- SideChannel’s QQ2 2024 results show a revenue increase to $1.927 million, up 19.17% YoY and 11.00% QoQ, with a gross margin of 45.0% and a net loss of $0.253 million. The company achieved its milestone of positive cash flow from operations for the quarter, delivering $0.032 million of operating cash inflow for the period. Management emphasizes a cash-flow–first approach and intends to remain cash flow positive on a quarterly basis while reducing operating expenses by approximately $1.7 million versus the prior year, supporting a path toward profitability.
- The near-term growth engine stems from a expanding vCISO services base, higher annual contract value (ACV) on new deals (above $180k), and a broadened product and services catalog via strategic partnerships. Enclave, the hardware/Zero Trust–oriented platform, is being advanced into startup, manufacturing, and DoD pilot opportunities, including a multi-month DoD paid PoC, which could yield larger software deals relative to traditional services.
- The balance sheet remains modest in cash ($851k at 3/31/2024) but improving in cash flow dynamics. Net deficit and accumulated losses linger (retained earnings negative at approximately $19.44 million), while current liabilities sit at $1.062 million against cash and equivalents of $0.851 million. The company emphasizes disciplined cost controls and an asset-light, relationship-driven revenue model. The longer-term investment thesis depends on Enclave adoption, expansion of DoD and enterprise logos, higher ACV per client, and sustainable gross margins as third-party software revenue margins normalize.