VirtualArmour Reports Q3 2019 Results; Services Revenue Exceeds Product Sales Revenue For First Time
Q3 2019 Financial Highlights
- Revenue for the quarter came in at
- Managed and professional services revenue increased 9.5% to
$1.4 million, due primarily to the expansion and addition of clients signed under contracts over the last year.
- Gross profit as a percentage of revenue increased to 29.8% from 26.4% due to a favorable shift in revenue mix to higher margin managed and professional services revenue.
- Annual recurring revenue (ARR) totaled
$4.7 millionat September 30, 2019, up 12% from $4.2 millionat September 30, 2018. The company defines ARR as the value of its service contracts normalized to a one-year period.
Q3 2019 Operational Highlights
- Won a
$330Kcontract with a Global Service Provider. This opportunity will build on the almost $2Madditional hardware, software and services deals that have been closed since January of 2019 for this customer.
- Expanded opportunity with
Global Satellite Companywith a $245Kgateway expansion project. This opportunity will build on the $1.7Madditional hardware deals that have been closed in the first half of 2019 for this customer.
- Was ranked Top 100 MSSP Globally by MSSP Alert’s Top 200 MSSP List.
- Joined AT&T Cybersecurity Partner Program to Deliver 24/7 Cybersecurity Managed Services Across the Globe.
- Signed two new channel partner as managed security service resellers that expands the range of service offerings to both companies allowing
VirtualArmourto pursue opportunities across the US.
Q3 2019 Financial Summary
Cost of sales totaled
Gross profit was
Total expenses were
Net and comprehensive loss was
“In 2019, we saw our business shift from a focus on hardware sales to more services contracts. Q3 is the first time that we have seen our managed service and professional service revenue exceed our hardware/software revenue,” said
“As part of the new alliance with AT&T Cybersecurity, the AlienVault Unified Security Management™ (USM™) platform will be integrated with VirtualArmour’s proprietary CloudCastr client portal. The integration of our platforms will further simplify and centralize threat management across our new and existing customers’ cloud and on-premise environments. Through this alliance, we also see a tremendous cross-selling opportunity to bring a unique combination of capability and value to our respective clients
“Subsequent to the quarter, we expanded upon an engagement with a global satellite company. This client has been a long-time customer of ours and exemplifies the type of customer we focus on as a cornerstone to our growth strategy. Through our partnership we have worked closely together to open gateways all over the globe enabling this satellite provider to become a pioneering force in networking and communications.
“Due to the continued growing threat of targeted breaches across all industries and business sizes, our outlook for the rest of 2019 and into 2020 remains very positive. We are seeing larger budgets being allocated to cyber protection as companies prepare for 2020 and beyond. We anticipate further revenue growth and margin expansion from our continued ramp up in sales of managed services, along with further penetration of new markets led by our growing sales, marketing, and service organization.”
Annual global cyber losses are expected to hit
With the ever-increasing cybersecurity risks and regulations being introduced, business leaders are fast realizing that there is more to be protected and serious penalties for not complying. According to the Worldwide Security Spending Guide from
The report says worldwide spending on security-related software, hardware and services is forecast to reach
The company maintains 24/7 client monitoring and service management with specialist teams located in its U.S. and
Important Cautions Regarding Forward Looking Statements
This press release may include forward-looking information within the meaning of Canadian securities legislation and U.S. securities laws. This press release includes certain forward-looking statements concerning a service contract
Forward-looking statements are frequently identified by such words as “may”, “will”, “plan”, “expect”, “anticipate”, “estimate”, “intend” and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management. All forward-looking information is inherently uncertain and subject to a variety of assumptions, risks and uncertainties, including the success of the Company in performing the IT implementation and migration, performance under the contract by all parties, the ability of
|VirtualArmour International Inc.
|Interim Consolidated Statements of Operations and Comprehensive Loss
|For the three and nine months ended September 30, 2019 and 2018
|(Unaudited - Expressed in U.S. Dollars)
|Three months ended
|Nine months ended
|Cost of sales||(1,705,750)||(2,894,256)||(6,207,712)||(8,161,866)|
|General and administrative||452,492||478,108||1,742,458||1,426,305|
|Research and development||53,034||56,189||154,986||144,569|
|Sales and marketing||559,770||591,730||1,815,814||1,710,889|
|Loss from Operations||(341,941)||(87,611)||(1,241,376)||(240,214)|
|Other Income (Expenses)|
|Change in fair value of warrant derivative liabilities||-||-||-||2,589|
|Net and Comprehensive Loss for the period||(492,037)||(165,415)||(1,540,738)||(411,826)|
|Loss per share – basic and diluted||(0.01)||(0.00)||(0.02)||(0.01)|
|Weighted average number of shares outstanding – basic and diluted||63,599,447||63,599,447||63,599,447||61,678,669|
|VirtualArmour International Inc.|
|Interim Consolidated Balance Sheets|
|As at September 30, 2019 and December 31, 2018|
|(Unaudited - Expressed in U.S. Dollars)|
|September 30,||December 31,|
|Total Current Assets||2,221,018||3,762,915|
|Property and equipment||457,798||513,984|
|Accounts payable and accrued liabilities||2,348,781||3,728,051|
|Current portion of lease obligations||349,292||679,647|
|Due to related parties||234,813||–|
|Total Current Liabilities||5,165,424||5,296,291|
|Common stock, no par value, 300,000,000 shares authorized Issued and outstanding: 63,599,447 (2018 – 63,599,447) shares||7,670,975||7,670,975|
|Additional paid-in capital||2,009,497||1,955,222|
|Total Stockholders’ Deficit||(2,661,701)||(1,175,238)|
|Total Liabilities and Stockholders’ Deficit||3,450,975||5,602,941|
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Source: VirtualArmour International Inc.