Corero Network Security (LSE:CNS) — Half Year Results for the six months ended 30 June 2026

0:00 Good afternoon, and welcome to the CORERO NETWORK SECURITY PLC Half Year Results Investor Presentation. Conference recorded meeting, investors will be in listen only mode. Questions are encouraged and could be submitted at any time by the Q and A tab situated on the right hand corner of your screen. Just simply type in your question and press send. Company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted then Alright. So it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to the team at CORERO NETWORK SECURITY. Good afternoon.

0:31 Good afternoon, Charlie. Thanks for for the introductions. Welcome everybody to CORERO's first half twenty twenty six financial performance results. I have with me today Chris Golden, our CFO for for CORERO NETWORK SECURITY, and we have Jonathan Patterson who's responsible for our investor relations. And we're excited to have a conversation here today with you. Moving along. Quick note on safe harbor and about where we are, overview on our business. CORERO has been well positioned for growth throughout 2026 and is well positioned in the reporting financials that we were able to produce in '20 in the first half of twenty twenty six. We'll talk more about the momentum and the product traction and market reach that we've been able to achieve in the business as we go through today's conversation.

1:25 But the the big items to take away is that we've been named once again the only innovator in the DDoS space or cyber resiliency space against all competitors and all tech companies in our competing industry. This is for the second time in a year, second time in two years that we've been in that space, we're the only ones that have been named an innovator. We had very nice accelerated revenue growth through the first half. We'll talk more about that, but 42% year on year growth along with very nice new product traction will demonstrate some execution success on new products that we brought to the market and new products that have actually established very strong resiliency with our selling that's led to a lot of new markets for us.

2:18 That market reach includes, opening up for the first time ever very large tier one telcos, both in The US and The UK, which came in after the period, in the reporting period, and has established us as an eligible option for any extreme vendor requirements or or complex solution requirements in the world.

2:44 And this has established us as well positioned for growth both in 2026 and thereafter. Next slide. I'll hand this on over to Chris to talk through the numbers. Yes. Just some quick highlights then. We've got more detail in further slides. But as Carl mentioned, year over year H1 revenue growth of 42%, so to $15,500,000 for the period. ARR growth year over year, also strong at 12%. We're now running at $24,100,000 as we come out of the first half of twenty twenty six. I'll touch on ARR in a bit more detail in a further slide. Handsome EBITDA conversion actually on that revenue growth. So first half of twenty twenty five, we actually generated an EBITDA loss of £1,400,000 That revenue growth largely translating into operational leverage and pulling through into EBITDA, which is really positive.

3:40 In period gross margin increased to 93%. Now we typically run at around 90%, 91%. So this elevated margin was partly driven by sales mix in the period, so may not be reflective of kind of H2, but positive to see it strong above 90%, and we expect gross margin to remain above 90% through the rest of the year. Continued strong customer renewal rate, 96% in the period. We typically hold that 96%, 97%, 98% range. 95 people. I think last time we reported this, we're at 90 people. With growth, we've been able to put some more more headcounts in there, which is great. And, yeah, increasing country footprint period over period.

4:31 So some of the highlights to the growth, as as we've mentioned, we have nice revenue growth. It's building on the back of a nice recurring revenue growth, but it comes on top of some significant partner and deal flows that we accomplished and have communicated to the to the investment community throughout the first half. One was a web application protection contract extension for 1,100,000 to tier point. It's a three year contract. It's building upon the relationship we have with tier point, especially in the web application space, which is a new and emerging space for us to cohabitate in this world of cyber resiliency.

5:18 The solution that we're providing there is very specific nonvolume denial of service protection as well as application security protection that would help a customer stay up for those complex web application attacks. That wedded together with DDoS or network based attacks builds up an entire complement of cyber resiliency. We have also we also took on a very major new customer in Brazil, building upon our Brazilian business book. And this new major service provider in Brazil was actually at the tune of $1,100,000 for a three year contract and represents both a new logo and, once again, increasing base of business in Brazil, now representing over about 10% of our businesses in Brazil for CORERO, up from zero two years ago.

6:18 Post the period end of h one, we also have announced a few deals that have come through. One was with a US based major telco, one of the top three telco providers in The US, for $1,400,000 on an initial tranche to us. And, this is, of course, against all the leading world's competitors in our space. They selected us for the first time to establish an estate into that tier one operator. A few weeks later, we were awarded officially a five year contract with a tier one UK based operator, once again, of the top telcos in The UK to the tune of $3,400,000 establishing a brand new estate of Carrero in this operator going forward.

7:09 And then at the same time, we announced an initial tranche into one of the world's largest neo cloud providers, which if you're not familiar with the term, is a cloud provider that is purpose built for AI AI applications. It's a its service is to be very, very extensible and resilient. And what you're finding is neo clouds have requisite requirements for DDoS and cyber resiliency. This is meant to be the first foray for them with us. It was greenfield opportunity. They weren't replacing in The States, and we're very excited about the way that that looks. It's worth stating at this point as well that based on this deal flow and the strong first half of twenty twenty six, management, we now expect to exceed revenue guidance from analyst consensus and to significantly exceed EBITDA guidance.

8:01 So that guidance coming into these results, the consensus analyst guidance was around 29,200,000 revenue to exceed that. And it was around $3,300,000 of EBITDA. We're looking to see that for the year. So where are we winning and what what is going on in our space? If you've been if you're new to the CORERO journey, you'll probably be hearing this for the for the first time. But if you've been through the CORERO journey together, we've been talking about this ever increasing

8:38 need for solutions in AI data centers and, you know, clouds. AI data centers are heavily invested in at the moment. Infrastructure in The US is a very hot sector. In fact, anybody trying to procure equipment at the moment, networking equipment, switching gear, chips. I think we've all heard about the RAM apocalypse. This is all factoring into actually DDoS installations. As these data centers and these new neo clouds get built, not only can they not deal with cyber attacks that would bleed them to or render them out or have outages, these data centers are incredibly sensitive to latency problems. Disruptions in network traffic alone can actually cause these data centers to be nonresponsive and nonvalue added. So they're looking for increased in resiliency solutions as they move into installing and delivering AI models.

9:36 This will continue, we believe, for the indefinite future. This is a large investment trend, and what you're seeing is the first early indicators of how we contribute to that trend. We today have three of the top Neo cloud providers as customers, and we think it's well suited for us moving forward as our product portfolio is purpose built for Neo Cloud as it's completely software and completely agnostic to hardware, which is a unique position for us in the marketplace. And you see some examples of some of the contract wins that come off of that. Moving on from there, what we what we believe

10:23 sorry. I kept myself kinda turning around. We're also based upon changing requirements in economies and legislation. This can be summed up in in a couple of words. There's a big move to sovereignty, and sovereignty is a is essentially a category where you have increased requirements for local providers to provide these services and for local technology to be delivered locally and for it to be certified resilient. So that's both for customers that have resilient critical infrastructure as well as providers of cybersecurity solutions for resiliency. This has led to many solutions for CORERO, mostly because our product portfolio is purpose built and fit for purpose for these changes.

11:16 The software allows companies to run these our solutions locally and these the economic aspects of our tool sets being much more advantaged than many of our competitors, both in pricing and terms, allows different countries around the world to be able to enjoy us at different revenue and cost models.

11:41 So the tier one deal that we did with The UK service provider was completely driven by a UK requirements. This is an example of a UK requirement of telco providers to make sure that they're resilient against the telecom security act in The UK. There's ever increasingly more and more legislation. This is a brand new set of legislations around the world that are being instantiated. There's an equivalent

12:13 set of rules coming out of or actually been already adopted in Continental Europe called the DORA Act. You see that listed here. That stands for the digital to do Digital Resilience. Yeah. Operational Resiliency Act out of the EU. But essentially, nearly every country in the world has this notion of resiliency or resilience or operations. India has this. Saudi Arabia has this. Most of the countries in The Middle East actually operate from this premise. So going forward, there's a huge change. And in that change, CORERO is actually getting much more customer acquisition and much more sales pipeline. In addition, of course, what drives our business beyond brand new data centers, beyond changing legislation is, of course, the threat.

13:07 And the threat continues to evolve at a bigger, faster, and smarter way, and the solutions that are in the marketplace are really tasked hard to make sure that they can address these changes. The changes are bigger. You can see here by our own internal estimates for the customers that we that we protect that there's been a 262% increase in average peak size of tax, and they've gotten faster. The attacks generally last seconds and can render you out in seconds. That means the meantime to resolution has to be sub second to be able to deal with these. Most vendors are are troubled with being able to detect and mitigate within seconds.

13:57 We are we're the fastest provider in the marketplace in this space and by far.

14:03 And in addition, the attackers, of course, understand protection algorithms, and they are working their way around these algorithms. So what attackers have done have gotten smarter. They essentially embed multiple unique attack vectors in a single attack, tasking the vendor that's actually trying to protect the company to be able to track all these varied attack type types at the same time.

14:33 Next slide. Why on prem matters? So we operate in on prem, and, of course, we operate in the cloud through our partners, where we provide the technology that our partners use to do cloud scrubbing. On prem has become a huge piece of the way that's that DDoS and cyber resiliency happens. On prem means on premises, and on premises means that it's nested close to your technology. On prem could mean that it mean it's in your Amazon instance. On prem could mean that it's in your data center that's in a different country. On prem could mean that it's in your data center in your country. But on prem meet it is meaningful for the reasons that we suggested.

15:22 It helps with legislation, sometimes settles legislation. It helps with control. It helps with sovereignty. It helps with being able to manage costs in their business. Our on prem software solutions are more readily asked for and more readily adopted today than ever at any other point in in cyber resiliency history. What people are realizing is that the filtration needs to happen close to the source of the problem.

15:55 Next slide. So why are why are we winning and why are our competitors falling short? Essentially, we have left

16:05 often in both the automation stack as well as the technology stack on performance. So our solution is largely hands free, largely completely automatic, completely moving towards AI enabled, AI, AI executed solution sets. So this provides for tremendous relief of the administrative burden that most of our competitors have actually levied upon their customers. In addition, we I mentioned the performance and our capability to remove latency from networks, And we provide as a as systemic part of our business integrations into many of the world's common vendors.

16:54 We go to market with Akamai. If you have an Akamai solution, which most of the world does,

17:01 that means that choosing CORERO will make your Akamai solution better. If you have a Juniper or HPE solution set, if you choose CORERO with that solution set, there's no other vendor that can make that cyber resiliency of that solution better. If you're with GTT, one of the top tier tier one companies in the world, if you have that solution, we will make it cyber resilient

17:28 better than any other vendors that's out there. That that powerful set of integrations is a very strong motivator to choose CORERO in the marketplace. Next slide. Our portfolio I mentioned has been growing. Two and a half, three years ago, we were essentially a single product company. Today, we've extended the product portfolio for a number of different reasons. One is to allow us to be more viable in large company RFPs and solution sets where more complexity is required and more solutions are required. This is among one of the reasons why we're now winning very large tier one enterprise tier one service provider accounts. In addition, the product portfolio is rounding out essentially parity gaps that we had with competitors, and now we believe that we have unique capabilities and strong standing differentiation with everybody in the marketplace.

18:26 Third, we opened up brand new markets for these new products that we're selling that allows us to have more routes to revenue. And what you see in here is the different kinds of solutions that we're bringing to market from traffic observability to API protections to performance monitoring to zero trust.

18:47 And it's not just us saying this, and this is something we are quite proud about, but it's really reflective of the journey that the whole company has made, That each year, this QKS group actually measures everybody in our space about how competitive are they, how are they doing with their product portfolio, what is exactly happening and resonating in the marketplace. It's who seems to have the best movement. And for a second year in a row, we were selected as the innovator in the space and for a second year in a row as an absolute leader in the space. And what you'll find is some of those vendors that they have in this list that they can that they show as independent vendors, those vendors rely on CORERO technology themselves.

19:32 So we're actually multiply represented in the leadership set segment here.

19:41 Okay. So I won't go over the actual H1 numbers because I think we've touched on them before. But this slide gives you a view of the trend, previous H1 year performances. And I guess to touch on some of these items, you see a strong revenue growth, obviously, and the strong year over year ARR growth. ARR growth since the end of twenty twenty five was fairly modest. So we exited 2025 at twenty three point nine million dollars We had that really strong surge in ARR growth through 2025. In the first half of this year, we haven't seen that same level of growth, and that's for a number of reasons. I think the first one I'd say is timing. So the deals that we announced post period end, they came shortly after the period end, in all truth.

20:30 And, you know, in a in a different time, they might have ended up being h one. You know, these these deals are actually, to be truthful, secured earlier. But with tier ones, it takes longer to get the paperwork done. So timing could have moved the AR of those deals in in into the period in a in a previous year. The other thing is we've even when we saw this change in mix in 2025, we've always said that we are not going to drive the commercial model for our customers. We are in you know, as a challenger brand, our aim is to acquire as many customers as we can as quickly as possible. And if they have a preference for upfront CapEx purchases, we'll sell to them on that basis. If they are have a preference for OpEx for any reason, we will sell them on that basis.

21:19 In the first half of this year, we did see more sentiment towards upfront CapEx purchasing. So a couple of examples in that. You know, our SMTD kind of commercial off the shelf model, which is essentially where customers bring their own hardware and deploy our software on top, That's a relatively new product to us and was incredibly successful in the first half of the year. Now I have a feeling that with customers not needing to bring their own sorry, not needing to purchase CORERO hardware, that reduced contract cost to them has brought some customers into the realms of having sufficient cash and budget to pay upfront when maybe they might have bought a subscription basis previously.

22:00 And also, we announced a big deal in LatAm, a 1,100,000 deal deal in LatAm. Every deal we've done in LatAm to date has been on a subscription basis. But again, with this enhanced product portfolio moving into a kind of higher tier operator space, this customer actually bought on a CapEx basis, which we might not have expected. I do expect that by the end of the year, we'll return back to our kind of typical trend on ARR, and I've got that on the next slide to show you as well. Gross margin being 93%. I mentioned this SNCD commercial off the shelf product. So no hardware on a deal for us being software only.

22:41 There's lower cost of goods sold in in a deal like that for us. So that largely has driven an increase of uplift on the gross margin in the period. I do expect that gross margin to return to the 90%, 91% for the second half of the year.

22:59 Cash. So yes, we relative to last year and relative to last coming out of 2025, cash has reduced. We exited 2025 with about 4,000,000 of cash. This is still kind of transitioning through that change in mix we saw in 2025. You know, moving away from the upfront CapEx purchases and the upfront cash that we get from those deals to those OpEx subscription models through 2025, we're coming through the kind of back half of that. And I do expect as we go through the second half of twenty twenty six that we will start to generate cash again. And moving forward, we will be cash generative. Quickly on this slide then, I mentioned ARR and the modest increase since the end of twenty twenty five.

23:49 The chart on the right hand side shows how ARR has been trending over the previous years. I do anticipate H1 just being a bit of a timing blip, and we will return to a similar trend as we exit 2026.

24:03 Geography, Carl mentioned that we've been expanding market beyond the typical U. S. And UK markets. For those who've been following CORERO over the years, that Americas number was upwards of eighty percent two years ago, expanding kind of into into The Middle East and into APAC has has has moved that number down and and increased the share for the rest of the world. And I guess within the Americas number as well, the share of LatAm has been increasing significantly over the past two years.

24:35 So heading to outlook. Essentially, I think you can tell by the numbers that we feel quite strong about the way that, h two has started. Of course, h one has already been published, and we feel strong about that too. And it's been driven by significant customer wins, obviously. These customer wins didn't happen overnight early in the in the half. Obviously, we saw these in the pipeline, and we knew that these were these were improving themselves and positioning themselves for a second half when we feel good about the enhanced pipeline that we have in 2026, which has led to moving our estimates above what the Street has consensusly provided, and we're looking to have our extended product portfolio continue to sell and contribute to the business overall.

25:29 Our ARR growth, as those mentioned, is continuing to shift, we believe that ARR growth the second half will be a very large portion of our business. Of course, the mix of our products and how our customer chooses to buy at the end, we're always subject to the way that they think about those things. So we're looking to exceed the market expectations for for revenue and also for EBITDA, as we mentioned, and we remain focused on CORERO status as an effective and also affordable solution provider combating any problem associated with cyber resiliency. This is the business we're in. This cyber resilient piece, when you think about AI, when you think about the ability for having few AI agents running much of the world's infrastructure, ChatGPT is an example. It can't go down.

26:27 You can't have clogged go down. You can't even have it be disrupted. These kinds of solution sets need to be nested with companies like CORERO or with CORERO in order to be able to make sure that the solution continues to prove itself out. We we believe we will remain well placed to capitalize on global growth as well as vendor replacement strategies as times moves on. It's a very large addressable market, and we're a rather small provider in that space that's looking to make ourselves more and more available to larger and larger companies out there. The number one problem we've had in the past was not being known as an eligible option for the the big established market share providers.

27:15 And we believe that that trend now is beginning to prove itself as changing. So with that, Charlie, I hand it back on over to you. Fantastic. Thank you very much indeed for the presentation. Ladies and gentlemen, do please continue to submit your questions just using the Q and A tab on the right hand corner of your screen. Just want the team take a few moments to review those questions submitted today. I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we've had a number of questions submitted throughout today's presentation. Thank you to all the investors for submitting those. If I may just hand back to you just to click on that Q and A tab, and if you could just read out the question where appropriate to do so, and I'll pick up from you at the end. Great. Thank you, Charlie. So I guess this first question, Chris, for yourself.

28:04 How should we think about the trade off between upfront license revenue and recurring subscription revenue? Is the current mix shift primarily customer driven? Or is it a deliberate commercial strategy? Yes. Good question. I mean, I touched on it earlier. You know, our primary position is that as a challenger brand, we are in the customer acquisition process, and we will be led by customers' buying preference. Actually, giving the customer that preference is a differentiator for us. You know, some of our competitors only offer a subscription basis. So that that can be a differentiator for us in some instances. So, yes, primarily, I would say it's customer driven. On the flip side, you you know, we we when we talked about the mix last year and the kind of guidance from what we were seeing on the market was typically the smaller providers that were the historic sweet spot for CORERO, who maybe didn't have cash readily available for CapEx, were looking for subscription, and we are still seeing that trend.

29:09 But on the back end, you know, there was a deliberate ploy to target the tier one market through product development, and we're now starting to sell significant deals into those tier one customers. They sometimes more likely have cash and have CapEx budgets available. So those customers at larger values would typically buy up on a CapEx basis. Thanks, Chris. And you seem popular today with the questions. Given the $15,500,000 of revenue and approximately $2,600,000 of EBITDA generated in H1, should investors be thinking about the second half as broadly similar? Or is there evidence that the second half could be materially stronger? Yes. So historically, from a sales bookings perspective, we've run on a roughly 45, 55 split between H1 and H2.

30:03 And from a bookings perspective, we anticipate the same split happening in 2026. I guess the two caveats I would give to that based on H1 results is we did see a higher CapEx mix in H1 than we maybe anticipated. That might not necessarily repeat in H2. And secondly, I mentioned gross margins earlier being high at 93%. Again, we had a higher mix of software only deals in h one, which, you know, generated a higher gross margin. Again, I don't anticipate h two following that exact same trend. So from a in year revenue recognition perspective and a gross margin perspective, we might not see exact replication in h two to h '1.

30:51 Thank you. Staying with you, Chris, will you pay tax in 2026? Is there any guidance you can provide on tax rate we should expect in 2026 and 2027? Yeah. I'm not in an exact position to comment on tax position at this point, but I guess what I would say is, you know, historically, CORERO has not been in a net profit position. So naturally, it has brought forward tax losses. The extent of those applicable will obviously be applied to future net profits, but I'm not in an exact position to comment on the tax position at this point. Staying with the theme, the transition to subscription revenues has affected cash conversion.

31:36 At what point do you expect the strong EBITDA growth to translate into sustained free cash flow? And should we expect second half cash generation to be material better than first half? Yeah. Our cash flow forecast definitely suggests that we will be generative in the second half of the year. I'd expect beyond that point given where we are with the ARR position that we're in, the recurring revenue and the recurring cash flow that comes with that, Some of the deals have transitioned from CapEx to subscription last year, again, regular cash payments with them. You know, ARR with we are targeting ARR growth ARR growth to exceed OpEx growth and cost growth. We're not too far away from that. So essentially, any incremental deal from that point should be cash generated as well as EBITDA generated.

32:29 Can you comment on the capitalized development spend? Is $2,000,000 per six month run rate to continue? Or should we expect this to rise meaningfully over the course of second half of twenty twenty six and then on into 2027? Yeah. I mean, I I can't say whether it will materially move from $2,000,000 or not. What I would say is we development costs as a dollar value have increased over the past couple of years because of this development push for for additional product capability, but we're seeing that as a return on revenue. We do see further opportunities for further product enhancement because it's driven by customer need and it's driven by commercial opportunities.

33:15 So what I would say is I would expect dollar value to increase. I would expect that dollar value as a percentage of sales to decrease, and any increase in capitalized development spend is purely gonna be driven from the commercial need to deliver additional product that has sales and commercial opportunity attached to it. In terms of the revenue contribution from the new product suite, traffic availability, API, performing monitoring performance monitoring, zero trust, how do you expect this to evolve in the next couple of years? Yeah. Carl, perhaps one for you. So there's this is a an exciting piece of the business and the business portfolio.

34:04 There are two broad ways to answer this question. On the on the first part that ever increasingly when companies buy DDoS, they buy all those things at once. They buy performance monitoring and zero trust, and they buy observability. You find ever increasing that those grid requirements will suggest that they want it all in order to be a cyber resilient company. So on the one hand, it will increase our base business and our base deals because it's an integrative solution set deal, not an individually alone sold solution set. So that's one piece of it. So what you find is, I would say, about one out of every two deals that we do have some sort of element of one of these new product portfolios in it embedded in the solution set.

34:59 Seconds, we sell, like we mentioned, with the web application deal in the first half, we will sell these solutions alone and unafraid up against different competitors often that compete alone with just those solution sets. So the revenue component will be twofold. The first is increased deals and conversion on deals, increased deal sizes as a result of the increased requirement, and increased ability to actually service RFPs that have these requirements so we're not that boxed out of them. The second revenue component is this alone and unafraid piece where where the solutions are being asked to be provided independently, and that we have the ability to actually provide a product for them that's independent of DDoS, which is a new solution new portfolio for us over the last couple years. The overall revenue size, I would suggest, is somewhere in the neighborhood plus or minus 5% to 10% of our business and growing fast.

36:03 And I guess it's not always necessarily that the dollar value of these product skews, you know, have being able to service customers with these product SKUs allows us to win larger DDoS deals because we have these additional capabilities with them. So my point being, the the actual dollar value of the the these products might not necessarily reflect their ability to win more and bigger DDoS deals. And you just can further evidence on that. In our release for The UK based tier one operator, we've mentioned in the release that that operator had requirements for layer seven, which is application attacks as well as encrypted attacks.

36:51 So we had just recently provided for capabilities in encrypted attack management, and we've been increasingly improving our layer seven capabilities. And without those capabilities, that $3,400,000 deal probably wouldn't have been available to us. Maybe sticking with that theme, level of growth, Carl, do you anticipate in the core DDoS product? Yes. So the core for us is all of those Asundrie products, the API, the zero trust, the traffic observability, that's all part of our, what we call observability and resilience ecosystem, the CORERO observability resilience ecosystem is it encompasses all of that. And we believe the core portfolio is vital for a fundamental change to a resilient platform. So said said simply, our company is transitioning to the core.

37:45 It's not going to be an add on product. Right? So it's it's DDoS will be part of the overall portfolio. Today, our company now, our salespeople, our engineers, our operations specialists are all embedded with being able to be a cyber resilient company as opposed to just a DDoS company. And then finally, Chris, when you say cash generative in H2, should investors expect positive free cash flow for the full year? And do you expect that cash generation to accelerate onto full year 2027 as the subscription revenue base matures. Okay. Yeah. I guess splitting that into two then, we definitely have the potential to be free cash flow positive for the year coming to the end of the year. I guess one of the factors that might prevent that is, you know, Q4 is a heavy period for us in terms of sales orders coming in.

38:45 It's just typically the seasonality of how customers buy. If you look at trends in in the past, somewhere between 3035% of our sales bookings can come in in the fourth quarter. Now if that order comes in on the October 1, the chances are that we fulfill that order and we invoice it and we collect the cash before the end of the year. If that order comes in on the December 31, we're not getting the cash until 2027. So clearly, and sales leadership are very focused on those key four deals, bringing them in as early as possible through the quarter to bring in that revenue and that cash. Second part of the question about kicking on into 2027 and accelerating cash generation. Yes, absolutely. I mentioned that ARR and the cash that comes with that is now approaching our cost base. And, you know, it's a short term goal of ours for ARR to exceed our cost base and just by its very nature then become cash generative before we add any upfront CapEx deals to that. Great. And then finally, a quick question about operating leverage.

39:49 Are any expense items planned to grow faster than revenue? No, I wouldn't say so. We're in a privileged position with our growth to be able to put more roles in to further strengthen that growth potential. Sales roles that comes with quota attached to them. So I I guess to some extent, if you bring in a new sales role, the cost comes in before the revenue. Obviously, it comes with a quote attached to it. It's built into into our budget. So there there's nothing specific at this moment in time that would require any ex you know, OpEx in general to to exceed the revenue growth rate. Great. Thank you both. I'll hand it back to you, Charlie. Fantastic. Look. Thank you indeed for answering every single question that's come through, I'm sure. It's greatly appreciated by investors.

40:40 Just before redirecting investors to provide you with their feedback, they're particularly important to the company. Carl, if I may just ask you for a few closing comments, please. Sure. Thank you, Charlie, that. So just just summarizing today's conversation, what you have is presented before you is a cybersecurity company that's transitioning into a cyber resiliency company that has been exploding on product products as well as addressable market execution inclusive of moving upstream to tier one operators both in The US and UK, some of the biggest companies in the world, as well as geographic expansion, which has been all part of the plan that we've been trying to address more and more addressable markets, as well as having the ability to be more compliant and catching trends with customers on fast moving cyber cyber trends in neo clouds, AI, as well as sovereignty, which are all the all the attributes of the future for tech purchases.

41:47 We believe we have an ever increasingly executable team. We've kept the headcount to be at or below a 100 for the last three years. So we've almost doubled the size of the bookings of the business, and you can see that we're getting much more production out of the business. I thank you for your interest in the business. We believe that we have a strong future potential and that will continue on as we move into 2027. Thank you. Fantastic, Carl. Thank you. Thank you for the team for updating investors today. Can I please ask investors not to close this session? Should we automatically redirect you to provide your feedback in order the team can better understand your views and expectations. This may take a few moments to complete, and that's greatly valued by the company. On behalf of the management team, CORERO NETWORK SECURITY PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.