SideChannel Reports First Quarter Results

Rhea-AI Summary

SideChannel (OTCQB:SDCH) reported its Q1 FY2025 financial results, showing revenue growth of 9.9% to $1.9 million compared to $1.7 million in Q1 FY2024. The company's gross margin decreased by 290 basis points to 45.8% from 48.7% year-over-year. Operating expenses saw a reduction of $24,000 (2.1%) compared to FY2024.

The company reported a net loss of $195,000 ($0.00 per share), an improvement from the $246,000 loss in the previous year. Cash, cash equivalents, and short-term investments increased by $75,000 to $1.4 million. Trailing twelve-month revenue reached $7.6 million with a revenue retention rate of 66.1%.

CEO Brian Haugli outlined strategic objectives focusing on Enclave adoption, new vCISO client acquisition, and expansion of cybersecurity risk reduction solutions. The company continues to invest in its sales and marketing team to accelerate revenue growth using existing cash reserves and operational cash flow.

Positive

• Revenue increased 9.9% YoY to $1.9 million
• Operating expenses decreased by 2.1%
• Net loss improved from $246K to $195K
• Cash position increased by $75K to $1.4 million
• Trailing twelve-month revenue reached $7.6 million

Negative

• Gross margin declined 290 basis points to 45.8%
• Revenue retention rate at 66.1% indicates significant customer churn
• Company continues to operate at a loss

Financial results conference call on Wednesday, February 5 @ 4:30 P.M. ET

WORCESTER, MA / ACCESS Newswire / February 5, 2025 / SideChannel, Inc. (OTCQB:SDCH) ("SideChannel"), a leading provider of cybersecurity services and technology to emerging and middle market companies, today announced its financial results for the first quarter of the fiscal year ended September 30, 2025.

Fiscal Year 2025 First Quarter Highlights

	●	Revenue of $1.9 million; 9.9% greater than Fiscal Year ("FY") 2024 first quarter revenue of $1.7 million.
	●	Gross margin of 45.8%; 290 bps lower than 48.7% for FY 2024.
	●	Operating expenses decreased $24 thousand, or 2.1%, compared to FY 2024.
	●	Net loss of $195 thousand or $0.00 per share versus a net loss of $246 thousand or $0.00 per share in FY 2024.
	●	Cash, cash equivalents, and short-term investments increased by $75 thousand from September 30, 2024, to an ending balance of $1.4 million at December 31, 2024.
	●	Trailing twelve-month revenue grew to $7.6 million as of December 31, 2024.
	●	Trailing twelve-month revenue retention was 66.1% as of December 31, 2024.

Management Comments

Commenting on the results for the quarter ending December 31, 2024, Brian Haugli, President and Chief Executive Officer of SideChannel, said, "Our strategic objectives are first to drive Enclave adoption, second to continue landing new vCISO clients, and third to expand the placement our cybersecurity risk reduction solutions at existing clients."

Haugli continued, "Last year, we began announcing additions to our selling and marketing team. This activity continued during the first quarter of our new fiscal year, and I anticipate more additions during the remainder of fiscal year 2025. These investments reflect our commitment to accelerating our revenue growth using our existing cash on hand as well as cash flow provided by operations."

SideChannel will host a conference call on February 5, 2025, at 4:30 P.M. Eastern Time to discuss its first quarter results and provide an update on the Company's initiatives.

CALL INFORMATION

Date:	Thursday February 5, 2025, at 4:30 P.M. Eastern Standard Time.
Dial In:	Toll Free: 888-506-0062
	International: 973-528-0011
	Participant Access Code: 542920

A webcast of the call will also be available: https://www.webcaster4.com/Webcast/Page/2071/51580

Participants may register in advance for the call using the webcast link.

The call will include management remarks and a live question and answer session. Questions may be submitted prior to the meeting using ir@sidechannel.com.

The Company's Form 10-Q for the quarter ended December 31, 2024, was filed with the Securities and Exchange Commission and is available at https://investors.sidechannel.com/sec-filings.

Financial tables follow.

SIDECHANNEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

		Three Months Ended
		December 31,
		2024				2023
Revenues		$	1,908			$	1,736
Cost of revenues			1,034				891
Gross profit			874				845
Operating expenses
General and administrative			660				709
Selling and marketing			267				269
Research and development			153				126
Total operating expenses			1,080				1,104
Operating loss			(206	)			(259	)
Other income, net			13				13
Net loss before income tax expense			(193	)			(246	)
Income tax expense			2				-
Net loss after income tax expense		$	(195	)		$	(246	)
Net loss per common share - basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average common shares outstanding - basic and diluted			226,021,806				214,578,923

SIDECHANNEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

		December 31, 2024				September 30, 2024
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	1,120			$	1,045
Short-term investments			250				250
Accounts receivable, net			585				732
Deferred costs			105				150
Prepaid expenses and other current assets			289				385
Total current assets			2,349				2,562
Fixed assets			29				33
Goodwill			1,356				1,356
Total assets		$	3,734			$	3,951
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	590			$	729
Deferred revenue			519				515
Income taxes payable			5				3
Total current liabilities			1,114				1,247
Total liabilities			1,114				1,247
Commitments and contingencies			-				-
Common stock, $0.001 par value, 681,000,000 shares authorized; 226,331,731 and 225,975,331 shares issued and outstanding as of December 31, 2024, and September 30, 2024, respectively.			226				226
Additional paid-in capital			22,432				22,321
Accumulated deficit			(20,038	)			(19,843	)
Total stockholders' equity			2,620				2,704
Total liabilities and stockholders' equity		$	3,734			$	3,951

About SideChannel

SideChannel helps emerging and mid-market companies protect their assets. Founded in 2019, we deliver comprehensive cybersecurity plans through a series of actions branded SideChannel Complete.

SideChannel deploys a combination of skilled and experienced talent and technological tools to offer layered defense strategies supported by battle-tested processes. SideChannel also offers Enclave, a network infrastructure platform that eases the journey from zero to zero-trust. Learn more at sidechannel.com.

Investors and shareholders are encouraged to receive press releases and industry updates by subscribing to the investor email newsletter and following SideChannel on X and LinkedIn.

You may contact us at:

SideChannel

146 Main Street, Suite 405
Worcester, MA 01608

Investor Contact

Ryan Polk
ir@sidechannel.com

Forward-Looking Statements

This press release may contain forward-looking statements, including information about management's view of SideChannel's future expectations, plans and prospects. In particular, when used in the preceding discussion, the words "believes", "hopes", "expects", "intends", "plans", "anticipates", "potential", "could", "should" or "may", and similar conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other measures of financial performance.

Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that may cause SideChannel's actual results and financial condition to differ materially from those expressed or implied in the forward-looking statements. These risk factors include, but are not limited to: that we have incurred net losses since inception, our need for additional funding, the substantial doubt about our ability to continue as a going concern, and the terms of any future funding we raise; our dependence on current management and our ability to attract and retain qualified employees; competition for our products; our ability to develop and successfully introduce new products, improve current products and innovate; unpredictability in our operating results; our ability to retain existing licensees and add new licensees; our ability to manage our growth; our ability to protect our intellectual property (IP), enforce our IP rights and defend against claims that we infringed on the IP of others; the risk associated with the concentration of our cash in one financial institution at levels above the amount protected by FDIC insurance; and other risk factors included from time to time in documents we file with the Securities and Exchange Commission, including, but not limited to, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These reports are available at www.sec.gov.

Other unknown or unpredictable factors also could have material adverse effects that could cause actual results to differ materially from those projected or represented in the forward-looking statements. Further, factors that we do not presently deem material as of the date of this release may become material in the future. The forward-looking statements included in this press release are made only as of the date hereof. SideChannel cannot guarantee future results, levels of activity, performance, or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, SideChannel undertakes no obligation to update these forward-looking statements after the date of this release, except as required by law, nor any obligation to update or correct information prepared by third parties.

SOURCE: SideChannel, Inc.

View the original press release on ACCESS Newswire

FAQ

What was SideChannel's (SDCH) revenue growth in Q1 FY2025?

SideChannel reported revenue of $1.9 million in Q1 FY2025, representing a 9.9% increase compared to $1.7 million in Q1 FY2024.

How did SDCH's gross margin perform in Q1 FY2025?

SDCH's gross margin decreased by 290 basis points to 45.8% compared to 48.7% in the previous year.

What is SDCH's current cash position as of December 31, 2024?

SideChannel reported cash, cash equivalents, and short-term investments of $1.4 million as of December 31, 2024, an increase of $75,000 from September 30, 2024.

What is SideChannel's (SDCH) trailing twelve-month revenue retention rate?

SDCH's trailing twelve-month revenue retention rate was 66.1% as of December 31, 2024.

What are SideChannel's strategic objectives for FY2025?

SideChannel's strategic objectives are to drive Enclave adoption, continue landing new vCISO clients, and expand cybersecurity risk reduction solutions at existing clients.