Crossword Cybersecurity posts 15% revenue growth in 2023, targets profitability in H2 2024
() , a technology company focused on cybersecurity and risk management software, announced its final results for the year ended December 31, 2023 (FY23) ahead of its AGM meeting.
Crossword reported a revenue increase of 15% during the period, with continued growth in annual recurring revenue (ARR) to £2.5m. ARR accounted for 65% of total revenue in FY23, with revenue per client rising by 9%. Loss before tax narrowed to £4.1m, and year-end cash was £0.7m.
In terms of product development, Crossword focused on the effects of generative AI on cybersecurity through AI workshops with major industry partners and academics. also launched a ransomware readiness assessment service in March 2023 to help its clients reduce exposure to associated attacks.
Post-period, Crossword launched Trillion HarVista, a novel solution allowing enterprise security teams to search conversations on the dark web in a clean environment. also penned a partnership with TD Synnex for Trillion to become available through the distributor's network of small and medium-sized resellers in Europe.
Most recently, Crossword launched a new CyberAI Practice as part of its consulting business, consolidating the group's artificial intelligence expertise into a suite of AI-focused cybersecurity consulting products and services.
Crossword issued £2.62m of convertible loans during the period to support sales and marketing, product and services development, and provide general working capital.
Tom Ilube, CEO, commenting: "In 2023, Crossword achieved a revenue growth rate of 15%. Although the UK economy was in recession during H2 2023, Crossword continued to grow, which demonstrates the resilience of the cybersecurity sector. With reducing inflation and interest rates having peaked, we expect growth rates to improve during 2024. With costs continuing to be tightly controlled, Crossword is determined to achieve EBITDA and cash breakeven during the second half of 2024."
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Crossword reported solid revenue growth of 15% in FY23 to £4.2m, anticipating yet higher growth to £7m in FY24 on the back of a robust sales pipeline, continued conversion, and margin improvement. The group maintained its ambitious FY24 guidance as it remained on track to deliver EBITDA and cash breakeven during H2 2024. Profitability will be bolstered by a targeted reduction of administrative expenses by half in terms of percentage of revenue in FY24 vs FY22.
Crossword continued to innovate during the period, driving scale and recurring revenues with an increasingly diversified product suite. As mentioned, the company made generative AI a focus in FY23 through CyberAI, and launched new products in ransomware and dark web protection. For its R&D efforts, the group was included in the CyberTech100 list of the world's most innovative cybersecurity companies. Operational progress also helped win a significant threat intelligence contract with a FTSE 250 engineering company that is an existing consulting client.
's M&A strategy has also contributed to recent positive performance. Following 3 acquisitions in FY1 and FY22, with the companies now fully integrated, cross selling and key account management have delivered organic growth. Last year's £2.62m fundraise helped support sales/marketing and product development, and a further working capital fundraise this year is expected to accelerate the drive to profitability.
Crossword is notably gaining momentum in the Caribbean region via a partner, primarily through its managed cyber-security monitoring service Nightingale. has secured $500k of new business in the region since the beginning of 2024, with continued growth anticipated for the rest of FY24.
Crossword is well-positioned to reach profitability in H2 2024 and continue growing. The UK cybersecurity market size is worth US$15.72bn in 2024, and estimated to reach $US25.81bn by 2029 (Modor Intelligence), growing at a CAGR of 10.42%.
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