Endace Share Discussion Threads

[knackers] 11/10/2011 22:10

Edward, that'll largely depend on proportion of sales these days (certainly since this time last year) that have been systems rather than cards. Systems have a sliding service and support package and at the top end recurring revenue on systems should be 25%...maybe more. I would venture that about 60% of H1 revenues will have been systems, by the year end (H2) that could be up to 65-70%.

So expect a positive impact in H2 and a "significant" kicker next year. Aspex's word not mine ;o)

[aspex] 11/10/2011 20:03

edwardt,
Does 'significant enough to mention' help?
Those are my words, not theirs
;o)

[edwardt] 11/10/2011 11:53

any view on what proportion of revenue is recurring?

[knackers] 11/10/2011 09:00

Just re-posting a link to that FT article Mike.

[aspex] 11/10/2011 08:09

They won't get mine cheap.
They cost me nearly 2 quid each on average.

[knackers] 11/10/2011 07:49

No question those are
O U T S T A N D I N G I N T E R I M R E S U L T S
A wonderful result given the backdrop. Says it all in spades. Think we're getting serious traction now ;o)
No Q Endace WILL be bought out in the next year or two and for a VERY healthy premium on their current price.

[mikepompeyfan] 11/10/2011 07:15

Excellent statement today. Last year was a £1.3m loss at interim stage.
Looks like it's all coming together k :-)

[aspex] 11/10/2011 07:11

Trading Update

Endace made excellent progress in the first half of the year. Revenues for the six months to 30 September 2011 are expected to be approximately US$18.6 million, an increase of 37% over the comparable period last year, and we expect to report a profit before tax, adjusted for share option costs, of approximately $0.2 million. Cash balances at 30 September 2011 were $2.6 million.

CEO Mike Riley, said:

"We are delighted with our first half performance. Sales of systems continue to lead our revenue mix, and the associated annuity income has become a material component of our revenues and contributor to strengthening margins. We are seeing increased momentum in our business. Our pipeline is excellent and we remain confident of meeting expectations for the year".

Announcement of half yearly results

The half yearly results for the six months ended 30 September 2011 will be announced on Tuesday 1 November 2011. An analyst briefing will take place on the morning of that date at Weber Shandwick Financial, Fox Court, 14 Gray's Inn Road, London, WC1X 8WS

So. Brief with emphasis on 37% YOY sales increase.
Recurring/annual revenue becoming worthwhile.

[mikepompeyfan] 10/10/2011 22:25

Defence groups turn to cybersecurity
Inside the Silicon Valley offices of Narus, an obscure internet traffic analysis business, Greg Oslan is plotting the future for Boeing.
Boeing bought Mr Oslan's small company last year, attracted by Narus technology that can detect malicious internet traffic in an ocean of data. This may seem far afield for Boeing, known primarily for building aircraft. But through Narus, the 95-year-old aerospace company gained a piece of the hottest area of the defence industry: cybersecurity.

The internet is turning the defence industry on its head, just as it transformed media, retail and other sectors before it.
"We have moved from hackers having fun, to a wave of organised crime, to more sophisticated 'malware' being used as a threat to a country's way of life," says Mr Oslan, who also runs Boeing's cybersecurity business.
For decades, Boeing and rivals such as Northrop Grumman, Raytheon and Lockheed Martin built the aircraft and heavy equipment needed to fight wars – making the companies charter members of what former US president Dwight Eisenhower famously referred to as the "military-industrial complex".
Today, those same companies are investing heavily to create a cyber-industrial complex, a development likely to have vast consequences for the future of the internet.


Major military contractors have been expanding into cybersecurity by acquiring smaller, specialist firms. This graphic highlights the deals shaping the emerging cyber-war industrial complex
The market for cyberarms is thriving in the wake of high-profile attacks, such as Russia's alleged attack on Estonian government websites in 2007 and the Stuxnet attack last year on Iran's nuclear programme. An array of companies now sell software to the US government that can break into and degrade or destroy an enemy's computer network, as well as programmes aimed at blocking such attacks.
"There is a feeding frenzy right now to provide products and services to meet the demands of governments, law enforcement and the military," says Ron Deibert, a University of Toronto expert on internet freedom and director of the Canada Centre for Global Security Studies.
Boeing and its rivals are expanding largely through acquisition. More than a dozen buy-outs of cybercompanies have been announced this year, according to the advisers ERG Partners – double the number than in 2010. These companies have sold for as much as $1.8bn, the price paid by private investment firm Providence Equity Partners for SRA International, a defence consulting company. SRA employs 1,000 people in its cybersecurity arm and its customers include the US army, navy and air force.
SRA says it "offers everything that's required to build a strong defence against the cyberthreat", including Cybergami, a tool for visualising where data are moving on a network.
Most of the companies getting snapped up are smaller than SRA, but still attract premiums. ERG calculates that because of the demand they typically fetch 20 per cent more for their cash flow than other private intelligence industry companies.

"Cybersecurity will remain a key focus area" for acquirers because it supports "key national security priorities," ERG said in September.
Hundreds of specialist firms have popped up outside Washington, in the state of Maryland, home to the National Security Agency and US Cyber Command. The spate of start-ups is pushing overall information technology employment in the greater Washington area to more than 280,000 – more than in Silicon Valley or New York City.
"We see a tremendous boom," says J. Thomas Sadowski, chief executive of the Economic Alliance of Greater Baltimore. Most of the new companies have fewer than 100 employees and many team up for government deals with big defence contractors, which sometimes buy them outright.
Clustered in bland office parks near the defence agencies, some firms are created by reformed prankster hackers and others by military veterans. Outwardly, they tout their ability to protect networks from attack, while also quietly offering tools to penetrate the networks of others.
The companies are all hoping to get a piece of the growing US budget for cyberarms. US defence, intelligence and homeland security agencies spend $10bn annually on cybersecurity, Deltek estimates. That remains a small fraction of the Pentagon's annual budget of $600bn, but the figure is expected to climb by at least 9 per cent annually – even as the White House seeks $40bn in annual defence cuts. The Pentagon will have 10,000 people at Cyber Command when fully staffed and far more are employed through outsourcing.
"The Obama administration has committed half a billion dollars to develop advanced defensive technologies, including novel approaches to improving network security," wrote William Lynn, the outgoing deputy secretary of defence, last month in Foreign Affairs. "But much remains to be done, and the window for doing it is short."
Add in what private companies are spending and the cyberarms market is more like $100bn in the US alone, says Kent Schneider, a former army officer and Northrop executive who leads the non-profit Armed Forces Communications and Electronics Association.
That figure includes goods sold to ward off cybercrime gangs that try to steal financial data, as well as goods to protect or attack nations. But the work of gangs, spies and soldiers is increasingly intertwined.
"Criminals are in a lot of places that the nation states might want to go," says Ashar Aziz, founder of Silicon Valley security company FireEye, which has seen "collusion" between criminal gangs and nation states in programs designed to steal defence industry secrets.
At Northrop, cybersecurity sales account for $1.1bn of its $27bn annual revenue, but the company expects that to rise.
"We've identified cyber as one of our four key areas for growth for the next five years," says Tim McKnight, vice-president at Northrop's intelligence systems division.
The US spends far more than any other country on its military and other nations have followed its lead in cyberinvestment. Since Cybercom became operational last year, the UK, France and more than a dozen others have moved to set up similar commands.
"Any country with a credible military is doing something like this," says James Lewis of the Center for Strategic and International Studies, who has advised US leaders and participated in semi-official cyberarms talks with rival China.
This increased spending on defence may be designed to protect the US from cyberattack, but the fact that as much as 85 per cent of the internet is under the control of private companies leaves it vulnerable to assault on infrastructure.
The companies that control the US electric grid and transport network lack a business need to invest in safer infrastructure, experts say, and an attack on either could devastate the US economy. The White House and Congress have yet to agree on how to share information about new cyberthreats with the private sector, let alone who should pay to protect it.
This quandary is one of the problems for an industry that is otherwise surging ahead in the near-absence of export controls and global rules limiting cyberaggression. Unlike fighter aircraft, most cybermonitoring and exploitation software can be sold to any country with which the US has relations.
Like many of its rivals, Narus sells its non-classified gear anywhere it can find a legal market, including China and pre-revolution Egypt.
All governments deserve help in preventing malicious software from spreading, Mr Oslan says. "We're in the infancy, on a global basis, [of being able to discover the source of attacks], which is a very difficult and expensive proposition."
The rules of cyberwar, along with the privacy issues it raises, will be debated in the years ahead. But for now they are taking a back seat to the industriousness found in Maryland's office parks.
"The market is dominated, obviously, by the government," says Mr Sadowski of the Baltimore economic development group.
And right now, the government is bulking up on cyberarms.

[knackers] 06/10/2011 09:57

Probably because of the complexity of sale and niche nature of the Endace system, so prob more likely to be a referral relationship.

You tend to see the Nitrosecurities of this world aligning themselves partner-wise, with the System Integrators. Fundamentally the EDA fabric/solution is niche/top end. Q1 Labs have about 1,800 customers. Endace may only be relevant to a fraction of their clients, valuable though they may be.

When Endace become more mainstream they will be... ;o)

Flash H1 results next week then. Well, it's grim out there in the wider econ for sure, but these cyber threats just get worse as does critical infra exposure. I wonder if the Govt sector may finally be starting to kick in...performance, value for money and future-proofed scalability always sell in my book!

[aspex] 06/10/2011 09:20

K,
Head rises further above the parapet. However I do wonder how Endace is not shown widely in the partner lists of these users.

[knackers] 06/10/2011 08:50

IBM and Intel launch themselves at the security market. I make that more than a third of Endace's tech partners that have been acquired in recent months; Narus, Cace, Nitrosecurity and now Q1 Labs...hmmmmm

[knackers] 05/10/2011 12:33

Knowing what we now know

that Betfair win was even more significant for Endace. BF will have needed to demonstrate that they were taking all appropriate/necessary measures to ensure infosec/cybersec best practices were being followed. Result: Endace's cyber IDS platform installed.

[knackers] 30/9/2011 10:06

Possibly, but I don't think so Mike - Selwyn's no longer a director and has been selling since May/June (as has Neil Richardson). I think his attentions are now on the Imarda project, and have been for some time now - and that looks an interesting proposition. I just wonder if he's sold down EDA to bolster Imarda's cash position and his holding prior to their IPO (a delay in the IPO may also have contributed to the stock sale timing - maybe). Then again he may have simply wanted to get some cash out - it's been tied up in Endace for sometime now, though granted he upset the Insts with his first block sale of stock in 2007 at about £3.50. Endace is a very, very different company now, twice the revenues, more than twice the headcount and client base...and look at where we are, just over £4.00!!

Long way to go here yet IMO, though to get full value you may have to wait another couple of years. As I said the other day, that fact that share price and NR have top sliced their holdings this year would suggest an imminent sale unikely...but who knows, if the price is right...well. I wouldn't bet against it happening in the next 12 months. The Exec would be wise to get the share price motoring again! These kiwis have a habit of hiding their light a wee bit - far too modest IMHO...even on the rugby park! ;o)

[mikepompeyfan] 29/9/2011 19:44

Perhaps the recent director sales have made some nervous ?
Last year the trading statement was 12th October so not long now. Should be interesting.

[knackers] 29/9/2011 14:57

Looks like a forced seller in the market 40k traded today (2x 20k) at the mid price £4.00 Seems the buyer was calling the shots getting hold of a nice little discounted bundle. Hmmmm their timing is pretty 'sharp'.

[knackers] 26/9/2011 12:57

I see Neil Richardson has also top-sliced his holding since Apr/May. Almost a mirror of Selwyn, is Neil also invested in Imarda? I know he has many other interests...

Fairly measured reduction, from 9.36% to 8.7% [since 31 July 2011]. Like share price about 100k shares sold in the last two months.

Holdings RNS would suggest both have concluded their sell down...p'haps suggesting a sale of the Co. is not imminent.

[knackers] 23/9/2011 11:49

Senate Committee approval. Data breach disclosure rapidly moving into legislation in the US:

[knackers] 23/9/2011 09:40

There's been a seller in the market for weeks placing blocks of 1,000 | 2,000 | 2,500 shares. Could this explain that string? Some of the stock acquired by Sophrosyne will no doubt have been sourced from SP's sells who's perhaps looking to fund/bolster IMARDA pre-float. Indeed that could also be one worth watching.

Edit - I see on the Endace website that at 27 July 2011 share price had already reduced his holding to 8.71% so he's indeed been selling down his position for some time. ~100k shares in nine weeks may account for that drip, drip we've recently seen.

[knackers] 22/9/2011 09:13

Ha-ha yes, I spotted that. Given we're days away, literally, from getting H1 numbers that target is now pretty meaningless and adjusting it by pennies - well - you gotta laugh.

This next trading statement is absolutely CRUCIAL. (hopefully) It should confirm a continuation of the upward/accelerating rev trend but ALSO provide confidence for the fwd order book/sales visibility and improved H1/H2 weighting. Further it just might provide a pointer for where Endace is heading 2-3 years down the line - should they succesfully fend off predators in that time (hmmm). I sense growing confidence with recent traction within the mainstream Fortune 500 enterprise sector. If they can move their brand here and beyond their niche Telco/ISP, Govt, FS markets what target price and future valuation then I wonder..?

Tasty prospects but we'll just have to wait and see, remember, recruitment has been relentless in recent weeks and I see about 12-14 vacancies on their website, given today's macro backdrop, that says it in spades. Could be an interesting next few weeks. Now back to work!

[aspex] 22/9/2011 08:25

K,
However I do see PG have lowered the price target from 517 to 513. Maybe to reflect the recent 5p drop in the market.

[knackers] 21/9/2011 18:30

Passive IDS from EDA in the frame I wonder? Well if their networks are running at 3Gb/s+ let's hope so - for their own benefit and protection - else they'll be ripping out and replacing what they've installed within 18 months!

[knackers] 21/9/2011 17:58

Getting silly now - yet another flash note published by PG this morning. They're gonna look chumps if they've called this one wrong (H1 trading flash due in 3 or so). Their favorite metaphor for Endace seems to be "blistering...."

Let's hope they mean that in a nice way! fwiw I think they do ;o)

[knackers] 20/9/2011 14:06

Japan defence firm Mitsubishi - suffers serious cyber attack targeting missile technology

[knackers] 20/9/2011 08:47

Good spot Mike. After a fairly quiet period from June-Aug Endace seem to be on another recruitment drive. Encouraging to see dedicated/senior BD staff being taken on in secondary mkts like Australia [and India which we saw earlier in the year]. Not the sort of thing you'd be doing ahead of average interims and a poor fwd order book...

...a possible driver/contributor to opportunities in the Govt sector?