Egm in the X-ray: Cyberoo experienced a margin boom

As of 12/31/2023 Cyberoo had net cash of EUR 3.85 million, a significant increase from EUR 1.89 million at the same date in 2022. This was due to the operating cash flow and despite an increase in net working capital from 3.45 to 5.83 million in connection with the growth in customer receivables linked to the growth in turnover. Despite the fact that the parent company's net profit is almost in line with the consolidated figure (the five subsidiaries are small), it was decided not to distribute any dividends to the shareholders in order to further strengthen the group's capitalisation and possibly proceed with growth by external lines (moreover, Cyberoo has announced that it intends to replicate the model implemented with the opening of the Polish office in other countries).

Cyberoo, like all companies in its industry, cannot disclose the names of its customers in order not to expose them to malware attacks. But at the end of 2023, it acquired, through its partner Npo Sistemi, a contract to supply the Cypeer Sonic service to one of the most important business consulting companies in Italy.

In May 2024, the new services 'Cypeer Keera', 'Cypeer Pot', 'Cypeer AgentX' and 'Vip Monitoring Ultra' were presented, all of which focus on the possibilities to monitor and detect cyber attacks in advance and to remedy them in a timely manner. Also presented was the first Cyberoo-branded hardware, BlackBox, which houses the Cypeer Manager, Cypeer Continuous Scanning and Cypeer Probe systems. This is capable of carrying out so-called 'penetration tests' (methods to ensure the protection of an It system by means of breach attempts using the same tools and techniques as a hacker). In particular, with the 'BlackBox' methodology, no information about the system being tested is shared with the testers.

It is understood that in the development of its products, Cyberoo also makes use of generative Ia, which in this case is capable of independently drafting a text containing an in-depth analysis of the computer alarm encountered, which contains the precise steps for solving the problem as well as the details of the specific case.

Since the names of customers cannot be disclosed, and given the sector of activity, it is not so easy for Cyberoo to 'advertise' itself, and that is precisely why Cyberoo relies primarily on the conclusion of partnership agreements (in Italy, one of the most recent agreements concerned the IT company Techlan Srl of Carpi) to enter new geographic areas or to strengthen its market share.

A marketing campaign was also used on the main social media (LinkedIn, YouTube and Instagram), called 'Above The Rest' and consisting of ten podcasts with the narration voice of sports commentator Federico Buffa.

Is there really a need for cybersecurity? Unfortunately, yes. The Clusit Report 2024 found that 310 cyber attacks of considerable severity took place in Italy in 2023 (+65% compared to the previous year), accounting for 11.2% of the global total. Of these, 64% were attributable to cybercrime. In our country, government organisations in particular were attacked (19% of the total), but a significant proportion (13%) concerned manufacturing companies. A quarter of the cyber attacks targeting industries worldwide concern Italian manufacturing companies.

The dominant attack technique (36% of the total) is DdoS (distributed denial of service), i.e. a hostile attempt to block the normal traffic of a server, service or network by 'flooding' it with Internet traffic. This technique is mostly used by 'activist' hackers acting for socio-political reasons, but 33% of the total is made up of malware attacks (malicious programmes or codes that prevent a computer system from functioning and for the restoration of which a ransom is usually demanded), of which companies are mostly the victims.

Who are not prepared. The 'Cybersecurity Readiness Index 2024' by Cisco shows that only 1 per cent of Italian companies consider themselves safe from cyber threats and as many as 78 per cent consider themselves to be at moderate to severe risk.

And this is where Cyberoo steps in (among others), which to facilitate SMEs' access to advanced cybersecurity solutions has entered into an agreement with Bnp Paribas Leasing Solutions for the operational leasing and financing of Cyber Security Intelligence and Cypeer, made by Cyberoo, with a locked-in price for three years, through the payment of monthly or quarterly fees.

In reality, the main 'risk' for Cyberoo, like all small cybersecurity companies, would be that of being targeted not by a hacker, but by a big player in the sector (as has already happened with Defence Tech Holding).

In an attempt to escape this fate, Sababa Security, after the delisting, rose from 40% to 100% of Digipoint Srl and subsequently integrated with the Verona-based Hwg, creating Hwg Sababa (headed by Sababa Security's CEO).

Cyberoo's free float is quite high (36.9 per cent of the share capital), and for a company in Euronext Growth Milan, so is the average trading volume. The market appreciates the results of the company (which has also strengthened its ESG activities by presenting its first sustainability report in 2023), and for several months now the share price trend has been upward overall. In both 2022 and 2023, there was a stock split (2 new shares for every 1), in order to facilitate investment in the stock also by the retail public. It is not an easy sector to understand, but undoubtedly a strong and growing one.