Earnings call transcript: Plurilock Security sees revenue rise in Q2 2025

Plurilock Security Inc. reported its earnings for Q2 2025, showcasing a 15% year-over-year increase in total revenue, reaching $16.4 million. Despite a downturn in gross margin, the company’s strategic focus on high-value sectors and services is evident. The stock price of Plurilock Security saw a 5% increase, closing at $0.21, reflecting positive investor sentiment. According to InvestingPro data, the company’s market capitalization stands at $38.21 million, with the stock currently trading below its Fair Value estimate.

Key Takeaways

• Total revenue increased by 15% year-over-year to $16.4 million.
• Gross margin decreased to 12% from 14.7% in the previous year.
• The company is focusing on enterprise and government markets.
• Plurilock is repositioning as a "services-led, product-enabled, AI-native" company.

Company Performance

Plurilock Security’s Q2 2025 performance highlights a significant 15% increase in revenue compared to the previous year. The company is strategically shifting its focus towards enterprise and government sectors, reducing its emphasis on low-margin hardware sales. This repositioning is part of its broader strategy to enhance its service offerings and leverage artificial intelligence, positioning itself competitively in the cybersecurity market.

Financial Highlights

• Revenue: $16.4 million, up 15% year-over-year.
• Gross Margin: 12%, down from 14.7% in Q2 2024.
• Adjusted EBITDA: -$1.4 million, a 42% improvement from the previous year.
• Cash and Equivalents: $1.7 million.
• Unused Credit Facilities: $8.5 million.

Outlook & Guidance

Plurilock Security is targeting margin expansion through critical services and exploring mergers and acquisitions, joint ventures, and strategic partnerships. The company anticipates benefiting from seasonal budget flows in the latter half of the year and is focused on expanding its international presence, particularly in Europe and the Middle East. Analyst consensus from InvestingPro strongly recommends buying the stock, with a target price suggesting significant upside potential. The next earnings report is expected on September 12, 2025.

Executive Commentary

CEO Ian Patterson emphasized the company’s strategic focus by stating, "Plurilock is now clearly articulating its identity as services-led, product-enabled, and AI-native." He also highlighted the importance of services in the company’s revenue model, noting, "For every $1 of technology that gets purchased, there’s typically $2 of services."

Risks and Challenges

• Market Saturation: Increasing competition in the cybersecurity sector could impact growth.
• Economic Conditions: Macroeconomic pressures may affect enterprise and government spending.
• Technological Changes: Rapid advancements in technology require continuous innovation.
• Cybersecurity Threats: The rising frequency of cyber attacks demands robust security solutions.
• International Expansion: Entering new markets poses regulatory and operational challenges.

Plurilock Security’s Q2 2025 earnings call underscores its commitment to strengthening its position in the cybersecurity industry through strategic focus and innovation. As the company navigates its challenges, its emphasis on services and AI could drive future growth. Get deeper insights into Plurilock’s valuation, financial health, and growth prospects with InvestingPro’s exclusive research report, featuring comprehensive analysis and expert recommendations.

Full transcript - Plurilock Security Inc (PLUR) Q2 2025:

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Joining us for Plerilock Securities conference call to discuss its financial results for the quarter ending 06/30/2025. I’m Ryan Fremantle from Safavid Capital, and we handle Plerilock’s Investor Relations. On the call today, we have Plurilox CEO, Ian Patterson and CFO, Scott Myers. During the call, all participants are in listen only mode. Following the presentation, we will conduct a question and answer session.

We encourage you to submit your questions through the q and a tab at any time, and management will answer them following the prepared remarks. Before management discusses the results, I’d like to remind everyone that certain statements in this call may be forward looking in nature. These include statements involving known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in our forward looking statements. For caveats about forward looking statements and risk factors, please see Plerilux MD and A for the quarter ending 06/30/2025, which can be found on our company profile at SEDAR plus. And unless otherwise stated, all dollar amounts referred to in this call are Canadian dollars, the company’s reporting currency.

I will now pass the call over to Plurlock’s CEO, Ian Patterson. Ian?

Ian Patterson, CEO, Plurlock: Thanks, Ryan. Good morning, everybody, and welcome to Plurlock’s financial results conference call for the 2025. I’m Ian L. Patterson, CEO of Plurlock. Today, as we review the quarterly results, I will provide highlights along with a business update, then we’ll go through some financial performance, and then finally, we’ll conclude with the prepared remarks by discussing our outlook, we will leave some time at the end for q and a.

Before getting into business specifics, I’d like to give a a high level overview of the global cyber threat environment. In the 2025, organizations faced nearly 2,000 attacks per week on average, up more than 20% year over year and close to 60% higher than two years ago. Europe saw the sharpest rise reflecting geopolitical tensions, regulatory fragmentation, while North America experienced a 20% increase in weekly attacks. These incidents are being driven by AI, nation state actors, and supply chain vulnerabilities as cybercriminals continue to target high value and highly visible sectors, including government education manufacturing. In this environment, cybersecurity is a boardroom and national security priority.

Plerlock remains focused on meeting this rising demand with real world solutions and a more selective strategic bidding approach serving organizations across North America and NATO aligned markets where the cost of failure is simply unacceptably high. We have a healthy growth pipeline built on long standing relationships, partner collaboration, and targeted business development with line of sight to second half activity benefiting from seasonal budget flows and ongoing strategic initiatives. During the conversation today, we will be talking about two interconnected business segments. Our solutions division provides technology and cybersecurity products through an extensive network of partners and customers. It also serves as a key entry point for our critical services.

Secondarily, our critical services consists of a specialized team that delivers tailored cybersecurity services to help clients address security challenges and build long term resilience. Here’s how we’re here’s how we’re positioning Plurlock for the next phase of growth. To better reflect the full breadth of our capability and our focus on mission critical cyber challenges, Plurlock is now clearly articulating its identity as services led, product enabled, and AI native, a delivery framework that defines how the company operates and delivers positive outcomes for clients. Thorlok’s unique positioning at the intersection of critical infrastructure and critical services enables it to mobilize rapidly in support of federal enterprise and defense sector clients. Critical services has become our core growth engine since its launch a couple years ago.

It carries higher margins, creates long term client relationships, and positions us as a trusted adviser on compliance, security architecture, and technology integration. Our strategy is to grow these engagements into recurring managed services while adding adjacent high value offerings that deepen customer relationships and boost profitability. Looking ahead, we are scaling this model internationally, building on our track record with Canadian and US federal clients to pursue NATO, Middle East, and other allied defense and commercial opportunities in partnership with major integrators as Plerlock seeks to capture a share of accelerating global cybersecurity spend. Let me walk through a few highlights from the quarter. With the implementation of our new accounting policy in Q4 twenty twenty four, which focuses on recognizing revenue from software and services over time rather than upfront.

Recognized revenue for the 2025 was 16,400,000.0, which was an increase of 15% over the new adjusted q two twenty twenty four revenues of 14.3. Our critical services business grew a 159% year over year to 4,300,000.0. This business line remains a core strategic priority, and we will continue to keep it front and center as well by shifting our revenue mix and growing recurring service relationships, we’re driving margin improvement. Gross profit decreased a 100,000 from 2,100,000.0 to to 2,000,000 with a slight dip in gross margins 12% from 14.7. This was largely due to a onetime larger lower margin resell order impacted overall margins this quarter.

Our higher margin offerings led by critical services remained strong, and we are positioned for expansion in the second half. The company had $1,700,000 in cash and access to an additional 8,500,000 in unused credit facilities on 06/30/2025. The balance sheet remains stable with cash on hand and unused credit capacity providing sufficient liquidity. And like previously mentioned, while occasional large resell orders may create quarter to quarter variability in blended gross margins, critical services remains, again, the primary driver for recurring higher value revenue. In the 2025, we announced nearly $10,000,000 in new business across a range of high value clients.

Several of these include 5 to 6 figure contracts as part of our land and expand strategy, which, which is things that we’ve seen in the past, where those land and expand deals ultimately, are a thin end of the wedge. They get us into a client. We get very sticky engagement. The client sees our delivery success, and ultimately, leads to six, seven, or even potentially 8 figures worth of business over the lifetime of that account. And I’d encourage folks, to to refer to our, investor deck where we have actually a case study of of what that looked like.

So we continue to leverage long standing relationships with US and Canadian government agencies while accelerating into commercial markets where enterprises face equally complex challenges. Partnerships with global leaders such as CrowdStrike and Forcepoint extend our reach, strengthen our credibility, and continue generating direct referrals and new business. During the quarter, high level engagements in Ottawa and Brussels reinforced our credibility and highlighted the unprecedented levels of allied government investment flowing into cybersecurity and defense, as as we have seen with, all of the news around, increased, levels of commitment to NATO as just one example. At this point, I’d like to walk you through some of the q two twenty twenty five financial results. As Ryan stated at the beginning of the call, all dollar amounts I’ll refer to are in Canadian dollars, which is Plerlock’s reporting currency.

As well, for more detailed information, please refer to the financial statements and management discussion and analysis document that we filed on SEDAR plus Turning to our second quarter financial results for the three months ending 06/30/2025. Total revenue for q two increased 15% to $16,400,000 as compared to $14,300,000 for the second quarter ended 06/30/2024. Hardware and system sales revenue for q two totaled $1,400,000 compared to 2,200,000.0 in q two last year, which accounted for 8.2% of total revenues compared to 15.2% in Q2 twenty twenty four. Software license and maintenance sales revenue for Q2 totaled 10,800,000.0 compared to 10,500,000.0 in q two of last year, accounting for 65.7% of total revenues compared to 73.7% of total revenues in q two twenty twenty four. Professional services revenue for q two was 4,300,000.0, compared to 1,600,000.0 in the prior quarter ended 06/30/2024, accounting for 26% of total revenues, up from 11.5% in 2024.

And so, again, these these last three bullets really speak to the, the change in revenue mix as we move more towards critical services. Finally, gross margins for q two twenty twenty five was 12% compared to 14.7% in q two twenty twenty four. And lastly, adjusted EBITDA, which is a non GAAP measure, improved 42% for Q2 to a loss of 1.4 compared to a loss of $2,400,000 in Q2 twenty twenty four. Lastly, cash and cash equivalents and restricted cash on 06/30/2025, was $1,700,000 which is up from $1,400,000 at March 31, and the company has an additional $8,500,000 of unused credit facilities. Our balance sheet remains stable with cash on hand and unused credit capacity.

We’ve also strengthened our working capital profile, by shortening payment terms with key customers, pulling forward cash and tightening contractor payments. Importantly, we’ve reduced focus on low margin hardware resell, and we’ve reallocated those resources and that selling time towards critical services and higher margin opportunities. Combined with selective bidding and changes in revenue recognition, these steps are ultimately smoothing revenue and setting us up for for healthier margins over time. So this concludes the the financial summary for the 2025. We’ll now move to the outlook.

Before we do that, I’d I’d like to add a few comments about the sale of our CloudCodes business to Scope Technologies that we announced earlier today. We had originally acquired certain assets of Indian based CloudCodes in August 2022 in order to access some zero trust cybersecurity solutions and enter the cloud access security market. Over the past three years, our business has undergone a significant evolution. At the time, CloudCodes’ focus on was on the small and and medium sized enterprise market, which aligned with Plerlock’s strategy at that point. However, as Plerlock has matured, and and building on the success of critical services, we’ve we’ve moved up market from from the SMB and SME space, to really concentrate on larger enterprise, which includes both government, our government clients as well as large global 2,000, commercial enterprises.

Today, that really has become our focus and is a key part of our Plerlock phase three, of growth, which we are now in. As a result, the SMB segment has become noncore for us, and continuing to operate in that space would not have supported our mission of streamlining operations and driving growth in enterprise and government markets through critical services. So, ultimately, that’s why we made the decision to sell CloudCodes. The the type of consideration, was was largely stock, meaning that we will benefit from any growth that, that the new owners, are able to generate as they scale that platform. And this allows us to stay laser focused on enterprise and and, our government clients while still sharing on the upside of of Cloudco’s future success, in in that market.

So moving on to the outlook for the year. As we look ahead, our strategy for 2025 remains clear. Continue expanding our margins, led by critical services and a more strategic approach to commercial resell while preserving a strong liquidity profile. We have built and continue to broaden a healthy pipeline across enterprise, defense and public sector markets, and we see strong line of sight into second half activity as seasonal budgets reset and strategic initiatives come into play. While select resell orders may create some quarterly margin variability, Critical services continues to drive recurring higher value revenue, and we remain confident in delivering sustained growth through the end of this year and into next.

Internationally, we’re making steady progress entering Europe, NATO, The Middle East and other non US defense markets, leveraging the credibility that we built with Canadian and US federal clients. Recent meetings with senior cybersecurity and procurement officials in Ottawa and Brussels reinforce that Plurlock is well positioned to capture a share of the unprecedented cyber and defense investments we’re seeing from allied governments. Plurlock’s growth strategy is anchored by three pillars. First, the company is driving organic growth in its high margin recurring critical services business fueled by rising demand across U. S.

Commercial, federal and allied government sectors as well as increasing inbound leads from referrals and strategic partnerships. Second, Ploorlock continues to pursue accretive M and A in enterprise and federal verticals, leveraging deep acquisition expertise built over four completed transactions since 2020, with a focus on profitable services led businesses that have trusted customer relationships, and exploring nondilutive capital efficient deal structures. Third, the company is expanding through strategic joint ventures and alliances in quantum, AI and defense technologies, looking to partner with AI native post quantum and secure infrastructure providers, pursuing joint defense bids with large primes and integrators and ultimately deepening penetration into Europe, NATO, The Middle East and other non US defense markets. And with that, I’d like to pass back to Ryan for the q and a portion of the conversation.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Thank you, Ian. As a reminder, submit a question, please click the q and a tab at the bottom of the webinar. We’d like to thank those who’ve submitted questions so far. So we’ll start with, can you talk about what drove your q two twenty twenty five revenue and sort of the outlook for the rest of the year and if that growth will continue?

Ian Patterson, CEO, Plurlock: Sure. So thank thank you for the question. So year over year revenue was was higher, due to the timing of a few large orders, as well as our our critical services growth. And so we’ve benefited from revenue recognition of software over time. I’ll I’ll remind folks also that we have a new measure, which is backlog, which historically we have not have, have have not had.

And so we are benefiting both from new sales as well as the backlog of contracts that we’ve already signed. And so we we historically have seen an uptick in the second half of the year, and this is as a result of of year end budgets, both in the public sector space. So as an example, the US federal government, their budgets end, at the September, so calendar q three. And then large commercial clients who are aligned with the calendar year, they also tend to have end of year spending, as well. And so it’s important to note that that a key pillar in our phase three strategy is realizing margin expansion, which we can achieve by remaining selective in which opportunities we pursue and favoring those with with higher margins.

And and so those so those items put together really speak to, to how we see the rest of 2025 and then 2026 shaping up.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: How are your cash needs?

Scott Myers, CFO, Plurlock: Cash is stable through a combination of cash, credit facilities. We’ve also improved collections, and on our payments with our vendors and getting extended terms. We’re improving our cash management significantly. For example, for government accounts, we’ve been, increasing our efforts there to significantly reduce how how much time it takes for us to get collection there. Governments and enterprises are under attack, and these attacks are driving more business to us and more frequently.

So customers are willing to pay us to ensure that we get give them the best cybersecurity, options that are out there.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: A few questions here about, the press release this morning with involving cloud codes. If critical services is Perlock’s core focus, can we expect more divestitures to further align with the business?

Scott Myers, CFO, Plurlock: So just wanna start by saying CloudCodes is a great technology. For us, though, it doesn’t align with our core focus. So we’ve been evaluating how best to unlock, value from non core assets. So while looking at this, we’re also working on our strategic initiatives that could expand our critical services footprint. So all these opportunities, we’ve evaluated, and we’ll look through the lens of what is operationally fitting and what we wanna do as well as how how well we are accretive, financially to the company.

We’re We’re finding, great traction in large enterprises and governments, so it makes sense for us to focus our efforts in targeting these markets. As a company, we’ve always seen m and a as a core pillar, which includes both the buy side and now the sell side of CloudCodes and also strategic partnerships, joint ventures, which is something we may pursue if, if it’ll be accretive to shareholder value.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: K. One more on CloudCodes. With your CloudCodes divestiture, does this mean that acquisitions are on hold?

Ian Patterson, CEO, Plurlock: No. I mean, this this transaction represents, actually, the bench strength that the company has in regards to m and a. I mean, historically, we’ve we’ve been on the buy side and and now on the sell side. I think I think Plurlock has proven a track record of value creation through m and a having successfully completed four four acquisitions to date, you know, five if you include the the RTO through the go public. Now we have sell side transactions.

So Plurlock ultimately is backed by a very experienced team with both operational depth, capital markets expertise, and m and a expertise. And so the company continues to explore a range of strategic opportunities, including acquisitions, joint ventures, which we mentioned, earlier, and so that can take many forms, as well as other value enhancing initiatives.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Okay. Where do you think your critical services margins can top out?

Scott Myers, CFO, Plurlock: Thanks, Ryan. It’s a it’s a hard number to pin because we don’t know exactly what opportunities will present themselves and what services we will offer going forward or where we can find experienced talent at the same or lower expenses. So we can emphasize that our growth is focused on higher margin offerings, and we aren’t going to onboard a business that meets our internal hurdle rate. So if if we’re not going to make a certain margin on it, we just won’t entertain it. You’re seeing that we’re getting a lot better margins on our services versus the solution side of the business, and that’s why we’re focusing there.

In terms of topping out, again, it’ll depend on the expertise. Generally, stuff that’s emergency and high demand demands a lot more margins and stuff that’s a little bit more regular is is I wouldn’t say lower, but very very good, but not as high as, you know, the the the on demand emergency stuff.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Can you discuss where your r and d spend will be focused going forward? Should we think of you as a software reseller, or are you working on internal new solutions?

Ian Patterson, CEO, Plurlock: Yeah. So that’s a great question. So if I think about the business today, the solutions division, is is largely focused around reselling third party commercial off the shelf technology, and so that’s a mixture of hardware and software. We’ve talked about partnerships like CrowdStrike and Forcepoint as as well as other strategic cybersecurity platforms. So so that’s really what the the solutions division is is focused on.

Critical services is is is really where we’re seeing a lot more focus around both r and d as well as as well as just focus from from a go to market perspective. So today, Plurilox still maintains its its its patent portfolio of of approximately half a dozen patents, we do continuously look for opportunities to patent new innovation, which can be as a result of specific software, innovations, or it could be more process innovation, leveraging leveraging software as well. So we believe that, that there is great opportunity to, bolster the moat around how we deliver critical services. And this is also somewhat evident in in the new tagline, that that you saw when, when you first joined the call, which was that Poreloc is services led, product enabled, and AI native. And so, really, what we’re what we’re trying to convey there is the fact that that we we have a very innovative team.

We’re gonna continuously look for ways of of securing those innovations. It may or may not show up as dedicated r and d expense in terms of in terms of those line items on on the financial statements, but there is absolutely a a focus and a heritage of of us being able to to identify, new innovations and then secure those.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Thanks. So we’ve got a couple questions around potential engagements and traction with NATO Europe and and other international jurisdictions. Is there anything that you can tell us about that? Seeing those things are confidential.

Ian Patterson, CEO, Plurlock: Yeah. So, I I mean, I think I like like with many cybersecurity companies, right, it’s difficult sometimes to talk about specific engagements or specific clients. I think I think I can I can give you a couple of trends, though, and I can also point to where we’re making investments? So a couple things that I would say. The first is that there’s been a very sizable shift in how the rest of the world is viewing its supply chain.

And what I mean by that is going into 2025, new administration in The United States, a lot of, a lot of traditional defense investments, which seem to be obvious go to, yes, just buy American capability, are now being revisited. And there’s there’s a bunch of great examples of that. I mean, you can look at at kind of star projects like the f 35, and you can also look at smaller things. So because there’s now some shift in how, how countries and how large global enterprises, which sometimes behave like small countries, are viewing their supply chain, they’re starting to revisit the question, should we get should we just go with the incumbent? Right?

There’s, there there’s always kind of the euphemism of you never get fired for buying IBM. The same is true in cybersecurity. The same is true in defense. But those are now being questioned. And so it opens the opportunity for innovative capabilities, and new providers to come in, while while those those questions are being asked.

What we’re seeing is an opportunity to engage, whereas in years past, that those opportunities weren’t weren’t there. So that’s the first part. I think the second part is that for Plerlock specifically, the the work that we’ve done, especially in critical services, although the solutions division as well, is really getting noticed by other stakeholders. And those other stakeholders are partners. In some cases, they’re officials.

In some cases, they’re other other customers directly. And we’re seeing we’re seeing introductions. We’re seeing word-of-mouth, and we’re seeing us as as a company being pulled into conversations and and sales opportunities that, frankly, we weren’t we weren’t seeing previously. And so what that means for us is is we are investing dollars, particularly in in, in people and in travel, to go visit, to go visit these customers, to go visit these, these folks. And so we’re allocating hard dollars to follow-up on the on those sales opportunities.

I will say that even in 2024, a certain amount of our revenue was was coming from Europe. And and and it may not have been a European, you know, entity that we were doing business with, but the reality too is that a lot of the global enterprises that we work with have large operations in Europe. So so there’s definite pull that that we’re feeling. We’re we’re following up on that, And I think that this is gonna be a topic of conversation that that will will will come up in future in future presentations.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: I know you are not providing guidance, but we have a few questions around when you expect to be EBITDA positive. Can you provide any information or anything about initiatives to get there in the future?

Ian Patterson, CEO, Plurlock: Yeah. I mean, listen. We’re we’re laser focused on on getting to both EBITDA positive as well as cash flow positive. You know, that’s that’s a combination of of really two drivers. So we are continuously looking to increase gross margins.

You’ve heard that, I think I think repeatedly through through this conversation that a core driver of of getting EBITDA positive is as a result of growing gross profit, less so about revenue. And it’s really if if we can get for a given dollar of revenue, if we can get more gross profit by prioritizing critical services as opposed to focusing on on some solutions division resell, then we’re absolutely gonna focus on critical services. So that’s that’s a key pillar. I think the second is is continuing our strategy around OpEx reduction, which which includes things like leveraging our offshore hiring centers. And the reality is that certain actions that we’ve already taken take time to work through the the p and l.

And so those are the things that we’re continuously focused on. We’re we’re laser focused on those, and I don’t see that changing anytime soon.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Can you discuss this the capacity you have to grow critical services with existing personnel? Do you need to hire more people? And if not, how much can the segment grow with existing resources?

Ian Patterson, CEO, Plurlock: Yeah. It’s a good it’s a good question. I mean, one of the key strengths around Plurlock is our access to talent, and I I think that’s evidence through even even from the externally facing materials. If you look through our investor presentation, we have a whole slide around the the people affiliated with us on our advisory board as well as our board board. And part of the the value that that we get from that network is the ability to hire top talent in a very competitive market.

Cybersecurity, by some estimates, have 4,000,000 jobs unfilled. There’s a war on talent out there, and we’ve we’ve got a secret weapon, which is our advisory team, that allows us to to have a a very massive network. And so if we need a a specialist skill set that would ordinarily be be unapproachable, from a cost perspective or even just finding those people, that is something that we have access to that others others don’t necessarily have. So that’s the first thing that I’d say is that we have been successful thus far through traditional recruiting channels as well as as we’ve given ourselves the secret weapon, which is this advisory team. And I think that you can you can see that the success of that just by the the rate of growth that we’ve seen from last year to this year.

You know, going from from a million to a couple of million, you know, we’ve was largely as a result of being able to ramp up quickly. So, so we have been successful so far. You know, of course, we have to continue putting in the effort to continue being successful, but I don’t see a a limit or a cap or, or anything in the in the near or even medium term, to be able to respond to customer demand. In fact, we’re we’re looking forward to the opportunity to introducing even more of our top talent to to those customers.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: As part of your growth, do you foresee some SaaS solutions being offered by your company to complement the services? This could help generate additional recurring revenues.

Ian Patterson, CEO, Plurlock: Yeah. I mean, I think that that speaks to to part of the core strategy of of the company of having both a solutions division as well as, as well as critical services. So the the the thing to keep in mind in in cybersecurity is that for every $1 of technology that gets purchased, which could be a SaaS solution, there’s typically $2 of services that that go into, implementing that solution, deploying that solution, running that solution, etcetera. And so these are not, these are not two different, things that we offer to a customer. These are two parts of an of a capability that leads to an outcome for our clients.

And to the degree to which we have an ownership stake in that in that technology, or not certainly is is something that that we are, we are looking at. And I think I’d I’d go back to again, when we were talking about the three pillars of growth, we also talked about m and a and joint venture as being one of those pillars. It’s absolutely something that that we we could do, and I do agree. I mean, it does it does build recurring revenue, but critical services itself builds recurring revenue as well. So so absolutely something that we are we are looking at and and could add to the portfolio.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Just just being mindful of its time here. We’re we’re past the half hour mark, but we’ve got one final question. You mentioned being more selective and strategic, with your approach to resale opportunities. What do you mean by that?

Ian Patterson, CEO, Plurlock: So we have a sales team, and and that sales team has a certain number of hours in the day, which we call selling time. And what we do internally is is we’re now benefiting from all of the existing work and investment that we’ve put into the business up until now. We now have more opportunity than we can go after. And so for us, both at the individual sales rep level as well as sales management as well as the the c level executive and and also at the board of directors, is is a very intentional strategy about what sales opportunities do we pursue. And if we have if we have two competing sales opportunities with all else being equal and we can sell a dollar, you know, we can we can sell a technology resell deal for a dollar at 10% margin, or we can sell, critical services engagement at at 45 or 50% margin, obviously, we stand to to make a lot more gross profit and and realize margin expansion if we if we favor and focus on critical services.

So that’s the theory behind behind what we’re doing. In practice, that means that, you know, that there’s gonna be a different revenue mix, and I think you’ve seen that so far this year. I mean, q two has a much larger percentage of revenue that is critical services today as compared to the the same time last year. And it’s also driving a gross margin profile that is different, than it was previously. And so we’re gonna continue to evaluate the the sales opportunities we have before us, and we’re gonna favor the ones that are that are larger in in gross margins.

And so that’s that’s really the the theory behind what we’re doing.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: Thank you. There’s no further questions. So if you weren’t able to ask your question or have other questions after the call, please reach out to us, and we’d be happy to answer them. Our contact information is on the screen. Now I’ll pass the call back to management for closing remarks.

Ian Patterson, CEO, Plurlock: Well, I’d just like to thank everybody both for for attending, this call as well as following the story. We look forward to continuing to share our progress with you in the quarters ahead. And, and if there are, like Ryan was saying, if there are additional questions, our our contact details, are are on the screen. The other thing that I would encourage everybody to do is is to sign up for the investor updates. And so if you go to the the URL on the screen, pluralock.com/company/investors, you can put in your email, and you can get notified in real time, as as news comes out, and you can be fully in the loop as we as we publicize and announce, announce activity.

Ryan Fremantle, Investor Relations, Safavid Capital, Safavid Capital: So this concludes Pluralock Securities q two twenty twenty five financial results conference call. Thank you for joining us. Have a great day.

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