SideChannel (SDCH) Q1 2025 earnings summary

Executive summary

• Revenue for the quarter ended December 31, 2024, increased 9.9% year-over-year to $1.9 million, driven by growth in vCISO engagements and higher adoption of cybersecurity services and software.

• Net loss for the quarter was $195 thousand, an improvement from a net loss of $246 thousand in the prior year period.

• Gross margin declined to 45.8% from 48.7% in the prior year quarter due to increased third-party software and services revenue.

• Cash, cash equivalents, and short-term investments rose by $75 thousand to $1.4 million at quarter end, marking the fourth consecutive quarter of cash increase.

• Strategic growth priorities include expanding proprietary software (Enclave), increasing vCISO engagements, and deepening program adoption at current clients, with international expansion in Asia-Pacific and the Middle East and continued US sales team growth.

Financial highlights

• Revenue grew 9.9% year-over-year to $1.9 million for the quarter.

• Gross profit was $874 thousand, with a gross margin of 45.8%.

• Operating expenses decreased 2.2% year-over-year to $1.08 million, with general and administrative expenses down 6.9%.

• Cash provided by operating activities was $75 thousand for the quarter.

• Working capital stood at $1.2 million as of December 31, 2024.

Outlook and guidance

• Management expects existing cash, cash equivalents, and anticipated cash flows from operations to be sufficient to meet working capital and contractual obligations for at least the next 12 months.

• Ongoing investments in sales and marketing are expected to continue throughout fiscal 2025 to accelerate revenue growth.

• Anticipated use of operational cash for strategic initiatives aligned with growth priorities.