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Webinar and live Q&A May 2, 2025, at 11 am ET
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50% increase in Gross profit year-over-year
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Gross Margin increased to 13.1% from 8.5% year-over-year
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152% increase in Critical Services revenue year-over-year
Vancouver, British Columbia--(Newsfile Corp. - May 1, 2025) - Plurilock Security Inc. (TSXV: PLUR) (OTCQB: PLCKF) and related subsidiaries ("Plurilock" or the "Company"), a global cybersecurity solutions provider, today announces its financial results for the year ended December 31, 2024. All dollar figures are stated in Canadian dollars, unless otherwise indicated.
"2024 was a transformative year for Plurilock, establishing a strong foundation for ongoing expansion in both the U.S. commercial and public sectors," said Ian L. Paterson, CEO of Plurilock Security. "Under our old accounting practices, revenue would have been just over $81 million (unaudited), compared to $70.4 million in 2023. Under the new approach, revenue was roughly $59 million, essentially flat year-over-year, however, gross profit increased over 50% to $7.8 million, validating our strategic focus on higher-margin software and services. Our Critical Services division also grew by 152%, reinforcing the two key metrics we've emphasized: gross profit and Critical Services performance. Contracted backlog more than doubled year-over-year to $56.7 million, improving revenue visibility and providing a strong platform for continued margin expansion."
Summary of Accounting Changes
In its efforts to explore a possible listing or other corporate activities in the US, the Company installed new auditors, MNP, to streamline the process of doing an audit under both Canadian (AASB) and US standards (PCAOB). Under review with the Company's new auditors, the Company has changed how it recognizes revenue. The changes were the following:
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Resell software is now recognized over the life of the contract as opposed to at a single point in time. This change reflects the nature of most modern software offers that have some sort of ongoing services component attached to the software.
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Hardware Vendor Maintenance and Support is now treated as an Agent transaction as opposed to a Principal transaction. Agent transactions recognize only the net amount of revenue (revenue less costs) as revenue. Principal transactions recognize gross revenue as revenue and the costs as Cost of Goods Sold (COGS).
The prior year ending December 31, 2023, was restated for these changes. Further information may be found in the notes of the financial statements.
Backlog Represents Unrecognized Software and Critical Services Revenue
The implementation of our new accounting practices focuses on recognizing revenue from software and services over time rather than upfront. This shift aligns more accurately with the long-term nature of our contracts and strengthens our ability to build a predictable revenue model. As a result, Plurilock is introducing contracted backlog as a key performance metric to provide greater visibility into future revenue. This figure represents all signed, contracted software and Critical Services revenue that has not yet been delivered, and reflects the long-term, re-occurring nature of our business model. A large portion of this $56.7 million (unaudited) backlog (up 109% from $27 million (unaudited) in 2023) stems from a major multi-year contract signed on October 3, 2024, but it also includes previously announced agreements from previous years that are being delivered over extended schedules.
Although this is the first time the Company has reported backlog, we will continue to provide this metric going forward to offer a clearer view of our revenue runway, especially as we continue to scale high-margin, service-based offerings. The entire backlog is software and services, highlighting our strategic shift away from hardware and reinforcing our focus on building a higher-value, re-occurring revenue business. The backlog represents future contracted revenue that will be recognized over the next three years.
Fiscal 2024 Financial Highlights
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Total revenue for the year ended December 31, 2024, was $59,124,540 (audited) as compared to $59,390,101 (audited) for the year ended December 31, 2023. Revenue for the year ended December 31, 2024, is lower than the comparative period as a result of the timing on a few large orders and lower volume of re-sell revenue from the Integra acquisition ("INC") offset partially by growth in professional services sales.
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Comparable gross sales booking1 under previous accounting interpretations would have been $81,247,713 (unaudited) and $70,420,131 (unaudited), for the year ended December 31, 2024 and 2023, respectively.
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Contracted backlog2 was $56,679,292 (unaudited) for the year ended December 31, 2024. This compares to contracted backlog of $27,063,000 (unaudited) for the year ended December 31, 2023.
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Hardware and systems sales revenue for the year ended December 31, 2024, totalled $8,755,823 (audited) compared to $18,865,698 (audited) respectively in the prior year ended December 31, 2023. Software, license, and maintenance sales revenue for the year ended December 31, 2024, was $41,690,864 (audited) compared to $37,082,412 (audited) in the prior year ended December 31, 2023. Professional services revenue was $8,677,853 (audited) for the year ended December 31, 2024, compared to $3,441,991 (audited) in the prior year ended December 31, 2023.
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Hardware and systems sales revenues for the year ended December 31, 2024, accounted for 14.8% of total revenues compared to 31.8% for the year ended December 31, 2023. Software, license and maintenance sales revenues for the year ended December 31, 2023, accounted for 70.5% compared to 62.4% for the year ended December 31, 2023. Professional services revenue for the year ended December 31, 2024, accounted for 14.7% of total revenues, compared to 5.8% for the year ended December 31, 2023.
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Gross margin for the year ended December 31, 2024, was 13.1% compared to 8.5% for the year ended December 31, 2023.
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Adjusted EBITDA for the year ended December 31, 2024 was $(3,605,378) compared to $(4,179,192) in the prior year ended December 31, 2023.
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Cash and cash equivalents and restricted cash on December 31, 2024 was $1,419,463 compared to $2,058,193 on December 31, 2023.
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During the year ended December 31, 2024, the Company used $7,056,064 of cash from operating activities compared to $1,870,194 in the prior year.
Select Annual 2024 Highlights
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February 21, 2024: Launched its new Critical Services offering
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April 1, 2024: New Executive Chair and Company begins business transformation plan
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July 9, 2024: Plurilock Critical Services expands existing engagement with S&P 500, NASDAQ 100 semiconductor company
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August 26, 2024: Engages Clear Street review U.S. strategic options
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October 3, 2024: US$19.3 million contract with S&P 500 semiconductor company
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October 10, 2024: Plurilock and CrowdStrike partner to secure critical infrastructure and organizations
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December 11, 2024: US$1.1 million Order from a Fortune 50 U.S. Conglomerate
Select Highlights Subsequent to Fiscal Year End 2024:
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January 27, 2025: Closes Over-Subscribed Special Warrant Offering for $4.9 million
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February 26, 2025: Launches New Offensive Security Offerings to Strengthen Cyber Resilience
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March 25, 2025: Plurilock and Forcepoint Partner to Strengthen Cybersecurity Solutions and Expand Market Reach
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April 2, 2025: CAD $5.9 Million in New Contracts Across Federal and Public Sector Clients
Financial Results Webinar - Friday May 2, 2025, at 11am ET
Plurilock CEO Ian L. Paterson and CFO Scott Meyers will host a live webinar on Friday, May 2, 2025, at 11 am ET / 8 am PT to review the results, provide Company updates and answer investor questions following the presentation.
Plurilock invites shareholders, analysts, investors, media representatives, and other stakeholders to attend the earnings webinar to discuss fiscal 2024 results.
Webinar Details
Date: Friday May 2, 2025
Time: 11:00 am ET / 8 am PT
Webinar: Register Here
Outlook
Plurilock entered 2025 with strong operational momentum and a clear strategic focus. Our Critical Services business continues to scale and contribute meaningfully to our expanding margins. The broader industry trend toward services-led solutions is playing to our strengths. In many cases, every dollar spent on cybersecurity products results in up to two dollars spent on services. As more organizations seek hands-on expertise to deploy, manage, and secure complex cybersecurity systems, demand for our high value, re-occurring services is increasing. With a contracted multi-year backlog of $56.7 million (unaudited) as of December 31, 2024, we now have greater revenue visibility and a strong foundation to support future performance.
Looking ahead, we are encouraged by a seasonally strong start to 2025, driven by the productivity of new team members, improved partner-driven deal flow, and growing demand for managed and project-based Critical Services. This early performance validates the strategic investments we made in late 2024, particularly in expanding our sales and service delivery capacity.
As we move through the year, we will continue to focus on converting one-time projects into long-term re-occurring services, increasing our presence in the U.S. commercial sector, and strengthening relationships across our federal customer base. The Company will also continue investing in the areas that support margin expansion, namely people, delivery capacity, and operational efficiency. These developments reinforce our ability to generate long-term, high-margin revenue while remaining disciplined in how we scale.
As part of Plurilock's strategic roadmap, we are actively exploring expanding our footprint in Europe by leveraging our long-standing relationships with public sector institutions in the United States and Canada. Building on our alignment with Five Eyes and NATO allies, we are focused on replicating our proven approach; working with security-conscious, compliance-driven government clients to unlock opportunities with like-minded institutions across key European markets. By building on our proven Critical Services model, we aim to support European public sector organizations with end-to-end security services, driving longer-term, higher-value engagements that align with our core strengths and margin priorities.
In a fast-evolving threat environment, we remain committed to building a resilient business that delivers trusted results for our clients and our shareholders alike. With a strong foundation, growing demand, and a clear focus on execution, we remain confident in our ability to deliver sustained performance throughout 2025 and beyond.
"Looking ahead to 2025, we expect to see continued momentum across our key strategic priorities, including margin expansion, growth in Critical Services, and the continued shift from hardware-centric sales to software and services," continued Ian L. Paterson, CEO of Plurilock Security. "In the first quarter alone, we closed just shy of $6 million in new business and further strengthened our balance sheet through a $5 million capital raise and an additional $1.9 million in warrant exercises. Our transition from hardware to software and services aligns with our core thesis of acquiring distribution and layering in higher-margin offerings. Today, approximately 92% of our revenue is derived from the United States, anchoring Plurilock firmly in one of the most resilient and security-focused markets globally. The combination of expanded capabilities, deepening client relationships, and recurring revenue momentum is beginning to generate a flywheel effect, one that we expect will accelerate further as we execute against our 2025 strategy."
Summary of Key Financial Metrics
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Note:
(1) Non-GAAP measure. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") and Adjusted EBITDA should not be construed as alternatives to net income/loss determined in accordance with IFRS. EBITDA and Adjusted EBITDA do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines EBITDA as earnings before interest, taxes, and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation, financing, investor relations and acquisition related expenses, loss on convertible debt conversion., loss on settlement of debt, impairment of assets and impairment of goodwill and intangibles. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.
Non-IFRS measures
This news release presents information about EBITDA and Adjusted EBITDA, both of which are non-IFRS financial measures, to provide supplementary information about operating performance. Plurilock defines EBITDA as net income or loss before interest, income taxes, depreciation, amortization, impairment on goodwill and intangibles and foreign exchange translation. Adjusted EBITDA removes non-cash share-based compensation, financing, investor relations, loss on convertible debt conversion inducement, loss on settlement of debt, impairment on assets and acquisition-related expenses from EBITDA. The Company believes that EBITDA and Adjusted EBITDA is a meaningful financial metric for investors as it adjusts income to reflect amounts which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. EBITDA and Adjusted EBITDA are not intended as a substitute for IFRS measures. A limitation of utilizing these non-IFRS measures is that the IFRS accounting effects of the adjustments do in fact reflect the underlying financial results of Plurilock's business and these effects should not be ignored in evaluating and analyzing Plurilock's financial results. Therefore, management believes that Plurilock's IFRS measures of net loss and the same respective non-IFRS measure should be considered together. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Readers should refer to the Company's most recently filed MD&A for a more detailed discussion of these measures and their calculations.
Annual Filings
Management's Discussion and Analysis and Consolidated Financial Statements and the notes thereto for the year ended December 31, 2024, can be obtained from Plurilock's corporate website at www.plurilock.com and under Plurilock's SEDAR+ profile at www.sedarplus.ca.
About Plurilock
Plurilock sells Cyber Security solutions to the United States and Canadian Federal Governments along with Global 2000 companies. Through these relationships, Plurilock sells its unique brand of Critical Services - aiding clients with our expertise to defend against, detect, and prevent costly data breaches and cyber-attacks.
For more information, visit https://www.plurilock.com or contact:
Ian L. Paterson
Chief Executive Officer
ian@plurilock.com
416.800.1566
Ali Hakimzadeh
Executive Chairman
ali@sequoiapartners.ca
604.306.5720
Sean Peasgood
Investor Relations
sean@sophiccapital.com
647.953.5607
Forward-Looking Statements
This press release may contain certain forward-looking statements and forward-looking information (collectively, "forward-looking statements") which relate to future events or Plurilock's future business, operations, and financial performance and condition. Forward-looking statements normally contain words like "will", "intend", "anticipate", "could", "should", "may", "might", "expect", "estimate", "forecast", "plan", "potential", "project", "assume", "contemplate", "believe", "shall", "scheduled", and similar terms. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. Although management believes that the forward-looking statements herein are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Plurilock's business. Additional material risks and uncertainties applicable to the forward-looking statements herein include, without limitation, unforeseen events, developments, or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Many of these factors are beyond the control of Plurilock. All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The forward-looking statements contained in this press release are made as at the date hereof and Plurilock undertakes no obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by applicable securities laws.
Cautionary Note Regarding Future Oriented Financial Information
This news release also contains future-oriented financial information and financial outlook (collectively, "FOFI") regarding the Company's eventual recognition of backlogged service contract revenue, which is subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this news release was made by management as of the date of this news release and was provided for the purpose of providing readers with an understanding of the importance of such backlogged contractual revenues, and is not an estimate of profitability or any other measure of financial performance. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein. The Company disclaims any intention or obligation to update or revise any FOFI contained in this News Release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein. The Company's Chief Executive Officer and Chief Financial Officer approved the FOFI contained in this news release on April 30, 2025.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1 Gross Sales Bookings: The gross value of all contracts signed and delivered within a given fiscal year.
2 Contracted Backlog: Consists of services and software contracts. Does not include any renewals or option years. Does not include any sales forecast.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/250423