, Plurilock sells its unique brand of Critical Services, aiding clients with our expertise to defend against, detect, and prevent costly data breaches and cyberattacks.

For more information, visit https://www.plurilock.com or contact:

Ian L. Paterson
Chief Executive Officer
ian@plurilock.com
416.800.1566

Ali Hakimzadeh
Executive Chairman
ali@sequoiapartners.ca
604.306.5720

Sean Peasgood
Investor Relations
sean@sophiccapital.com
647.953.5607

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the TSX Venture Exchange policies) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release may contain certain forward-looking statements and forward-looking information (collectively, "forward-looking statements") related to future events or Plurilock's future business, operations, and financial performance and condition. Forward-looking statements normally contain words like "will", "intend", "anticipate", "could", "should", "may", "might", "expect", "estimate", "forecast", "plan", "potential", "project", "assume", "contemplate", "believe", "shall", "scheduled", and similar terms. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions, and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Plurilock's business. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, the impact of general economic conditions, and unforeseen events and developments. This list is not exhaustive of the factors that may affect the Company's forward-looking statements. Many of these factors are beyond the control of Plurilock. All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof, and Plurilock undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws. Risks and uncertainties about the Company's business are more fully discussed under the heading "Risk Factors" in its most recent Annual Information Form. They are otherwise disclosed in its filings with securities regulatory authorities available on SEDAR+ at www.sedarplus.ca.

Cautionary Note Regarding Future Oriented Financial Information

This news release also contains future-oriented financial information and financial outlook (collectively, "FOFI") regarding the Company's anticipated exceeding of its fiscal 2023 revenues for the 2024 fiscal year, which is subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this news release was made by management as of the date of this news release and was provided for the purpose of providing readers with an understanding of the importance of such anticipated fiscal 2024 revenues, and is not an estimate of profitability or any other measure of financial performance. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein. The Company disclaims any intention or obligation to update or revise any FOFI contained in this News Release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein. The company's Chief Executive Officer and Chief Financial Officer approved the FOFI contained in this news release on November 26, 2024.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/231481

FAQ

What was Plurilock's (PLCKF) revenue for Q3 2024?

Plurilock's revenue for Q3 2024 was $14.3 million, compared to $20.0 million in Q3 2023.

What was the largest contract Plurilock secured in Q4 2024?

Plurilock secured a US$19.3 million contract with an S&P 500 semiconductor company in October 2024.

How much did Plurilock's Critical Services revenue grow in 2024?

Plurilock's Critical Services revenue grew 70% YTD in 2024, reaching $3.3 million compared to $2.0 million YTD in 2023.

What was Plurilock's (PLCKF) gross profit margin for YTD 2024?

Plurilock's gross profit margin for YTD 2024 was 14.2%, compared to 10.3% in YTD 2023.