SideChannel (SDCH) investor relations material

Executive summary

• Year-to-date revenue reached $5.6 million, up 1.3% year-over-year, driven by growth in Cybersecurity Software and Services and Enclave platform adoption, offset by a decline in vCISO Services revenue.

• Net loss for the nine months ended June 30, 2025, was $510 thousand, an improvement from $645 thousand in the prior year period.

• Gross margin remained stable at 47.5% for the nine-month period.

• Enclave platform gained traction, especially with Department of Defense clients, and a new Insider Threat Service was launched, led by an industry expert.

• Management remains confident in strategic direction, focusing on expanding Enclave, acquiring new vCISO clients, and broadening cybersecurity offerings.

Financial highlights

• Q3 revenue was $1.78 million, a 3.8% decrease year-over-year, with gross margin at 47.0%.

• Nine-month revenue was $5.58 million, with gross profit of $2.65 million and net loss of $510 thousand.

• Operating expenses for the quarter rose to $1.1 million, mainly due to increased selling and marketing for Enclave; nine-month operating expenses fell 3.1% to $3.19 million.

• Cash, cash equivalents, and short-term investments totaled $1.2 million at June 30, 2025, down $46 thousand since fiscal year start.

• Trailing twelve-month revenue retention was 61.4% as of June 30, 2025.

Outlook and guidance

• Focus remains on growing core cybersecurity software, particularly Enclave, and expanding service offerings, including Insider Threat.

• Continued investment in sales and marketing infrastructure to support proprietary software growth.

• Management expects existing cash and anticipated cash flows to be sufficient for the next 12 months.