Cybersecurity Solutions for Government and Enterprise
Tailored Cybersecurity Solutions for a Geopolitically Charged World
Cybersecurity encompasses the strategies and tools used to safeguard internet-connected devices, networks, and data against unauthorized access and illicit use. Cybersecurity is meant to provide confidentiality, integrity, and accessibility of data throughout its entire lifespan. This protective framework encompasses both software and hardware elements, as well as information shared across the internet, protecting a wide array of assets ranging from personal information to complex organizational systems.
Today’s cybersecurity landscape faces a relentless barrage of sophisticated threats. Malicious actors, from profit-driven criminals to nation-states, possess the tools to cripple critical infrastructure, steal sensitive data, and disrupt our daily lives. Schools, hospitals, businesses, and government agencies alike are all vulnerable.
Pure-play cybersecurity Company and Sophic Capital client Plurilock Security [TSXV:PLUR, OTC:PLCKF] is a leader in the fight against cyber threats. Plurilock stands out as a prominent North American cybersecurity Company in the microcap space. Plurilock is a trusted provider of IT and cybersecurity solutions for governments and commercial clients across North America and NATO countries. The Company develops and integrates innovative solutions for specific security challenges, addressing gaps in the market. Their portfolio boasts established brands renowned for their commitment to client safety and regulatory compliance. Their focus on high-value critical services, combined with patented AI, data, and identity solutions positions them as a key player in the evolving cybersecurity market.
Plurilock operates three business units with offices on the east and west coasts of both the United States and Canada: 1) The Solutions Division serves as the foundation, reselling technology and cybersecurity solutions through its deep partner network and customer base, facilitating both critical service delivery and SaaS sales, 2) The Critical Services Division (formerly Professional Services) delivers customized services to address and resolve critical security gaps that disrupt organizations, and 3) Plurilock AI, a proprietary SaaS platform. While all aspects of the business are growing, the Critical Services division is a key growth driver given its much higher gross margin profile and stickiness with customers. The strategy involves leveraging existing relationships with value added reseller (VAR) clients to cross-sell / up-sell higher-margin critical services and software and once deployed becoming the go-to trusted partner for all things cyber.
Strategic Partnerships and Trusted Solutions
With data as the new battleground, cyberwarfare is poised to become the primary front in future conflicts. Just as the aerospace and defense industry safeguards physical borders, Plurilock stands as a guardian in the digital realm. Plurilock recognizes the intricate link between global events and cybersecurity threats. Stringent regulations, geopolitical tensions, and the ever-evolving threat landscape create unique security challenges for multinational corporations. Plurilock specifically tailors its services to address these real-world complexities, ensuring clients are protected in today’s volatile environment.
Plurilock’s Solutions Division resells cybersecurity industry products and technologies to meet the needs of commercial and government customers in North America (Exhibit 1). The Solutions Division also sells services directly to end users.
Exhibit 1: Some of Plurilock’s Customers
Source: Plurilock Company Investor Presentation
Plurilock prioritizes a consultative approach, combining best-in-class partner solutions with in-house security expertise. This allows the Company to address complex cybersecurity challenges for clients and support their business-critical applications. By identifying complementary high-margin offerings, Plurilock utilizes the VAR network to introduce existing clients to new solutions that address additional security needs. This not only expands client value but also boosts profitability.
Plurilock wins deals against established competitors by leveraging their competitive advantage. Plurilock utilizes existing master service agreements from the Solutions Division to build trust and secure new business in combination with an advisory council of renowned experts to open doors and facilitate deal flow. Additionally, they recommend AI-powered solutions (drawing on their expertise in building AI products) over traditional, resource-intensive consulting approaches.
Cross-selling Critical Services to existing VAR clients is proving successful. The Critical Services segment, fueled by strong demand from existing clients, has become the fastest-growing segment (~3x growth in 2023, 134% CAGR since 2020). Plurilock can organically grow this high-margin segment without the need to acquire new clients, as demonstrated by the composition shift in revenue, with Critical Services growing from ~1% in 2022 to ~4% in 2023 increasing overall gross profit margins from 7.7% to 8.3%. More recently, Plurilock reported Q2 2024 gross profit of $2 million, which is 44% growth year-over-year. This can be attributed to prioritizing high-end consulting and services above software sales, leading to a faster sales cycle with improving margins. Q2 had a gross margin of roughly 15.6% up from 11.2% in Q1 2023, reflecting the consulting business growing into a larger portion of total revenues. The continued expansion of the Critical Services segment should be a key driver of future profitability and value creation.
Plurilock’s Advisory Council – World Class People Creating New Opportunities
Plurilock has assembled an impressive advisory council featuring some of the most influential names in cybersecurity, government, military, aerospace, and banking (Exhibit 2). Beyond their impressive credentials, these advisors offer Plurilock invaluable networks and expertise. When the time is right, their connections in mergers and acquisitions can help facilitate strategic partnerships and exits, while their government and military ties can open doors to new contracts and opportunities. Additionally, their deep understanding of cybersecurity can bolster Plurilock’s Critical Services division and position them for strategic growth.
In essence, this advisory council represents a wealth of opportunities for Plurilock. With such a powerful advisory council in place, Plurilock is well-positioned to expand its reach, increase deal flow, and drive revenue growth. As the Company’s footprint expands, it can leverage its scale to improve margins and solidify its position as a leading player in the cybersecurity market. This strategic advantage positions Plurilock for significant growth and success, with clear evidence these relationships are already in bloom. Plurilock is becoming the trusted partner for more and more clients, which should increase its share of wallet and stickiness with its existing and new potential client base.
Exhibit 2: Partial List of Plurilock’s Subject Matter Experts
Source: Plurilock Corporate Website
High-Value Solutions for High-Profile Clients
Plurilock Critical Services division provides high-end security consulting services, solving critical issues for multibillion dollar companies, and governments. When organizations face urgent cybersecurity issues, Plurilock Critical Services steps in. Leveraging Plurilock’s pool of highly skilled consultants and engineers to deliver immediate solutions, ensures a perfect product-to-market fit for each unique challenge.
Largest Deal in Company History
On October 3, 2024, Plurilock signed a US$19.3 million contract with a S&P 500 semiconductor company to modernize the security stack of a major global enterprise. Plurilock to re-platform the customer’s security operations stack using leading AI-native cybersecurity platform and provide dedicated Critical Services team members for a 12-month period. This deal followed US$1.9 million in new cybersecurity contracts with a prominent S&P 500-listed semiconductor company to modernize several of the Customer’s foundational cybersecurity and information security platforms and resources.
TD SYNNEX
On September 12, 2024, Plurilock entered into a partnership with TD SYNNEX (NYSE: SNX) to provide AI-focused Critical Services and cybersecurity solutions across their North American operation. This represents the initial phase of a potential wider partnership, with the possibility of future expansion into the Company’s global footprint.
Plurilock has been a leader in AI-powered cybersecurity since their inception over eight years ago. Being chosen to deliver Critical Services in this area highlights the Company’s expertise and validates their mission to protect world leading organizations from evolving threats. With Plurilock as a service provider, TD SYNNEX can enhance the range of AI services they offer in this crucial sector, driving both current business outcomes and future growth for their partners. This announcement followed recent Advisory Council addition, Brian Aebig.
New Advisory Council Member
These announcements followed recent Advisory Council addition Joe Sexton. Plurilock does not offer a point solution, rather a combination of products and services, with the ability to service companies of any sizes and solve a wide range of problems. Part of the reason Mr. Sexton joined Plurilock was the belief in the Company’s ability to execute. Plurilock has the tools and the resources to succeed right now, they just need the reach. Part of the Advisory Council’s objective is to leverage their connections to create new opportunities, which is made easier by the fact Plurilock already has the trust of both the U.S. Government and other larger enterprises. Mr. Sexton’s emphasis on business outcomes and strategic growth aligns with Plurilock’s goals, bringing a focused approach to capturing market share in the competitive cybersecurity sector.
Cashed Up and Ready for Growth
Following a successful $5.5 million equity financing in May 2024 and the recent injection of an additional $2 million from warrant exercises, Plurilock is well-capitalized and positioned for growth. While the Company is not yet profitable, its increasing revenues, expanding high-margin Critical Services, and a robust pipeline of new opportunities signal a clear path toward profitability. The strengthened balance sheet provides ample runway to reach this milestone, while also allowing Plurilock to continue evaluating strategic, accretive acquisitions that would expand its platform and further capitalize on its growing customer base.